In a significant expansion of its oncology portfolio, Jazz
Pharmaceuticals has reached an agreement to purchase Chimerix for $935 million, securing rights to a promising brain cancer treatment currently under FDA review. The all-cash transaction, announced Wednesday, will see Jazz paying $8.55 per share, representing a 72% premium over Chimerix’s previous day closing price.
The acquisition, expected to close in the second quarter of 2025, will be funded through Jazz’s substantial cash reserves and investments, which stood at $3 billion at the conclusion of 2024. The deal centers around Chimerix’s experimental drug dordaviprone (ONC201), which could become Jazz’s sixth marketed cancer medication.
Dordaviprone is currently awaiting FDA accelerated approval for treating gliomas featuring H3 27M mutations, which research from 2014 indicates are particularly prevalent in glioma patients under 50 years old. The drug’s submission to regulators was based on clinical trial results showing that 28% of participants experienced either tumor shrinkage or stabilization. While this initial study lacked a control group, Chimerix is currently conducting a Phase 3 trial comparing dordaviprone against placebo in post-radiation therapy glioma patients, with interim data expected in the third quarter of 2025.
Bruce Cozadd, Jazz’s chairman and CEO who recently announced his retirement plans, expressed optimism about the acquisition, stating that dordaviprone could quickly become a standard treatment option for this rare cancer while generating sustainable revenue. Market analysts, including Jefferies’ Maury Raycroft, project peak sales potential of approximately $550 million for the drug in its initial indication.
The FDA’s acceptance of the accelerated approval application may have been influenced by Chimerix’s progress in enrolling patients for the ongoing Phase 3 trial. The regulatory decision, which has been granted priority review status, is anticipated in the third quarter.
The merger brings together two veteran biotechnology companies with distinct origins. Jazz, established in 2003, initially focused on developing treatments for neurological and psychological conditions. Chimerix, founded in 2002, began its journey developing antiviral treatments targeting smallpox and HIV.
For Jazz Pharmaceuticals, based in Dublin, this strategic acquisition represents an opportunity to diversify its revenue streams beyond its current top-selling product, the sleep medication Xywav. The transaction will harness Jazz’s substantial financial position, as evidenced by its multi-billion dollar cash and investment holdings.
The emphasis on oncology expansion through this acquisition aligns with broader industry trends toward developing targeted cancer therapies, particularly for rare and difficult-to-treat conditions. The development of dordaviprone specifically addresses an area of significant unmet medical need in brain cancer treatment.
The timing of the deal coincides with a period of leadership transition at Jazz, as CEO Cozadd, who helped establish the company, prepares for retirement. This acquisition may represent one of his final major strategic moves at the helm of the organization.
When the transaction concludes, Jazz will not only gain a potential new revenue stream but also strengthen its position in the oncology market, particularly in the treatment of rare cancers. The deal’s structure, utilizing Jazz’s substantial cash reserves, demonstrates the company’s financial strength and commitment to growing its cancer treatment portfolio through strategic acquisitions.