In an effort to broaden its portfolio with potential treatments that could bring in fresh revenue, Merck & Co is buying Cambridge-based drugmaker Acceleron Pharma Inc for about $11.5 billion in a transaction expected to close in the fourth quarter, the companies said on Thursday.
Acceleron’s work focuses on therapeutics that treat cardiovascular and other blood-related disorders and its drug Merck’s targeting is a potential treatment for high blood pressure in vessels that connect the lungs and heart.
The US pharmaceutical giant looks to beef up its portfolio with drugs for rare diseases beyond blockbuster cancer drug Keytruda, so it will pay $180 per Acceleron share in cash, for the access to the potentially lucrative rare disease drug candidate, sotatercept.
That represents a premium of 2.6% to the stock’s closing price on Wednesday, Refinitiv data shows.
According to the US National Institute of Health, around 25-30 million Americans living with a rare disease making the market for treatments targeting rare diseases lucrative as pharma typically charge higher prices for drugs which serve small patient populations.
On top of Acceleron’s sotatercept drug, potential treatment for pulmonary arterial hypertension, a rare and potentially life-threatening blood vessel disorder that affects the lungs, which is in a late-stage study, Merck will also gain access to Reblozyl.
Merck’s estimates see PAH as a roughly $7.5 billion market by 2026.
Reblozyl is approved in the US, Europe, Canada and Australia for the treatment of two blood-related disorders, including anemia in patients with beta thalassemia. Acceleron developed and sells that drug through collaboration with Bristol Myers Squibb Co., the largest institutional shareholder in the company, with more than an 11% stake.
Later this year Merck, who has long faced investor criticism that it’s far too dependent for revenue from its drug Keytruda, expects to have results from late-stage research into a potential COVID-19 treatment it is developing.
Keytruda, which is now approved for treating a dozen types of cancer, brought more than one-third of Merck ‘s total revenue in the second quarter- $4.2 billion.