Incyte Corporation and Massachusetts-based ARIAD Pharmaceuticals, Inc. announced 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 Incytewill obtain an exclusive license to develop and commercialize Iclusig 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, a release stated.
Under the terms of the license agreement, Incyte will receive an exclusive license to develop and commercialize Iclusig. Iclusig is approved in Europe for the treatment of patients with types of leukemia.
“The acquisition of ARIAD’s European operations is a unique and strategic opportunity for Incyte, which will further establish our medical and commercial footprint in Europe,” said Hervé Hoppenot, chief executive officer of Incyte. “Adding the ARIAD team’s experience, talent, resources and relationships to our existing European organization accelerates our planned global expansion and leaves us well-positioned to maximize the potential future European launches from our rich development portfolio.”
“The decision to divest our European operations and out-license the commercial rights to Iclusig in Europe is one of the key outcomes of our ongoing strategic review,” stated Paris Panayiotopoulos, CEO of ARIAD. “We are delighted to have Incyte as a committed partner to continue Iclusig’s strong revenue growth in Europe, while significantly strengthening our financial position and maintaining future strategic optionality with a potential buy-back of Iclusig.”
Under the agreement Incyte will make a $140 million payment to ARIAD from cash on hand.
In addition 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-cancer indications, if approved, in the territory.
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.
The transaction is expected to reduce ARIAD’s 2017 annual operating expenses by approximately $65 million. The transaction is added to Incyte’s earnings in 2018.
