French drugmaker Ipsen has entered into a definitive agreement to buy the global oncology assets from the USA's Merrimack Pharmaceuticals, in a deal that could be worth around $1 billion.

The transaction includes Merrimack's key marketed product Oniveyde (irinotecan liposome injection), which is approved in the US for the treatment of patients with metastatic adenocarcinoma of the pancreas after disease progression following gemcitabine-based therapy.

The drug is also in a Phase II trial in first-line previously untreated metastatic pancreatic cancer, a Phase II/III trial in relapsed small-cell lung cancer, and a Phase I pilot trial in breast cancer, which Ipsen will take responsibility for on deal closing.

As per the terms of the agreement, Ipsen will gain exclusive commercialisation rights for the current and potential future indications in the US, as well as the current licensing agreements with Shire for commercialisation rights ex-US and PharmaEngine for Taiwan.

In return, it will pay Merrimack $575 million cash at closing plus up to $450 million upon the approval of potential additional indications for Onivyde in the US.

Ipsen said the deal "represents a unique opportunity and a strong strategic fit," that secure "a marketed, wholly-owned asset with current US revenues and significant revenue growth projections".

The transaction, which is subject to customary closing conditions, is expected to close by the end of the first quarter of 2017.