Merck to Acquire Prometheus Biosciences for $10.8 Billion to Strengthen Immunology Pipeline

On April 16, MSD announced in conjunction with Prometheus Biosciences that the two companies have reached a definitive agreement, under which MSD, through its subsidiary, will acquire Prometheus at a price of $200 per share, corresponding to a total acquisition price of approximately $10.8 billion.

Prometheus is a clinical-stage biotechnology company pioneering the discovery, development, and commercialization of novel therapeutic and companion diagnostic products for the treatment of immune-mediated diseases using a precision medicine approach. The company's lead candidate, PRA023, is a humanized monoclonal antibody (mAb) targeting Tumor Necrosis Factor (TNF)-like Ligand 1A (TL1A), which is associated with intestinal inflammation and fibrosis.

Prometheus is developing PRA023 for the treatment of immune-mediated diseases, including ulcerative colitis (UC), Crohn's disease (CD), and other autoimmune conditions. In December 2022, the company announced positive results for PRA023 in the ARTEMIS-UC and APOLLO-CD trials; the former being a Phase II placebo-controlled study evaluating the safety and efficacy in patients with moderate to severe active UC, and the latter a Phase IIA open-label study assessing safety and efficacy in patients with moderate to severe CD.

"Prometheus has applied a powerful set of analytical tools to the comprehensive collection of IBD samples, identifying significant disease insights, and has now generated a promising late-stage drug candidate," said Dr. Dean Y. Li, President of Merck Research Laboratories. "I look forward to collaborating with the talented team at Prometheus to establish a new paradigm for precision treatments in immune-mediated diseases."

According to the terms of the acquisition agreement, MSD will acquire all outstanding shares of Prometheus through a subsidiary. The acquisition is subject to approval by Prometheus shareholders. The transaction is expected to be completed in the third quarter of 2023.

MSD Chairman and Chief Executive Officer Robert M. Davis said, "At MSD, we are committed to achieving our goal of saving and improving lives, and we continue to seek and secure those compelling scientific and value-creating opportunities. The agreement with Prometheus will accelerate our growth in the field of immunology, where there remains a significant unmet patient need. This transaction enhances the diversity of our overall portfolio and is a key cornerstone in strengthening our sustainable innovation engine, which will drive our growth over the next decade."

"Prometheus was founded to revolutionize the treatment of immune-mediated diseases by applying powerful precision medicine approaches," said Mark McKenna, Chairman and Chief Executive Officer of Prometheus. "This agreement with MSD, a leader in biopharmaceutical research and development, enables Prometheus to maximize the potential of PRA023 while continuing to leverage our technology and expertise to drive further discoveries to address the needs of patients with immune-mediated diseases."

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