CTI Biopharma has something many biotech companies aspire to achieve—revenue. Sales of its approved cancer drug are growing, but commercialization comes with costs as does development of the molecule for additional indications. CTI expects it will need to raise money, but the dismal financial conditions mean fundraising prospects for any biotech company could remain challenging for the foreseeable future.

Enter Swedish Orphan Biovitrum (Sobi), the Stockholm-based rare diseases biopharmaceutical company. Sobi has agreed to acquire CTI in a cash deal that values the Seattle-based biotech at $1.7 billion. According to the terms of the deal, Sobi will pay $9.10 for each share of CTI, which represents an 89% premium to the stock’s price before the deal was announced Wednesday.

The heart of the acquisition is Vonjo, a drug for myelofibrosis, a rare bone marrow cancer that impairs the production of red blood cells. Last year, the FDA granted accelerated approved for the small molecule as a treatment for myelofibrosis in adults.

Vonjo, a JAK inhibitor, is designed to selectively block two proteins from the JAK family without hitting yet another protein from the family that’s associated with immune dysfunction and lymphomas. CTI, which develops targeted therapies for blood cancers, aims to expand that approach to other indications. A Phase 1/2 study is ongoing in graft versus host disease, a complication of stem cell transplants in which immune cells from the donor attack the cells of the transplant recipient.

CTI reported $53.9 million in sales for Vonjo in 2022. Its cash position at the end of 2022 was $79.9 million, which the company said in its annual report should be enough to support operations at least through the fourth quarter of 2023. But looking beyond the first quarter of next year, CTI said it will need to raise more money.

Sobi says Vonjo complements its current drug portfolio, particularly Doptelet, a drug that won FDA approval in 2018 for treating chronic liver disease patients who have thrombocytopenia, or low blood platelet counts. That drug came to Sobi via another deal, the $915 million acquisition of Dova Pharmaceuticals in 2019. Sobi reported that Doptelet accounted for 2.5 billion Swedish krone (about $244.5 million) in sales last year, a 91% increase over sales in the prior year.

There are synergies across both Doptelet and Vonjo. Sobi says both are drugs for rare blood platelet disorders and both are prescribed by hematologist oncologists and hematologists. In the announcement of the CTI acquisition, Sobi President and CEO Guido Oelkers said Sobi’s U.S. and global hematology capabilities will help get Vonjo to patients faster and more effectively.

“The acquisition of CTI is the latest in a series of transformative transactions Sobi has conducted to build its leading rare hematology franchise,” Oelkers said.

The CTI acquisition puts Sobi squarely in the mix of a myelofibrosis market that is becoming more competitive. Jakafi, a JAK inhibitor from Incyte, won the first FDA drug approval for myelofibrosis in 2011. Bristol Myers Squibb followed in 2019, winning approval for Inrebic, also a JAK inhibitor. GSK expects to receive an FDA decision next month for momelotinib, a JAK inhibitor that came from its $1.9 billion Sierra Oncology acquisition.

Others are trying to expand myelofibrosis treatment beyond JAK inhibition. Last fall, Merck agreed to pay $1.35 billion to buy Imago Biosciences, a biotech with lead programs in mid-stage clinical development in myelofibrosis and essential thrombocythemia. Earlier this year, MorphoSys restructured to focus on its late-stage myelofibrosis drug candidate, pelabresib, which came to the company via the $1.7 billion acquisition of Constellation Pharmaceuticals in 2021.

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