Ipsen is paying Merrimack Pharmaceuticals $575 million in cash to acquire Merrimack's marketed anticancer drug Onivyde® (irinotecan liposome injection) and global oncology assets, including a generic doxorubicin HCl liposome injection, and commercial and manufacturing infrastructure. Merrimack could receive up to another $450 million in regulatory milestones if Onivyde is approved for additional indications in the U.S. The transaction is expected to close during the first quarter of 2017, subject to customary conditions and Merrimack stockholder approval. 

Onivyde was approved in the U.S. in October 2015, and in the EU during October 2016, for the treatment of metastatic adenocarcinoma of the pancreas after disease progression with gemcitabine-based therapy, in combination with 5-fluorouracil and leucovorin. Under terms of the proposed deal with Merrimack, Ipsen will market Onivyde in the U.S. and retains exclusive U.S. commercialization rights to potential future indications for the drug. The French firm will also take over the existing licensing agreement with Shire, through which the latter has ex-U.S. commercialization rights to Onivyde and with PharmaEngine for commercialization rights in Taiwan. Merrimack could receive net milestone payments of up to $33 million from the Shire deal. The potential $450 million in additional regulatory milestones from Ipsen for further development of Onivyde are composed of $225 million if the drug achieves FDA approval in first-line pancreatic cancer, $150 million for FDA approval in small cell lung cancer, and $75 million for FDA approval in any third indication.

Ipsen says the transaction offers the potential to achieve significant synergies through integration of the Onivyde franchise with its existing commercial infrastructure in the U.S. for the cancer drug Somatuline®, which achieved global sales of €255 million ($268 million) in the first half of 2016. “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,” commented David Meek, Ipsen's CEO.  The firm will take over the clinical development program for Onivyde, which includes a Phase II trial in first-line previously untreated metastatic pancreatic cancer, a Phase II/III trial in relapsed small-cell lung cancer, and a Phase I pilot trial in breast cancer.

Teva retains worldwide commercial rights to the generic doxorubicin HCl liposome injection product, which is currently under FDA review for the potential treatment of ovarian cancer, multiple myeloma, and Kaposi’s sarcoma. Ipsen will be eligible to receive milestones and shared profits on potential future sales. Merrimack reported $14.5 million product revenues from the commercial sale of Onivyde during the third quarter of 2016, up $1.6 million compared with Q2 2016. License and collaboration revenues were $12.4 million during Q3 2016.

The firm says the deal with Ipsen will provide the financial resources needed to focus on three priority clinical-stage antibody candidates: MM-121 (seribantumab), MM-141 (istirabumab), and MM-310, which it has identified through a strategic review process. It plans to plow $125 million into the pared-down pipeline, which will allow it to remain self-funding through to second half of 2019.

MM-121 is a fully human HER3 receptor monoclonal antibody (mAb) that is undergoing a Phase II evaluation as combination therapy with docetaxel or pemetrexed, in non-small-cell lung cancer. MM-141 is a bispecific tetravalent antibody that targets the phosphatidylinositol 3-kinase/AKT/mechanistic target of rapamycin (P13K/AKT/mTOR) pathway. The drug is in Phase II development in combination with nab-paclitaxel and gemcitabine as first-line therapy in metastatic pancreatic cancer patients who exhibit Merrimack’s insulin-like growth factor-1 (IGF-1) biomarker profile. MM-310 is an antibody-directed nanotherapeutic (ADN), which contains a prodrug of docetaxel and targets the EphA2 receptor. A Phase I study with MM-310 is expected to start during Q1 2017.

Merrimack confirmed that it will now discontinue the Phase I study with its three-mAb combination therapy MM-151 and will instead look to partner the program or seek external financing. Continued investment in MM-131, MM-302, and other preclinical programs will also be shelved until partners or other funding opportunities can be identified. A Phase II study with MM-302 in HER2-positive metastatic breast cancer was halted in December 2016.

Merrimack in addition plans to use funds from the Ipsen deal to extinguish $175 million in outstanding Senior Secured Notes and return $200 million to its shareholders through a special cash dividend. Since October 2016, the firm’s headcount will have been cut by 80%, to 80 employees.  At the start of October Merrimack announced cutting 22% of its workforce, and the resignation of its then CEO, Robert Mulroy.

Commenting on the deal with Ipsen, Merrimack board chairman and interim president and CEO Gary L. Crocker, stated, “with this transansformative step, Merrimack is moving forward as a more focused R&D company targeting three clinical stage assets with outstanding value potential. This strategic transaction also enhances stockholder value by providing sufficient, nondilutive capital to fund our new, strongly focused clinical objectives for MM-121, MM-141, and MM-310.” Dr. Yasir Al-Wakeel, CFO and head of corporate development of Merrimack, added, “through the transaction announced today, we are streamlining our operating structure to significantly reduce operating expense, while bolstering our capital structure through an infusion of cash and the extinguishment of the Senior Secured Note Going forward, we will have a more focused capital allocation program dedicated to advancing MM-121, MM-141, and MM-310. With the multiyear cash runway provided by this transaction, Merrimack will have ample resources to fund its development programs into the second half of 2019, by which time we expect to have additional data regarding the viability of MM-121, MM-141, and MM-310.”


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