Merrimack sells off drug for $1 billion and cuts workforce by 80%
pharmafile | January 9, 2017 | News story | Sales and Marketing | Onivyde, ipsen, merrimack
Ipsen has announced the agreement to acquire oncology assets from Merrimack Pharmaceuticals, most notably the pancreatic cancer drug Onivyde, in a deal worth a potential $1 billion. The deal is broken down into an upfront fee of $575 million, followed by a potential $450 million dependent on approvals for Onivyde in the US.
In addition to acquiring Onivyde, Ipsen revealed that they will also acquire Merrimack’s commercial and manufacturing infrastructure, as well as the generic drug doxorubicin HCI liposome injection. This part of the deal will see Merrimack’s workforce drop from a total of 400 employees to approximately 80.
On Merrimack’s part, the deal comes shortly after it had announced that it would stop a Phase 2 trial for a breast cancer after tests revealed that both treatment and control arms experienced shorter than expected median progression-free survival. In October the company had announced that its CEO had resigned as part of a wider restructuring program.
The money gained from the deal will see Merrimack pay off $195 million in debts, return $200 million to stockholders, as well as a further $450 million payment to shareholders dependent upon the terms of the deal. Merrimack has also stated that it would plough $125 million into the development of three experimental cancer drugs, with the deal being part of a plan to be a ”more focused research and development company”, according to chairman Gary Crocker,
David Meek, CEO of Ipsen, commented, “The acquisition of Onivyde represents a compelling strategic opportunity to further strengthen Ipsen’s oncology portfolio while leveraging our U.S. infrastructure and creating meaningful potential incremental growth and profitability. Pancreatic cancer is now the third leading cause of cancer-related deaths. It is an area that has had many drug failures and very few FDA approvals over the past two decades. For the tens of thousands of patients living with pancreatic cancer in the U.S. who have received prior treatment with gemcitabine, Onivyde represents an important, differentiated innovation, given its proven overall survival benefit in an area of high unmet medical need with few approved therapies.”
Ipsen will take over the clinical developments plans for the drug, which includes a Phase 2 trial for treatment of metastatic pancreatic cancer, a Phase 2/3 trial n relapsed small-cell lung cancer and a Phase 1 pilot trial in breast cancer. The deal is expected to conclude in the first quarter of 2017.
Ben Hargreaves
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