Merck emerges as lead bidder in potential Acceleron buyout with deal possible this week — report
With rumors swirling about a potential buyout of biotech Acceleron and its lead PAH drug sotatercept, market watchers have been keeping close tabs on industry movers and shakers due up for an expensive bolt-on. According to a new report, it appears Merck may be the one.
Merck is in “advanced talks” on a deal to acquire Cambridge, MA-based Acceleron in what previous reports pegged as a potential $11 billion buyout, the Wall Street Journal reported Monday. A deal could come as early as this week, according to the Journal.
Bristol Myers Squibb, which holds an 11.5% stake in Acceleron, looked like the early leader in the clubhouse for a buyout after news of an acquisition landed last week. But Merck, with a new management team looking to make a major splash, may have pulled the rug out from under its Big Pharma competitor.
The payoff here could be huge: Sotatercept has turned out open-label Phase II data in PAH, a rare disease characterized by high blood pressure in the lungs, showing improvements across a broad range of outcomes, including peak oxygen uptake or VO2 max, as well as ventilatory efficiency, total workload and arteriovenous oxygen content. The drug also posted an early outcomes win in patients’ six-minute walk test.
The results, and an upcoming Phase III test, were good enough for SVB Leerink analyst Geoffrey Porges to tap sotatercept as a potential $3 billion peak seller.
For Merck, sotatercept could serve as a crown jewel rare disease drug as the pharma, best known for its megablockbuster I/O drug Keytruda, looks to flesh out its pipeline with former CEO Ken Frazier and R&D czar Roger Perlmutter — the architect of Keytruda’s success — now out the door.
Former operations lead Rob Davis is now in the CEO role with Dean Li, formerly the head of early discovery R&D, taking over Perlmutter’s roost. In a call with analysts back in May, the new Merck leadership team announced its intent to lean heavily on business development in the coming years as it looks to press its advantage after Keytruda.
At the time, the focus of those potential acquisitions was uncertain, but rare disease could now be a major focal point moving into the future. Let’s see what happens this week.