Why Ipsen Is Buying Albireo (ALBO) (IPSEY)

By Dan Anderson ● Jan 9, 2023
  •  Ipsen (IPN, IPSEY) and Albireo (ALBO) announced that they have entered into a definitive merger agreement under which Ipsen will acquire Albireo. These are the details.

Ipsen (IPN, IPSEY) and Albireo (ALBO) announced that they have entered into a definitive merger agreement under which Ipsen will acquire Albireo, an innovator in bile-acid modulators to treat pediatric and adult cholestatic liver diseases. The anticipated acquisition will enrich Ipsen’s Rare Disease portfolio and pipeline.

The lead medicine in Albireo’s pipeline is Bylvay (odevixibat), a potent, once-daily, oral, non-systemic ileal bile acid transport inhibitor (IBATi). And Bylvay was approved in 2021 in the U.S. for the treatment of pruritus in patients 3 months of age and older with progressive familial intrahepatic cholestasis (PFIC), and in the E.U. for the treatment of PFIC in patients aged 6 months or older. And pruritus is one of the most prominent and problematic manifestations of the disease, often resulting in severely diminished quality of life, Bylvay has orphan exclusivity for the approved indications in PFIC in the U.S. and E.U.

Along with this lead indication, Albireo announced in December 2022 that supplementary regulatory filings have been made for Bylvay in the E.U. and the U.S. for Alagille syndrome (ALGS). ALGS is a rare, genetic disorder that can affect multiple organ systems, including the liver, with a paucity of bile ducts preventing bile flow from the liver to the small intestine. And the most debilitating symptom of ALGS is severe pruritus.5 In the Phase III ASSERT trial, treatment with Bylvay met both primary and secondary endpoints and was associated with statistically significant improvements in pruritus severity and reductions in serum bile acid levels compared to placebo, and was well tolerated.

Plus, Bylvay is in late-stage development for biliary atresia (BA). It is currently being investigated in the BOLD study, the first, prospective double-blind, Phase III clinical trial in BA, a rare, pediatric liver disease that can result in cirrhosis and liver failure and is the leading cause of liver transplantation among children. Orphan drug designations have been granted in both ALGS and BA indications in the U.S. and E.U.

As part of the deal, Ipsen will also acquire Albireo’s clinical stage asset A3907, a novel oral systemic apical sodium-dependent bile acid transporter (ASBT) inhibitor currently in development for adult cholestatic liver disease like primary sclerosing cholangitis (PSC), which could complement Ipsen´s existing development programs. Along with Bylvay and A3907, Albireo’s pipeline includes A2342, an oral systemic sodium-taurocholate co-transporting peptide (NTCP) inhibitor being evaluated for viral and cholestatic diseases, which is moving ahead in investigational new drug (IND)-enabling trials.

Financial highlights

This acquisition will provide immediate incremental sales and strengthen Ipsen’s rare disease infrastructure. And Albireo guided for total Bylvay revenues of $24 million for 2022. Given the level of ongoing R&D expenses, the deal is expected to be dilutive to Ipsen’s core operating income until the end of 2024. This is in line with Ipsen’s medium-term outlook regarding its strategic focus on building a high-value and sustainable pipeline through external innovation. The Group will provide its annual guidance for 2023 in February.

Transaction details

Under the terms of the agreement and plan of merger, Ipsen, through a fully owned subsidiary, will initiate a tender offer to acquire all outstanding shares of Albireo at a price of $42 per share in cash at the closing of the transaction, for an initially estimated aggregate consideration of $952 million plus one contingent value right (CVR) per share. Each CVR will entitle its holder to deferred cash payments of $10 per CVR payable upon the U.S. Food and Drug Administration (FDA) approval of Bylvay in the Biliary Atresia indication at the latest by 31 December 2027, allowing for a potential increase in the number of patients in the BOLD study.

The $42 per-share cash consideration represents a premium of 104% compared to Albireo’s 1-month volume-weighted average price of $20.60 preceding announcement of the transaction. And the transaction will be fully financed by Ipsen’s existing cash and lines of credit. The Board of Directors of Albireo has unanimously approved the transaction and recommended that the stockholders of Albireo tender their shares in the tender offer.

KEY QUOTES:

“We are excited about the potential of Albireo’s assets and scientific expertise, which we gain through this acquisition, and we believe this is a compelling growth opportunity for Ipsen. Our Rare Disease franchise is strengthened with Bylvay, which, in addition to being the first-approved treatment in PFIC, has two further indications being investigated in rare liver conditions that are underserved. Additionally, Bylvay and the clinical and preclinical novel bile acid transport inhibitors in Albireo’s portfolio complement our own pipeline in liver disease.”

  • David Loew, Chief Executive Officer of Ipsen

“Unwavering dedication to patients and commitment to science have always been the north star for Albireo. This focus has driven us to develop and gain approval for Bylvay as the first drug treatment for PFIC. Our talented team at Albireo have advanced the first Phase III studies in three different pediatric liver diseases while discovering two promising new clinical stage bile acid modulators. We believe that Ipsen is well positioned to apply its global R&D and commercial capabilities to make these medicines available to more cholestatic liver disease patients and accelerate the mission of providing hope for families. ”

  • Ron Cooper, President and Chief Executive Officer of Albireo