Tag: Merck

Merck KGaA to Acquire SpringWorks Therapeutics in $3.9 Billion Deal to Expand Rare Tumor Treatments

Posted on by slightbourne@noblecapitalmarkets.com

Merck KGaA, Darmstadt, Germany, is making a significant move to bolster its healthcare division, announcing plans to acquire U.S.-based SpringWorks Therapeutics for approximately $3.9 billion. The definitive agreement will see Merck pay $47 per share in cash, representing a 26% premium to SpringWorks’ 20-day average stock price before news of the deal first surfaced.

This acquisition fits neatly into Merck’s long-term strategy to expand its global healthcare portfolio, particularly in the area of rare tumors and precision oncology. With this deal, Merck will not only add two groundbreaking FDA-approved therapies to its pipeline but also strengthen its commercial footprint in the United States—the largest pharmaceutical market in the world.

SpringWorks brings to the table a robust portfolio focused on rare diseases and oncology. Its leading products include OGSIVEO® (nirogacestat), the first systemic therapy approved for adults with progressing desmoid tumors, and GOMEKLI™ (mirdametinib), the first FDA-approved treatment for both adults and children with neurofibromatosis type 1-associated plexiform neurofibromas (NF1-PN). Both therapies address underserved patient populations and are expected to drive immediate and sustainable revenue growth for Merck’s healthcare business.

“This acquisition marks a major step in our strategy to position Merck as a global powerhouse in science and technology,” said Belén Garijo, Chair of the Executive Board and CEO of Merck KGaA, Darmstadt, Germany. “It enhances our rare tumor portfolio, expands our presence in the U.S., and accelerates growth opportunities for our Healthcare sector.”

Financially, the acquisition is expected to be immediately revenue accretive and to contribute to earnings per share (EPS pre) by 2027. Merck plans to finance the acquisition through a combination of cash on hand and new debt while preserving its strong investment-grade credit rating.

SpringWorks’ CEO Saqib Islam expressed optimism about the deal, emphasizing that Merck’s resources and global reach will allow SpringWorks’ innovative therapies to benefit a broader population of patients worldwide. “We believe joining Merck will enable us to accelerate our mission to improve the lives of people affected by devastating rare tumors,” Islam said.

Regulatory approvals and SpringWorks shareholder approval are still pending, but both companies’ boards have unanimously supported the transaction. Closing is expected in the second half of 2025.

Beyond just two approved therapies, SpringWorks also brings a promising pipeline of additional programs targeting solid tumors and hematological cancers. Merck’s move to integrate this pipeline reflects its commitment to diversifying its portfolio while focusing on innovation-driven growth.

The acquisition also fits neatly into Merck’s wider portfolio strategy revealed during its 2024 Capital Markets Day: pursue external innovation through in-licensing and acquisitions that deliver early value. While healthcare remains a priority, Merck maintains ambitions to expand across its life sciences and electronics sectors as well.

For investors and the healthcare community, this deal signals that Merck is serious about building a leadership position in treating rare tumors and is willing to invest heavily to secure future growth. It also promises a significant expansion of treatment options for patients with limited existing therapies.

Take a moment to take a look at more emerging growth healthcare companies by taking a look at Noble Capital Markets’ Research Analyst Robert Leboyer’s coverage list.

Merck Acquires Harpoon Therapeutics for $680 Million To Diversify Cancer Immunotherapies

Posted on by slightbourne@noblecapitalmarkets.com

Merck has announced a definitive agreement to acquire clinical-stage biotech Harpoon Therapeutics for $23 per share in an all-cash deal valued at approximately $680 million. The acquisition provides Merck with Harpoon’s promising pipeline of novel T-cell engager immunotherapies that harness the body’s immune system to treat cancer.

