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April 16 (Reuters) – Merck & Co (MRK.N) stated on Sunday it’ll purchase Prometheus Biosciences Inc (RXDX.O) for about $10.8 billion, selecting up a promising experimental therapy 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 therapies for autoimmune illnesses. That represents a 75% premium to the $114.01 closing value for Prometheus shares on Friday.
“That is permitting us to maneuver into immunology in a powerful method and can enable us sustainable progress, we expect, nicely into the 2030s given the lengthy patent life,” Merck Chief Government 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 circumstances, may very well be a multibillion-dollar vendor for Merck. He stated the current launch of encouraging Part II medical trial outcomes drove Merck to pounce.
“We have been watching their medical improvement program for some time,” Davis stated.
If the deal closes within the third quarter of this yr as hoped, Merck might launch a late-stage ulcerative colitis examine of the drug within the fourth quarter or first quarter of 2024, Davis stated.
Merck has been looking for deals 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 yr.
Davis stated income from the Prometheus acquisition might begin to roll in across the time Keytruda patents might probably expire.
Davis in contrast the deal to at least one he struck in 2021 for Acceleron, which allowed Merck to rapidly construct out its pipeline of cardiovascular medication.
“I consider now we’ve a really sturdy portfolio within the cardiometabolic area. We see this acquisition of Prometheus constructing out an analogous portfolio within the immunology area,” Davis stated, including that Merck brings scale, international attain and important capital to deploy.
Final summer time, Merck was reportedly in talks to purchase most cancers targeted biotech Seagen Inc (SGEN.O), however rival Pfizer Inc (PFE.N) ended up hanging 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 essentially the most compelling science, and the place that science aligns with worth we transfer,” Davis stated, noting that the corporate will not be eager about giant transformative or cost-synergy pushed offers.
Merck’s talks with Prometheus have 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 therapy.
Reporting by Kanjyik Ghosh in Bengaluru; Modifying by Tom Hogue
Our Requirements: The Thomson Reuters Trust Principles.
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