HQ Team
April 17, 2023: US-based Merck will buy Prometheus Biosciences for about 10.8 billion to shore up its immunology portfolio to shield itself from eventual revenue loss as patents on its cancer immunotherapy Keytruda expires by the end of the decade.
Merck, through a subsidiary, has agreed to acquire California-based Prometheus for $200.00 per share in cash for a total equity value of approximately $10.8 billion, according to a company statement.
Under the terms of the acquisition agreement, Merck, through a subsidiary, will acquire all of the outstanding shares of Prometheus. The transaction is expected to close in the third quarter of 2023.
“The agreement with Prometheus will accelerate our growing presence in immunology where there remains a substantial unmet patient need,” said Robert M. Davis, chairman, and chief executive officer, of Merck.
“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 said.
Immune-related diseases
Prometheus is a clinical-stage biotechnology company employing a precision medicine approach for discovering, developing, and commercializing diagnostic products and therapeutic medicines to treat immune-related diseases.
The company’s lead candidate, PRA023, is a humanized monoclonal antibody directed to tumour necrosis factor-like ligand 1A, a target associated with intestinal inflammation and fibrosis.
Tumour necrosis factor alpha has been identified as a major regulator of inflammatory responses and is known to be involved in the pathogenesis of some inflammatory and autoimmune diseases.
Pleiotropy is defined as the expression of multiple traits by a single gene. For example, phenylketonuria is a disease. It is a genetic disorder caused by the low metabolism of the amino acid phenylalanine in the body cells.
Pleiotropy is derived from a Greek word meaning more ways.
Marfan syndrome in humans, sickle cell diseases, phenylketonuria, albinism, and schizophrenia are other examples of pleiotropy.
Ulcerative Colitis
“Prometheus was established to revolutionize the treatment of immune-mediated diseases through applying a powerful precision medicine approach,” said Mark McKenna, chairman and chief executive officer of Prometheus Biosciences.
“This agreement with Merck…allows Prometheus to maximize the potential for PRA023 while continuing to apply our technology and expertise to fuel further discoveries to address the needs of patients with immune disorders.”
Prometheus is developing PRA023 to treat immune-mediated diseases, including ulcerative colitis (UC), Crohn’s disease, and other autoimmune conditions.
Inflammatory bowel disease is a term used to collectively describe Crohn’s disease and ulcerative colitis.
These conditions are characterized by chronic inflammation of the gastrointestinal tract. Prolonged inflammation results in damage to the tissues lining the tract.
Clinical Trials’ positive.’
Ulcerative colitis and Crohn’s disease are usually characterized by diarrhoea, rectal bleeding, abdominal pain, fatigue, and weight loss.
In December 2022, the company 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.
The APOLLO-CD is a phase 2A, open-label study evaluating safety and efficacy in patients with moderate to severe Crohn’s disease.
“By applying a portfolio of powerful analytic tools to a comprehensive collection of inflammatory bowel disease samples, Prometheus identified important disease insights that have now yielded a promising late-stage candidate,” said Dr Dean Y. Li, president of Merck Research Laboratories.
Morgan Stanley & Co. LLC acted as financial advisor to Merck in this transaction, and Paul, Weiss, Rifkind, Wharton & Garrison LLP as its legal advisors.
Centerview Partners LLC and Goldman Sachs & Co. LLC acted as financial advisors to Prometheus and Latham & Watkins LLP as the company’s legal advisor.
