What happened
Shares of the commercial-stage cancer company Epizyme (EPZM +0.00%) are soaring today. Specifically, the drugmaker's stock is up by a handsome 58% as of 10:50 a.m. ET Monday.
Epizyme's shares are racing higher today in response to a buyout agreement with French biopharma Ipsen (OTC: IPSEY). Ipsen reportedly agreed to pay $1.45 per share, as well as a milestone-dependent contingent value right (CVR) of $1.00 per share, to acquire the small-cap drugmaker.
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So what
The deal represents a roughly 60% premium relative to Epizyme's closing price last Friday. Ipsen and Epizyme said they expect the transaction to close by the end of the third quarter of 2022.
NASDAQ: EPZM
Key Data Points
Through this buyout, Ipsen will gain Epizyme's EZH2a inhibitor cancer drug Tazverik, which was initially approved by the Food and Drug Administration (FDA) as a treatment for patients with epithelioid sarcoma (a type of soft tissue cancer) back in January 2020. Epizyme has since been able to broaden the drug's label to include patients with follicular lymphoma, a form of non-Hodgkin lymphoma.
Although Tazverik is reportedly the primary driver behind this deal, Ipsen will also gain the oral SETD2 inhibitor EZM0414 via this transaction. EZMO414 is currently in early-stage clinical trials as a potential treatment for adult patients with relapsed or refractory multiple myeloma and diffuse large B-cell lymphoma.
Now what
The key takeaway from this buyout seems to be that larger biopharmas do appear to be bargain hunting right now. Speaking to this point, Epizyme's stock was down over 90% over the past 12 months and over 94% from its five-year high, achieved around the time of Tazverik's first regulatory approval, prior to today's deal. Ipsen, in short, was able to scoop up Epizyme at a bargain basement price thanks in large part to the ongoing bear market. The inherent difficulty of raising cash during a prolonged bear market could in turn spark a rash of similar deals in the not-so-distant future.
