Incyte to acquire ARIAD’s EU operations, in-license Iclusig

Incyte (NASDAQ:INCY) has agreed to acquire ARIAD Pharmaceuticals’ (NASDAQ:ARIA) European operations. At the expected June 1 closing of the transaction, Incyte will obtain an exclusive license to develop and commercialize Iclusig in Europe and other select countries.

The agreement to divest its European operations and out-license Iclusig in Europe will enable ARIAD to focus its promotion of Iclusig on the highly valuable U.S. market, while strengthening its financial position and maintaining important optionality through a potential buy-back provision for the Iclusig license rights in the event of a change-in-control of ARIAD.

Under the accord, Incyte will acquire all shares of ARIAD Pharmaceuticals (Lausanne, Switzerland), the
parent company of ARIAD’s European subsidiaries responsible for the commercialization of Iclusig in the licensed territory, for $140-million.

Under the European licensing agreement, ARIAD will be entitled to receive tiered royalties of between 32% and 50% on net sales of Iclusig and up to $135-million in potential development and regulatory milestones for Iclusig in new oncology indications.

Incyte has also agreed to fund a portion of the ongoing clinical development of Iclusig in ARIAD’s OPTIC and OPTIC-2L clinical trials through cost-sharing payments of up to $7-million in each of 2016 and 2017.

“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,” Paris Panayiotopoulos, president and CEO of ARIAD, said in a statement.

“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,” he added.