Harpoon’s lead asset is HPN328, an investigational T-cell engager targeting delta-like ligand 3 (DLL3) for the treatment of small cell lung cancer (SCLC) and other neuroendocrine tumors expressing DLL3. HPN328 directs a patient’s T-cells to kill tumor cells displaying DLL3. In October 2022, Harpoon reported positive interim data from the ongoing Phase 1/2 trial showing encouraging tolerability and early signs of efficacy for HPN328.

The acquisition expands Merck’s burgeoning oncology portfolio, adding a new modality to its toolkit. “This agreement reflects the creativity and commitment of scientists and clinical development teams at Harpoon. We look forward to further evaluating HPN328 in innovative combinations with other pipeline candidates,” stated Dr. Dean Y. Li, President of Merck Research Laboratories.

Harpoon’s TriTAC and ProTriTAC Platforms

Beyond HPN328, Merck also gains Harpoon’s proprietary TriTAC and ProTriTAC platforms for developing novel T-cell engagers. TriTACs (tri-specific T-cell activating constructs) are engineered protein therapies designed to recruit a patient’s immune cells to attack tumor cells. The ProTriTAC platform applies a prodrug concept to remain inactive until reaching the tumor site.

Harpoon has an extensive pipeline of TriTAC candidates against various cancer targets, including:

  • HPN217: Targets B-cell maturation antigen (BCMA) for relapsed/refractory multiple myeloma, currently in Phase 1.
  • HPN601: Targets epithelial cell adhesion molecule (EpCAM) for solid tumors expressing EpCAM.
  • HPN424: Targets delta-like ligand 4 (DLL4) for solid tumors.
  • Other preclinical TriTACs targeting tumor antigens like NaPi2b, FLT3, and DLL3.

The platforms offer modular designs to quickly generate and test new immunotherapies directed to disease-specific targets. Merck can leverage these platforms to strengthen its immunotherapy pipeline in cancer and possibly other disease areas.

Merck Building an Oncology Powerhouse

Cancer immunotherapies represent the next wave of innovation in oncology drug development. The Harpoon acquisition aligns with Merck’s strategy to establish leadership in immuno-oncology.

Merck already markets the blockbuster PD-1 checkpoint inhibitor Keytruda, approved for 30 different cancer indications. Keytruda generated $17.2 billion in sales in 2021. Now with Harpoon, Merck adds T-cell engagers to its arsenal. These therapies provide another way to leverage the immune system against hard-to-treat tumors like SCLC.

Merck is also developing numerous other novel agents across various modalities:

  • Cancer vaccines targeting specific tumor mutations (Personalized Cancer Vaccine, V590, V591)
  • Antibody-drug conjugates (belantamab mafodotin, ladiratuzumab vedotin)
  • Bispecific fusion proteins targeting both PD-1 and LAG-3
  • First-in-class inhibitors (MK-6482, KL-A)

Combined with its extensive capabilities in discovery research and clinical development, Merck is positioning itself as an oncology powerhouse able to take on cancers from all angles.

The Harpoon acquisition provides another building block in this strategy. In Harpoon’s pipeline and platforms, Merck gains cutting-edge T-cell engager capabilities to complement internal immuno-oncology programs. Merck can advance Harpoon’s therapies into new combination regimens and indications to maximize their potential.

Deal Details

Under the terms of the agreement, Merck will acquire Harpoon through a subsidiary, purchasing all outstanding Harpoon shares for $23 each in cash. This represents a premium of 118% over Harpoon’s previous closing share price.

The deal has been approved by Harpoon’s Board of Directors and is expected to close in the first half of 2024, pending shareholder approval and regulatory clearances. It will be accounted for as an asset acquisition by Merck.

Harpoon shareholders will vote on the acquisition at a future shareholder meeting. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act will also need to expire.

Advisors on the deal include Evercore Group for Merck and Centerview Partners for Harpoon.

With promising new immunotherapies and platforms adding to its robust oncology pipeline, Merck strengthens its leadership in the high-growth cancer drug market. The Harpoon acquisition provides Merck with new T-cell engager capabilities to help develop life-changing medicines for patients with cancer worldwide.

