What happened
Shares of CTI BioPharma (CTIC) were up more than 80% early Wednesday after the company announced it was getting bought out for $1.7 billion by Swedish Orphan Biovitrum AB (BIOVF 2.61%), also known as SOBI. CTI BioPharma specializes in targeted therapies for rare blood cancers.
So what
SOBI agreed to buy CTI for $9.10 a share, which is 89% above CTI's closing price on Tuesday and 95% higher than its 30-day average of $4.67. CTI's lead therapy is Vonjo (pacritinib), which is approved by the Food and Drug Administration (FDA) in February 2022 to treat adults with intermediate- or high-risk primary or secondary cytopenic myelofibrosis, a rare type of bone marrow cancer that leaves patients with a low platelet count.
The move boosts SOBI's blood therapies. While there are only roughly 21,000 patients in the U.S. with myelofibrosis, pacritinib is also being studied in other indications, either as a monotherapy or a combination therapy, including as a COVID-19 treatment and to treat acute graft-versus-host disease.
Now what
The deal is expected to close in the third quarter of this year. SOBI CEO Guido Oelkers said the move will increase his company's rare hematology portfolio, along with being highly accretive to SOBI's revenue in a short period of time.
CTI will become a wholly owned subsidiary of SOBI. The move enhances SOBI's footprint in the U.S., while it provides an international presence for CTI, along with the help of SOBI's greater resources and scale.
CTI is scheduled to report first-quarter earnings on Thursday. In 2022, the company reported revenue of $53.9 million, all from Vonjo sales. CTI lost $93 million in net income in 2022 and, as of Dec. 31, said it had $79.9 million in cash.