Merck & Co., Inc. (MRK - Free Report) announced a definitive agreement to buy small private cancer biotech, Peloton Therapeutics for an upfront payment of $1.05 billion in cash. The acquisition will add Peloton’s novel late-stage renal cell carcinoma (RCC) candidate, PT2977 to Merck’s oncology pipeline, which is currently riding on the success of its blockbuster PD-L1 inhibitor Keytruda.
PT2977, an oral HIF-2α inhibitor, is currently being evaluated in multiple cancer studies including phase II studies in von Hippel-Lindau (VHL) disease-associated RCC and in combination with Exelixis, Inc.’s (EXEL - Free Report) Cabometyx (cabozantinib) , a VEGFR-targeting agent, in metastatic RCC and a phase I/II study in metastatic RCC.
In addition to the upfront payment, Merck will also be entitled to pay a further $1.15 billion of potential milestones payments. The transaction is expected to close in the third quarter of 2019.
This is Merck’s second acquisition of cancer-focused biotech this year. In April, Merck closed its previously announced acquisition of small cancer focused biotech, Immune Designfor an approximate value of $300 million.
Merck’s stock has risen 4% this year so far against the industry’s decline of 1.3%.
This year has been good as far as M&A activity in the pharmaceuticals/biotech industry is concerned. Oncology and immuno-oncology are key areas of focus. Bristol-Myers Squibb Co. (BMY - Free Report) , one of the largest pharma giants, announced that it will acquire leading biotech company Celgene for a whopping $74 billion. This will be one of the largest acquisitions in recent times.
Another large-cap pharma company Eli Lilly (LLY - Free Report) bought Loxo Oncology in February for $8.0 billion to broaden its oncology portfolio. Roche also announced an agreement to acquire Spark Therapeutics in February 2019 for $4.8 billion. Post completion of the buyout, Roche will get access to Spark Therapeutics’ novel gene therapy, SPK-8011 for the treatment of hemophilia A, which is expected to enter phase III in 2019
A surge in M&A activity during 2019 is expected in the overall drug/biotech sector on the lines of Bristol-Myers and Eli Lilly as companies look to use huge cash reserve and combat rivalry woes.
Merck currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Merck & Co., Inc. (MRK - Free Report) announced a definitive agreement to buy small private cancer biotech, Peloton Therapeutics for an upfront payment of $1.05 billion in cash. The acquisition will add Peloton’s novel late-stage renal cell carcinoma (RCC) candidate, PT2977 to Merck’s oncology pipeline, which is currently riding on the success of its blockbuster PD-L1 inhibitor Keytruda.
PT2977, an oral HIF-2α inhibitor, is currently being evaluated in multiple cancer studies including phase II studies in von Hippel-Lindau (VHL) disease-associated RCC and in combination with Exelixis, Inc.’s (EXEL - Free Report) Cabometyx (cabozantinib) , a VEGFR-targeting agent, in metastatic RCC and a phase I/II study in metastatic RCC.
In addition to the upfront payment, Merck will also be entitled to pay a further $1.15 billion of potential milestones payments. The transaction is expected to close in the third quarter of 2019.
This is Merck’s second acquisition of cancer-focused biotech this year. In April, Merck closed its previously announced acquisition of small cancer focused biotech, Immune Designfor an approximate value of $300 million.
Merck’s stock has risen 4% this year so far against the industry’s decline of 1.3%.
This year has been good as far as M&A activity in the pharmaceuticals/biotech industry is concerned. Oncology and immuno-oncology are key areas of focus. Bristol-Myers Squibb Co. (BMY - Free Report) , one of the largest pharma giants, announced that it will acquire leading biotech company Celgene for a whopping $74 billion. This will be one of the largest acquisitions in recent times.
Another large-cap pharma company Eli Lilly (LLY - Free Report) bought Loxo Oncology in February for $8.0 billion to broaden its oncology portfolio. Roche also announced an agreement to acquire Spark Therapeutics in February 2019 for $4.8 billion. Post completion of the buyout, Roche will get access to Spark Therapeutics’ novel gene therapy, SPK-8011 for the treatment of hemophilia A, which is expected to enter phase III in 2019
A surge in M&A activity during 2019 is expected in the overall drug/biotech sector on the lines of Bristol-Myers and Eli Lilly as companies look to use huge cash reserve and combat rivalry woes.
Merck currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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