Pharmion buys cancer drug developer for $59 mln

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pharmion corpPharmion Corp. on Wednesday said it acquired Cabrellis Pharmaceuticals for an initial cash payment of $59 million to expand its portfolio with a cancer drug candidate currently in mid-stage trials.

Pharmion said it will make two additional payments of $12.5 million each if the small cell lung cancer drug, amrubicin, gets U.S. and EU approval.

The deal will result in a $55 million charge in Pharmion's fourth quarter, the biotechnology company said. Cabrellis has $4 million in net cash.

f the drug is approved for another use in the United States or in the European Union, Pharmion will pay $10 million more to Cabrellis' shareholders for each market.

Pharmion said it will immediately take over the development of amrubicin. Cabrellis holds North America and EU rights to the drug.

Pharmion will initiate late-stage studies for use of the drug in small cell lung cancer in the United States and European Union in the second half of 2007, and expects to submit approval applications for both the markets in 2009.

The drug is already approved in Japan for lung cancer.

Pharmion expects to end 2006 with about $125 million to $130 million in cash, cash equivalents and short-term investments. It has no debt outstanding. (Reporting by Saumyadeb Chakrabarty, Varsha Tickoo in Bangalore)

© Reuters 2006