Merck & Co. stated on Sunday it’ll purchase San Diego’s Prometheus Biosciences for about $10.8 billion, in an effort to construct up its presence in immunology.
In doing so, Merck will decide up a promising experimental remedy for ulcerative colitis and Crohn’s illness, whereas paying $200 per share for the biotechnology firm that focuses on therapies for autoimmune illnesses.
The worth 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 manner and can permit us sustainable development, we expect, effectively into the 2030s given the lengthy patent life,” Merck Chief Govt Robert Davis stated in an interview.
Prometheus outlines its beginnings on its web site, relationship again greater than 20 years, with the work of Dr. Stephan Targan, of Cedars-Sinai Medical Heart in Los Angeles.
That in the end led to the formation of Precision IBD – IBD stands for inflammatory bowel illness – the precursor to Prometheus Biosciences, which credit a Cedars-Sinai group as continued “shut companions and collaborators.”
Native listings for Prometheus embody Science Park Street in La Jolla and Carroll Park Drive in Sorrento Valley.
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. He stated the current launch of encouraging Part II scientific trial outcomes drove Merck to pounce.
“We’ve been watching their scientific growth program for some time,” the CEO stated.
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 on the lookout 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 practically $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 may doubtlessly expire.
He in contrast the deal to 1 he struck in 2021 for Acceleron, which allowed Merck to rapidly construct out its pipeline of cardiovascular medicine.
“I consider now we have now a really sturdy portfolio within the cardio-metabolic house. We see this acquisition of Prometheus constructing out an identical portfolio within the immunology house,” Davis stated, including that Merck affords scale, international attain and vital capital to be deployed.
Final summer season, Merck was reportedly in talks to purchase cancer-focused biotech Seagen Inc., however rival Pfizer Inc ended up hanging a $43 billion deal for Seagen final month.
Davis stated Merck would proceed to be opportunistic on acquisitions, with out regard for measurement.
“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 desirous about giant transformative or cost-synergy pushed offers.
Merck’s talks with Prometheus have been first reported by the Wall Road Journal.
Merck in February forecast 2023 earnings under Wall Road estimates, with a steep decline in gross sales of its COVID-19 antiviral remedy.
– Reuters and employees experiences
(Reporting by Michael Erman in New Jersey, with further reporting by Kanjyik Ghosh and Akanksha Khushi in Bengaluru; enhancing by Tom Hogue, David Goodman and Invoice Berkrot)