In a significant expansion of its oncology portfolio, Jazz
Pharmaceuticals has entered into an agreement to purchase Chimerix for $935 million, positioning itself to acquire an experimental brain cancer treatment currently under FDA review. The all-cash transaction, announced Wednesday, will see Chimerix shareholders receive $8.55 per share, representing a 72% premium above the company’s closing price on Tuesday.
The Dublin-based pharmaceutical company plans to finance the acquisition using its substantial cash reserves and investments, which stood at $3 billion at 2024’s end. The deal is expected to reach completion during 2025’s second quarter.
At the heart of the acquisition is dordaviprone (ONC201), Chimerix’s investigational drug targeting gliomas with H3 27M mutations. These mutations are particularly prevalent in glioma patients under 50 years old, according to a 2014 research study. The drug would complement Jazz’s existing cancer medicine lineup, which currently includes five products, while helping diversify revenue beyond its primary income source, the sleep medication Xywav.
Clinical trials for dordaviprone have shown promising results, with 28% of participants in a small study experiencing either tumor shrinkage or prevention of new tumor formation. While this initial study lacked a control group, Chimerix is currently conducting a Phase 3 trial comparing the drug against placebo in post-radiation therapy glioma patients, with interim data expected in 2025’s third quarter.
Bruce Cozadd, Jazz’s chairman and CEO, expressed optimism about the drug’s potential, stating it could quickly become a standard treatment option for this rare cancer while generating sustainable revenue. The FDA is currently reviewing dordaviprone under priority review, with a decision anticipated in the third quarter.
According to Jefferies analyst Maury Raycroft, the FDA’s acceptance of the accelerated approval application may have been influenced by Chimerix’s success in enrolling patients for the Phase 3 trial. Raycroft projects peak sales could reach approximately $550 million for the indication currently under FDA consideration.
The merger brings together two veteran biotechnology companies with rich histories. Jazz, established in 2003, began with a focus on neurology and psychology medications, while Chimerix, founded in 2002, initially concentrated on developing antiviral treatments for HIV and smallpox.
The acquisition announcement comes during a period of transition for Jazz, as Cozadd, who helped establish the company, recently announced his retirement plans. The deal represents a strategic move to strengthen Jazz’s position in the oncology market while providing Chimerix shareholders with a substantial premium on their investment.
The transaction highlights ongoing consolidation in the biotechnology sector and demonstrates Jazz’s commitment to expanding its cancer treatment portfolio. By acquiring Chimerix and its promising brain cancer drug candidate, Jazz aims to enhance its presence in the oncology field while potentially offering new treatment options for patients with limited therapeutic choices.
The deal’s structure and timing suggest confidence in dordaviprone’s regulatory prospects and commercial potential, with Jazz positioning itself to potentially launch a new cancer treatment pending FDA approval. The acquisition also reflects the company’s strategic approach to growth through targeted acquisitions in areas of unmet medical need.