Spectrum Pharmaceuticals and Cell Therapeutics have entered into an agreement to form a 50:50 owned joint venture, RIT Oncology, to commercialize and develop Zevalin in the United States.

Zevalin, a radioimmuno-therapeutic is currently marketed in the local market by Cell Therapeutics for the treatment of patients with relapsed or refractory, low-grade or follicular B-cell non-Hodgkin's lymphoma (NHL), including patients who have rituximab-refractory follicular NHL.

Under the arrangement, upon the closing of the transaction the companies will become the sole members of a limited liability company (LLC) whose sole purpose would be to commercialize Zevalin in the US.

According to sources, a board of managers consist of an equal number of members from both companies would be established to govern the LLC.

In addition, both parties will equally provide for the future capital requirements of the LLC and share equally in the profits and losses of the LLC.

Cell Therapeutics will get an initial payment of $7.5 million at closing and $7.5 million in early January 2008. Other than this, the company will secure up to $15 million product sales milestone payments upon achievement of certain revenue targets.

However, the closing of the joint venture transaction is subject to the satisfaction of certain customary closing conditions.

Both partners currently expect the transaction to close in December 2008.