Merck said the deal is expected to close in the second half of the year.
Steve Hockstein/Bloomberg News
Merck said early Thursday that it had cut a deal to buy a biotech firm called Pandion Therapeutics for $60 per share in cash, more than twice Pandion’s current share price.
Shares of Pandion (ticker: PAND), which develops drugs to treat autoimmune diseases, closed at $25.63 on Wednesday. The stock has traded as low as $10.28, and no higher than $27.75, over the past 12 months. Shortly after the deal was announced, Pandion shares climbed to $59.32 in premarket trading, up 134.1%.
Merck shares were up 0.3% in premarket trading.
The deal values Pandion at approximately $1.85 billion. The company is developing drugs called immune modulators to target autoimmune diseases. Its most advanced drug candidate, called PT101, is being tested as a treatment for ulcerative colitis and other autoimmune diseases. It has successfully completed a Phase 1a safety and tolerability trial.
“This acquisition builds upon Merck’s strategy to identify and secure candidates with differentiated and potentially foundational characteristics,” said Dr. Dean Li, president of Merck Research Laboratories, in a statement.
Merck shares are down 8.8% so far this year, and 6.7% over the past 12 months. The company’s longtime CEO, Kenneth Frazier, announced his long-expected retirement in early February. He will be succeeded by the company’s executive vice president, Robert Davis.
Though the company is among the top vaccine makers in the world, and is generally renowned for its vaccine development capabilities, Merck’s efforts to develop a Covid-19 vaccine have so far failed. In late January, the company said it was giving up on its two experimental Covid-19 vaccines, after disappointing early trials.
The company said that the Pandion acquisition is expected to close in the first half of this year. Pandion went public in July of 2020 in an initial public offering priced at $18 per share. It opened for trading at $27 per share on July 17.
Merck announced a number of deals in late 2020, including the $2.75 billion acquisition of a private biotech company called VelosBio, and the $425 million acquisition of another privately held firm, called Oncimmune.
Write to Josh Nathan-Kazis at [email protected]
