On June 27, 2022 Ipsen (Euronext: IPN; ADR: IPSEY) and Epizyme (Nasdaq: EPZM) reported that they have entered into a definitive merger agreement under which Ipsen will acquire Epizyme (Press release, Ipsen, JUN 27, 2022, View Source [SID1234616261]). The transaction was unanimously approved by both Ipsen and Epizyme Boards of Directors and is anticipated to close by the end of the third quarter of 2022, subject to the satisfaction of all closing conditions. Epizyme is a fully integrated, commercial-stage biopharmaceutical company developing and delivering transformative therapies against novel epigenetic targets for cancer patients.
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The primary focus of the acquisition is on the lead medicine, Tazverik (tazemetostat), a first-in-class, chemotherapy-free EZH2[1] inhibitor, which was granted Accelerated Approval by the U.S. Food and Drug Administration (FDA) in 2020. It is currently indicated for adults with relapsed or refractory follicular lymphoma (FL) whose tumors are positive for an EZH2 mutation as detected by an FDA-approved test and who have received at least two prior systemic therapies, and for adult patients with relapsed or refractory follicular lymphoma who have no satisfactory alternative treatment options, as well as for adults and pediatric patients aged 16 years and older with metastatic or locally advanced epithelioid sarcoma not eligible for complete resection.[i] Tazverik is currently in the Phase III stage of a registrational confirmatory study (SYMPHONY-1) in combination with rituximab and lenalidomide (R2) in patients with relapsed/refractory FL who have received at least one prior therapy. Initial results from the Phase III randomized portion of this study are planned to read out in 2026.
As part of the transaction, Ipsen will also acquire Epizyme’s first-in-class, oral SETD2 inhibitor development candidate, EZM0414, which was granted FDA Fast Track status and is currently under evaluation in a recently initiated Phase I/Ib trial in adult patients with relapsed or refractory multiple myeloma and diffuse large B-cell lymphoma, as well as a portfolio of preclinical programs focusing on epigenetic targets.
"Through this agreement, we will expand our assets in oncology. Ipsen’s capabilities and resources in oncology combined with Epizyme’s will accelerate the growth of Tazverik to achieve its full potential in follicular lymphoma patients. The strength of data support Tazverik’s positioning in patients with both EZH2 mutation positive and wild-type follicular lymphoma. We are compelled by the potential of its efficacy and tolerability profile, especially for elderly and/or frail patients who are treated in the community-based setting. Furthermore, we are excited to bring on board epigenetic expertise and the SETD2 inhibitor, as well as several pre-clinical compounds into our portfolio," said David Loew, Chief Executive Officer of Ipsen.
"Epizyme was founded in 2007 with a commitment to rigorous scientific research and a vision of developing novel epigenetic therapies. I am incredibly proud of what our team has accomplished over the past 15 years, from the approval of Tazverik to advancing our next novel investigational agent, EZM0414, to the clinic, as well as the progress made on our preclinical compounds focused on both hematologic malignancies and solid tumors," said Grant Bogle, President and Chief Executive Officer of Epizyme. "We expect that this acquisition and Ipsen’s commitment to invest in the oncology space will ensure our epigenetic pipeline continues to advance in a way we could not have done on our own to bring transformative cancer therapies to patients in need."
Financial highlights
The acquisition of Epizyme will immediately provide incremental sales and will leverage the U.S. commercial infrastructure. Given the level of ongoing R&D expenses, the transaction is expected to be moderately dilutive on Ipsen’s core operating income until the end of 2024. This is in line with Ipsen’s medium-term outlook regarding its strategic focus on building a high-value and sustainable pipeline through external innovation. The dilutive impact on 2022 core operating margin will be limited, given the expected timing of the transaction.
Transaction details
The Board of Directors of Epizyme has unanimously approved the transaction and recommended that the stockholders of Epizyme tender their shares in the tender offer. Royalty Pharma, Epizyme’s largest stockholder with approximately 20.5% of Epizyme’s total shares of common stock outstanding (on a non‑diluted basis) as of the date hereof, has entered into a support agreement with Ipsen pursuant to which it has agreed to tender its shares in the tender offer.
Under the terms of the agreement and plan of merger, Ipsen, through a subsidiary, will initiate a tender offer to acquire all outstanding shares of Epizyme at a price of $1.45 per share in cash at the closing of the transaction, for an initial estimated aggregate consideration of $247 million[2] plus one contingent value right (CVR) per share. Each CVR will entitle its holder to deferred cash payments of $0.30 per CVR payable upon the first achievement of $250 million in aggregate net sales of Tazverik (excluding sales in Japan and Greater China[3]) in any period of four consecutive quarters, by 31 December 2026 and $0.70 per CVR payable upon receipt of U.S. regulatory approval necessary for the commercial marketing and sale of the combination of Tazverik and R² (rituximab and lenalidomide) in second-line follicular lymphoma by 1 January 2028. The $1.45 per share cash consideration represents a premium of approximately 144% compared to Epizyme’s average closing price of $0.60 over the 30 trading days preceding announcement of the transaction. The transaction will be fully financed by Ipsen’s existing cash and lines of credit.
The closing of the tender offer will be subject to customary conditions, including the tender of shares representing at least a majority of the total number of Epizyme’s outstanding shares, the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and other customary conditions. Upon the successful completion of the tender offer, Ipsen would acquire all shares not acquired in the tender through a second-step merger for the same consideration as the tendering shareholders.
