Report: Merck Strikes with $11 Billion Deal for Acceleron and Phase III PAH Drug
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The question of which pharma giant will acquire rare disease-focused Acceleron Pharma appears to be over. Reports emerged late Wednesday afternoon that Merck emerged as the winning suitor with a deal valued at about $11 billion.
Bloomberg Law reported Merck and Acceleron came to terms at a price of $180 per share. Although no formal announcement from either company has been made public, Bloomberg said the deal could be announced as early as Thursday morning. If the early report is accurate, that means Merck beat out Bristol Myers Squibb, which already owns about 11.5% of the company. BMS gained the stake in Acceleron when it acquired Celgene, which struck multiple collaboration agreements with the company in 2008 and 2011. That partnership netted approval of Reblozyl in 2019 for the treatment of anemia in adult patients with beta thalassemia who require regular red blood cell (RBC) transfusions.
With the acquisition, Merck will gain control of Acceleron’s portfolio of treatments for rare disease, including its Phase III pulmonary arterial hypertension (PAH) drug sotatercept. The Acceleron drug is an investigational agent designed to be a selective ligand trap for members of the TGF-beta superfamily. The drug is designed to rebalance BMPR2 signaling, which is a key molecular driver of PAH, a rare progressive disorder characterized by the constriction of pulmonary arteries and elevated blood pressure in the pulmonary circulation. In 2019, sotatercept received Orphan Drug Designation for PAH from the U.S. Food and Drug Administration.
Sotatercept will bolster Merck’s existing PAH pipeline that includes Adempas, which it gained in a licensing deal with Bayer. Earlier this year, Merck initiated a Phase II/III PAH study of MK-5475, an inhaled soluble guanylate cyclase (sGC) stimulator.
Merck’s acquisition places the company in a leading position among rare disease-focused companies. And, if Sotatercept is approved, it will lessen the company’s dependence on its blockbuster cancer drug, Keytruda, which is on track to becoming the top-selling drug in the world and provides about half of Merck’s revenue stream. Analysts peg Sotarcept sales at about $2 billion if it is approved. The asset is currently in an ongoing Phase III study.
Daina Graybosch, Senior Research Analyst at SVB Leerink, told BioSpace hours ahead of the deal report that Merck’s new head of research and development Dean Li has a feel for the PAH space given his background as a cardiologist. Graybosch said the company has a “long, rich history of understanding this type of biology.” Although she does not see something like Sotatercept becoming an asset that can replace a drug like Keytruda, she said having multiple assets for PAH could be a firm foundation for long-term growth.
“I think if Merck does a deal, they just truly have some ability to analyze it and they see something that could really be a meaningful step change,” Graybosch said.
The analyst added that Merck has been consistent with its strategic focus, which includes multiple acquisitions over the past few years. Some of those buys include the $425 million in upfront cash to acquire OncoImmune, as well as a $1.85 billion deal for autoimmune-focused Pandion Therapeutics.
While terms of the deal have not been formally announced, Graybosch speculated that Merck could be required to dump its Phase II/III PAH asset due to concerns of potential market monopoly. Although both drugs have different forms of mechanisms, the Federal Trade Commission could raise that concern.