Acquisition Further Diversifies Merck’s
Oncology Pipeline with Expansion into Targeted Therapies That Treat
Hematological Malignancies
Merck (NYSE: MRK), known as MSD outside the United States and
Canada, and ArQule, Inc. (Nasdaq: ARQL) today announced that the
companies have entered into a definitive agreement under which
Merck, through a subsidiary, will acquire ArQule for $20 per share
in cash for an approximate total equity value of $2.7 billion.
ArQule is a publicly traded biopharmaceutical company focused on
kinase inhibitor discovery and development for the treatment of
patients with cancer and other diseases. ArQule’s lead
investigational candidate, ARQ 531, is a novel, oral Bruton’s
tyrosine kinase (BTK) inhibitor currently in a Phase 2 dose
expansion study for the treatment of B-cell malignancies.
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“ArQule’s focus on precision medicine has yielded multiple
clinical-stage oral kinase inhibitors that have novel and important
properties,” said Dr. Roger M. Perlmutter, president, Merck
Research Laboratories. “This acquisition strengthens Merck’s
pipeline with the addition of these strategic assets including,
most notably, ARQ 531, a compelling candidate for the treatment of
B-cell malignancies.”
BTK inhibition has been shown to prevent B-cell receptor
signaling that is critical for the survival and proliferation of
leukemic cells in many B-cell malignancies. ARQ 531 is a highly
selective, reversible inhibitor that blocks both wild-type BTK and
the C481S mutant form of the enzyme that is commonly associated
with resistance to other BTK inhibitors. In early clinical trials,
ARQ 531 demonstrated a manageable safety profile and early signs of
anti-tumor activity for the treatment of patients with relapsed or
refractory chronic lymphocytic leukemia (CLL) and Richter’s
Transformation. Final data from the Phase 1 study of ARQ 531 will
be presented on Dec. 9, 2019 at the 61st American Society of
Hematology (ASH) Annual Meeting & Exposition in Orlando,
Florida.
“We are proud that Merck has recognized the contributions that
ArQule, together with its scientific collaborators, has made to the
field of precision medicine in oncology with ARQ 531 for the
treatment of B-cell malignancies and with the rest of our
clinical-stage pipeline,” said Paolo Pucci, CEO, ArQule. “With this
agreement, ArQule’s pipeline will benefit from Merck’s vast
capabilities and determined engagement to benefit the patients who
we have always strived to serve.”
Under the terms of the acquisition agreement announced today,
Merck, through a subsidiary, will initiate a tender offer to
acquire all outstanding shares of ArQule. The closing of the tender
offer will be subject to certain conditions, including the tender
of shares representing at least a majority of the total number of
ArQule’s outstanding shares, the expiration of the waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act and other
customary conditions. Upon the successful completion of the tender
offer, Merck’s acquisition subsidiary will be merged into ArQule,
and any remaining shares of common stock of ArQule will be canceled
and converted into the right to receive the same $20 per share
price payable in the tender offer. The transaction is expected to
close early in the first quarter of 2020.
BofA Securities acted as financial advisor to Merck in this
transaction and Covington & Burling LLP as its legal advisor.
Centerview Partners acted as exclusive financial advisor to ArQule
and Skadden, Arps, Slate, Meagher & Flom LLP as its legal
advisor.
Important Information About the Tender Offer
The tender offer described in this press release (the “Offer”)
has not yet commenced. This press release is for informational
purposes only and is neither an offer to purchase nor a
solicitation of an offer to sell any shares of the common stock of
ArQule, Inc. (“ArQule”) or any other securities. At the time the
planned tender offer is commenced, a tender offer statement on
Schedule TO, including an offer to purchase, a letter of
transmittal and related documents, will be filed by Merck Sharp
& Dohme Corp. (“Merck”) and Argon Merger Sub, Inc., a
wholly-owned subsidiary of Merck, with the Securities and Exchange
Commission (the “SEC”), and a solicitation/recommendation statement
on Schedule 14D-9 will be filed by ArQule with the SEC. The offer
to purchase shares of ArQule common stock will only be made
pursuant to the offer to purchase, the letter of transmittal and
related documents filed as a part of the Schedule TO.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ BOTH THE
TENDER OFFER STATEMENT AND THE SOLICITATION/RECOMMENDATION
STATEMENT REGARDING THE OFFER, AS THEY MAY BE AMENDED FROM TIME TO
TIME, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION.
Investors and security holders may obtain a free copy of these
statements (when available) and other documents filed with the SEC
at the website maintained by the SEC at www.sec.gov or by directing
such requests to the Information Agent for the Offer, which will be
named in the tender offer statement. Additional copies of the
tender offer materials may be obtained at no charge by contacting
Merck at 2000 Galloping Hill Road, Kenilworth, N.J., 07033 or by
phoning (908) 423-1000. In addition, Merck and ArQule will file
annual, quarterly and current reports and other information with
the SEC. Merck’s and ArQule’s filings with the SEC also will be
available to the public from commercial document-retrieval services
and at the SEC’s website at www.sec.gov.
