Ipsen Commercial Chief: Buying Clementia Will Bolster Rare Disease Franchise
Executive Summary
Buying Canada-based Clementia is consistent with Ipsen’s strategy to acquire top assets in mid to late stages of development for specialty oncology, neuroscience or rare disease indications, chief commercial officer tells Scrip.
Ipsen is bolstering its portfolio in ultra rare diseases by buying Clementia Pharmaceuticals Inc. of Canada and in so doing reinforcing its strategy of buying first-in-class or best-in-class assets in mid-to-late stage development that offer promising commercial prospects, according to the French pharma's chief commercial officer.
Ipsen is paying $1.04bn up front plus an additional deferred amount of $263m to buy Montreal-based Clementia Pharmaceuticals.
"Buying Clementia is important for Ipsen from a strategy perspective on three levels: it really accelerates our global rare disease organization, particularly in the area of ultra-orphan diseases. It increases the value of our pipeline with innovative, either first-in-class or best-in-class assets and we believe this deal will tackle both categories. It also gives us the opportunity for a near-term launch of a largely derisked asset with limited competition.” - Harout Semerjian, Ipsen
The agreed transaction gives Ipsen the late-stage asset palovarotene, a retinoic acid receptor gamma selective agonist, for the treatment of orphan diseases, including fibrodysplasia ossificans progressiva (FOP) and multiple osteochondromas (MO).
Chief commercial officer Harout Semerjian said the acquisition was the largest in Ipsen's 90-year history and offered the French group a very promising asset in the near future, as palovarotene's first commercial launch looks set to occur in mid-2020.
“We want to be a leading biotech focused on innovation and specialty care, especially in oncology, neuroscience or rare diseases," he told Scrip in an interview.
"In oncology, our credentials are very strong. We’ve been in the neuroscience space for thirty years with our neurotoxins, while in the rare diseases area we’ve had good presence in certain areas, but this deal we will truly accelerate formation of our rare disease portfolio and do it fast, because the likely launch of palovarotene is imminent,” Semerjian said.
Palovarotene’s US NDA submission for flare-up treatment of FOP is expected in the second half of this year, for a potential launch in mid-2020.
Palovarotene is also in a Phase III registrational trial evaluating a chronic dosing regimen for FOP, a Phase II trial for MO, and a Phase I trial for dry eye disease.
Palovarotene has received orphan drug designation for FOP and MO from the FDA and the EMA and fast track, breakthrough therapy and rare pediatric disease designations for FOP from the FDA.
“Buying Clementia is important for Ipsen from a strategy perspective on three levels: it really accelerates our global rare disease organization, particularly in the area of ultra-orphan diseases. It increases the value of our pipeline with innovative, either first-in-class or best-in-class assets and we believe this deal will tackle both categories. It also gives us the opportunity for a near-term launch of a largely derisked asset with limited competition,” Semerjian said.
Deal Details
Ipsen will buy all of Clementia’s shares for $25.00 each in cash up front and offer a contingent value right (CVR) purchase of $6.00 per share, giving a total transaction value of up to $1.3bn. The initial cash offer of $25 per share marked a premium of around 70% to Clementia's recent average share price.
Ipsen said the deal would be fully financed by existing cash and lines of credit.
Analysts widely welcomed the move.
Bryan, Garnier & Co in a note to investors said it was a “potentially transformative acquisition in ultra-rare diseases” for Ipsen.
Société Générale said it offered “a good strategic fit and positive long-term impact.”
But analysts at Credit Suisse voiced caution because of the mixed clinical data for palovarotene during development so far, and the apparent limited patent protection for the compound.
"At face value, the compound has missed two separate primary endpoints in its Phase II studies, which always raises concerns,” Credit Suisse said, adding that “the composition of matter patent for palovarotene appears to expire in 2021 with protection relying on orphan drug exclusivity.”
Clementia licensed palovarotene from Roche, which discontinued development following Phase II studies in chronic obstructive pulmonary disease (COPD).