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Merck to Acquire Prometheus Biosciences for $10.8 Billion

Industry: Healthcare
Current: Company Performance

Merck agreed to acquire Prometheus Biosciences for $10.8 billion on 16th Apr’23
The acquisition is expected to accelerate Merck's growth in immunology and help address unmet patient needs
As per GlobalData, a total of $1.35 billion was spent by Merck on M&A deals in 2022, compared with $13.35 billion in 2021

Overview of Merck's Acquisition:

On 16th April 2023, Merck, a leading biopharmaceutical company, announced that it has agreed to acquire Prometheus Biosciences for $10.8 billion, in a move to strengthen its presence in the field of immunology. The deal comes as Merck seeks to protect itself from an eventual revenue loss as patents on its cancer immunotherapy, Keytruda, begin to expire towards the end of the decade.

Merck will acquire Prometheus Biosciences, a biotechnology company specializing in immunological disease treatments, through one of its subsidiaries for $200 per share. This represents a 75% premium to the $114.01 closing price for Prometheus shares on 14th April 2023. As per Merck Chairman and CEO Robert Davis, acquiring Prometheus will accelerate Merck's growth in immunology, where significant unmet patient needs exist, and expand its product portfolio.

Merck (MSD outside US and Canada) is a biopharmaceutical company that develops prescription medicines, biologics, vaccines, and animal health products. It offers products for various diseases and animal health needs. Meanwhile, Prometheus Biosciences is a biotech company that discovers, develops, and commercializes therapeutic and companion diagnostic candidates for inflammatory bowel disease (IBD), including PRA023 and PR600, PR300, PR1100, PR1800, and PR2100.

Merck M&A Deals Value:

The acquisition marks Merck's latest in a series of M&A deals over the years. According to GlobalData, the company acquired Imago BioSciences for $1.35 billion in 2022, and it acquired Acceleron Pharma for $11.5 billion in 2021. A total of $1.35 billion was spent by Merck on M&A deals in 2022, compared with $13.35 billion in 2021. The company has been actively seeking opportunities to expand its portfolio and acquire innovative technologies to drive growth.

In conclusion, Merck’s acquisition of Prometheus Biosciences for $10.8 billion is a strategic move to strengthen its presence in the field of immunology and diversify its portfolio. The acquisition is expected to accelerate Merck's growth in immunology and help address unmet patient needs, positioning it as a leader in the biopharmaceutical industry.