Merck Looks to Strengthen Immunology Pipeline with $10.8B Acquisition of Prometheus Biosciences

Merck is betting big on Prometheus Biosciences’ promise of drugs treating autoimmune conditions. The New Jersey-based pharma behemoth has agreed to acquire the biotech company for $200 per share in cash through a subsidiary, representing a 75% premium to the $114.01 closing price on Friday. The transaction is expected to close in the third quarter of this year.

Sand Diego-based Prometheus’ pipeline drug in development – PRA023- treats immune diseases including ulcerative colitis and Crohn’s disease and recently reported separate positive study results in mid-stage testing.

“The agreement with Prometheus will accelerate our growing presence in immunology where there remains substantial unmet patient need,” said Robert M. Davis, Merck’s chairman and chief executive officer.

The deal is the sector’s second largest this year and the most significant acquisition for Merck since its $11.5 billion buyout of Acceleron Pharma in 2021.

The Prometheus buy comes as Merck risks losing a lucrative revenue stream. By 2028, Merck’s key patents for its $165,000 cancer drug Keytruda, which harnesses the body’s own immune system to fight cancers with dramatic results, are set to expire.

Merck’s sales last year came to $59.3 billion, with Keytruda sales making up roughly $21 billion of it. To lessen the blow, Merck has been increasing its footprint in the autoimmune and cardiovascular treatment space.

Last July, Merck was reportedly looking to buy biotech firm Seagen for $40 billion, to expand its cancer drug portfolio. But rival Pfizer won the bid, buying the oncology medications company for $43 billion in March.