Advisors
Barclays is acting as exclusive financial advisor to Ipsen and Orrick Herrington & Sutcliffe LLP as legal counsel to Ipsen. Epizyme is advised by both Jefferies and MTS Health Partners, L.P., joint lead financial advisors in connection with the transaction, with WilmerHale serving as legal counsel. In addition, MTS Securities, LLC (an affiliate of MTS Health Partners, L.P.) provided an opinion to the Board of Directors of Epizyme regarding the fairness of the offer consideration to be received by the holders of Epizyme common stock in the transaction, subject to the qualifications and limitations set forth therein.
Conference call
A conference call and webcast for investors and analysts will begin today at 2pm Paris time. Participants can join the call by dialling +1 785 424 1876 or, for U.S. participants, +1 877 888 4312 toll-free; the passcode is 63710. A recording will be available on ipsen.com, while the webcast can be accessed here.
ENDS
About Tazverik (tazemetostat)
Tazverik is a methyltransferase inhibitor indicated for the treatment of:
Adults and pediatric patients aged 16 years and older with metastatic or locally advanced epithelioid sarcoma not eligible for complete resection.
Adult patients with relapsed or refractory follicular lymphoma whose tumors are positive for an EZH2 mutation as detected by an FDA-approved test and who have received at least two prior systemic therapies.
Adult patients with relapsed or refractory follicular lymphoma who have no satisfactory alternative treatment options.
These indications are approved under accelerated approval based on overall response rate and duration of response. Post marketing studies are required to confirm the anticipated clinical benefit and retain the labeled Accelerated Approval indications.
The most common (≥20%) adverse reactions in patients with epithelioid sarcoma are pain, fatigue, nausea, decreased appetite, vomiting and constipation. The most common (≥20%) adverse reactions in patients with follicular lymphoma are fatigue, upper respiratory tract infection, musculoskeletal pain, nausea and abdominal pain.
About SYMPHONY-1[ii]
SYMPHONY-1 is a global, multicenter Phase Ib/III study designed to determine the recommended Phase III dose (RP3D) and the efficacy and safety of Tazverik plus R² (rituximab and lenalidomide) versus placebo plus R², in patients with relapsed/refractory follicular lymphoma after at least one prior therapy. Updated safety and activity data from the Phase Ib safety run-in portion of the study were presented at the 2022 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting. Thirty-eight of the 44 patients were evaluable for tumor assessments as of the data cutoff, with 36 patients responding to treatment. The activity findings showed an objective response rate of 95 percent (50% complete response rate and 45% partial response rate). Two patients achieved stable disease, and two patients had progressive disease (one from the 400-mg cohort and one from the 600-mg cohort). Median progression-free survival (PFS) and duration of response were not yet reached as the study is ongoing. The safety profile of the Tazverik and R² combination was consistent with the prescribing information for both Tazverik and R², respectively.
About EZM0414
EZM0414 is a potent selective, oral, small molecule, investigational drug agent that inhibits the histone methyltransferase, SETD2, which plays a role in oncogenesis. SETD2 methylates histone as well as non-histone proteins, and this activity is involved in several key biological processes including transcriptional regulation, RNA splicing, and DNA damage repair. Based on the preclinical data on SETD2 inhibition by EZM0414 in multiple settings, including high risk t(4;14) multiple myeloma (MM) and in other B-cell malignancies such as diffuse large B-cell lymphoma (DLBCL), the Company is conducting SET-101, a Phase 1/1b study of EZM0414, for the treatment of adult patients with relapsed or refractory MM and DLBCL.
About follicular lymphoma[iii],[iv]
Follicular lymphoma is a type of non-Hodgkin lymphoma (NHL) which is a cancer of the lymphatic system. Follicular lymphoma develops when the body makes abnormal B lymphocytes. These lymphocytes are a type of white blood cell that normally helps fight infections. When a patient has a lymphoma, the abnormal lymphocytes build up in the lymph nodes or other body organs. Follicular lymphoma is generally slow growing. Each year, 15-20,000 people in the U.S. are diagnosed with follicular lymphoma. Most affected individuals are diagnosed with advanced disease.
About epithelioid sarcoma[v]
Epithelioid sarcoma is a rare, slow-growing type of soft tissue cancer. Most cases begin in the soft tissue under the skin of a finger, hand, forearm, lower leg or foot, though it can start in other areas of the body. Typically, epithelioid sarcoma starts as a small firm growth or lump that is painless. It usually starts out as a single growth, but multiple growths may occur by the time a person seeks medical help. Sometimes this sarcoma appears as ulcers that don’t heal, looking like open wounds over the growths. It is estimated that 13,040 individuals received a diagnosis of soft tissue sarcomas in the U.S. in 2018 with a corresponding 5,150 deaths.[vi]
About diffuse large B-cell lymphoma[vii]
Diffuse large B cell lymphoma (DLBCL) is a type of NHL. NHL is a cancer of the lymphatic system. It develops when the body makes abnormal B lymphocytes. These lymphocytes are a type of white blood cell that normally help to fight infections. When a patient has a lymphoma, the abnormal lymphocytes build up in lymph nodes or other body organs. DLBCL grows quickly and treatment starts soon after diagnosis. DLBCL is the most common type of NHL in the U.S. and worldwide, accounting for about 22 percent of newly diagnosed cases of B-cell NHL in the U.S. More than 18,000 people are diagnosed with DLBCL each year.[viii]
About multiple myeloma[ix]
Multiple myeloma is a rare form of cancer characterized by excessive production (proliferation) and improper function of certain cells (plasma cells) found in the bone marrow. Excessive plasma cells may eventually mass together to form a tumor or tumors in various sites of the body, especially the bone marrow. When multiple tumors are present or the bone marrow has greater than 10% plasma cells, the term multiple myeloma is used. In 2019, over 32,000 individuals in the U.S. were diagnosed with this disease.