Jazz broadens oncology reach with $935M Chimerix acquisition

Jazz Pharmaceuticals has made a significant move in the realm of cancer treatment by announcing its plan to acquire Chimerix for $935 million. This acquisition, which includes a promising experimental medicine currently under review by the Food and Drug Administration (FDA), represents a strategic expansion for Jazz in the oncology sector. The medicine in question is aimed at treating glioma, a type of brain cancer.

Under the terms of the agreement, shareholders of Chimerix will receive $8.55 per share, marking a substantial 72% premium over the closing price on Tuesday. Jazz Pharmaceuticals anticipates that the transaction will be finalized by the second quarter of 2025. The acquisition will be financed entirely in cash, drawing from Jazz’s substantial reserves and investments that totaled $3 billion at the close of 2024.

The drug central to this acquisition is known as ONC201, or dordaviprone. It has been put forward for accelerated approval by the FDA for individuals suffering from glioma that contains a specific mutation known as H3 27M. Research conducted in 2014 indicated that such genetic mutations are predominantly found in patients under 50 who develop glioma. The application for FDA approval of Chimerix’s drug is bolstered by trial results demonstrating that dordaviprone either shrank tumors or prevented new tumors from forming in 28% of participants. However, this study did not involve a comparison with a placebo or another active treatment.

To strengthen the drug’s approval prospects, Chimerix is conducting a Phase 3 clinical trial. This trial is designed to compare dordaviprone against a placebo in glioma patients who have previously undergone radiation therapy. Preliminary findings from this trial are expected to be available by the third quarter of 2025. If granted approval, dordaviprone could rapidly become a standard treatment option for this specific and rare form of cancer, potentially generating substantial revenue for Jazz Pharmaceuticals. Bruce Cozadd, the chairman and CEO of Jazz, expressed optimism about the drug’s potential to contribute significantly to the company’s revenue stream in the near future.

The decision of the FDA to accept the accelerated approval application might have been influenced by Chimerix’s progress in enrolling participants for the Phase 3 trial. According to Maury Raycroft, an analyst at Jefferies, the drug could achieve peak sales of approximately $550 million if approved for the current indication under review.

This acquisition merges two well-established companies in the biotechnology industry. Jazz Pharmaceuticals, founded in 2003, initially focused on developing treatments for neurological and psychological conditions. In contrast, Chimerix, established in 2002, concentrated on antiviral solutions for diseases like smallpox and HIV. Notably, Bruce Cozadd, who played a pivotal role in founding Jazz Pharmaceuticals, recently announced his retirement from the company.

The successful integration of Chimerix into Jazz Pharmaceuticals could mark a new chapter for both companies, enhancing their capabilities and expanding their influence in cancer drug development.