Ipsen strikes $1.3B Clementia buyout to boost rare disease unit
13 March 2019
Ipsen has struck a $1.3 billion (€1.1 billion) deal to buy Clementia Pharmaceuticals for its late-phase rare disease drug palovarotene. The transaction will see Ipsen hand over $1 billion upfront to acquire the retinoic acid receptor gamma agonist ahead of a filing for FDA approval.
Canada’s Clementia picked up the worldwide rights to palovarotene from Roche in 2013. Roche took the drug as far as phase 2 in lung diseases but pulled the plug after it failed to beat placebo in patients with emphysema. That created an opportunity for Clementia, which bought palovarotene for a knockdown price on the back of external studies into the effect of retinoic acid receptor gamma agonists on bone formation.
Having raised a $60 million mezzanine round and pulled off a $137 million IPO, Clementia generated phase 2 data on the use of palovarotene in fibrodysplasia ossificans progressiva (FOP) that it thinks will support a filing for FDA approval later this year. Clementia was gearing up to commercialize the drug in the treatment of episodic flare-ups of the rare disease itself but has opted to sell up instead.
Ipsen, which has been on the hunt for growth-fueling deals, is to pay $1 billion upfront and hand over a further $263 million if FDA accepts a filing for approval of palovarotene in a second indication, multiple osteochondromas (MO). Like FOP, MO is a rare bone disease associated with excess bone morphogenetic protein signaling.
Palovarotene could come to market in the treatment of FOP flare-ups around the middle of next year, with approvals in other indications to follow. Clementia is running a phase 3 trial of a chronic dosing regimen for FOP and a midphase study in MO.
Optimism about the hopes of palovarotene succeeding in phase 3 took a hit in May when a midphase study cast doubt on the drug’s ability to reduce heterotopic ossification to the extent demanded by FDA. Yet, Clementia has weathered that storm and concerns about its IP—the composition-of-matter patents acquired from Roche expire in 2021—to emerge with a takeover bid that is above its highest ever share price.
Ipsen needs the gamble to pay off. Unless Ipsen is willing to add significantly to the debt it is taking on to buy Clementia, the takeover will account for most of its M&A firepower. That means the hunt for first-in-class, mid to late-phase oncology, neuroscience and rare disease assets to fuel growth may slow, leaving Ipsen reliant on palovarotene for inorganic growth.
Shares in Ipsen fell 3% in early trading in Paris following news of the deal, although some observers see the takeover as a good move by the company.
“The $1.0 billion upfront acquisition of Clementia should be well received, in our view, as a deal has been long-awaited to boost visibility on the next phase of growth,” analysts at Jefferies wrote in a note to investors.
Published by FierceBiotech on February 25, 2019
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