Merck to buy Prometheus Biosciences for about $11 billion
Business
Merck will pay $200 per share for the California-based biotechnology company
(Reuters) - Merck & Co. said on Sunday it will buy Prometheus Biosciences Inc. for about $10.8 billion, picking up a promising experimental treatment for ulcerative colitis and Crohn's disease and building up its presence in immunology.
Merck will pay $200 per share for the California-based biotechnology company that specializes in treatments for autoimmune diseases. That represents a 75% premium to the $114.01 closing price for Prometheus shares on Friday.
Merck Chief Executive Robert Davis said the Prometheus drug, PRA023, being developed to treat ulcerative colitis, Crohn’s disease, and other autoimmune conditions, could be a multibillion-dollar seller for Merck. He said the recent release of encouraging Phase II clinical trial results drove Merck to pounce.
If the deal closes in the third quarter of this year as hoped, Merck could launch a late-stage ulcerative colitis study of the drug in the fourth quarter or first quarter of 2024, Davis said.
Merck has been looking for deals to protect itself from eventual revenue loss as patents on its blockbuster cancer immunotherapy Keytruda begin to expire toward the end of the decade. The company reported nearly $21 billion in Keytruda sales last year.
Davis said revenue from the Prometheus acquisition could start to roll in around the time Keytruda patents could potentially expire.
