France's Ipsen to buy some Merrimack assets for up to $1 billion

Markets Reuters

French drugmaker Ipsen SA said on Monday it would buy some assets of U.S. peer Merrimack Pharmaceuticals Inc , including its pancreatic cancer treatment Onivyde, for up to $1 billion.

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Ipsen will pay $575 million at the closing of the deal and up to $450 million more, contingent on some approvals for Onivyde in the United States.

The deal would give Merrimack the resources to fund the development of three new compounds targeting pancreatic, lung, and other types of cancers. It would boost Ipsen's portfolio, which has traditionally focused on endocrinology.

Ipsen will get exclusive commercialization rights for Onivyde in the United States, the current licensing agreements with Shire Plc for commercialization rights excluding the United States and with PharmaEngine Inc <4162.TWO> for Taiwan.

The deal also includes Merrimack's commercial and manufacturing assets, Ipsen said.

Merrimack plans to return at least $200 million to stockholders through a special cash dividend, which equates to about $1.54 per outstanding common share.

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The deal, to be funded by Ipsen's existing cash and lines of credit, would be dilutive to the drugmaker's earnings in 2017 but will add to it from 2018 both in operating margin and earnings per share, the company said.

MTS Health Partners LP and Dechert LLP advised Ipsen on the deal. BofA Merrill Lynch and Credit Suisse Securities (USA) LLC were advisers to Merrimack.

Reuters reported the deal on earlier on Sunday, citing people familiar with the matter.

(Reporting by Ismail Shakil in Bengaluru; Editing by Peter Cooney)