Merck buys Acceleron for approximately $ 11.5 billion as part of campaign to promote rare disease drugs

September 30 (Reuters) – Merck & Co (MRK.N) announced Thursday that it will acquire Acceleron Pharma Inc (XLRN.O) for approximately $ 11.5 billion, expanding its portfolio beyond aging cancer drug Keytruda with potential treatments that could generate new income.

The deal gives Merck access to Acceleron’s rare disease drug candidate sotatercept, which the company says could generate billions of dollars in sales, and comes as Keytruda heads for lost commercial exclusivity in 2028.

Lung cancer treatment accounted for 36.7%, or $ 4.18 billion, of Merck’s total sales in the second quarter.

Sotatercept is currently in an advanced stage study, testing it as a treatment for a rare cardiovascular disease called pulmonary arterial hypertension (PAH), a type of high blood pressure that affects the blood vessels in the lungs. Merck considers PAHs to be a market of approximately $ 7.5 billion by 2026.

The drugmaker will pay $ 180 per Acceleron share in cash, which is about a 2.6% premium over the share’s closing price on Wednesday, according to data from Refinitiv.

Avoro Capital, which owns 7% of Acceleron’s shares with its managed funds, said the deal undervalues ​​the drugmaker.

“We believe there should be no rush to sell low now, as the value of the business will only increase as more clinical trial data is released,” he said. stated in a press release.

While the Acceleron deal does not completely remove excess generic competition for Keytruda, it does help diversify sales, which addresses a major concern of shareholders, Cantor Fitzgerald analyst Louise Chen wrote in a client note. .

Merck is targeting a US launch of the sotatercept in 2024-2025 and its commercial exclusivity for PAHs should extend until 2036-2037.

The deal also adds an FDA-approved blood disorder drug Reblozyl to Merck’s portfolio, which Acceleron markets with partner Bristol Myers Squibb (BMY.N).

Report by Mrinalika Roy in Bengaluru; Editing by Vinay Dwivedi, Sriraj Kalluvila and Anil D’Silva

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