Incyte may have shelled out to license Ariad Pharmaceuticals’ leukemia therapy Iclusig in Europe, but the drug isn’t the crux of the deal. Incyte, revving up its pipeline of drug candidates, also wants to get its hands on Ariad’s commercial infrastructure on the continent.
Incyte will pay $140 million up front for Ariad’s European operations, plus royalties on Iclusig sales that could hit 50% on the high end. It gets the right to sell the drug in Europe and a few other countries, and to potentially develop it for new uses.
And it nabs Ariad’s operations there, with 125 employees in regulatory and commercial jobs. Acquiring “a fully-integrated and established pan-European team” will give Incyte a leg up on its European expansion plans. The European hub will “optimize clinical development and maximize the potential of future European launches for Incyte’s portfolio of products in development,” the company said in a statement.
Meanwhile, Ariad gets some much-needed cash to put toward a couple of new cancer drugs, and it hives off European operations that don’t fit with its future plans. It also keeps an option to buy back the rights to Iclusig down the road--and, notably, if Ariad were bought out, the buyer keeps that option. Meanwhile, the company laid off 25% of its workforce in March, and the Incyte deal is its latest move resulting from a “strategic review” launched by newly minted CEO Paris Panayiotopoulos.
The Incyte deal is “one of the key outcomes of our ongoing strategic review,” Panayiotopoulos said in a statement. “We are delighted to have Incyte as a committed partner to continue Iclusig’s strong revenue growth in Europe.”
Incyte may be best known as Big Pharma’s favorite dance partner in immuno-oncology, with a who’s who of companies teamed up on combination drug studies, including Roche, Merck & Co., Bristol-Myers Squibb and AstraZeneca. Its only on-market drug is Jakafi, a myelofibrosis drug that it co-markets with Novartis. Between Incyte’s U.S. sales and Novartis’ royalties on ex-U.S. yield, the drug brought in $215 million for the first quarter.
Then there’s its rheumatoid arthritis drug baricitinib, developed with Eli Lilly, which recently beat AbbVie blockbuster Humira in an RA study; it’s now at the FDA awaiting approval. Lilly has worldwide marketing rights to that med, except in graft-versus-host-disease (GVHD).
This year, Incyte is expecting Iclusig to add $25 million to $30 million to its top line, with Jakafi bringing in up to $830 million.
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With Iclusig back to market, would Eli Lilly bid for Ariad? Would anyone?