Company will give $10 million up front for two candidates and the rest at closing.
Merck & Co. is offering $130 million for Insmed’s pipeline of follow-on biologic (FOB) candidates and its commercial manufacturing facilities located in Boulder, CO. In December, Merck expressed interest in creating a franchise based on FOBs.
The Boulder facilities comprise 50,000 sq. ft. of biologics process development analytical laboratory and manufacturing plants.
The company will initial pay $10 million for the two lead FOBs and the balance upon closing of the transaction. Merck does not have any further milestone or royalty obligations. Insmed says that these initial payments will allow it to maintain its normal business operations throughout the closing period without the need for dilutive financing.
The up-front payment will cover Phase III INS-19 and Phase I INS-20. INS-19, a recombinant granulocyte-colony stimulating factor (G-CSF), will be evaluated for its ability to prevent infections in patients with cancer receiving chemotherapy. INS-20 is a pegylated recombinant G-CSF designed to allow for less frequent dosing.
Insmed’s pipeline also includes IN-21, which is an interferon, and INS-22, which is a glycoprotein that stimulates the development and production of red blood cells and may be used in diseases like anemia.
Insmed will now focus on Iplex, its protein therapeutic platform. Iplex is being developed in a Phase II study of myotonic muscular dystrophy as well as in ALS. Early-stage research programs with Iplex includes retinopathy of prematurity.
As of December 31, 2008, Insmed had $2.4 million in cash on hand with an ongoing net cash burn of approximately $1.2 million per month. At closing and after fees, taxes, and other costs related to this transaction with Merck, Insmed expects net proceeds of approximately $123 million.
To comment on this story, go to BLOGbiotech.