Date: 2016-06-02
Type of information: Product acquisition
Compound: Iclusig™ (ponatinib) and Ariad's european operations
Company: Ariad Pharmaceuticals (USA - MA) Incyte (USA - DE)
Therapeutic area:
Type agreement: product acquisition licensing
Action mechanism:
Disease:
Details: * On May 9, 2016, Incyte and AriadPharmaceuticals announced the entry into a definitive agreement for Incyte to acquire Ariad's European operations. At the close of the transaction, the companies will also enter into a license agreement whereby Incyte will obtain an exclusive license to develop and commercialize Iclusig® (ponatinib) in Europe and other select countries. The planned acquisition of a fully-integrated and established pan-European team of 125 employees, including medical, sales and marketing personnel, will further Incyte's strategic plan and accelerate the establishment of its operations in Europe , helping to optimize clinical development and maximize the potential of future European launches for Incyte's portfolio of products in development.
The agreement to divest its European operations and out-license Iclusig in Europe will enable Ariad to focus its promotion of Iclusig® on the highly valuable U.S. market, while strengthening its financial position and maintaining important optionality through a potential buy-back provision for the Iclusig® license rights in the event of a change-in-control of Ariad.
Under the terms of the license agreement, Incyte will receive an exclusive license to develop and commercialize Iclusig® throughout Europe and in other select countries. Iclusig® is approved in Europe for the treatment of patients with chronic myeloid leukemia (CML) and Philadelphia -positive (Ph+) acute lymphoblastic leukemia (ALL) who are resistant to or intolerant of certain second generation BCR-ABL inhibitors and all patients who have the T315I mutation.Pursuant to the terms of a share purchase agreement, Incyte will acquire all shares of Ariad Pharmaceuticals ( Luxembourg ) S.a.r.l., the parent company of Ariad's European subsidiaries responsible for the commercialization of Iclusig in the licensed territory, for a payment to Ariad of $140 million that will be funded by Incyte through available cash on hand.
The transaction is expected to close on or about June 1, 2016 , subject to customary closing conditions, and is expected to reduce Ariad's 2017 annual operating expenses by approximately $65 million . The transaction is expected to be earnings accretive for Incyte in 2018.
Financial terms: Ariad and Incyte have also agreed to enter into a license agreement, pursuant to which Incyte will be granted an exclusive license to develop and commercialize Iclusig® in the European Union and 22 other countries, including Switzerland , Norway , Turkey , Israel and Russia . Ariad will be entitled to receive tiered royalties of between 32 and 50 percent on net sales of Iclusig® in the territory and up to $135 million in potential development and regulatory milestones for Iclusig in new oncology indications in the territory. ARIAD may also become eligible to receive additional milestones for non-oncology indications, if approved, in the territory. Incyte has also agreed to fund a portion of the ongoing clinical development of Iclusig in Ariad's OPTIC and OPTIC-2L clinical trials through cost-sharing payments of up to $7 million in each of 2016 and 2017.
The terms of the License Agreement also include an option for an acquirer of Ariad to buy back the rights to Iclusig by repaying the upfront and milestone payments, plus paying an additional amount based on Iclusig sales during the previous 12 months and royalties of 20 to 25 percent on sales for the remaining royalty term. The buy-back provision cannot be exercised before two years or after six years from the closing of this transaction, and includes a transition period of up to one year.
Latest news: * On June 2, 2016, Ariad Pharmaceuticals announced that it has completed the sale of its European operations to Incyte Corporation and entered into the previously announced license agreement for Incyte to exclusively license Iclusig® (ponatinib) in Europe and other select countries. Ariad transferred all rights to its EU operations to Incyte , which has acquired all shares of Ariad Pharmaceuticals ( Luxembourg ) S.a.r.l., the parent company of Ariad's European subsidiaries responsible for the commercialization of Iclusig in the licensed territory, for a payment to Ariad at the closing of approximately $140 million (subject to customary post-closing adjustments). In addition, Incyte has now been granted an exclusive license to develop and commercialize Iclusig in the European Union and 22 other countries, including Switzerland , Norway , Turkey , Israel and Russia . In connection with the closing of the Incyte transaction, the previously disclosed amendments to Ariad's royalty financing agreement with PDL BioPharma, entered into on May 9, 2016 , became effective. Ariad and PDL agreed to amend the agreement to, among other things, include net sales of Iclusig made by Incyte in the calculation of net sales under the PDL agreement and to restructure Ariad's option to receive additional funding so that Ariadmay require PDL to fund up to an additional $40 million (instead of the original $100 million ) in July 2017 , rather than between January and July 2016 . Baker & McKenzie LLP represented Ariad in the Incyte transaction, and Mintz, Levin , Cohn, Ferris, Glovsky & Popeo, P.C. represented Ariad in the PDL transaction.
