As its stock price plummeted early this year, what did Massachusetts biotech Epizyme do to try to stop the bleeding?
In a Tuesday filing with the Securities and Exchange Commission (SEC), Epizyme provided an intriguing blow-by-blow of how it tried to resolve its financial woes.
Starting in late January with the formation of a committee to explore its options, the report details the roller coaster ride the company took on its way to being sold late last month to Ipsen for $247 million.
Interspersed through the account are updates on Epizyme’s tumbling stock price. To open the year, the company’s shares traded at $2.68. On June 1, they bottomed out at $0.42 before rallying as the sale approached. The final price for the acquisition worked out to $1.45 a share, plus $1 each in potential milestones for Epizyme’s primary product, blood cancer drug Tazverik.
As recently as January 2020, Epizyme’s shares were valued at $26.72. They were still at $9.71 in June of last year.
Aside from selling the company, Epizyme considered other options including equity financing, restructuring, selling off selected assets and refinancing its loans, the filing shows.
Throughout the process, Ipsen was coming at Epizyme with offers. In January, the Paris-based firm offered to buy U.S. rights to Tazverik, but Epizyme ultimately decided that the financial terms of that deal wouldn’t benefit either company.
Later, Ipsen offered $310 million, plus $320 million in potential milestone payments for Tazverik and two pipeline drugs. But in April, Epizyme concluded that sales of the key assets would effectively be a sale of the company without direct payment to stockholders and would leave Epizyme having to address its liabilities. The company's rejection of that offer led to an immediate discussion about a full buyout of the company.
Drumming up enthusiasm for Epizyme was a challenge. Of the 31 potential equity investors who were approached, none showed interest. Of 17 “mid-size” oncology companies that Epizyme hit up in April, only one responded. A month later, Epizyme reached out to 18 “large global oncology companies,” with only two showing interest.
A potential “merger of equals” fell through in April when the other company executed a transaction with a third party. On consecutive days in May, two interested companies bowed out, citing a lack of confidence in Tazverik’s growth potential.
On and on it went, with Epizyme’s share price falling and Ipsen coming in with offers to buys the company—first at $1.10 a share, then nine days later at $1.25 per share. Six days later, Ipsen tweaked the milestone potential, then it hiked the share price up to $1.30.
With Epizyme's share price suddenly on the rebound, Ispen eventually got to $1.45 on June 23, and the deal was struck.
It was an anxious six months for Epizyme—but all too common in the current biotech landscape where once promising companies have quickly lost their appeal.
Three of the company’s executives walk away with golden parachutes that were revealed in the SEC filing. CEO Grant Bogle receives $3.41 million, while Epizyme's former and acting chief medical and development officer Shefali Agarwal, M.D., and chief scientific officer Jeffery Kutok, M.D., Ph.D., get $1.73 million and $1.48 million, respectively.