French drugmaker Ipsen has signed a definitive agreement to buy the global oncology assets of US-based Merrimack Pharmaceuticals in a deal worth potentially more than $1 billion. The acquisition includes Merrimack’s key cancer drug Onivyde, which is approved in the US for treating patients with metastatic adenocarcinoma of the pancreas after disease progression following gemcitabine-based therapy.

The drug is also currently undergoing phase 2 trials for first-line previously untreated metastatic pancreatic cancer, a phase 2/3 trial in relapsed small-cell lung cancer and a phase 1 pilot trial in breast cancer. Ipsen will take responsibility for advancing the clinical development program once the transaction has closed.

Under the terms of the agreement, Ipsen will gain exclusive commercialization rights for current and potential future Onivyde indications in the US, as well as the current licensing agreements with Shire for commercialization rights outside of the US and PharmaEngine for Taiwan. Merrimack’s commercial and manufacturing infrastructure and generic doxorubicin HCI liposome injection is also included in the deal.

The Paris-headquartered firm will pay Merrimack $575 million cash on closing, plus up to $450 million upon approval of potential additional indications for Onivyde in the US. It said the acquisition represents a “unique opportunity and a strong strategic fit,” securing a marketed, wholly-owned asset with current US revenues and significant revenue growth projections.

“The acquisition of Onivyde represents a compelling strategic opportunity to further strengthen Ipsen’s oncology portfolio while leveraging our US infrastructure and creating meaningful potential incremental growth and profitability,” commented Ipsen CEO, David Meek. He added that pancreatic cancer is now the third-leading cause of cancer-related deaths and is an area that has had many drug failures and very few Food and Drug Administration (FDA) approvals over the past two decades.

The transaction, which is subject to customary closing conditions and regulatory approvals as well as a vote by Merrimack shareholders, is expected to close by the end of the first quarter of 2017.

In February 2016, Ipsen agreed to pay US drugmaker Exelixis up to $855 million for the rights to cancer drug Cabozantinib.