Pharmion acquires Cabrellis for $59M+

Colorado, USA-based Pharmion Corp says it has acquired the privately-held, US clinical-stage oncology firm Cabrellis Pharmaceuticals, which has the North American and European Union rights to the third-generation synthetic anthracycline amrubicin, which is now in advanced Phase II clinical development for the treatment of small-cell lung cancer. The product will expand Pharmion's current oncology portfolio and will accelerate its entry into solid tumor therapies, the firm notes.

Under the terms of the agreement, Pharmion will make an initial cash payment of $59.0 million ($55.0 million after deducting the $4.0 million in net cash held by Cabrellis). It will make two additional payments of $12.5 million each upon approval of amrubicin by regulatory authorities in the USA and the EU. Upon the product's clearance for a second indication in the USA or the EU, Pharmion would make an additional payment of $10.0 million for each market.

The transaction, which Pharmion says is effective immediately, will result in a charge to earnings in its fourth quarter of 2006 of approximately $55.0 million for acquired in-process R&D.