Ipsen to buy cancer drugs from Merrimack, including Onivyde

Ipsen announced a definitive agreement to acquire global oncology assets from Merrimack Pharmaceuticals, including Onivyde (irinotecan liposome injection), under a deal potentially worth more than $1 billion. Under the agreed terms, Ipsen will pay $575 million in cash at closing plus up to $450 million linked to the approval of additional indications for Onivyde in the US, where it is currently authorised for the treatment of certain patients with metastatic adenocarcinoma of the pancreas.

Ipsen CEO David Meek said the transaction, which is expected to close by the end of the first quarter, "represents a compelling strategic opportunity to further strengthen Ipsen's oncology portfolio while leveraging our US infrastructure and creating meaningful potential incremental growth and profitability." The deal also includes Merrimack's commercial and manufacturing infrastructure, as well as a generic version of Johnson & Johnson's Doxil (doxorubicin liposome injection).

Under the agreement, Ipsen will gain exclusive commercialisation rights for the current and potential future Onivyde indications in the US, as well as the current licensing agreements with Shire for ex-US marketing rights and PharmaEngine for Taiwan, China. Ipsen suggested that Onivyde, which generated sales of $37.3 million in the first nine months of 2016, has "significant revenue growth projections, based on solid clinical data and potential approvals in additional indications already in clinical development." The company indicated that current studies of the drug include a Phase II trial in first-line previously untreated metastatic pancreatic cancer, a Phase II/III study in relapsed small-cell lung cancer and a Phase I pilot trial in breast cancer.

The decision by Merrimack to sell Onyvide comes after the company unveiled in October last year a major restructuring involving a workforce reduction of 22 percent and a cut in spending of more than $200 million over the next two years. As part of the overhaul, CEO Robert Mulroy resigned from his post, with chairman Gary Crocker appointed to serve as interim chief executive.

Merrimack indicated that following the transaction with Ipsen, it will have approximately 80 employees, representing a reduction of 80 percent prior to implementing the restructuring plan. Crocker remarked "the agreement to sell Onivyde and generic Doxil, and our decision to focus on MM-121, MM-141 and MM-310, conclude a comprehensive process that our board conducted to maximise value for stockholders."

Last month, Merrimack reported that following a recent independent Data and Safety Monitoring Board recommendation and subsequent futility analysis, it has decided to stop a Phase II study of MM-302 in certain patients with HER2-positive metastatic breast cancer.