Merck & Co. agreed to acquire Prometheus Biosciences

Merck & Co. announced Sunday that it agreed to acquire Prometheus Biosciences for $200 per share in cash, or a total equity value of about $10.8 billion. The company said the move will bolster its pipeline with the addition of PRA023, a late-stage asset Prometheus is working on for the treatment of ulcerative colitis (UC), Crohn's disease and other autoimmune conditions. 

The agreed price represents a 75% premium to Prometheus' Friday close. The transaction, which is expected to close in the third quarter, comes on the heels of a report in The Wall Street Journal citing anonymous sources as saying the two companies were in advanced talks about a potential merger. 

 Merck CEO Robert Davis says the acquisition "will accelerate our growing presence in immunology where there remains substantial unmet patient need." It is also expected to add "diversity to our overall portfolio and is an important building block as we strengthen the sustainable innovation engine that will drive our growth well into the next decade," he remarked. 

 In December, Prometheus said it would advance PRA023 into late-stage testing in UC and Crohn's disease after reporting positive results for the anti-TL1A monoclonal antibody in a pair of Phase II studies. In the ARTEMIS-UC trial, 26.5% of patients with UC who were given PRA023 achieved clinical remission at week 12 compared to 1.5% for placebo. Meanwhile, the APOLLO-CD study showed that 26% of Crohn's patients on PRA023 achieved endoscopic response and 49.1% attained clinical remission, versus prespecified historical placebo rates of 12% and 16%, respectively.