Merck to Buy Cancer Drug Maker Peloton Therapeutics -- 2nd Update
May 21 2019 - 9:46AM
Dow Jones News
By Kimberly Chin
Merck & Co. agreed to acquire cancer drug developer Peloton
Therapeutics Inc. for $1.05 billion in cash, adding to a list of
deals in 2019 by pharmaceutical companies looking to bolster their
cancer treatment portfolios.
Merck would acquire all shares outstanding of Peloton through a
subsidiary, the company said Tuesday.
The takeover deal comes as Peloton was preparing to go public.
Last week, the Dallas-based company said it would offer 9.4 million
shares in an initial public offering, with an expected price range
of $15 to $17 a piece. This would give the company net proceeds of
roughly $137 million at the midpoint range.
In addition to the initial $1.05 billion consideration from
Merck, Peloton shareholders are also eligible to receive an
additional $1.15 billion if the company achieves certain regulatory
and sales milestones.
"This acquisition exemplifies Merck's strategy to pursue novel
therapeutic candidates based on exceptionally promising and
innovative research," said Roger Perlmutter, president of Merck
Research Laboratories, in prepared remarks.
The companies expect the transaction to close in the third
quarter.
Peloton, which is based in Dallas, is a closely held drug
discovery and development company focused on oral medicines for
cancer and other non-oncology diseases. Peloton's leading drug
candidate PT2977 is a novel oral inhibitor for late-stage renal
cell carcinoma.
The market for cancer drugs is $123 billion world-wide. Earlier
this year, Eli Lilly & Co. acquired Loxo Oncology Inc. for
roughly $8 billion in cash and Bristol-Myers Squibb Co. said it was
buying Celgene Corp. in a deal valued at about $74 billion. The
transaction is expected to close in the third quarter.
Write to Kimberly Chin at kimberly.chin@wsj.com
(END) Dow Jones Newswires
May 21, 2019 09:31 ET (13:31 GMT)
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