(AOF) – Ipsen has entered into a definitive merger agreement with Epizyme. The transaction has been unanimously approved by the respective boards of directors of Ipsen and Epizyme with expected closing by the end of the third quarter of 2022, subject to the satisfaction of all closing conditions. Epizyme is an integrated research-to-commercialization biopharmaceutical company committed to developing and delivering innovative treatments through novel epigenetic drugs for cancer patients.
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 Guaranteed Value Certificate (CVG) per share.
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 Chinac) during any period of four consecutive quarters, by December 31, 2026; and $0.70 per CVG payable 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 second-line follicular lymphoma by January 1, 2028.
The price of $1.45 per share represents a premium of approximately 144% over Epizyme’s average closing price of $0.60 over the 30 trading days prior to the announcement. The transaction will be entirely financed by Ipsen’s available cash and existing credit lines.
The acquisition focuses on Epizyme’s lead drug, Tazverik (tazemetostat), a first-in-class, non-chemotherapy EZH2 inhibitor, which obtained US regulatory approval under a fast-track process in 2020.
It is currently indicated in adults with relapsed or refractory follicular lymphoma (FL) whose tumor is positive for an EZH2 mutation, detected by an FDA-approved test, and who has received at least two prior systemic therapies. in adults with relapsed or refractory follicular lymphoma who have no satisfactory alternative treatment, as well as in adults and children aged 16 years and over with metastatic or locally advanced epithelioid sarcoma , not eligible for complete resection.
Tazverik is currently being studied in a registrational Phase III trial (SYMPHONY-1) in combination with rituximab and lelalidomide (R2) in patients with relapsed/refractory LF who have previously received at least one previous treatment. The first results of the randomized part of this Phase III study are expected in 2026.
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Key points
– 3rd French laboratory specialized in peptides and toxins, created in 1929;
– Turnover of €2.6 billion distributed between specialty medicine for 92% (neuroendocrine tumors with Somatuline, prostate cancer with Decapeptyl, kidney with Cabometyx, pancreas with 0nivyde and the rest in family health (Smecta, Forlax, Fortrans, etc.);
– International presence mainly in Europe (39% + 5% in the United Kingdom) and the United States (34%);
– New business model in 4 pillars: maximization of the specialty medicine portfolio and strategic review of the family health activity, reorganization of R&D targeted towards differentiated drugs in oncology, rare diseases and neurosciences, industrial efficiency and environmental commitment and social ;
– Capital controlled by the founding Beaufour families (66.54% of voting rights), Marc de Garidel chairing the 14-member board, David Loew being managing director;
– Solid balance sheet with net debt reduced to €525 million, i.e. a leverage effect of 0.6 and free cash flow of €647 million.
Challenges
– 2022 strategy capitalizing on specialty medicine and the integration of Clementia targeting €3.2 billion in revenue and over 32% operating margin;
– Innovation strategy supported by R&D equal to 15% of sales carried out in 3 centers (Oxford, Cambridge, Saclay), €1 billion of investment being devoted to botulinum and recombinant toxins, having resulted in the creation of a portfolio 21 products, including 3 registered (Dysport wrinkles de la gabelle, Dysport PUL Spasticity, Somatuline acromegale) and 6 in phase 3 (cabometyx in combination with 6 other products, decapeptyl 3 M, Onivyde 1L and 2L, Dysport solutions);
– Environmental strategy: reduction, between 2015 and 2020, of 5% in energy consumption and CO2 emissions and 30% in water consumption / integration since 2019 of ESG criteria in bond issues;
– Partnerships with the German company Schwabe, with Oncodesign, a specialist in pharmaco-imaging and the possession of biomarkers; and, in oncology, with the Canadian center IRICoR;
– Commercial benefits of the Cabometyx-rivumab protocol against renal cell carcinoma, approved by the European Commission;
– Decisions expected by the end of 2021: regulatory with Onivyde against lung cancer in the United States and Palovarotene against FOP, clinical for Cabometyx-atezolizumab against liver cancer;
– Waiting for acquisitions, with a strike force of €1.3 billion.
Oncology supports laboratory performance
Oncology generated $163 billion in revenue in 2021 (out of an industry total of $613 billion), up 11.9%, according to GlobalData. Its average annual growth has reached 15.4% over the past twenty years. This segment, which is increasingly competitive, is dominated by a few heavyweights such as MSD (Merck & Co. Inc), Roche, BMS
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immuno-oncology, the specialty that has been driving this market for ten years, supports research. GlobalData estimates that this segment could reach 180 billion in 2026. The major players are looking to strengthen themselves in this niche. Pfizer recently acquired Canadian biotech Trillium Therapeutics for $2.3 billion. Following this operation, the American group got hold of two promising molecules in the treatment of blood cancer.