- French drugmaker Ipsen will buy Massachusetts-based biotech Epizyme, announcing on Monday that it will spend $247 million to acquire the cancer drug developer in a deal that could be worth another $170 million if certain goals are met.
- In 2020, Epizyme won Food and Drug Administration accelerated approval of Tazverik, a drug for a rare soft-tissue cancer that’s since been cleared in a type of blood cancer. The company earned only $31 million in sales last year, and recorded a net loss of $250 million.
- Per deal terms, Ipsen will pay $1.45 per share and potentially up to another $1 per share through what’s known as a contingent value right. The upfront payment represents a 53% premium to the closing price of Epizyme stock Friday, although it is far below the nearly $27 price that shares hit just before Tazverik won approval.
Epizyme met a goal that few biotechs achieve when it managed to secure approval of Tazverik. But converting that clinical and regulatory success into commercial performance has proved challenging.
The first cancer type in which Tazverik won approval, epithelioid sarcoma, is diagnosed in only a few hundred U.S. patients per year. The second, follicular lymphoma, has several competing treatments available, like Gilead’s Zydelig as well as similarly acting drugs.
Epizyme did manage to attract overseas partners, with Eisai holding rights in Japan as part of an earlier development deal, and Hutchmed in China paying $25 million upfront for rights in 2021. To raise money, Epizyme sold a 21% stake in the company to Royalty Pharma, a biotech financing company, for $100 million in 2019.
The biotech still was forced to cut costs, laying off 11% of its workforce in August 2021 and then another 12% of the remaining employees in March 2022.
As part of Ipsen, Tazverik will join a cancer drug business that includes primarily chemotherapy and hormone therapies. Only one, Somatuline, is a blockbuster, with 2021 sales of $1.2 billion euros, or $1.3 billion.
Ipsen said the deal will “will immediately provide incremental sales” and will help it build its U.S. sales and marketing organization. However, Epizyme’s ongoing research and development expenses, which amounted to $131 million in 2021, will reduce Ipsen’s profits “until the end of 2024.”
Epizyme has two major Phase 3 trials underway for Tazverik to confirm its use in both sarcoma and lymphoma. If successful, those trials would allow the company to convert accelerated FDA clearances into full approvals.
Ipsen shares fell 3% Monday on the Euronext stock exchange.
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