Merck Bets on Neurodegenerative Disease Treatments with Caraway Buyout

Posted on by slightbourne@noblecapitalmarkets.com

Pharmaceutical giant Merck announced Tuesday that it will acquire Caraway Therapeutics, a preclinical biotech company pursuing novel approaches to treating genetically defined neurodegenerative and rare diseases. The deal reflects Merck’s ongoing commitment to developing much-needed disease-modifying therapies for progressive brain conditions.

Under the agreement, Merck will make an upfront payment to obtain Caraway, followed by additional milestone payments contingent upon the progress of certain Caraway pipeline assets. Though financial terms were not disclosed, the total potential consideration could reach up to $610 million.

“Caraway’s multidisciplinary approach has yielded important progress in evaluating novel mechanisms of modulation of lysosomal function with potential for the treatment of progressive neurodegenerative diseases,” said George Addona, Merck’s head of discovery. “We look forward to applying our expertise to build upon this work with the goal of developing much needed disease-modifying therapies for these conditions.”

Unlike symptomatic treatments, disease-modifying therapies aim to directly impact underlying disease processes and ultimately alter the course of a condition’s progression. This has remained an elusive goal for brain diseases like Alzheimer’s and Parkinson’s.

Caraway’s work targets dysfunctions in cellular “recycling” processes that clear toxic materials from the brain. Its treatments stimulate lysosomes, which act as cell disposal units, to boost their activity. Researchers believe a boost in waste clearance could counter neurodegeneration.

Merck has been an investor in Caraway since 2018 through its venture capital arm MRL Ventures Fund. Now, by folding Caraway’s team and portfolio into its research labs, Merck aims to leverage its considerable drug development capabilities to advance lysosomal modulation treatments for neurodegeneration.

“This is a testament to the hard work and dedication of the Caraway team and our mission to develop therapeutics with the potential to alter the progression of devastating neurodegenerative diseases and help patients,” said Caraway CEO Martin D. Williams in a statement. “This acquisition leverages Merck’s industry-leading research and development capabilities to help further advance our discovery and preclinical programs.”

Alongside Merck, Caraway has been backed by several high-profile life sciences investors including SV Health Investors, AbbVie Ventures, Amgen Ventures, and Eisai Innovation.

An Urgent Need for Better Brain Treatments

Currently available medications can only manage symptoms for a period of time for Alzheimer’s, Parkinson’s, and related neurodegenerative diseases. None treat underlying pathologies or substantially slow worsening cognition and functionality.

Alzheimer’s alone impacts more than 6 million Americans and the prevalence is expected to triple in the next 30 years if no new treatments emerge. Experts have emphasized the urgent need for innovations.

Major players in the pharmaceutical industry have confronted disappointed late-stage clinical trial results among proposed Alzheimer’s treatments over the past decade, suffering high-profile setbacks.

Yet Merck’s buy-in suggests promise still exists in Caraway’s early-stage lysosomal modulation approach, even though treatments haven’t advanced to human testing yet. Merck aims to apply its extensive expertise to push potential therapies over the finish line where others have stumbled before.

Continuing a Neuroscience Focus

Alongside this deal, Merck continues to expand its research across neurodegenerative diseases in other ways. Thus far in 2023, Merck has also entered into research collaborations to pursue non-amyloid targets for Alzheimer’s and chiral chemistry for better brain penetrance among compounds targeting neurological conditions.

“The alignment with Caraway’s innovative science and focus on elucidating disease-modifying neurotherapeutics dovetails nicely with our ongoing work,” said Addona.

Overall, Merck’s acquisition of Caraway signals both increasing momentum around emerging theories of neurodegeneration—like waste clearance’s role—and a formidable commitment by the pharma organization to translating the latest science into paradigm-shifting treatments for patients.