Key Points
- Merck agreed to acquire Prometheus Biosciences in a deal worth $10.8 billion.
- Prometheus Biosciences shares rose 70% in early trading Monday after the announcement.
- Merck shares fell slightly on the news.
Shares of Prometheus Biosciences (RXDX) surged on Monday after the maker of inflammatory bowel disease treatments has announced it will be acquired by Merck, as the drugmaker seeks to diversify its product line.
Under an agreement of & Worth $10.8 billion, Merck (MRK) has agreed to acquire Prometheus Biosciences for $200 per share, a 75% premium to Friday's closing price. The deal for Prometheus is expected to close in the third quarter.
Prometheus Biosciences President and CEO Mark McKenna said the deal would maximize the potential of its lead product, a drug aimed at targeting inflammatory bowel diseases such as ulcerative colitis and Crohn's disease, “while continuing to apply our technology and expertise to fuel new discoveries to meet the needs of patients with immune disorders.
The acquisition will add diversity to Merck's portfolio as it seeks to tap into new markets, said Robert M. Davis, the company's president and chief executive officer.
“The Agreement with Prometheus accelerate our growing presence in the field of immunology where there remain significant unmet needs for patients,” said Davis.
Prometheus Biosciences shares rose 70% in early trading on Monday following the announcement Merck shares fell slightly on the news.
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Source: investopedia.com
