$1bn deal covers two liposome-encapsulated formulations of approved therapies

French firm Ipsen has agreed to buy rights to two drugs from US cancer specialist Merrimack. The deal covers pancreatic cancer therapy Onivyde (irinotecan liposome injection) and generic ovarian cancer treatment Doxil (doxorubicin HCl liposome injection).

Ipsen will pay $575 million (£470 million) up front, plus up to $450 million should Onivyde be approved for additional uses in the future. Ipsen will also acquire Merrimack’s commercial and manufacturing infrastructure.

Merrimack will return at least $200 million of the proceeds to shareholders through a special dividend. It will use the rest of the funds to pay off existing debt and to invest in developing other pipeline drug candidates.

The deal comes less than three weeks after Merrimack stopped trials of its experimental breast cancer candidate MM-302.