Citius Pharmaceuticals has entered into an agreement with Dr. Reddy’s Laboratories to acquire its exclusive license of E7777 (denileukin diftitox), a late-stage oncology immunotherapy for the treatment of CTCL, a rare form of non-Hodgkin lymphoma. E7777, an engineered IL-2-diphtheria toxin fusion protein, is an improved formulation of oncology agent, ONTAK, which was previously approved by the U.S. FDA for the treatment of patients with persistent or recurrent CTCL. The last patient in a pivotal trial of E7777 has been enrolled, and a biologics license application (BLA) for E7777’s first indication in CTCL is expected to be filed with the FDA by the end of 2022.
 
Citius will acquire Dr. Reddy’s exclusive license of E7777 from Eisai Co., Ltd. and other related assets owned by Dr. Reddy’s. Citius’s exclusive license rights include rights to develop and commercialize E7777 in all markets except for Japan and certain parts of Asia. Additionally, Citius will retain an option on the right to develop and market the product in India. Eisai retains exclusive development and marketing rights for the agent in Japan and Asia. Dr. Reddy’s will receive a $40 million upfront payment and is entitled to up to $40 million in development milestone payments related to CTCL approvals in the U.S. and other markets, up to $70 million in development milestones for additional indications, as well as commercial milestone payments and low double-digit tiered royalties on net product sales. Eisai is to receive a $6 million development milestone payment upon initial approval and additional commercial milestone payments related to the achievement of net product sales thresholds. Eisai will be responsible for completing the current CTCL clinical trial, and chemistry, manufacturing and controls (CMC) activities through the filing of a BLA for E7777 with the U.S. Food and Drug Administration (FDA). Citius will be responsible for development costs associated with potential additional indications.
 
“We are expanding our late-stage pipeline with E7777, a novel formulation of a well-known and previously FDA-approved immunotherapy for the treatment of CTCL, a rare and debilitating cancer that reduces a patient’s quality of life,” said Myron Holubiak, president and CEO, Citius. “The addition of E7777 will allow us to accelerate serving cancer patients with critical unmet needs and provide us with a substantial near-term revenue opportunity in CTCL. There are approximately 3,000 new cases of CTCL diagnosed in the U.S. annually, resulting in approximately 30,000 to 40,000 patients suffering from CTCL at any given time. The addressable population for E7777 will be later stage, relapsed and refractory patients who require systemic therapy. We estimate that this could be approximately 30% of the CTCL population. We also believe E7777 may support substantially greater upside potential in PTCL and intend to explore additional immuno-oncology indications.”