Ipsen To Acquire Oncology Assets From Merrimack Pharma - Quick Facts

(RTTNews) - Merrimack Pharmaceuticals Inc. (MACK) announced that it has agreed to sell Oncology Assets to French specialty-driven biotechnological company Ipsen S.A. (IPSEY) for $1.025 billion, plus up to $33 million in net milestone payments retained by Merrimack's exclusive licensing agreement with Shire. The transaction, which is expected to be completed in the first quarter of 2017.

Under terms, Ipsen will gain commercialization rights for ONIVYDE indications in the U.S., as well as the current licensing agreements with Shire for commercialization rights ex-U.S. and PharmaEngine for Taiwan. The transaction also includes Merrimack's commercial and manufacturing infrastructure, and generic doxorubicin HCl liposome injection.

Upon completing the Ipsen transaction and refocusing effort, the company will have about 80 employees; this represents a reduction of 80% from approximately 400 employees prior to implementing the restructuring in October 2016.

Merrimack also announced the completion of strategic pipeline review resulting in the identification of the three most promising clinical programs to focus its development efforts on going forward. The company believes focusing on MM-121, MM-141 and MM-310 programs is in the best interests of Merrimack, its stockholders and cancer patients worldwide.

Under terms, Merrimack will receive from Ipsen a $575 million in cash at closing; and up to $450 million in additional regulatory approval-based milestone payments.

Merrimack intends to use payment to invest $125 million to develop the Company's streamlined oncology pipeline, to extinguish the $175 million in outstanding Senior Secured Notes due in 2022, plus about $20 million of costs associated with the redemption.

The company also planned to return at least $200 million to the Company's stockholders through a special cash dividend. The Company will announce a record date and ex-dividend date in due course.

Merrimack will also return to the company's stockholders 100% of the amounts received of the up to $450 million in additional regulatory approval for ONIVYDE in the U.S.