USA – Merck has struck a US$11.5 billion deal to buy Acceleron Pharma to expand its growing pipeline of cardiovascular treatments, and said it is on the hunt for further acquisition opportunities.
The US life sciences group said it would acquire US-listed Acceleron for US$180 per share in cash in a deal that is expected to close in the fourth quarter.
It is the latest in a series of acquisitions of emerging companies by large pharma groups aiming to secure access to blockbuster drugs to boost future revenues. Pfizer last month paid US$2.3bn to acquire Trillium Therapeutics, which is developing a therapy that it hopes will be transformative for treating blood cancers.
Acceleron, which is based in Cambridge, Massachusetts, is a biotech company that develops protein-based therapies to treat certain types of cancers and rare diseases.
The company markets Reblozyl, a drug that treats anaemia in certain blood disorders, in the US, Europe and Canada in collaboration with Bristol-Myers Squibb, which owns an 11.5 per cent stake in Acceleron.
Rob Davis, chief executive of Merck, said the deal would give Merck access to a potential blockbuster drug candidate sotatercept, a treatment for a rare high blood-pressure disorder that is in Phase 3 clinical trials. Merck said it was targeting a launch for sotatercept in 2024-25.
Davis said he was confident Merck could successfully commercialise the drug as a foundational therapy and multibillion-dollar revenue opportunity.
Merck is seeking to diversify its drug portfolio with its blockbuster cancer drug Keytruda — which generated more than a third of company revenues in the second quarter — expected to face generic competition in coming years.
“This fits perfectly in our capital allocation and development strategy. It really rounds out and complements our cardiovascular pipeline, and broadens and bolsters the overall pipeline,” Davis says.
The company mentioned it would continue to look to broaden its pipeline of drugs and was prepared to accept a potential rating downgrade if the right acquisition opportunity emerged.
Geoffrey Porges, analyst at SVB Leerink, said the price seemed fair given that a buyer would get 25 to 30 per cent of the value of Reblozyl, which is likely to become a $2bn-plus brand by the late 2020s. Merck would also get access to other drugs in Acceleron’s pipeline, including sotatercept, he said.
“Acceleron will offer a buyer a relatively secure US$1bn to US$1.5bn in estimated revenue by 2025, increasing to an estimated US$2.7bn by 2030, and it is not unreasonable to expect the contribution to be US$3.5bn in revenue by 2030,” said Porges.