Merrimack Pharmaceuticals, headquartered in Cambridge, Massachusetts, has agreed to sell two oncology drugs to Ipsen, a pharmaceutical company headquartered in Paris, France, in a transaction valued at up to $1.025 billion. In addition, Merrimack is eligible to receive up to $33 million in net milestone payments pursuant to Merrimack’s exclusive licensing agreement with Shire.

Under the agreement, Merrimack will sell to Ipsen Onivyde (irinotecan liposome injection), including US commercialization rights and its licensing agreement with Shire. Merrimack will also sell its generic version of doxorubicin hydrochloride liposome injection, which Merrimack markets in the US as Doxil and for which it has a development, license, and supply agreement with Actavis (note: Actavis acquired Allergan for $70.5 billion in 2015 and subsequently took Allergan as its corporate name and later divested Allergan’s generics business to Teva Pharmaceuticals Industries in 2016 in a $40.5 billion deal).

Merrimack will receive $575 million in cash from Ipsen at closing and up to $450 million in additional regulatory approval-based milestone payments. Merrimack will also retain the rights to receive net milestone payments pursuant to Merrimack’s exclusive licensing agreement with Shire for the ex-US development and commercialization of Onivyde for up to $33 million. The $33 million of net milestone payments includes payments related to Onivyde of $18 million from the sale of the drug in two additional European countries, $5 million related to the sale of the drug in the first major non-European, non-Asian country, and $10 million for the first patient dosed in a planned small-cell-lung cancer trial.

The transaction is subject to certain customary closing conditions, including Merrimack stockholder approval and certain governmental regulatory clearances and is expected to be completed in the first quarter of 2017.

Merrimack has also reviewed it pipeline and will be focusing its effort on three clinical programs going forward: seribantumab, a monoclonal antibody in Phase II development for lung cancer; istiratumab, a bispecific tetravalent antibody under Phase II development for pancreatic cancer; and MM-310, an antibody soon to enter Phase I development for solid tumors.

Source: Merrimack Pharmaceuticals