(Update: analyst comments)
PARIS (Agefi-Dow Jones)–The pharmaceutical laboratory Ipsen announced on Monday that it was preparing to launch a friendly takeover bid (OPA) targeting 100% of the capital of the American biopharmaceutical company Epizyme, specialized in oncology, for an amount of 247 million dollars, or 234 million euros. The transaction provides for an additional price of up to $170 million.
The Ipsen share fell 3.5% to 84.80 euros, while these announcements left some analysts perplexed. Ipsen isn’t very familiar with the world of liquid tumors in which Epizyme operates, but the lab’s market power could allow biotech sales to increase, comments Bryan, Garnier & Co.
According to the pharmaceutical company, the acquisition of Epizyme should have a “limited” dilutive effect on the operating result of Ipsen’s activities in 2022. This dilutive effect on the operating result of activities will be “moderate” until the end of 2024, Ipsen said. JPMorgan calculates that the acquisition of Epizyme will have a negative effect of around 4% to 10% on the operating result of Ipsen’s activities between 2022 and 2024, before having a positive effect estimated between 3% and 8% over the next two years.
By acquiring Epizyme, Ipsen intends to strengthen its commercial infrastructure in the United States. The planned operation is in line with the strategy of the French laboratory aimed at building a portfolio of R&D products with high added value and sustainability through external innovation.
“The acquisition focuses on Epizyme’s lead drug, Tazverik (tazemetostat),” already approved by US authorities for the treatment of certain follicular lymphomas, Ipsen said in a statement.
A generous bonus
“Under the terms of the agreement and the merger plan, Ipsen, through a subsidiary, will launch a tender offer to acquire all of the outstanding shares of Epizyme at a price of 1 $.45 per share in cash at the closing of the transaction, for an initial total amount estimated at $247 million, to which is added a certificate of guaranteed value (CVG) per share”, indicated the French group.
“Each CVG will entitle its holder to deferred cash payments of $0.30 per CVG payable upon achieving the first milestone of $250 million in Tazverik’s aggregate net sales (excluding Japan and Greater China) during any period of four consecutive quarters, by December 31, 2026,” Ipsen said.
In addition, a payment of $0.70 per CVG is expected “upon confirmation of regulatory approval from U.S. authorities necessary for the marketing and sale of Tazverik in combination with R2 (rituximab and lenalidomide) in follicular lymphoma of second line by January 1, 2028,” added Ipsen.
The $1.45 per share price represents a 144% premium to Epizyme’s average closing price of $0.60 over the 30 trading sessions prior to the announcement, Ipsen also said.
No call to market
Members of Epizyme’s board of directors have unanimously approved the transaction and recommend that shareholders of the biotech company tender their shares into the tender offer. Royalty Pharma, which owns 20.5% of the outstanding Epizyme shares, has already entered into a support agreement with Ipsen under which it has agreed to tender its shares to the offer.
The completion of the acquisition of Epizyme is expected by the end of the third quarter and will be fully financed by available cash and existing credit lines from Ipsen, said the pharmaceutical company.
“If the tender offer is successful, Ipsen would acquire all of the shares not acquired under the offer through a second merger transaction at the same price,” added Ipsen. .
-Alice Doré and Dimitri Delmond, Agefi-Dow Jones; +33 (0)1 41 27 47 31; [email protected] ed: VLV – ECH
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June 27, 2022 05:06 ET (09:06 GMT)