Baxter International, a developer, manufacturer and marketer of medical products, and Onconova Therapeutics, a discoverer and developer of novel small molecule therapeutics, have entered into a European licensing agreement for rigosertib, a novel targeted anti-cancer compound currently in a phase III study for the treatment of a group of rare hematologic malignancies called myelodysplastic syndromes (MDS) and in a phase II/III study for pancreatic cancer.

Baxter will make an upfront payment of $50 million to Onconova, which will be recorded as a special pre-tax in-process research and development charge in the third quarter of 2012. Baxter will obtain commercialization rights in the E.U. and other countries in Europe In addition, Onconova may receive up to $515 million in pre-commercial development and regulatory milestones for the MDS and pancreatic cancer indications, in addition to sales milestones and royalties. Baxter has the option to participate in the development and commercialization of rigosertib in additional indications. Baxter has an existing equity investment with Onconova of $50 million.

''Rigosertib's first anticipated indication would be a natural complement to Baxter's existing treatments for patients managing rare hematologic conditions, and will allow us to expand the product portfolio of our existing hematologic sales force,'' said Ludwig Hantson, president of Baxter's bioScience business.

Ramesh Kumar, CEO of Onconova, said, ''The financial resources resulting from this transaction will help to advance the rigosertib program toward commercialization and will support other Onconova candidates in clinical development including Ex-RAD, a radioprotectant, and ON 013105, our second novel anti-cancer agent.''

Rigosertib's mechanism of action targets dual pathways (PI-3K and PLK) critical to the growth of cancer cells. It has been studied in more than 600 patients worldwide and has shown activity in treating both solid tumors and hematological malignancies. Rigosertib is currently being evaluated in a phase III clinical trial in 270 MDS patients who have failed or relapsed after receiving current therapeutic options, with initial results expected in the second half of 2013. Rigosertib is also in a phase II/III combination study in patients with previously untreated metastatic pancreatic cancer. In addition, an oral formulation of rigosertib is in a phase II study in transfusion-dependent low or intermediate-1 risk MDS patients. Onconova has gained orphan drug designation for MDS in the U.S. and Europe.