Baxalta partner CTI plunges after FDA slaps partial hold on PhIII myelofibrosis drug

The FDA has slapped a partial clinical hold on CTI BioPharma's ($CTIC) late-stage myelofibrosis drug pacritinib after patients in the drug arm of a Phase III study began to die at a higher rate than those in the placebo group. The drug arm also registered a higher number of adverse events, further raising concerns about the safety of the drug.

The biotech reports that the regulatory hold affects all the clinical work for the JAK2 drug, which is partnered with Baxalta ($BXLT). Enrollment has been halted and patients won't be allowed to cross over to the drug. Patients who aren't registering a response will also be taken off the drug. 

The hold comes just four weeks after CTI and Baxalta completed a rolling submission for the drug at the FDA.

Seattle-based CTI's next steps include modifying its trial protocols and informing patients, while taking "certain other actions."

Biotech stocks have been hammered hard in the first 5 weeks of the year, setting the stage for an ugly reception for any news about a setback in the clinic. CTI's shares plunged by nearly 50% this morning.

"The excess mortality was most evident during the non-randomized crossover period following the initial 24 weeks of randomized treatment, during which patients in the control arm could switch to pacritinib treatment," the company said in a statement. "In prior correspondence, the FDA acknowledged the difficulty addressing non-significant results, and that crossover designs can confound the interpretation of safety as well as the evaluation of survival."

CTI CEO James Bianco has repeatedly disappointed investors over the years with its up-and-down advancement of pixantrone, which has never been approved in the U.S. The kinase inhibitor pacritinib had revived hopes in some fields with late-stage data last fall that flagged a major reduction in spleen volume, altering a lethal effect of the disease.

- here's the release