Updated 4/16/2023, 9:25 a.m.: Merck (MRK) has agreed to acquire Prometheus Biosciences (RXDX) for $10.8B. Through a subsidiary, MRK has agreed to a price of $200.00 per share, paid in cash. The total equity value is around $10.8 billion.
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The transaction should close in the third quarter of this year. Merck will acquire all outstanding shares of Prometheus, subject to Prometheus Biosciences shareholder approval.
Merck’s top-seller, Keytruda, received FDA acceptance for review of a new application last week. Nonetheless, the company is apparently eager to use the acquisition to pre-fill the hole that will be created when Keytruda loses its patent protection, in 2028.
Prometheus does not yet have any approved products, but its trials of treatments for Crohn’s disease and ulcerative colitis have seen positive results, and RXDX is a Strong Buy, according to analyst consensus.
RXDX stock has risen nearly 7% year-to-date, and has risen more than 1% in post-market trading since Friday. The company has a market cap of $5.42B.
Merck, for its part, is also rated a Strong Buy. MRK has risen 4.5% year-to-date, and it boasts an “Outperform” Smart Score of 9.