PRA023 is a novel, late-stage candidate for
ulcerative colitis and Crohn’s disease and other autoimmune
conditions
Prometheus Biosciences’ comprehensive data
set enables target discovery and precision medicine approach in
inflammation and immunology
Merck (NYSE: MRK), known as MSD outside the United States and
Canada, and Prometheus Biosciences, Inc. (“Prometheus”) (Nasdaq:
RXDX) today announced that the companies have entered into a
definitive agreement under which Merck, through a subsidiary, has
agreed to acquire Prometheus for $200.00 per share in cash for a
total equity value of approximately $10.8 billion.
“At Merck, we are committed to delivering on our purpose to save
and improve lives and continue to identify and secure opportunities
where compelling science and value creation align,” said Robert M.
Davis, chairman and chief executive officer, Merck. “The agreement
with Prometheus will accelerate our growing presence in immunology
where there remains substantial unmet patient need. This
transaction adds diversity to our overall portfolio and is an
important building block as we strengthen the sustainable
innovation engine that will drive our growth well into the next
decade.”
Prometheus is a clinical-stage biotechnology company pioneering
a precision medicine approach for the discovery, development, and
commercialization of novel therapeutic and companion diagnostic
products for the treatment of immune-mediated diseases. The
company’s lead candidate, PRA023, is a humanized monoclonal
antibody (mAb) directed to tumor necrosis factor (TNF)-like ligand
1A (TL1A), a target associated with both intestinal inflammation
and fibrosis.
“Prometheus was established to revolutionize the treatment of
immune-mediated diseases through the application of a powerful
precision medicine approach,” said Mark McKenna, chairman and chief
executive officer of Prometheus Biosciences. “This agreement with
Merck, a leader in biopharmaceutical research and development,
allows Prometheus to maximize the potential for PRA023, while
continuing to apply our technology and expertise to fuel further
discoveries to address the needs of patients with immune
disorders.”
Prometheus is developing PRA023 for the treatment of
immune-mediated diseases including ulcerative colitis (UC), Crohn’s
disease (CD), and other autoimmune conditions. In December 2022,
the company announced positive results for PRA023 from ARTEMIS-UC,
a Phase 2, placebo controlled, study evaluating safety and efficacy
in patients with moderate to severely active UC and APOLLO-CD a
Phase 2A, open-label, study evaluating safety and efficacy in
patients with moderate to severe CD. The findings were recently
presented at the 18th Congress of European Crohn’s and Colitis
Organisation (ECCO).
“By applying a portfolio of powerful analytic tools to a
comprehensive collection of IBD samples, Prometheus identified
important disease insights that have now yielded a promising
late-stage candidate,” said Dr. Dean Y. Li, president, Merck
Research Laboratories. “I look forward to working with the talented
Prometheus team to establish a new paradigm of precision treatment
for immune diseases.”
Under the terms of the acquisition agreement, Merck, through a
subsidiary, will acquire all of the outstanding shares of
Prometheus. The acquisition is subject to Prometheus Biosciences
shareholder approval. The closing of the proposed transaction will
be subject to certain conditions, including the expiration of the
waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act and other customary conditions. The transaction is expected to
close in the third quarter of 2023.
A copy of the merger agreement pursuant to the transaction will
be filed with the Securities and Exchange Commission (“SEC”) and
will be publicly available. In addition, Merck and Prometheus will
file annual, quarterly and current reports and other information
with the SEC, which are available to the public from commercial
document-retrieval services and at the SEC’s website at
www.sec.gov. Copies of the documents filed with the SEC by Merck
may be obtained at no charge on Merck’s internet website at
www.merck.com or by contacting Merck at 126 East Lincoln Avenue
P.O. Box 2000, Rahway, NJ 07065 USA, or (908) 740-4000. Copies of
the documents filed with the SEC by Prometheus may be obtained at
no charge on Prometheus’ internet website at
https://www.prometheusbiosciences.com or by contacting Prometheus
at 3050 Science Park Road, San Diego, CA 92121 or (646)
241-4400.
