Ipsen Enters Into Partnership With Inspiration Biopharmaceuticals

Ipsen and Inspiration Biopharmaceuticals have entered into a partnership to develop drugs to treat h

The two leading product candidates are scheduled to begin phase III clinical testing in 2010, including Ipsen's recombinant porcine factor VIII, OBI-1 and Inspiration's recombinant factor IX product, IB1001.

OBI-1 is indicated for the treatment of patients with acquired haemophilia and hemophilia A, who have developed an inhibitory immune reaction to human forms of factor VIII. IB1001 is for the acute and preventative treatment of bleeding in patients with hemophilia B.

As per the agreement, Ipsen will exclusively sub-license OBI-1 to Inspiration in exchange for $50m in convertible notes and a 27.5% royalty on future OBI-1 sales. Inspiration will also enter a separate agreement with Ipsen for supply of the OBI-1 product. Whereas, Ipsen is expected to provide up to $259m of funding to Inspiration. The proceeds will be used for the development and commercialisation of its hemophilia pipeline, including OBI-1.

Furthermore, Ipsen will make an upfront investment of $85m in Inspiration in exchange for shares of a new class of preferred stock constituting 20% of Inspiration's fully-diluted equity. In connection with the agreement, Ipsen will be entitled to appoint one member (out of 7) to the Board of Directors of Inspiration.

In addition, milestone payments up to $174m would be paid to Inspiration based on the successful development of IB1001 and OBI-1. For each milestone payment, Ipsen would receive a note convertible into Inspiration equity with a 7- or up to 9-year maturity and a 2.5% coupon. These notes would be redeemable in cash at maturity at Ipsen's discretion.

Upon certain triggering events, Ipsen would also have the ability to acquire full control of Inspiration. The transaction is expected to close in the first quarter of 2010.

Jean-Luc Belingard, chairman and CEO of Ipsen, said: "Inspiration has both a strong development experience and a broad pipeline that will provide the opportunity for new growth on our way to building a new, multi-product global franchise for Ipsen in haematology. We are impressed by the track record of Inspiration's management team in this field. We are confident that the structure we have designed will continue to foster the exceptional environment that has made Inspiration successful until a time when the company has OBI-1 and IB1001 commercialised, and would synergistically benefit from Ipsen's specialist care global footprint.

"Subject to the products in development being approved by the relevant regulatory authorities and upon successful commercialisation, we believe Inspiration's portfolio, including OBI-1, could exceed sales of $1bn in the next 10 years. After entering the US market last year, we remain committed to growing Ipsen's specialist disease areas on a global basis. This new partnership reflects Ipsen's long-term strategy to build a successful global specialty care franchise that will benefit both patients, doctors and shareholders."