Ipsen gets U.S. manufacturing with $1.25B deal for Merrimack Pharmaceuticals

France's Ipsen gets a sterile manufacturing operation in Cambridge, Massachusetts with its $1.25B deal for Merrimack.

France’s Ipsen will get a manufacturing foothold in the U.S. with a new deal to expand its oncology reach in the country.

The drugmaker Monday said it would pay up to $1.25 billion to buy Cambridge, Massachusetts-based Merrimack Pharmaceuticals, primarily to get control of U.S. rights to pancreatic cancer drug Onivyde.  Ipsen will also add Merrimack’s generic version of ovarian cancer drug Doxil.  

As part of the deal Ipsen gets Merrimack’s sterile manufacturing site in Cambridge, which it said is near Ipsen’s operations in the area. It will take only about 100 employees in the deal, about half of them tied to the manufacturing operation. The French biotech has half a dozen manufacturing facilities in Europe and the U.K.

“Ipsen plans to manufacture Onivyde in the Cambridge facility and will scale up as demand requires,” a spokesman said in an email Monday.

Ipsen, which has been building its U.S. presence for several years, will pay Merrimack $575 million in cash when the deal closes, which is expected by the end of the quarter, and up to $450 million in additional milestone payments.

For that, Ipsen gets the U.S. rights to current and future uses of Onivyde, as well as the licensing agreement with Shire for rights to the drug outside the U.S. In the announcement, CEO David Meek said that the acquisition of Onivyde would strengthen Ipsen’s oncology portfolio and allow the company to build on its U.S. infrastructure. The company has about 130 U.S. employees now.

“We have a growing U.S. oncology presence,” Meek said in a call Monday with analysts.