French drugmaker Ipsen SA has annouced that will buy some of Merrimack Pharmaceuticals Inc. oncology assets, including the pancreatic cancer drug Onivyde and its generic version of Doxil , in a deal worth up to $1.025 billion.
Merrimack will receive $575 million when the deal closes and also could receive up to $450 million in additional milestone payments.
The transaction, which is expected to be completed in the first quarter of 2017, is subject to certain customary closing conditions, including Merrimack stockholder approval and certain governmental regulatory clearances.
Merrimack will now focus on three clinical assets targeting pancreatic, lung, and other types of cancers: MM-121, MM-141 and MM-310. Of the three, MM-121 is the most advanced and is in Phase 2 testing in non-small cell lung cancer (read more on this new focus on developing innovative and promising anti-cancer agents )
“The agreement to sell Onivyde and generic Doxil, and our decision to focus on MM-121, MM-141 and MM-310, conclude a comprehensive process that our Board conducted to maximize value for stockholders and confirms the strength of our technology and the power of systems biology,” said Gary Crocker, Merrimack’s chairman and interim CEO.
Merrimack said it plans to return at least $200 million to stockholders through a special cash dividend of about $1.54 per common share. It will also return all of the expected $450 million payment to shareholders.
The company’s stock hit a fresh three-year low Friday. It closed trading at $3.60, down 5.26%.
Upon completion of the deal, Merrimack would have cut about the 80% of its workforce, keeping 80 emplyees only.
In October , Merrimack’s then-CEO Robert Mulroy resigned but still is not known his potential successor and the Chairman of the Board, Gary Crocker, remains interim CEO.