Ipsen To Buy Merrimack's Oncology Assets, Including Onivyde

(RTTNews) - French drug maker Ipsen SA (IPSEY) said Sunday it has agreed to acquire the global oncology assets of Merrimack Pharmaceuticals Inc. (MACK), including the pancreatic cancer drug Onivyde, in a deal worth up to $1.025 billion.

Onivyde, or irinotecan liposome injection, is marketed for the treatment of patients with metastatic adenocarcinoma of the pancreas. Onivyde is a clinically differentiated and FDA-approved product for patients with high unmet medical needs.

Under the terms of the deal, Ipsen will gain exclusive commercialization rights for the current and potential future Onivyde indications in the U.S., as well as the current licensing agreements with Shire for commercialization rights outside the U.S. and with PharmaEngine for Taiwan.

The transaction also includes Merrimack's commercial and manufacturing infrastructure as well as generic doxorubicin HCl liposome injection, marketed as Doxil, in the U.S.

Ipsen will pay $575 million cash at closing of the transaction, plus up to $450 million in future milestones upon the approval of potential additional indications for Onivyde in the U.S.

Merrimack will retain up to $33 million in net milestone payments pursuant to its exclusive licensing agreement with Shire.

The transaction is expected to close by the end of the first quarter of 2017.

Ipsen noted that the deal should be dilutive in 2017 and accretive from 2018 onwards both in its operating margin and earnings per share.

In a separate statement, Merrimack said it has completed its previously announced strategic pipeline review and will focus on the three most promising clinical programs of MM-121, MM-141 and MM-310.

Revealing further details of the restructuring plan announced in October 2016, Merrimack said it will eliminate about 80 percent of its workforce, reducing headcount from about 400 to about 80.

In addition, the company will return $200 million to its stockholders through a special cash dividend.

MACK closed Friday's trading at $3.60. In Monday's pre-market activity, the shares are surging $1.40 or 38.89 percent to $5.00.

In Paris, Ipsen's shares are down 0.38 euros or 0.53 percent to 71.35 euros.