Merck is in advanced talks to buy cancer drugmaker Harpoon Therapeutics
MERCK has agreed to acquire cancer drugmaker Harpoon Therapeutics for US$680 million as it seeks to solidify its leadership position in the profitable oncology space.
The drugmaker will pay US$23 a share for South San Francisco-based Harpoon, it said in a statement on Monday (Jan 8) that confirmed an earlier report by Bloomberg News. Merck is offering more than double Harpoon’s last closing share price on Friday.
Harpoon, whose stock has gained 41 per cent in the past year, rose 111 per cent in early trading in New York. Merck shares were little changed.
Merck is looking for new sources of growth as its top-selling medicine, the cancer immunotherapy Keytruda, is likely to face pricing pressure at the end of this decade. Keytruda generated US$20.9 billion in 2022, making it one of the best-selling drugs in the world.
Harpoon is developing drugs that harness the body’s immune system to fight cancer, including a type of lung cancer and multiple myeloma. Its technology involves T-cell engagers, drugs that aim to use a patient’s own immune system to kill tumour cells. The company’s lead candidate targets a molecule called Delta-like ligand three that is expressed at high levels in small cell lung cancer and neuroendocrine tumours.
It’s currently in an early-stage trial as a single agent for patients with certain advanced cancers and is being studied in combination with an existing immunotherapy for small cell lung cancer.
“Given the investor interest we have seen with other T-cell engager assets like Amgen’s tarlatamab, we view this takeout by Merck as a good value pick up,” Evan David Seigerman, an analyst at BMO Capital Markets said in a note to clients. “While data for Harpoon is early, it is promising and gives Merck the opportunity to expand its pipeline into a promising target.”
Merck has been actively building its new product portfolio with outside drug candidates. In October, it agreed to buy the rights to sell Daiichi Sankyo’s three experimental cancer drugs in a deal that involved US$4 billion upfront and as much as US$22 billion in potential future payments. In April, Merck announced an US$10.8 billion deal for Prometheus, a maker of autoimmune drugs.
The deal for Harpoon is expected to close in the first half of 2024, according to Monday’s statement. Evercore is financial adviser to Merck, while Centerview Partners is advising Harpoon. BLOOMBERG
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