Italian pharmaceuticals and diagnostics company Menarini is to buy US biopharma Stemline Therapeutics in a deal valued at up to $677 million.

The transaction is expected to close in the second quarter of 2020, subject to the usual conditions, including the tender of more than 50% of all Stemline shares as well as antitrust clearance.

"Stemline is an excellent fit for Menarini, enabling us to expand our presence in the US with an established biopharmaceutical company focused on developing oncology therapeutics," said Menarini’s CEO Elcin Barker Ergun. “Through this acquisition, we will continue to strengthen our portfolio and pipeline of oncology assets and deliver novel therapies around the world.”

The acquisition gives the Florence-based company access to Stemline’s Elzonris, a novel targeted therapy directed to the interleukin-3 receptor-α (CD123). Stemline has launched Elzonris for treating blastic plasmacytoid dendritic cell neoplasm (BPDCN) in adults and children two years or older following approval in the US in December 2018.

BPDCN is a rare and aggressive form of myeloid cancer, affecting the skin, bone marrow, central nervous system and other tissues.

Stemline said Menarini’s infrastructure will provide support for its ongoing efforts to develop additional applications of Elzonris to serve the unmet needs of patients suffering from difficult-to-treat diseases and cancers.

“Joining Menarini represents a unique opportunity for Stemline to advance the commercialization of Elzonris across the globe and to accelerate the development of our pipeline of oncology assets,” said Stemline’s chairman, CEO and founder Ivan Bergstein.

Under the terms of the transaction, Menarini will offer Stemline shareholders a total consideration of $12.50 per share, comprised of an upfront payment of $11.50 in cash and one non-tradeable Contingent Value Right (CVR), which will entitle each holder to an additional $1.00 per share upon completion of the first sale of Elzonris in any one of the following countries: France, Germany, Italy, Spain, or the UK.

Menarini expects to fund the acquisition through existing cash resources. Both companies’ boards of directors have unanimously approved the deal.