Celgene Corporation (NASDAQ:CELG) is planning to buy Impact Biomedicines.
The deal will have Celgene Corporation making an initial payment of $1.1 billion for Impact Biomedicines. After this, there is the possibility of additional payments based on the performance of Impact Biomedicines’ fedratinib.
Fedratinib is a drug in development for treating myelofibrosis and polycythemia vera. There have been Phase II and Phase III studies of the drug an both of them showed significant statistical improvements in patients taking the medicine.
“Myelofibrosis is a disease with high unmet medical need as the number of patients who are ineligible for or become resistant to existing therapy continues to increase,” Nadim Ahmed, President of Hematology and Oncology for Celgene Corporation, said in a statement. “We believe fedratinib is uniquely positioned as a potential treatment for myelofibrosis and it provides strategic options for us to build leadership in this disease with luspatercept and other pipeline assets.”
Celgene Corporation says that additional payments following its acquisition of Impact Biomedicines could reach $1.4 billion based on the performance of myelofibrosis. It also notes that a sales milestone of $5 billion for fedratinib could result in up to $4.5 billion of extra payments.
Celgene Corporation will have to wait for customary closing conditions to complete before it can finish its acquisition of Impact Biomedicines. The company says that it is expecting the deal to close during the first quarter of 2018.
Celgene Corporation is getting financial advice for the deal from Credit Suisse and legal advice from Hogan Lovells. Impact Biomedicines’s financial advisor is PJT Partners and its legal advisor is Latham & Watkins.
CELG stock was down 1% as of Monday morning.
As of this writing, William White did not hold a position in any of the aforementioned securities.
