Merck acquires Prometheus Biosciences in $10.8B deal

April 18, 2023

Merck & Co. (MSD) announced this week that it has acquired California-based biotech Prometheus Biosciences in a deal totaling $10.8 billion.

Prometheus’ lead clinical asset, PRA023, was a driving force behind the acquisition. The mAb is currently under development for the treatment of immune diseases such as ulcerative colitis and Crohn’s disease, the drug works by targeting TNF-like ligand 1A (TL1A), addressing both intestinal inflammation and fibrosis.

The drug has blockbuster potential, with Citi analysts predicting it could add 15% to 30% to Merck's long-term earnings once approved.

Merck will acquire all the outstanding shares of Prometheus through a subsidiary, subject to the approval of Prometheus Biosciences shareholders. The completion of the acquisition is expected to close later in 2023.

About the acquisition, Dean Y. Li, president of Merck Research Laboratories said, “By applying a portfolio of powerful analytic tools to a comprehensive collection of IBD samples, Prometheus identified important disease insights that have now yielded a promising late-stage candidate.”

Just a few weeks ago, Merck announced a research collaboration and license agreement Proxygen to jointly develop molecular glue degraders for therapeutic targets. While the companies did not disclose the amount that was paid upfront by Merck, Proxygen will be eligible for future payments of up to $2.55 billon based on the development of the programs.