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Prometheus (RXDX) Stock Surges 70% on Buyout Offer From Merck
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Pharma goliath, Merck (MRK - Free Report) and Prometheus Biosciences, Inc , together announced entering a definitive agreement where the former is set to acquire the latter, through a subsidiary for $200 per share in cash for a total equity value of approximately $10.8 billion. Prometheus’ stock was up 70% following the news, in the pre-market hours.
In the past year, shares of Prometheus have skyrocketed 263.5% against the industry’s 11.3% decline.
Image Source: Zacks Investment Research
The successful closing of the deal will add Prometheus’ lead product candidate, PRA023, to Merck’s portfolio of drugs, thus diversifying its overall portfolio. PRA023 is a humanized monoclonal antibody that engages with a common target associated with both intestinal inflammation, fibrosis and tumor necrosis factor like ligand 1A. Per Merck’s management, the acquisition of Prometheus is set to strengthen its immune-mediated disease treatment portfolio.
Prometheus is currently developing PRA023 in mid-late-stage studies for the treatment of immune-mediated diseases including ulcerative colitis (UC), Crohn’s disease (CD) and other autoimmune conditions. We would like to remind the investors that Prometheus announced positive results from its phase II ARTEMIS-UC and phase IIA APOLLO-CD studies of PRA023 in December 2022.
The ARTEMIS-UC study met its primary endpoint, showing 26.5% of patients, receiving treatment with PRA023, achieving clinical remission compared with 1.5% of patients on placebo at week 12. Additionally, the study also reached its secondary endpoint of endoscopic improvement with statistical significance. In the APOLLO-CD study, key endpoints were also met. The study showed 26.0% of patients on PRA023 achieved endoscopic response and 49.1% of patients on PRA023 achieved clinical remission.
The phase II ARTEMIS-UC study evaluated the safety and efficacy of PRA023 in patients with moderate to severely active UC, while the phase IIA APOLLO-CD study evaluated the candidate’s safety and efficacy in patients with moderate to severe CD. Based on the successful outcome, Prometheus expects to advance PRA023 into pivotal phase III studies for UC and CD in 2023.
Per the agreement, Merck will acquire all outstanding shares of Prometheus, subject to its shareholders’ approval. The deal's closing hinges on certain conditions, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and other customary conditions. Merck and Prometheus expect to close the acquisition deal in the third quarter of 2023.
In the past year, shares of Merck have shot up 34% compared with the industry’s 8.7% rise.
Image Source: Zacks Investment Research
Prometheus has a few other candidates in its pipeline currently in pre-clinical to early-stage development. The acquisition by Merck will grant Prometheus access to the former’s world-class technology and massive resources to maximize the potential for PRA023, enhancing the further development of its other candidates to address the needs of patients with immune disorders.
Merck and Prometheus, both currently have a Zacks Rank #3 (Hold).
Some better-ranked stocks worth considering from the drug/biotech sector are Novo Nordisk (NVO - Free Report) and Aptinyx . Novo Nordisk currently sports a Zacks Rank #1 (Strong Buy), while Aptinyx carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, the Zacks Consensus Estimate for Novo Nordisk’s 2023 earnings per share has increased from $4.20 to $4.52. In the past year, shares of Novo Nordisk shot up 44.9%.
NVO beat estimates in three out of the four trailing quarters, missing the mark on one occasion, delivering an average earnings surprise of 3%.
In the past 60 days, the Zacks Consensus Estimate for Aptinyx’s 2023 loss per share has narrowed from 77 cents to 47 cents. In the past year, shares of Aptinyx have fallen by 87.3%.
APTX beat estimates in each of the trailing four quarters, delivering an average earnings surprise of 6.56%.
Image: Bigstock
Prometheus (RXDX) Stock Surges 70% on Buyout Offer From Merck
Pharma goliath, Merck (MRK - Free Report) and Prometheus Biosciences, Inc , together announced entering a definitive agreement where the former is set to acquire the latter, through a subsidiary for $200 per share in cash for a total equity value of approximately $10.8 billion. Prometheus’ stock was up 70% following the news, in the pre-market hours.
In the past year, shares of Prometheus have skyrocketed 263.5% against the industry’s 11.3% decline.
Image Source: Zacks Investment Research
The successful closing of the deal will add Prometheus’ lead product candidate, PRA023, to Merck’s portfolio of drugs, thus diversifying its overall portfolio. PRA023 is a humanized monoclonal antibody that engages with a common target associated with both intestinal inflammation, fibrosis and tumor necrosis factor like ligand 1A. Per Merck’s management, the acquisition of Prometheus is set to strengthen its immune-mediated disease treatment portfolio.
Prometheus is currently developing PRA023 in mid-late-stage studies for the treatment of immune-mediated diseases including ulcerative colitis (UC), Crohn’s disease (CD) and other autoimmune conditions. We would like to remind the investors that Prometheus announced positive results from its phase II ARTEMIS-UC and phase IIA APOLLO-CD studies of PRA023 in December 2022.
The ARTEMIS-UC study met its primary endpoint, showing 26.5% of patients, receiving treatment with PRA023, achieving clinical remission compared with 1.5% of patients on placebo at week 12. Additionally, the study also reached its secondary endpoint of endoscopic improvement with statistical significance. In the APOLLO-CD study, key endpoints were also met. The study showed 26.0% of patients on PRA023 achieved endoscopic response and 49.1% of patients on PRA023 achieved clinical remission.
The phase II ARTEMIS-UC study evaluated the safety and efficacy of PRA023 in patients with moderate to severely active UC, while the phase IIA APOLLO-CD study evaluated the candidate’s safety and efficacy in patients with moderate to severe CD. Based on the successful outcome, Prometheus expects to advance PRA023 into pivotal phase III studies for UC and CD in 2023.
Per the agreement, Merck will acquire all outstanding shares of Prometheus, subject to its shareholders’ approval. The deal's closing hinges on certain conditions, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and other customary conditions. Merck and Prometheus expect to close the acquisition deal in the third quarter of 2023.
In the past year, shares of Merck have shot up 34% compared with the industry’s 8.7% rise.
Image Source: Zacks Investment Research
Prometheus has a few other candidates in its pipeline currently in pre-clinical to early-stage development. The acquisition by Merck will grant Prometheus access to the former’s world-class technology and massive resources to maximize the potential for PRA023, enhancing the further development of its other candidates to address the needs of patients with immune disorders.
Prometheus Biosciences, Inc. Price and Consensus
Prometheus Biosciences, Inc. price-consensus-chart | Prometheus Biosciences, Inc. Quote
Zacks Rank and Stocks to Consider
Merck and Prometheus, both currently have a Zacks Rank #3 (Hold).
Some better-ranked stocks worth considering from the drug/biotech sector are Novo Nordisk (NVO - Free Report) and Aptinyx . Novo Nordisk currently sports a Zacks Rank #1 (Strong Buy), while Aptinyx carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, the Zacks Consensus Estimate for Novo Nordisk’s 2023 earnings per share has increased from $4.20 to $4.52. In the past year, shares of Novo Nordisk shot up 44.9%.
NVO beat estimates in three out of the four trailing quarters, missing the mark on one occasion, delivering an average earnings surprise of 3%.
In the past 60 days, the Zacks Consensus Estimate for Aptinyx’s 2023 loss per share has narrowed from 77 cents to 47 cents. In the past year, shares of Aptinyx have fallen by 87.3%.
APTX beat estimates in each of the trailing four quarters, delivering an average earnings surprise of 6.56%.
Merck & Co., Inc. Price and Consensus
Merck & Co., Inc. price-consensus-chart | Merck & Co., Inc. Quote