Baxter International (BAX) and Cell Therapeutics (CTIC) jointly announced that they have entered into an exclusive worldwide licensing agreement to develop and commercialize pacritinib. Pacritinib is a novel investigational JAK2/FLT3 inhibitor with activity against genetic mutations linked to myelofibrosis, leukemia and certain solid tumors. Pacritinib is currently in Phase III development for patients with myelofibrosis, a chronic malignant bone marrow disorder. Under the terms of the agreement, Baxter gains exclusive commercialization rights for all indications for pacritinib outside the United States and Baxter and CTI will jointly commercialize pacritinib in the United States. Baxter will make an upfront payment of $60M, which includes an equity investment in CTI of $30M. In addition, CTI is eligible to receive clinical, regulatory, and commercial launch milestone payments of up to $112M, $40M of which relates to clinical milestones that may be achieved in 2014. Assuming regulatory approval and commercial launch, CTI may receive additional sales milestone payments. CTI will receive royalties on net sales of pacritinib in ex-US markets, and the companies will share U.S. profits equally. Baxter will record a special pre-tax in-process research and development charge in the fourth quarter of 2013 of approximately $30M. Results from earlier Phase I and II studies of pacritinib demonstrated encouraging results, including meaningful clinical benefits coupled with good tolerability among patients with advanced myelofibrosis. Based on the efficacy and tolerability profile demonstrated to date, the pivotal program for pacritinib includes two Phase III clinical trials: PERSIST-1 is studying efficacy and safety in a broad set of patients with myelofibrosis without limitations on blood platelet counts, and PERSIST-2 will evaluate efficacy and safety in patients with low platelet counts, and is expected to begin in the fourth quarter of 2013.