Ipsen has completed an acquisition of Canada-based Clementia Pharmaceuticals to expand its rare diseases portfolio.

The deal involves an initial aggregate consideration of $1.04bn as an upfront cash payment, which equals $25 per share.

Ipsen will pay an additional $263m ($6 per share) if Clementia’s investigational retinoic acid receptor gamma (RARγ) Palovarotene is approved in the US as a treatment for multiple osteochondromas (MO).

An application seeking US Food and Drug Administration (FDA) approval for Palovarotene to prevent heterotopic ossification (HO) in fibrodysplasia ossificans progressiva (FOP) patients is set to be filed in the second half of this year.

“We are encouraged by compelling and consistent clinical data from the extensive Phase II programme.”

The submission will include data from a Phase II clinical trial demonstrating that Palovarotene led to a more than 70% decrease in new HO across all dosing levels.

Ipsen chief scientific officer Alexandre Lebeaut said: “We are encouraged by compelling and consistent clinical data from the extensive Phase II programme, as well as fast-track, breakthrough therapy, orphan drug and rare paediatric diseases designations from the FDA.

“We are focused on the successful regulatory submission of Palovarotene as a first-in-class therapeutic solution for patients with episodic flare-up treatment of fibrodysplasia ossificans progressiva in the second half of 2019.”

Clementia CEO Clarissa Desjardins noted that Ipsen’s development capabilities and commercial footprint will help provide patients worldwide with access to Palovarotene.

The deal was first announced in February this year, and has been approved by the board of directors of both the parties, Clementia’s shareholders and the Quebec Superior Court.