Merck & Co agreed to acquire Cidara Therapeutics Inc, a biotech company developing a flu treatment, as part of its ongoing efforts to make up for the upcoming patent loss of its blockbuster cancer drug Keytruda.
Merck will pay $221.50 a share in cash for Cidara in a tender offer, more the twice Thursday’s closing price, for a total transaction value of about $9.2bn, the companies said yesterday in a statement.
Cidara’s shares were up 106% at the start of trading yesterday in New York, while Merck’s stock was down 0.8%. As of Thursday’s close, Cidara’s shares had risen 294% this year. Merck shares closed up 1.6% on Thursday, taking its decline this year to 6.6%.
Merck is seeking deals to expand its portfolio of treatments as it prepares for patent losses that are expected to erode its sales by $18bn over the next five years. In 2028, Merck faces a patent expiration for Keytruda, the best-selling drug in pharmaceutical history which accounted for almost half of the company’s revenue last year.
The company also announced a similar size purchase in July, when it agreed to buy respiratory drugmaker Verona Pharma Plc for around $10bn. Merck “continues to go for a string-of-pearls approach to M&A rather than sizing up for an asset that could uniquely solve its patent cliff,” Mizuho’s Jared Holz said in a note Friday.
The company beat rival pharma companies in a heated bidding war, according to the Financial Times, which earlier reported the deal. It’s among a spate of competitive deals in the pharma industry, which are all vying for new drugs to replenish their pipelines. Last week, Pfizer Inc. beat out Novo Nordisk A/S in a very public bidding war for obesity biotech Metsera Inc. in a $10bn deal for the three-year-old company.
The value of biotechnology and pharmaceuticals deals globally has risen 31% this year to about $187bn, according to data compiled by Bloomberg, driven by transactions including Johnson & Johnson’s $14bn-plus acquisition of Intra-Cellular Therapies Inc and Novartis AG’s recently announced takeover of Avidity Biosciences Inc.
Merck is one of the biggest vaccine makers, a group that’s under threat by the Trump administration.
Cidara’s drug, CD388, is not a vaccine, meaning it doesn’t depend on producing an immune response. It’s a long-acting treatment to prevent the flu in people who are at higher risk of complications. It’s currently in a late-stage trial. Cidara says it could provide an additional option to vaccines and antivirals to help prevent influenza.
Merck Chief Executive Officer Rob Davis called the drug an “important driver of growth through the next decade.”
The flu remains a major public health problem, with tens of thousands of people dying from the virus each year just in the US. Last winter the US experienced by some measures its worst flu season in 15 years, and last season’s flu vaccines were only about 56% effective.
The purchase has been approved by both Merck’s and Cidara’s boards, and is expected to close in the first quarter of 2026. Merck plans to update investors on a call on Monday morning.
BofA Securities Inc. and Gibson Dunn LLP were Merck’s advisers in the deal. Evercore and Goldman Sachs & Co, along with Cooley LLP advised Cidara.
Merck will pay $221.50 a share in cash for Cidara in a tender offer, more the twice Thursday’s closing price, for a total transaction value of about $9.2bn, the companies said yesterday in a statement.
Cidara’s shares were up 106% at the start of trading yesterday in New York, while Merck’s stock was down 0.8%. As of Thursday’s close, Cidara’s shares had risen 294% this year. Merck shares closed up 1.6% on Thursday, taking its decline this year to 6.6%.
Merck is seeking deals to expand its portfolio of treatments as it prepares for patent losses that are expected to erode its sales by $18bn over the next five years. In 2028, Merck faces a patent expiration for Keytruda, the best-selling drug in pharmaceutical history which accounted for almost half of the company’s revenue last year.
The company also announced a similar size purchase in July, when it agreed to buy respiratory drugmaker Verona Pharma Plc for around $10bn. Merck “continues to go for a string-of-pearls approach to M&A rather than sizing up for an asset that could uniquely solve its patent cliff,” Mizuho’s Jared Holz said in a note Friday.
The company beat rival pharma companies in a heated bidding war, according to the Financial Times, which earlier reported the deal. It’s among a spate of competitive deals in the pharma industry, which are all vying for new drugs to replenish their pipelines. Last week, Pfizer Inc. beat out Novo Nordisk A/S in a very public bidding war for obesity biotech Metsera Inc. in a $10bn deal for the three-year-old company.
The value of biotechnology and pharmaceuticals deals globally has risen 31% this year to about $187bn, according to data compiled by Bloomberg, driven by transactions including Johnson & Johnson’s $14bn-plus acquisition of Intra-Cellular Therapies Inc and Novartis AG’s recently announced takeover of Avidity Biosciences Inc.
Merck is one of the biggest vaccine makers, a group that’s under threat by the Trump administration.
Cidara’s drug, CD388, is not a vaccine, meaning it doesn’t depend on producing an immune response. It’s a long-acting treatment to prevent the flu in people who are at higher risk of complications. It’s currently in a late-stage trial. Cidara says it could provide an additional option to vaccines and antivirals to help prevent influenza.
Merck Chief Executive Officer Rob Davis called the drug an “important driver of growth through the next decade.”
The flu remains a major public health problem, with tens of thousands of people dying from the virus each year just in the US. Last winter the US experienced by some measures its worst flu season in 15 years, and last season’s flu vaccines were only about 56% effective.
The purchase has been approved by both Merck’s and Cidara’s boards, and is expected to close in the first quarter of 2026. Merck plans to update investors on a call on Monday morning.
BofA Securities Inc. and Gibson Dunn LLP were Merck’s advisers in the deal. Evercore and Goldman Sachs & Co, along with Cooley LLP advised Cidara.