April 16 (Reuters) – Merck & Co (MRK.N) stated on Sunday it's going to purchase Prometheus Biosciences Inc (RXDX.O) for about $10.8 billion, selecting 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 makes a speciality of remedies for autoimmune ailments. That represents a 75% premium to the $114.01 closing worth for Prometheus shares on Friday.
“That is permitting us to maneuver into immunology in a powerful means and can enable us sustainable progress, we predict, effectively 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 ulcerative colitis, Crohn’s illness, and different autoimmune situations, might be a multibillion-dollar vendor for Merck. He stated the latest launch of encouraging Part II scientific trial outcomes drove Merck to pounce.
“We have been watching their scientific growth program for some time,” Davis stated.
If the deal closes within the third quarter of this 12 months as hoped, Merck might 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 tip of the last decade. The corporate reported almost $21 billion in Keytruda gross sales final 12 months.
Davis stated income from the Prometheus acquisition might begin to roll in across the time Keytruda patents might doubtlessly 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 medication.
“I imagine now we have now a really sturdy portfolio within the cardiometabolic house. We see this acquisition of Prometheus constructing out the same portfolio within the immunology house,” Davis stated, including that Merck brings scale, international attain and vital capital to deploy.
Final summer season, Merck was reportedly in talks to purchase most cancers centered biotech Seagen Inc (SGEN.O), however rival Pfizer Inc (PFE.N) 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 dimension.
“We glance the place we see probably the most compelling science, and the place that science aligns with worth we transfer,” Davis stated, noting that the corporate shouldn't be all for giant transformative or cost-synergy pushed offers.
Merck's talks with Prometheus had been first reported by the Wall Avenue Journal.
The corporate in February forecast 2023 earnings beneath Wall Avenue estimates and a steep decline in gross sales of its COVID-19 antiviral remedy.
Reporting by Kanjyik Ghosh in Bengaluru; Enhancing by Tom Hogue
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