Merck To Buy Immune Design For $300M

Biotech M&A is on a roll in 2019, with a couple of multi-billion dollar deals announced already, including Bristol-Myers Squibb Co BMY's proposed buy of Celgene Corporation CELG and Eli Lilly And Co LLY's agreement to buy Loxo Oncology Inc LOXO.

The deal flow continued Thursday morning, as pharma giant Merck & Co., Inc. MRK announced a deal to buy thinly-traded microcap Immune Design Corp IMDZ.

What Happened

Merck has entered into a definitive deal to buy Immune Design, a late-stage immunotherapy company, for $5.85 per share in cash or $300 million in total, with the per share value representing a 312 percent premium over the latter's closing price Wednesday.

Immunotherapy is an emerging technology that taps into the body's immune system to fight diseases.

Specifically, Immune Design's proprietary GLAAS and ZVex technologies help activate "the immune system's natural ability to generate and/or expand antigen-specific cytotoxic immune cells to fight cancer and other chronic diseases."

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Why It's Important

Health care transactions are expected to top $331 million in 2019, Biopharmadive said, citing law firm Baker McKenzie. The bulk of the potential M&A will likely be in hot therapeutic area and platforms such as oncology and gene therapy, the report added.

The Immune Design deal is likely to beef up Merck's oncology franchise, which has been performing well, thanks to its wonder cancer drug Keytruda, accounting for about roughly one-fifth of the latter's total sales.

What's Next

Merck, through a subsidiary, will initiate a tender offer to acquire all outstanding Immune Design shares, with the closing of the transaction contingent on tendering of at least a majority of the latter's outstanding shares, anti-trust clearance and other customary closing conditions. Following the successful closing of the tender offer, Merck will acquire all untendered shares through a second-step merger.

The companies expect the transaction to close in the second quarter of 2019.

Immune Design shares were skyrocketing more than 300 percent to $5.83 in pre-market trading.