ZACKSยท2025-03-06 15:10Core Viewpoint - Jazz Pharmaceuticals has announced a definitive agreement to acquire Chimerix for $8.55 per share, totaling nearly $935 million, with the deal expected to close in the second quarter of 2024, pending regulatory approvals [1][2]. Group 1: Acquisition Details - The acquisition will enhance Jazz's oncology portfolio by adding Chimerix's lead drug, dordaviprone, which is under FDA review for treating recurrent H3 K27M-mutant diffuse glioma, with a decision expected by August 18, 2025 [2][3]. - If approved, dordaviprone will be the first FDA-approved therapy for this type of glioma and among the first targeted therapies for high-grade gliomas, currently treated mainly with radiation [3]. - The deal is expected to be funded through Jazz's existing cash and investments [1]. Group 2: Strategic Fit and Financial Implications - The acquisition is seen as a strategic fit for Jazz, which currently markets five oncology drugs, allowing for portfolio expansion and revenue diversification [8]. - Jazz has been successfully reducing its reliance on its neuroscience portfolio, with oncology product revenues expected to contribute significantly to total revenues, projected to be between $4.15 billion and $4.40 billion in 2025, reflecting a 5% year-over-year growth at the midpoint [9][10]. - The addition of dordaviprone, which has patent protection until at least 2037, aligns with Jazz's goal for durable revenue streams [10]. Group 3: Market Reaction - Following the acquisition announcement, Chimerix's shares surged nearly 71%, while Jazz's shares increased by about 1%. Year-to-date, Jazz's shares have risen 14%, and Chimerix's shares have skyrocketed 143%, both outperforming the industry average growth of 6% [6].