Item 1.01. Entry into a Material Definitive Agreement.
(i) Underwriting Agreement
On February 8, 2018, CTI BioPharma Corp. (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with Leerink Partners LLC acting as sole book-running manager and as representative of the several underwriters named therein (collectively, the “Underwriters”), relating to the offer and sale (the “Offering”) of 20,000,000 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”). The price to the public in this Offering is $3.00 per share of Common Stock. The Underwriters have exercised in full their option to purchase an additional 3,000,000 shares. Upon closing of the Offering, the total number of issued and outstanding shares is expected to be approximately 57,982,990. The net proceeds to the Company from this Offering are expected to be approximately $64.2 million, after deducting underwriting discounts, commissions and other estimated offering expenses.
The Company filed a shelf registration statement on Form S-3 (Registration Statement No. 333-221382) with the Securities and Exchange Commission (“SEC”) on November 7, 2017, which became effective on December 6, 2017 and was amended on January 24, 2018 and January 31, 2018, which amendments became effective on January 31, 2018 (collectively, the “Registration Statement”). The Offering was made pursuant to the Registration Statement, as supplemented by a preliminary prospectus supplement filed with the SEC on February 5, 2018, a free writing prospectus filed with the SEC on February 8, 2018, and a final prospectus supplement filed with the SEC on February 12, 2018.
The Company plans to use the net proceeds from this offering to (i) complete the PAC203 clinical trial, (ii) complete the review of the pacritinib MAA by the EMA, (iii) conduct additional research concerning the possible application of pacritinib in indications outside of myelofibrosis, and (iv) complete the PIX306 clinical trial, as well as for general corporate purposes, which may include funding research and development, conducting preclinical and clinical trials, acquiring or in-licensing potential new pipeline candidates, preparing and filing possible new drug applications and general working capital.
In the Underwriting Agreement, the Company has agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended, or to contribute to payments that the Underwriters may be required to make because of such liabilities.
The above description of the Underwriting Agreement is qualified in its entirety by reference to the Underwriting Agreement, which is attached hereto as Exhibit 1.1.
A copy of the opinion of O’Melveny & Myers related to the legality of the Common Stock is attached hereto as Exhibit 5.1.
A copy of the Specimen Certificate of Common Stock is attached hereto as Exhibit 4.1.
(ii) BVF Exchange Agreement
On February 8, 2018, BVF Partners L.P. (“BVF Partners”) entered into an Exchange Agreement with the Company (the “Exchange Agreement”) to exchange 8,000,000 shares of Common Stock and 575 shares of the Company’s Series N Preferred Stock, par value $0.001 per share, that BVF Partners owns into 12,575 shares of the Company’s Preferred Stock (defined below). BVF Partners is a beneficial owner of approximately 20.00% of the Common Stock, and Matthew Perry, President of BVF Partners, serves on the Board of the Company.
The above descriptions of the Exchange Agreement and the Preferred Stock are qualified in their entirety by reference to Exhibit 10.1 and 3.1 attached hereto, respectively.