French drugmaker Ipsen will pay $575m to buy Merrimack Pharma's oncology business, headed by second-line pancreatic cancer therapy Onivyde.
The deal includes Onivyde (liposomal irinotecan) and Merrimack's generic version of Doxil (liposomal doxorubicin), as well as the manufacturing and commercial operations supporting the two products. Merrimck also stands to receive up to $450m in additional payments if Onivyde is approved for follow-up indications, including first-line pancreatic cancer therapy.
Cambridge, Massachusetts-based Merrimack announced it planned to restructure its business last October following the resignation of chief executive Robert Mulroy, which came a year after it bagged approval for Onivyde in the US and after sales growth for the new drug started to stall. At the time, analysts suggested that either the second-line market was smaller than anticipated or the company's commercial efforts were not effective enough.
For Ipsen, the deal continues its drive to expand its oncology franchise, currently headed by hormonal therapy Somatuline for neuroendocrine tumours and Cabometyx (cabozantinib) for advanced renal cell carcinoma.
The firm is also in the midst of a revamp of its business and has said expansion into emerging markets is a key strategic priority, particularly as sales in France have been impacted by government moves to drive generic drug use.
Ipsen CEO David Meek said the deal with Merrimack is "a compelling strategic opportunity to further strengthen Ipsen's oncology portfolio while leveraging our US infrastructure and creating meaningful potential incremental growth and profitability".
"For the tens of thousands of patients living with pancreatic cancer in the US 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," he added.
Mulroy's departure from Merrimack prompted a 22% reduction in workforce, and the new deal with Ipsen will see its workforce slashed even further from around 400 to 80. The slimmed down company will now concentrate on developing three pipeline drugs, headed by anti-ErbB3 antibody seribantumab (MM-121) for non-small cell lung cancer (NSCLC).
The other two drugs are istiratumab (MM-141), double-headed antibody targeting ErbB3 and IGF1R in trials for pancreatic cancer, and MM-310, an antibody directed nano-therapeutic targeting the EphA2 receptor which is thought to be present in 50-100% of major tumour types including prostate, ovarian, bladder, gastric and lung cancers.