Inspiration Biopharmaceuticals Inc., which filed for Chapter 11 bankruptcy in November 2012, and partner Ipsen SA unloaded their lead hemophilia program, OBI-1 (recombinant porcine factor VIII), to Baxter International Inc., which boasts the market-leading resume in the hemophilia space.

Baxter picked up global rights to OBI-1, which is in Phase II/III studies in acquired hemophilia A and in congenital hemophilia A with inhibitors against human FVIII, as well as Ipsen's manufacturing facility for OBI-1 in Milford, Mass.

The potential $700 million agreement included an up-front payment of $50 million and development and sales milestones of $135 million, including payments of up to $20 million based on regulatory approval of the acquired hemophilia A indication in the U.S. and first additional country, plus tiered payments ranging from 12.5 percent to 17.5 percent of OBI-1 annual net sales.

OBI-1 has orphan drug designation in the U.S. and Europe and was granted fast-track designation for acquired hemophilia A by the FDA.

The asset sale signaled the beginning of the end for Cambridge, Mass.-based Inspiration, which was co-founded in 2007 by John Taylor and Scott Martin, whose sons inherited hemophilia. The U.S. Bankruptcy Court in Boston approved the asset purchase agreement Thursday morning, according to John Butler, Inspiration's CEO.

With Evercore Partners as financial advisor, Inspiration and Ipsen are finalizing the sale of IB1001 , an intravenous recombinant factor IX product designed to treat and prevent bleeding in hemophilia B that is under regulatory review in the U.S. and Europe. The deal is expected to conclude in several weeks, Butler said.

Although Inspiration's and Ipsen's initial objective was to sell the two hemophilia candidates as a package deal, "our first goal was to maximize the value for our stakeholders," Butler told BioWorld Today. Splitting the assets into two transactions – both with multiple bidders – emerged as the better strategy to "divide and conquer," he added.

"We're thrilled with the outcome," Butler said. "I couldn't ask for a better acquirer for OBI-1 than Baxter."

Inspiration and Paris-based Ipsen merged their hemophilia portfolios in 2010, with Ipsen investing $259 million to fund clinical development of Inspiration's two lead products while the small biotech, then based in Laguna Niguel, Calif., handled the development work. The deal included an option for Ipsen to purchase the company, potentially transforming hemophilia into Ipsen's largest single market. (See BioWorld Today, Jan. 10, 2010.)

Inspiration continued to move the products through clinical studies and submitted a biologics license application to the FDA for IB1001 last year. But the partnership began to unravel last summer, after the FDA placed both Phase III studies of IB1001 on hold following routine laboratory evaluations that showed a trend toward a higher proportion of IB1001-treated individuals developing a positive response to testing of antibodies to Chinese hamster ovary protein, the product's host cell protein. (See BioWorld Today, Apr. 18, 2012.)

In August, the companies restructured the partnership, including a provision to remove Ipsen's call option to acquire Inspiration so the biotech could become more independent. The revised agreement also called for Ipsen to invest another $20 million after Inspiration completed a $30 million qualified external financing. (See BioWorld Today, Aug. 22, 2012.)

That financing never came, however, forcing Inspiration into bankruptcy protection several months later. (See BioWorld Today, Nov. 1 , 2012.)

Ipsen has continued to provide Inspiration with debtor-in-possession (DIP) financing of up to $18.3 million to fund operations, including continuation of clinical trials, and the sale process. Ipsen agreed to extend the DIP to Inspiration for 45 days, or an additional amount of up to $5 million.

The OBI-1 asset sale now moves to regulatory clearance under the Hart-Scott-Rodino Antitrust Improvements Act, according to Butler. Once that process is completed, Inspiration will work with Baxter, of Deerfield, Ill., to complete the compound's transition.

As Inspiration's only senior secured creditor, Ipsen will receive approximately 60 percent of the up-front payment from Baxter, 80 percent of additional payments up to a present value of $304 million and 50 percent of any additional proceeds, according to a statement from the French company. The asset sale process also signaled the end of Ipsen's foray into hemophilia.

Butler was hopeful that, ultimately, Inspiration played a significant role in advancing a promising hemophilia treatment toward the commercial market. "At the end of the day, the most important thing is bringing these products to the patients," he said. "Whether the Inspiration name is on the box is much less important."