- Merck and Cubist Pharmaceuticals, which were in discussions for a rumored $7 billion deal, announced an acquisition agreement on Monday morning for $9.5 billion. That means Merck is paying about $102 cash per Cubist share and getting ahold of its powerful portfolio of antibiotics.
- Cubist already has one of the top antibiotics on the market, Cubicin. In addition, it is developing treatments to combat antibiotic-resistant infections.
- This acquisition is in line with Merck's larger strategy to make small-to-midsize acquisitions in complementary areas. Cubist's stock was up more than 35% on the news.
Merck has an existing infectious disease (ID) program. But adding the Cubist drugs to its portfolio will amp up its ID presence significantly.
The company is projected to have $2 billion in sales within the next two years, driven in part by its popular injectable antibiotic Cubicin. Cubist is also expected to win approval for another antibiotic, Zerbaxa, sometime this month.
Merck itself is working on an exciting compound that could probably benefit from Cubist's expertise. Relebactam, which is being fast-tracked by the FDA under its Qualified Infectious Disease Product (QIDP) track, is being developed to combat antibiotic-resistant bacterial infections, which kill 23,000 people per year in the U.S.