Jazz Pharmaceuticals has agreed to acquire Chimerix for approximately $935 million, the companies said Wednesday, in a deal designed to bolster the buyer’s rare oncology portfolio with a treatment under FDA Priority Review and potential approval this summer for a form of glioma.
Chimerix’s lead clinical pipeline candidate is dordaviprone, a first-in-class small molecule treatment designed to selectively target the mitochondrial protease ClpP and dopamine receptor D2 (DRD2). Dordaviprone is being developed for H3 K27M-mutant diffuse glioma, a rare, high-grade brain tumor that most commonly affects children and young adults.
The FDA has set a target Prescription Drug User Fee Act (PDUFA) action date of August 18 for dordaviprone after the agency accepted the company’s New Drug Application (NDA) under Priority Review for accelerated approval.
If approved, dordaprivone would be the first FDA-approved drug for recurrent H3 K27M-mutant diffuse glioma, with the current standard of care now limited to radiation therapy.
“Adding dordaviprone to our oncology R&D pipeline will further diversify our portfolio with a medicine that addresses a significant unmet need with no other FDA-approved therapies and limited treatment options for this patient population,” Bruce Cozadd, Jazz’s co-founder, chairperson, and CEO, said in a statement.
He added that dordaviprone could also contribute durable revenue beginning in the near-term. Chimerix projected in 2001 that the drug—then known as ONC201—would generate more than $500 million in global peak sales in H3 K27M-mutant diffuse glioma, the first of several potential indications.
Chimerix revealed that projection in January 2021 when it announced it had acquired the drug and the rest of the pipeline of Oncoceutics for $78 million upfront—half in Chimerix stock, the other half in cash—plus up to $360 million in payments for ONC201 and two other programs tied to achieving development, regulatory, and sales milestones.
“We are encouraged by the dordaviprone clinical trial results to date and look forward to closing the proposed acquisition and working with our new colleagues from Chimerix to fully leverage our combined R&D and commercial expertise to deliver this novel therapy to patients, beginning as early as the second half of this year,” Cozadd added.
That could be one of Cozadd’s last major acts at the day-to-day helm of Jazz. In December, Cozadd told Jazz’s board that he intends to retire as CEO once it chooses a successor, something expected by the end of this year.
The board is undertaking a formal search process to identify a new CEO—though Cozadd would continue to serve as chairperson of the board of directors. Cozadd co-founded Jazz in 2003, serving as executive chairman until being appointed chairperson and CEO in 2009.
“Durable growth driver”
“We see this acquisition adding a durable growth driver to JAZZ’s oncology franchise,” Jessica Fye, an analyst with J.P. Morgan, wrote Wednesday in a research note. “We also see the deal as consistent with JAZZ’s recent commentary signaling BD [business development] as an area of (continued) high priority, even with the CEO transition on the horizon.”
In addition, dordaviprone is also being developed for newly diagnosed, non-recurrent H3 K27M-mutant diffuse glioma following radiation treatment, for which the treatment is under study in the ongoing Phase III ACTION trial (NCT05580562). Should dordaprivone win approval for that indication, it would potentially extend use of the drug into the front-line setting.
At $8.55 per share cash, the purchase price marks a 72% premium from Chimerix’s closing price Tuesday of $4.96. Investors reacted to news of the company’s acquisition by Jazz Pharma with a buying surge that sent Chimerix shares soaring 70% to $8.44 Wednesday in late trading as of 3:40 p.m. ET.
Shares of Chimerix have zoomed nearly 10-fold since December, when the company announced plans to seek accelerated approval for dordaviprone. Chimerix also said at the time that it intended to pursue a rare pediatric disease priority review voucher. A 2024 study has pegged the average value of a PRV at $100 million, though individual vouchers have sold for between $67.5 million and $350 million.
Jazz said it will begin an all-cash tender offer to acquire all outstanding shares of Chimerix’s common stock. Upon successful completion of the tender offer, Jazz said, it would acquire all shares not acquired in the tender through a second-step merger for the same price per share as was paid in the tender offer.
Jazz expects to fund the transaction through existing cash and investments. The company finished 2024 with $2.413 billion in cash and cash equivalents, plus $580 million in investments—nearly double the $1.6 billion in cash, cash equivalents, and investments the company reported at the end of 2023.
Both Jazz and Chimerix have approved the acquisition deal, which is expected to close in the second quarter. The deal is subject to customary closing conditions that include the tender of a majority of the outstanding shares of Chimerix’s voting common stock.
“We are excited to reach this agreement with Jazz Pharmaceuticals as they bring global scale to broaden our dordaviprone commercial strategy,” stated Mike Andriole, Chimerix’s president and CEO. “This announcement is the culmination of years of scientific work by our incredibly talented team and will deliver significant and certain value to our shareholders.”