Merck to build out immunology presence with $11 billion Prometheus deal

authored by Michael Erman

Prometheus Biosciences Inc. will be acquired by Merck & Co. on Sunday for about$ 10.8 billion, according to a report by Reuters. This acquisition will strengthen the company’s’s position in the immunology field by taking on an exciting experimental treatment for ulcerative colitis and Crohn.

The California-based biotechnology company that specializes in autoimmune disease treatments will receive$ 200 per share from Merck. That represents a 75 % increase over the closing price of Prometheus shares on Friday, which was$ 114.01.

Given the huge trademark life, Merck Chief Executive Robert Davis said in an discussion,” This is allowing us to move into immunology in a good strategy and will grant us sustainable development, we think, well into the 2030s.”

Davis predicted that Merck could sell the Prometheus drug, PRA023, which is being developed to treat ulcerative colitis, Crohn’s’s disease, and other autoimmune conditions, for a multibillion dollar price. He claimed that Merck pounced on the recent launch of encouraging Phase II clinical trial outcomes.

For a while, Davis said,” We’ve’ve been watching their clinical development program.”

According to Davis, Merck may begin a late-stage ulcerative colitis research of the medication in the fourth quarter or second quarter of 2024 if the deal closes in its anticipated fourth quarter this summer.

As the trademarks for Merck’s’s revolutionary cancer therapy Keytruda start to disappear toward the end of the decade, the company has been looking for agreements to safeguard itself from potential sales losses. Last summer, the company reported Keytruda sales of almost$ 21 billion.

According to Davis, Prometheus consolidation revenue may begin to flow around the time Keytruda patents might disappear.

Davis compared the agreement to the one he made with Acceleron in 2021, which facilitated Merck’s’s rapid expansion of its vascular drug pipelines.

” In the cardiovascular house, I think we now have a very good portfolio.” In the microbiology house, we see Prometheus’ learning expanding a similar investment, Davis said, adding that Merck brings level, global reach, and sizable capital to build.

Merck was reportedly considering purchasing cancer-focused biotechnology Seagen Inc. last summer, but Pfizer Inc, a rival, ultimately agreed to buy the company for$ 43 billion last month.

Davis predicted that Merck would keep being greedy about acquisitions but agnostic about size.

Davis noted that the organization is truly interested in significant transformational or cost-synergy driven talks and said,” We look where we see the most powerful knowledge, and where that science aligns with worth we move.”

The Wall Street Journal was the first to report on Merck’s’s conversations with Prometheus.

In February, the industry predicted 2023 income that would be lower than Wall Street projections and a sharp drop in sales of its COVID-19 antiviral medication.

( Reporting from New Jersey by Michael Erman; additional reporting from Bengaluru by Kanjyik Ghosh and Akanksha Khushi; editing by Tom Hogue, David Goodman, and Bill Berkrot )

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