Ipsen S.A. entered into a definitive asset purchase and sale agreement to acquire global oncology assets from Merrimack Pharmaceuticals, Inc. for $1.1 billion.
January 08, 2017
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Ipsen S.A. (ENXTPA:IPN) entered into a definitive asset purchase and sale agreement to acquire global oncology assets from Merrimack Pharmaceuticals, Inc. (NasdaqGM:MACK) for $1.1 billion on January 7, 2017. Under the terms of the agreement, Ipsen will pay $575 million cash at closing. Additional milestone payments of $225 million will be done upon the regulatory approval by the FDA of ONIVYDE for the treatment of metastatic adenocarcinoma of the pancreas as first-line treatment, $150 million will be paid upon the regulatory approval by the FDA of ONIVYDE for the treatment of small cell lung cancer after failure of first-line chemotherapy and final $75 million will be paid upon the regulatory approval by the FDA of ONIVYDE for an additional indication unrelated to those described above. The transaction will be fully financed by Ipsen's existing cash and lines of credit. In case the transaction is terminated, Merrimack will pay $25 million as termination fees.
The transaction is subject to customary closing conditions, including governmental regulatory clearances, and approval by Merrimack shareholders. Deal is also subject to HSR act approval and third party approvals. The deal has been unanimously approved by the Merrimack Board of Directors. Deal has been approved by Board of directors of Ipsen. The transaction is expected to close by the end of the first quarter of 2017. Merrimack intends to use the $575 million upfront payment to invest $125 million to develop the Company's streamlined oncology pipeline, such that Merrimack will be able to fund itself into the second half of 2019, to extinguish the $175 million in outstanding Senior Secured Notes due in 2022, plus approximately $20 million of costs associated with the redemption and to return $140 million to the Company's stockholders through a special cash dividend. The deal is expected to be dilutive in 2017 and accretive from 2018 onwards both in operating margin and EPS. As on March 30, 2017, the transaction was approved by the shareholders of Merrimack Pharmaceuticals, Inc. The transaction is expected to close in the coming days.
MTS Health Partners, LP acted as financial advisor and Alain Decombe, Matt Rothman, Gino Insana, Stephanie Haas and Tony Chan of Dechert LLP acted as legal advisor for Ipsen. Philip Richter and Elizabeth Kalenik of Fried Frank advised Merrill Lynch, Pierce, Fenner & Smith Incorporated and Credit Suisse Securities (USA) LLC, who acted as financial advisors and Katherine Ashley, Graham Robinson, Matthew Zisk, Erica Schohn, Moshe Spinowitz, Chade Severin and Marissa Leonce of Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor for Merrimack.
Merrimack Pharmaceuticals, Inc. is a biopharmaceutical company. The Company does not have any ongoing research or development activities and is seeking potential acquirers for its remaining preclinical and clinical assets. It is entitled to receive payments related to its sale of ONIVYDE to Ipsen S.A. and also its contingent payments related to its sale of MM-121 and MM-111 to Elevation Oncology, Inc. These payments are payable by Ipsen upon approval by the United States Food and Drug Administration (FDA) of Onivyde for certain additional clinical indications. ONIVYDE is approved by FDA to market as a first-line treatment of metastatic adenocarcinoma on the pancreas. It is also entitled to receive payments related to its sale of anti-HER3 programs to Elevation Oncology, Inc. The Companyâs wholly owned subsidiaries include Merrimack Pharmaceuticals UK Limited and Merrimack Securities Corporation.
Ipsen S.A. entered into a definitive asset purchase and sale agreement to acquire global oncology assets from Merrimack Pharmaceuticals, Inc. for $1.1 billion.
MERRIMACK PHARMACEUTICALS, INC. 