About ArQule
ArQule is a biopharmaceutical company engaged in the research
and development of targeted therapeutics to treat cancers and rare
diseases. ArQule’s mission is to discover, develop and
commercialize novel small molecule drugs in areas of high unmet
need that will dramatically extend and improve the lives of our
patients. Our clinical-stage pipeline consists of four drug
candidates, all of which are in targeted, biomarker-defined patient
populations, making ArQule a leader among companies our size in
precision medicine. ArQule’s pipeline includes: ARQ 531, an orally
bioavailable, potent and reversible dual inhibitor of both wild
type and C481S-mutant BTK, in phase 2 for patients with B-cell
malignancies refractory to other therapeutic options; miransertib
(ARQ 092), a potent and selective inhibitor of the AKT
serine/threonine kinase, in a registrational trial with cohorts in
Proteus syndrome and PROS; ARQ 751, a next generation highly potent
and selective AKT inhibitor, in phase 1 for patients with solid
tumors with AKT1 and PI3K mutations; and derazantinib, a
multi-kinase inhibitor designed to preferentially inhibit the
fibroblast growth factor receptor (FGFR) family, in a
registrational trial for iCCA in collaboration with Basilea and
Sinovant. ArQule’s current discovery efforts are focused on the
identification and development of novel kinase inhibitors,
leveraging the Company’s proprietary library of compounds.
Merck’s Focus on Cancer
Our goal is to translate breakthrough science into innovative
oncology medicines to help people with cancer worldwide. At Merck,
the potential to bring new hope to people with cancer drives our
purpose and supporting accessibility to our cancer medicines is our
commitment. As part of our focus on cancer, Merck is committed to
exploring the potential of immuno-oncology with one of the largest
development programs in the industry across more than 30 tumor
types. We also continue to strengthen our portfolio through
strategic acquisitions and are prioritizing the development of
several promising oncology candidates with the potential to improve
the treatment of advanced cancers. For more information about our
oncology clinical trials, visit www.merck.com/clinicaltrials.
About Merck
For more than a century, Merck, a leading global
biopharmaceutical company known as MSD outside of the United States
and Canada, has been inventing for life, bringing forward medicines
and vaccines for many of the world’s most challenging diseases.
Through our prescription medicines, vaccines, biologic therapies
and animal health products, we work with customers and operate in
more than 140 countries to deliver innovative health solutions. We
also demonstrate our commitment to increasing access to health care
through far-reaching policies, programs and partnerships. Today,
Merck continues to be at the forefront of research to advance the
prevention and treatment of diseases that threaten people and
communities around the world - including cancer, cardio-metabolic
diseases, emerging animal diseases, Alzheimer’s disease and
infectious diseases including HIV and Ebola. For more information,
visit www.merck.com and connect with us on Twitter, Facebook,
Instagram, YouTube and LinkedIn.
Forward-Looking Statement of Merck & Co., Inc.,
Kenilworth, N.J., USA
This news release of Merck & Co., Inc., Kenilworth, N.J.,
USA (the “company”) includes statements that are not statements of
historical fact, or “forward-looking statements,” including with
respect to the company’s proposed acquisition of ArQule. Such
forward-looking statements include, but are not limited to, the
ability of the company and ArQule to complete the transactions
contemplated by the merger agreement, including the parties’
ability to satisfy the conditions to the consummation of the offer
contemplated thereby and the other conditions set forth in the
merger agreement, statements about the expected timetable for
completing the transaction, the company’s and ArQule’s beliefs and
expectations and statements about the benefits sought to be
achieved in the company’s proposed acquisition of ArQule, the
potential effects of the acquisition on both the company and
ArQule, the possibility of any termination of the merger agreement,
as well as the expected benefits and success of ArQule’s product
candidates. These statements are based upon the current beliefs and
expectations of the company’s management and are subject to
significant risks and uncertainties. There can be no guarantees
that the conditions to the closing of the proposed transaction will
be satisfied on the expected timetable or at all, with respect to
pipeline products that the products will receive the necessary
regulatory approvals or that they will prove to be commercially
successful. If underlying assumptions prove inaccurate or risks or
uncertainties materialize, actual results may differ materially
from those set forth in the forward-looking statements.
Risks and uncertainties include, but are not limited to,
uncertainties as to the timing of the offer and the subsequent
merger; uncertainties as to how many of ArQule’s stockholders will
tender their shares in the offer; the risk that competing offers or
acquisition proposals will be made; the possibility that various
conditions to the consummation of the merger and the offer
contemplated thereby may not be satisfied or waived; the effects of
disruption from the transactions contemplated by the merger
agreement and the impact of the announcement and pendency of the
transactions on ArQule’s business; the risk that stockholder
litigation in connection with the offer or the merger may result in
significant costs of defense, indemnification and liability;
general industry conditions and competition; general economic
factors, including interest rate and currency exchange rate
fluctuations; challenges inherent in new product development,
including obtaining regulatory approval; and the company’s ability
to accurately predict future market conditions.
The company undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future events or otherwise, except as required by law. Additional
factors that could cause results to differ materially from those
described in the forward-looking statements can be found in the
company’s 2018 Annual Report on Form 10-K and the company’s other
filings with the Securities and Exchange Commission (SEC) available
at the SEC’s Internet site (www.sec.gov).
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version on businesswire.com: https://www.businesswire.com/news/home/20191209005234/en/
Merck Media: Pam Eisele (267) 305-3558
Ayn Wisler (917) 691-6218
ArQule Media: Cait Williamson, Ph.D. (646) 751-4366
Merck Investors: Peter Dannenbaum (908) 740-1037
Courtney Ronaldo (908) 740-6132
ArQule Investors: Marc Schegerin, M.D. (781) 994-0300
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