US pharmaceutical giant Merck announced on Monday that it will be purchasing cancer drug maker ArQule in a $2.7 billion all-cash deal. Merck, better known as Merck Sharp & Dohme (MSD) outside of the US, purchased the smaller company to bolster its oncology business and to take advantage of ArQule leading blood cancer drug that has already shown promising test results.
Merck's purchase of ArQule at $20 per share represents an almost 100 percent premium of the latter's closing price on Friday last week. ArQule shares surged further on Monday following the news of the acquisition, reaching as high as $19.32 per share before the bell. The acquisition deal is expected to be completed in the first quarter of 2020.
The publicly-traded biopharmaceutical company based in Massachusetts presented a unique opportunity for Merck given the successful initial medical trial results of its treatment of patients with cancer and other diseases.
ArQule's new wonder drug, the ARQ 531, is an oral Bruton's tyrosine kinase (BTK) inhibitor treatment for B-cell malignancies. The drug is already undergoing a phase 2 dose-expansion study.
Merck Research Laboratories president, Dr. Roger M Perlmutter, mentioned in a statement that ArQule was particularly attractive to the company given its focus on precision medicine, which has resulted in multiple clinical-stage oral kinase inhibitors studies.
Perlmutter added that the acquisition should further strengthen Merck's oncology pipeline, which should help it develop more treatments for different kinds of diseases. The company is of course particularly interested in ARQ 531, which can prove very profitable when it is finally made available commercially.
Merck's plans to add ARQ 531 to its portfolio of blockbuster treatments, which include its cancer immunotherapy drug called Keytruda. Merck was able to generate more than $3 billion in sales in its last quarter with Keytruda. With the addition of ARQ 531, the company may also finally be able to resolve concerns over its reliance on a single product to drive its future growth.
In early clinical trials, ARQ 531 proved to have a manageable safety profile and was found to be effective in generating signs of anti-tumor activity in patients with relapsed or refractory chronic lymphocytic leukemia (CLL) and Richter's Transformation. Final results for the drug's Phase 1 study is expected to be released on December 9 next year.
ArQule CEO Paolo Pucci mentioned in a statement that he and the company's scientific collaborators are very proud that Merck has recognized their efforts and the contributions they have made to the oncology field. Pucci stated that the combination of ArQule's ARQ 531 treatment and Merck's vast capabilities should ultimately benefit both companies' patients.
