NEW YORK – Ipsen on Monday said it will acquire Epizyme to grow its oncology portfolio and bring the EZH2 inhibitor Tazverik (tazemetostat) under its aegis.
French pharmaceutical firm Ipsen's main interest is in Tazverik, which is approved in the US for advanced, unresectable epithelioid sarcoma patients; for relapsed or refractory follicular lymphoma patients without other options; and for refractory, previously treated follicular lymphoma patients with an EZH2 mutation. The combination of Tazverik plus Genentech/Biogen's Rituxan (rituximab) and lenalidomide is being studied in relapsed or refractory follicular lymphoma in a Phase III registrational trial, called SYMPHONY-1, that's slated to read out in 2026.
"Through this agreement, we will expand our assets in oncology," Ipsen CEO David Loew said in a statement. "Ipsen's capabilities and resources in oncology combined with Epizyme's will accelerate the growth of Tazverik to achieve its full potential in follicular lymphoma patients … in patients with both EZH2 mutation positive and wild-type follicular lymphoma."
Under the agreement terms and merger plan, Ipsen will initiate a tender offer through a subsidiary to acquire all outstanding shares of Cambridge, Massachusetts-based Epizyme at $1.45 per share in cash, for an aggregate offer of $247 millionplus one contingent value right (CVR) per share. The holder of each CVR will be entitled to deferred cash payments of $.30 per CVR if net sales of Tazverik reaches $250 million (excluding sales in Japan and China) during any of four consecutive quarters by Dec. 31, 2026. They will also be eligible for payments of $.70 per CVR if Tazverik-Rituxan-lenalidomide achieves US regulatory approval in second-line follicular lymphoma by Jan. 1, 2028.
Royalty Pharma, Epizyme's largest stockholder with around 20.5 percent of the firm's shares of outstanding common stock, has entered into a support agreement with Ipsen to tender its shares in the offer.
In addition to Tazverik, Ipsen will also acquire Epizyme's SETD2 inhibitor, EZM0414, which has fast track status from the US Food and Drug Administration and is currently undergoing Phase I/Ib evaluation as a treatment for relapsed or refractory multiple myeloma and diffuse large B-cell lymphoma. Ipsen will also garner Epizyme's preclinical programs involving epigenetic targets.
"We expect that this acquisition and Ipsen's commitment to invest in the oncology space will ensure our epigenetic pipeline continues to advance in a way we could not have done on our own to bring transformative cancer therapies to patients in need," Epizyme CEO and President Grant Bogle said in a statement.
The definitive merger agreement, slated to close in Q3, has already been unanimously approved by Ipsen and Epizyme's boards of directors. Ipsen is expecting the Epizyme acquisition to immediately provide incremental sales and said it will leverage Epizyme's US commercial infrastructure. However, given Epizyme's R&D expenses, Ipsen expects the transaction will have limited dilutive impact on its 2022 core operating margin and be moderately dilutive to its core operating income until the end of 2024.
Barclays is Ipsen's financial adviser, and Orrick Herrington & Sutcliffe is its legal counsel. Jefferies and MTS Health Partners are joint financial advisers to Epizyme, and WilmerHale is its legal counsel. MTS Securities provided an opinion to Epizyme's board about the fairness of Ipsen's offer to the holders of Epizyme's common stock.
According to Ipsen, its $1.45 per share cash offer represents a 144 percent premium to Epizyme's average closing price of $.60 per share for the month prior to the transaction's announcement. Upon completion of the tender offer, Ipsen said it intends to buy all shares not purchased in the deal through a second-step merger.