Merck buys Prometheus Biosciences for almost $11bn
Merck has agreed to purchase Prometheus Biosciences for $10.8bn because the US drugmaker bolsters it pipeline forward of the attainable lack of exclusivity over its best-selling most cancers drug later this decade.
The all-cash transaction for Prometheus — a San Diego-based biotech specializing in ailments attributable to irregular exercise of the physique’s immune system — is the most recent signal of a rebound in mergers and acquisitions within the sector following a dip in exercise final yr.
Prometheus is creating a monoclonal antibody therapy for ulcerative colitis, a sort of inflammatory bowel illness. It introduced constructive trial outcomes for its lead drug candidate focusing on the illness from a mid-stage trial in December and is creating a number of different therapies utilizing machine studying to determine drug targets.
Merck stated the deal would strengthen the corporate’s place within the fast-growing area of immunology, the place there’s vital unmet affected person want.
“This transaction provides range to our total portfolio and is a crucial constructing block as we strengthen the sustainable innovation engine that can drive our development effectively into the following decade,” stated Robert Davis, Merck’s chair and chief govt.
Merck has agreed to pay $200 per share for Prometheus, a 75 per cent premium to Friday’s closing value for the corporate’s shares, that are listed on the Nasdaq.
Merck has been on the hunt for acquisitions over the previous yr because it seeks to diversify its pipeline forward of the potential lack of exclusivity on its blockbuster most cancers drug Keytruda. Key patents associated to that drug, which generated virtually $21bn in revenues in 2022, are attributable to expire in direction of the tip of the last decade enabling rivals to launch comparable merchandise.
The US drugmaker was reportedly in talks with oncology-focused Seagen a few potential deal final yr however didn’t transfer ahead with a transaction. In March Pfizer swooped on Seagen, asserting a deal for a complete enterprise worth of $43bn, which was the most important pharmaceutical transaction introduced since AbbVie agreed to purchase Allergan in 2019.
Below the phrases of the transaction Merck is buying Prometheus by means of a subsidiary. The deal, which was first reported by the Wall Road Journal, is topic to approval from Prometheus shareholders and regulators. The transaction is predicted to shut within the third quarter of 2023.