Merck & Co., Inc. MRK is making another big-ticket buy, this time to expand its presence in the autoimmune disease market.
What Happened: Large-cap biopharma Merck announced Thursday it has signed a definitive agreement to buy Pandion Therapeutics Inc PAND for $60 per share in cash, or a total equity value of $1.85 billion.
The per-share value represents a 134% premium over the $25.63 price at which Pandion shares closed Wednesday.
Cambridge, Massachusetts-based Pandion is a clinical-stage biopharma that focuses on developing novel therapeutics to treat patients living with autoimmune disease.
The transaction is expected to close in the first half of 2021.
The Merck-Pandion Deal Logic: Pandion's pipeline consists of immune modulators targeting critical control nodes. Its lead candidate PT101 is an engineered IL-2 mutein fused to a protein backbone and is designed to selectively activate and expand regulatory T cells, commonly called Tregs, for the potential treatment of ulcerative colitis and other autoimmune diseases.
The company recently completed a Phase 1a study of PT101, with the study achieving its primary objective of safety and tolerability. Its pipeline also includes PD-1 agonists in development for numerous autoimmune disorders.
"This acquisition builds upon Merck's strategy to identify and secure candidates with differentiated and potentially foundational characteristics," Dr. Dean Li, president of Merck Research Laboratories, said in a statement.
Dr. Rahul Kakkar, CEO of Pandion said, "We believe Merck is well positioned to bring our novel approach to the millions of those living with autoimmune diseases, and we look forward to seeing these molecules progress in the clinic."
Merck's M&A Deals: Merck was quite active on the M&A front in 2020. Early in the year, the company completed its $2.7 billion acquisition of ArQule. Later, the company acquired privately held Themis, a company focused on vaccines and immune-modulation therapies for infectious diseases and cancer.
It followed up with a $2.75-billion, all-cash acquisition of privately held VelosBio, which is developing cancer therapies, and a $425-million buy of privately held OncoImmune, which had a Phase 3 asset that was being evaluated for the treatment of severe and critical COVID-19.
Merck also struck two strategic oncology collaborations with Seagen Inc SGEN.
This diversification is seen as an effort to reduce Merck's increasing reliance on its blockbuster cancer immunotherapy Keytruda, which is a mainstay in its product portfolio.
MRK, PAND Price Action: Merck shares were down 0.11% at $74.48 at last check Thursday, while Pandion shares were ripping 131.8% higher to $59.41.
Related Link: The Week Ahead In Biotech: J&J Vaccine Adcom Meeting, Sarepta FDA Decision And Plenty Of Earnings
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