Merrimack Pharmaceuticals ($MACK) announced selling some of its assets to Ipsen ($IPSEY). These assets include pancreatic cancer drug Onivyde. The deal is likely to be valued at nearly $1 billion. Ipsen will pay $575 million at the closing of the deal. It will also pay up to $450 million upon meeting certain milestones.
The deal will be mutually beneficial as Merrimack will be able to garner enough funds for developing three new compounds targeting pancreatic, lung, and other types of cancers. Ipsen will obtain U.S. commercialization rights for Onivyde and Merrimack's current licensing agreements with Shire Plc outside the United States. The companies expect the deal to be closed in the first quarter of 2017.
Merrimack stock lost nearly 47 percent of its value in the past 12 months. However, with new developments, the share prices are likely to pick up. The company had recently reported the discontinuation of a phase II trial on its breast cancer candidate, MM-302. The decision was taken after a recommendation and a futility analysis conducted by an independent Data and Safety Monitoring Board (DSMB).
The company now plans to focus its attention on the development of its three pipeline candidates which are MM-121, MM-141 and MM-310. The company plans to invest $125 million out of its Ipsen deal proceeds to develop its pipeline.