MERCK BUYS RIVAL DRUG DEVELOPER FOR $10.8 BILLION
Drug giant Merck will pay $10.8 billion in cash to buy Prometheus Biosciences, a San Diego company that develops drugs for diseases resulting from the body’s defective immune system.
Merck is using its purchasing power to buy new and emerging drugs to replace those for which the company’s patents are expiring, including Keytruda, its best-selling cancer drug that generated more than $20 billion in revenue in 2022 and becomes public property later this decade.
Merck has agreed to a price of $200 per share of Prometheus, 75 percent above its closing price on 14 April.
Prometheus has announced a successful trial of its monoclonal antibody treatment for ulcerative colitis and is using machine learning to sift through other possible drug formulas for irritable bowel diseases.
“The agreement with Prometheus will accelerate our growing presence in immunology where there remains substantial unmet patient need,” Merck CEO Robert Davis said in a statement announcing the buy.
“This transaction adds diversity to our overall portfolio and is an important building block as we strengthen the sustainable innovation engine that will drive our growth well into the next decade,” he added.
The deal continues the revival of mergers and acquisitions in the pharma industry after a lull last year.
In March, Pfizer announced it had agreed to pay $43 billion for Seagen Inc. and its pioneering line of anti-cancer drugs. Cancer treatment is also a Pfizer specialty.
Seagen’s new drugs could bring $31 billion in sales by 2028, market research firm Evaluate said.