CTI Biopharma $CTIC announced that it has signed an agreement with Baxalta $SHPG returning pacritinib to CTIC. According to the terms of the agreement, Baxalta will pay CTI a one-time cash payment of $10.3M as reimbursement for certain incurred or expected-to-be incurred expenses. CTI will repay the $10.3M upon the first regulatory approval or any pricing/reimbursement approval of any product containing pacritinib.

The agreement was first signed in 2013. This is yet another setback for CTIC, which has lost more than 67% of its market capitalization since the start of this year. The company had reported mixed results for pacritinib from a late-stage study evaluating the product against physician-specified best available therapy (BAT), including Novartis' $NVS Jakavi (ruxolitinib), in patients with advanced myelofibrosis showed statistically valid results in one of two co-primary endpoints. The results were mixed. Meanwhile, the full clinical hold on the drug continues. The FDA had suspended the company's clinical development of pacritinib in February because of an abnormal number of deaths from intracranial hemorrhage, cardiac failure and cardiac arrest. It withdrew its New Drug Application (NDA) as a result.

CTIC still has substantial cash on its balance sheet. However, with no future for its lead product candidate, I believe that CTIC is a value trap.