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Merck to acquire Acceleron for $11.5 billion in rare disease drugs push

PUBLISHED ON 2021-09-30 21:31:00 EST Arghyadeep


Key Points

• Merck is buying Acceleron for about $11.5 billion to broaden its portfolio 

• The deal gives Merck access to Acceleron’s sotatercept, a rare disease drug candidate for PAH

• Sotatercept is currently in a late-stage study, and the disease is expected to have a roughly $10.62 billion market by 2026

Merck & Co Inc on Thursday said it signed a deal to acquire drugmaker Acceleron Pharma Inc for about $11.5 billion, as the U.S. pharmaceutical giant looks to strengthen its portfolio with drugs for rare diseases.

The deal will give Merck, the manufacturer of blockbuster cancer drug Keytruda, access to Acceleron’s potentially lucrative rare disease drug candidate, sotatercept.

Massachusetts-based Acceleron focuses on therapeutics to treat cardiovascular and other blood-related disorders. Its sotatercept aims to treat pulmonary arterial hypertension (PAH), a type of high blood pressure that affects the lungs, which is being assessed in the late-stage study.

As Keytruda’s patent will expire in 2028, Merck will lose the market exclusivity, and as of the second quarter, the lung cancer treatment accounted for 36.7% of Merck’s sales, which is about $4.18 billion.

The acquisition deal will give the pharma giant a multi-billion dollar peak sales opportunity, as it is estimated that the global PAH market to reach  $10.62 billion by 2026.

Merck said it would pay $180 per Acceleron share in cash, a premium of about 2.6% to the stock’s closing price on Wednesday, and is expected to close in the fourth quarter of 2021.

“Although the acquisition of Acceleron will not fully remove the overhang of generic competition for MRK’s single largest drug Keytruda (we estimate 37% of 2021 sales), it does help diversify sales, which addresses a large shareholder concern,” Cantor Fitzgerald analyst Louise Chen said in a client note.

Merck is planning to launch sotatercept in the U.S. in the next three to four years. Its market exclusivity for PAH is expected to extend through 2036-2037.

The deal also adds the FDA-approved therapeutics Reblozyl, which treats two blood-related disorders, including anaemia in patients with beta-thalassemia - which Acceleron markets with partner Bristol Myers Squibb - to Merck’s portfolio.

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