Before Jazz Pharmaceuticals inked a $935 million deal for Chimerix earlier this month, the biotech had been in talks with six other pharmas and one biotech about several different potential offers.
Ultimately, Chimerix’s board went with Jazz’s offer due to its cash payable nature and the recent downward trend in biopharma financial markets, plus a general volatility tied to escalating political and global trade tensions, according to Securities and Exchange Commission documents filed Friday.
Buying Chimerix gives Jazz control of the brain cancer drug candidate dordaviprone, also known as ONC201, a small molecule designed to treat recurrent H3 K27M-mutant diffuse glioma.
But Jazz wasn’t first on site. Since August of 2023, Chimerix had been in discussions about potential licensing deals for ONC201 with a “global pharmaceutical company,” known as “party A” in the filings.
Chimerix steadily entered discussions with more companies—termed parties B through G—about potential strategic transactions related to the oncology candidate, per the docs.
Jazz was one of the last contenders to enter the scene, reaching out after Chimerix publicly announced on Dec. 9, 2024, its plan to submit a new drug application seeking accelerated approval for ONC201 before the year ended.
On Dec. 18 and Dec. 19, Chimerix’s board reviewed its offers from several different companies**,** including a potential equity financing, a possible ex-U.S. licensing transaction for ONC201 and a potential acquisition. The board ultimately decided to move forward with multiple options at the same time.
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On the same day—Dec. 19—party A submitted a proposal to acquire ONC201 and related assets for an upfront payment of $350 million and a contingent payment of $100 million upon FDA approval. Chimerix management reached out to the pharma and said the proposal was insufficient.
Less than a month later, party A tried again, submitting a new proposal to acquire Chimerix for an upfront payment of $6.50 per share and one contingent value right (CVR) per share, representing the right to receive a one-time payment of $1.50 upon FDA approval of ONC201 no later than June 2027, plus a one-time payment of $1.50 once ONC201 achieved yearly net sales in the U.S. above $700 million at a date before 2030.
According to the filing, Chimerix’s board directed management to discuss transaction terms with party A in a way designed to increase the economic value and certainty of that proposal, with the view that alternative offers from other potential counterparties could be increased if they had a better non-binding indication from party A.
Meanwhile, bidders started dropping. Party F lost interest after Chimerix told the company that it had received a proposal with a higher value than party F’s offer of around $5 per share. And party G—a biotech—discontinued conversations regarding a potential acquisition on the belief that it wouldn’t be able to compete with other interested parties.
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On Jan. 26, party A came back again with a revised proposal to acquire Chimerix on the same terms as before, but with the deadlines to hit the payment-triggering milestones removed.
Chimerix management told party A on Jan. 30 that the revised offer was still not good enough.
On Feb. 6, Jazz outlined an acquisition offer for an upfront payment of $5.50 per share and one CVR per share representing the right to receive one-time payments of $1 upon FDA approval, 25 cents upon receipt of pricing approval in at least three major European markets and $1.50 once global net sales of ONC201 were above $500 million in a calendar year.
Chimerix told Jazz the offer was insufficient, but that Chimerix would provide additional due diligence materials so Jazz could increase its offer.
Ten days later, Chimerix publicly announced that the FDA had accepted its new drug application seeking accelerated approval, with the application receiving priority review and a decision expected by Aug. 18 of this year.
On March 3, Jazz submitted its final proposal: $8.55 per share in all cash.
On the same day, party A shared a proposal to acquire Chimerix for an upfront payment of $7.50 per share and one CVR per share representing the right to receive a one-time payment of $2, payable if ONC201 received full approval by the FDA before Aug. 31, 2032. The CVR would not be payable if the primary endpoint of Chimerix’s ongoing phase 3 study was not achieved or if Chimerix received a complete response letter.
That night, the board met to review the two offers and determined Jazz to be the winning bidder. The next afternoon, Chimerix’s board unanimously decided that Jazz’s offer was in the best interests of its stockholders.
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The board took into account several different factors when reaching its recommendation that stockholders accept the proposal, according to the documents.
One consideration was that Jazz’s offer price represented a 70% premium over Chimerix’s closing price per share on March 3 and an 89% premium over the weighted average price of shares during the preceding 30-day trading period.
The biotech board also considered the fact that the offer was payable fully in cash, allowing stockholders to realize immediate value.
Furthermore, they weighed the risks of remaining a standalone company and general risks tied to market conditions. Among the potential risks identified were “the challenges faced by the biopharmaceutical industry,” including potential competition; “complex regulatory and political regimes”; and an “evolving pricing environment,” particularly in light of “the increasing scrutiny of pharmaceutical pricing and proposals to address the perceived high cost of pharmaceuticals.”
Another consideration was “the current state of the U.S. and global economies, including the recent downward trend in the biopharmaceutical financial markets, U.S. trade policies and tariffs.” The board also cited rising inflation and volatility resulting from escalating political and global trade tensions in its ultimate decision.