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Agios Pharma Agrees to Sell Oncology Business to Servier for US$2 Billion Plus Royalties

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Shares of Agios Pharmaceuticals traded 30% higher after the company reported that it has agreed to sell its oncology research business to France's Servier Group in a transaction valued up to US$2 billion in cash plus future royalties.

Biopharmaceutical company Agios Pharmaceuticals Inc. (AGIO:NASDAQ), which is focused on cellular metabolism to treat cancer and rare genetic diseases, today announced that it entered into a definitive agreement to sell its commercial, clinical and research-stage oncology portfolio to global independent pharmaceutical company Servier for cash consideration of up to $2.0 billion. Under the terms of the agreement, Agios Pharmaceuticals will receive $1.8 billion upfront in cash and is eligible to receive an additional cash payment of $200 million from a potential future milestone payment for its vorasidenib. Additionally, "the company will receive 5% royalties on U.S. net sales of TIBSOVO® (ivosidenib tablets) from transaction close through loss of exclusivity and 15% royalties on U.S. net sales of vorasidenib from first commercial sale through loss of exclusivity."

Agios Pharmaceuticals mentioned that it decided to sell it oncology portfolio in order "to move forward with a singular focus on accelerating and expanding its genetically defined disease portfolio, including the mitapivat clinical programs and a robust pipeline of therapeutic candidates." Specifically, the firm indicated that it is dedicating all of its resources to advancing mitapivat as a potential treatment for three initial hemolytic anemias and will continue to build out its scientific expertise in cellular metabolism and PK activation to boost and grow its genetically defined disease portfolio.

The company stated that the transaction is expected to close in Q2/21 and that when the sale is finalized it intends to return at least $1.2 billion to its shareholders.

Agios Pharmaceuticals' CEO Jackie Fouse, Ph.D. commented, "Our decision to accelerate the next chapter of Agios' success with a singular focus on genetically defined diseases and sell our oncology portfolio to Servier is a transformational milestone for Agios. The result of a deliberative strategic review, this decision reflects the progress we have made understanding and harnessing the science and promise of PK activation and captures the full value of our oncology assets...With mitapivat poised to become a new potential treatment option for patients with pyruvate kinase (PK) deficiency, thalassemia and sickle cell disease and with a rich pipeline based on our pioneering leadership in PK activation and cellular metabolism, Agios' near- and long-term future is filled with significant value-generating catalysts."

"The proceeds from the transaction will allow us to focus on rapidly advancing our genetically defined disease portfolio for patients in need, strengthen our capital structure and return at least $1.2 billion to shareholders post-closing, achieve capital markets independence and participate in the future success of TIBSOVO® and vorasidenib...This transaction will allow the oncology portfolio to grow and thrive with Servier and will provide Agios with the resources required to optimize the development of our promising genetically defined disease therapies, ultimately enabling the greatest overall positive impact for patients," CEO Fouse added.

Servier Group's President Olivier Laureau remarked, "The strategic acquisition of Agios' oncology business, including its precision medicine portfolio and pipeline, is aligned with our ambition to become a recognized player in oncology and further supports our commitment to provide innovative treatments to cancer patients with unmet medical needs. It is a key step for the Servier Group as it will significantly strengthen our position in the U.S. and reinforce our R&D capabilities in oncology."

David K. Lee, CEO of Servier's U.S. subsidiary Servier Pharmaceuticals, commented, "Agios is a leader in the cellular metabolism space with a proven track record of discovering, developing and commercializing precision medicines...The acquisition of Agios' oncology business, including highly experienced talent from research, development, technical operations and commercial functions, allows for an immediate expansion of our U.S. business into other hematologic malignances and provides the potential for longer-term growth into the solid tumor space, thus ensuring that we can serve more patients living with unmet cancer needs than ever before."

The company reported that the transaction has already been approved by its Board of Directors and is anticipated to close in Q2/21 subject to shareholder and regulatory approvals. The firm advised that its U.S.-based employees working with the oncology business will be given a comparable offer to work at Servier.

Agios Pharmaceuticals is based in Cambrdige, Mass. and is utilizes its understanding of cellular metabolism to discover and develop medicines to treat malignant hematology, solid tumors and rare genetic diseases. The company indicated that it currently has two approved oncology precision medicines and multiple investigational therapies in clinical and preclinical development.

Servier Group is a global independent pharmaceutical firm headquarters in Suresnes, France. The company has annual revenues of 4.6 billion euros and operates in 150 countries employing 22,000 people worldwide. Servier is governed by a non-profit foundation and each year invests on average 25% of its total revenues (excluding generics) and all its profits for research and development. The Group's activities are focused in the areas of cancer and diabetes, cardiovascular, immune-inflammatory, and neurodegenerative diseases and high-quality generic drugs.

Servier Pharmaceuticals LLC is Servier's commercial-stage pharmaceuticals company in the U.S. which is presently concentrating its efforts on building a robust portfolio of oncology assets with future plans to expand to other areas of unmet medical needs.

Agios Pharmaceuticals started the day with a market cap of around $2.3 billion with approximately 69.26 million shares outstanding and a short interest of about 7.2%. AGIO shares opened nearly 33% higher today at $44.1127 (+$10.9027, +32.83%) over Friday's $33.21 closing price. The stock has traded today between $40.01 to $45.91 per share and is currently trading at $43.35 (+$10.14, +30.53%).


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