© Reuters. FILE PHOTO: Signage is seen on the Merck & Co. headquarters in Kenilworth, New Jersey, U.S., November 13, 2021. REUTERS/Andrew Kelly
By Michael Erman
(Reuters) -Merck & Co stated on Sunday it’ll purchase Prometheus Biosciences Inc for about $10.8 billion, choosing up a promising experimental remedy for ulcerative colitis and Crohn’s illness and build up its presence in immunology.
Merck pays $200 per share for the California-based biotechnology firm that focuses on remedies for autoimmune ailments, representing a 75.4% premium to Prometheus’ final closing worth.
Shares of Prometheus had been buying and selling at $194.49 earlier than the bell on Monday.
“That is permitting us to maneuver into immunology in a powerful manner and can permit us sustainable progress, we expect, properly into the 2030s given the lengthy patent life,” Merck Chief Govt Robert Davis stated in an interview.
Davis stated the Prometheus drug, PRA023, being developed to deal with two inflammatory bowel ailments (IBD) – ulcerative colitis and Crohn’s illness – and different autoimmune circumstances, could possibly be a multibillion-dollar vendor for Merck. He stated the current launch of encouraging mid-stage trial outcomes drove Merck to pounce.
“We have been watching their scientific growth program for some time,” Davis stated.
The probability of a counter-bid is slim as different giant drugmakers have already got a significant publicity to IBD or immunology, and Merck represents the cleanest acquirer from an antitrust perspective, stated Stifel analyst Annabel Samimy.
“Merck has acquired a game-changing asset in PRA023,” stated Samimy.
If the deal closes within the third quarter of this 12 months as hoped, Merck may launch a late-stage ulcerative colitis research of the drug within the fourth quarter or first quarter of 2024, Davis stated.
Merck has been searching for offers to guard itself from eventual income loss as patents on its blockbuster most cancers immunotherapy Keytruda start to run out towards the top of the last decade. The corporate reported almost $21 billion in Keytruda gross sales final 12 months.
Davis stated income from the Prometheus acquisition may begin to roll in across the time Keytruda patents probably expire.
Davis in contrast the deal to at least one he struck in 2021 for Acceleron, which allowed Merck to shortly construct out its pipeline of cardiovascular medicine.
“I imagine now we have now a really robust portfolio within the cardiometabolic area. We see this acquisition of Prometheus constructing out an identical portfolio within the immunology area,” Davis stated, including that Merck brings scale, world attain and important capital to deploy.
Final summer time, Merck was reportedly in talks to purchase most cancers centered biotech Seagen Inc, however rival Pfizer Inc (NYSE:) ended up placing a $43 billion deal for Seagen final month.
Davis stated Merck would proceed to be opportunistic on acquisitions, however is agnostic about measurement.
Merck’s talks with Prometheus had been first reported by the Wall Avenue Journal.
The corporate in February forecast 2023 earnings under Wall Avenue estimates and a steep decline in gross sales of its COVID-19 antiviral remedy.
