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Stemline Therapeutics, whose drug for a rare, aggressive type of acute leukemia was approved by the FDA about 18 months ago, has signed an acquisition deal with Italian biopharma Menarini Group.

Stemline (NASDAQ: STML), a New York-based company, developed the first FDA-approved drug for blastic plasmacytoid dendritic cell neoplasm, or BPDCN. The drug, tagraxofusp (Elzonris) targets CD123, a cell surface protein associated with the blood cancer.

The Menarini transaction is worth up to $677 million, according to the companies, which announced the agreement Monday. Under the deal terms Menarini, which is headquartered in Florence, plans to acquire Stemline shares at $12.50 apiece, split into $11.50 up front and another $1 upon the first sale of its drug in France, Germany, Italy, Spain or the United Kingdom following approval by the European Commissionas long as it occurs on or before the end of 2021.

Stemline requested European regulators review the drug as a treatment for adult BPDCN patients in January 2019, according to its latest annual report.

US sales of the drug brought in $43.2 million in 2019, its first year on the market. That year the company reported a net loss of $76.8 million.

Menarini CEO Elcin Barker Ergun, in a statement, said the acquisition would expand the Italian companys presence in the US and strengthen its oncology portfolio. The privately held biopharma says its annual sales top $4.2 billion.

As part of the Italian drug maker, Stemline plans to continue its efforts to launch the BPDCN drug outside of the US and to advance it as a potential treatment for other diseases. Stemline is also evaluating the drug in Phase 1/2 trials as a treatment for patients with chronic myelomonocytic leukemia, myelofibrosis, and acute myeloid leukemia.

Stemline saw its stock price soar on the acquisition announcement, rising to $12.10 in a jump of more than 150 percent compared to its close at $4.75 per share Friday. When Stemline went public in 2013, it priced its shares at $10 apiece.

Founded in 2003 by current CEO Ivan Bergstein, the companys approach to drug development is based on research into what are known as cancer stem cells, or cancerous cells that act like stem cells in that they reproduce themselves and sustain the cancer, showing outsize ability to resist chemotherapy and other standard cancer treatments. Read more about Stemlines origins in this Xconomy piece from 2011.

Both companies boards of directors have OKd the tie-up. If shareholders agree, the firms anticipate the deal will close this quarter.

Image: iStock/ChiccoDodiFC

Sarah de Crescenzo is an Xconomy editor based in San Diego. You can reach her at sdecrescenzo@xconomy.com.

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Stemline Slated for Acquisition by Menarini in Deal Worth Up to $677M - Xconomy