Ipsen has announced that it will be buying the oncology sector of Merrimack Pharmaceuticals, including Onivyde, the latter’s pancreatic cancer treatment.
Merrimack Pharmaceuticals is a Cambridge, Massachusetts-based corporation. It is specialized in the development, manufacturing and marketing of cancer treatments.
Ipsen is a pharmaceutical company. It was established in 1929 and is based in Paris, France. The French company is specialized in the development and marketing of medications targeting various areas. These include oncology, endocrinology, and neuromuscular disorder treatments.
The French manufacturer announced that it will be buying a part of Merrimack. More exactly, its Oncology sector. This will also include Onivyde, a pancreatic cancer treatment.
A sales deal is expected to come to a base value of $575 million. An additional $450 million may be invested. This latter will depend on a number of factors.
These are additional regulatory approvals for the mentioned Onivyde. Various other, smaller milestone payments may be contained in the additional sum.
Merrimack released a series of details about the deal. As such, it stated that it will be investing in its pipeline. The area could see about $125 million out of the sales value.
A further $175 million will be paid off in company loans. Reports state that “at least” $200 million will be returned to the shareholders. This will be done through a special dividend. Its value will come to about $1.54 per share.
The additional $450 million sum will reportedly have the same destination. Merrimack reported that it will also be paying it back to shareholders.
As such, the per share value could rise with an additional $3.46. A potential dividend might reach a $5 per share sum. It would be higher than the company’s Friday share value.
The Ipsen deal could come to account to about $1.05 billion. Its final value would include the benchmark payments. Merrimack investors have reportedly hailed the deal. The Ipsen agreement will reportedly cut back on costs. It will also be raising company money.
As such, the drug manufacturer could be able to also fund new projects. These could target Merrimack’s three cancer compounds. The latter have been reported to show promise. Merrimack will be focusing on the MM-310, MM-141, and MM-121 clinical objectives.
Following the agreement, the company shares rose by 43 percent. The increase was registered during pre-market trading hours.
Ipsen also went to offer sale details. The French developer will be looking to expand its cancer treatments range. As such, it will also gain control over Onivyde.
This is one of the latest and few available treatments for pancreatic cancer. It recently received the U.S. Food and Drug Administration’s approval.
David Meek, the Ipsen CEO, released a statement. According to him, this aforementioned treatment could represent a strategic opportunity. It could help strengthen the company’s oncology variants.
It might also help leverage Ipsen’s United States infrastructure. The acquisition could also potentially create a meaningful incremental profitability and growth.
The current sales deal will offer Ipsen some advantages. As such, the company will receive exclusive commercialization rights.
This will target the sale of current or future potential Onivyde indications. As these will target the United States, Ipsen will also receive rights in other countries.
Merrimack’s manufacturing and commercial infrastructure will also be included in the deal. As will its Doxil product. This latter is an HCI liposome injection of a generic doxorubicin.
Ipsen officials stated that deal might affect its 2017 earnings. However, it should also boost share and earnings values starting with 2018.
The company’s shares fell slightly on Monday. They marked a less than 1 percent fall when compared to Friday. On Monday morning, the company had a $74.93 per share value.
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