Jazz Pharmaceuticals has drummed up a deal in double time, agreeing to buy Chimerix for $935 million just days after its CEO voiced an interest in diversifying the pipeline.
Buying Chimerix will give Jazz control of the brain cancer drug candidate dordaviprone. The FDA is set to decide whether to approve the small molecule in recurrent H3 K27M-mutant diffuse glioma by Aug. 18, giving Jazz a potentially near-term win and speedy return on investment from the buyout, should it gain the green light.
Chimerix filed for accelerated FDA approval after seeing responses in a phase 2 trial and partly enrolling a phase 3 study that could deliver interim data in the third quarter.
Jazz has agreed to pay a 72% premium over Chimerix’s closing share price Tuesday to buy the biotech before it reaches the upcoming regulatory and clinical inflection points. Both companies have agreed to the deal, although Chimerix has the option to pay a $35 million termination fee if it gets a better offer.
The deal fits the blueprint outlined on a Jazz earnings call last week, when executives expressed a desire to buy assets with durable sales that align with the company’s development and commercial capabilities. Neuroscience and oncology topped the list of target therapeutic areas.
Dordaviprone has patent protection through at least 2037, suggesting it can meet Jazz’s durable revenue requirement, and the molecule will slot into a portfolio that features multiple cancer drugs. Jazz said it will combine its development and commercial capabilities with Chimerix’s resources to support the drug.
Chimerix outlined plans to commercialize dordaviprone itself on a conference call late last year. At that time, Tom Riga, chief operating and commercial officer at Chimerix, said the biotech could reach the targeted physicians with “a nimble and efficient sales force of roughly 25 to 30 account managers in the United States.”
The biotech estimated there are around 2,000 patients in the U.S., informing its prediction that the drug candidate can justify ultra-orphan pricing and access a market worth upward of $1 billion. Dordaviprone is on track to be the first drug approved in the indication and may be eligible for a rare pediatric disease priority review voucher. Such vouchers sell for around $150 million.
In addition to dordaviprone, which has opportunities in recurrent and front-line patients, Chimerix’s R&D pipeline includes another potential solid tumor treatment. The candidate, ONC206, is ten times more potent than dordaviprone in vitro, according to Chimerix. The biotech is running a phase 1 trial in people with central nervous system cancers and sees opportunities to expand to other solid tumors.