Merck Acquires Prometheus Biosciences For $10.8B, Strengthening Its Immunology Pipeline

by Akanksha Bakshi, Benzinga Editor
April 17, 2023 7:47 AM | 2 min read
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  • Prometheus Biosciences Inc RXDX shares are jumping Monday morning as Merck & Co MRK has agreed to acquire the company for $200.00 per share in cash for a total equity value of ~$10.8 billion.
  • The transaction represents over 75% premium to Prometheus' last closing price of $114.01.
  • Prometheus is developing PRA023 to treat immune-mediated diseases, including ulcerative colitis (UC), Crohn's disease (CD), and other autoimmune conditions.
  • In December 2022, Prometheus announced positive results for PRA023 from ARTEMIS-UC, a Phase 2, placebo controlled, study evaluating safety and efficacy in patients with moderate to severely active UC and APOLLO-CD a Phase 2A, open-label, study evaluating safety and efficacy in patients with moderate to severe CD.
  • "The agreement with Prometheus will accelerate our growing presence in immunology where there remains substantial unmet patient need. 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," commented Robert M. Davis, chairman and CEO, Merck.
  • The transaction is expected to close in the third quarter of 2023.
  • "I believe now we have a very strong portfolio in the cardiometabolic space. We see this acquisition of Prometheus building out a similar portfolio in the immunology space," Davis stated, adding that Merck brings scale, global reach and significant capital to deploy, reported Reuters, citing an interview.
  • According to the report, Merck has been looking for deals to protect itself from potential revenue loss as patents on its blockbuster cancer immunotherapy Keytruda expire towards the end of the decade.
  • Davis anticipates that revenue from the Prometheus acquisition would begin to flow around the time that Keytruda patents might expire, mentioned the report.
  • Price Action: MRK shares are trading lower by 0.21% at $115.07 and RXDX higher by 69.55% at $193.30 premarket on Monday.
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