Advisors
Morgan Stanley & Co. LLC acted as financial advisor to Merck
in this transaction and Paul, Weiss, Rifkind, Wharton &
Garrison LLP as its legal advisors. Centerview Partners LLC and
Goldman Sachs & Co. LLC acted as financial advisors to
Prometheus and Latham & Watkins LLP as the company’s legal
advisor.
About inflammatory Bowel Disease
Inflammatory bowel disease (IBD) is a term used to collectively
describe Crohn’s disease and ulcerative colitis. These conditions
are characterized by chronic inflammation of the gastrointestinal
(GI) tract. Prolonged inflammation results in damage to the tissues
lining the GI tract. Both ulcerative colitis and Crohn's disease
usually are characterized by diarrhea, rectal bleeding, abdominal
pain, fatigue and weight loss.
About PRA023
PRA023 is a humanized monoclonal antibody directed to tumor
necrosis factor (TNF)-like ligand 1A (TL1A). PRA023 binds both
soluble and membrane associated human TL1A with high affinity and
specificity. Prometheus is developing PRA023 for the treatment of
immune-mediated diseases including UC, CD, and other autoimmune
conditions.
About Prometheus Biosciences
Prometheus Biosciences, Inc. is a clinical-stage biotechnology
company pioneering a precision medicine approach for the discovery,
development, and commercialization of novel therapeutic and
companion diagnostic products for the treatment of immune-mediated
diseases. The company’s precision medicine platform,
Prometheus360™, combines proprietary machine learning-based
analytical approaches with one of the world’s largest
gastrointestinal bioinformatics databases to identify novel
therapeutic targets and develop therapeutic candidates to engage
those targets.
Investor Call
Merck will hold an investor call on Monday, April 17, at 8:00
a.m. EDT to discuss this proposed acquisition. Journalists who wish
to ask questions are requested to contact a member of Merck’s Media
Relations team at the conclusion of the call. To listen to the
call, please visit
https://www.merck.com/investor-relations/events-and-presentations/.
About Merck
At Merck, known as MSD outside of the United States and Canada,
we are unified around our purpose: We use the power of leading-edge
science to save and improve lives around the world. For more than
130 years, we have brought hope to humanity through the development
of important medicines and vaccines. We aspire to be the premier
research-intensive biopharmaceutical company in the world - and
today, we are at the forefront of research to deliver innovative
health solutions that advance the prevention and treatment of
diseases in people and animals. We foster a diverse and inclusive
global workforce and operate responsibly every day to enable a
safe, sustainable and healthy future for all people and
communities. 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., Rahway,
N.J., USA
This news release of Merck & Co., Inc., Rahway, N.J., USA
includes statements that are not statements of historical fact, or
“forward-looking statements,” including with respect to Merck’s
proposed acquisition of Prometheus. Such forward-looking statements
include, but are not limited to, the ability of Merck and
Prometheus to complete the transactions contemplated by the merger
agreement, including the parties’ ability to satisfy the conditions
to the consummation of the merger contemplated thereby and the
other conditions set forth in the merger agreement, statements
about the expected timetable for completing the transaction,
Merck’s and Prometheus’s beliefs and expectations and statements
about the benefits sought to be achieved in Merck’s proposed
acquisition of Prometheus, the potential effects of the acquisition
on both Merck and Prometheus, the possibility of any termination of
the merger agreement, as well as the expected benefits and success
of Prometheus’s product candidates. These statements are based upon
the current beliefs and expectations of Merck’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 merger; the risk that
competing offers or acquisition proposals will be made; the
possibility that various conditions to the consummation of the
merger contemplated thereby may not be satisfied or waived
(including the failure to obtain the requisite vote by Prometheus’s
stockholders); the effects of disruption from the transactions
contemplated by the merger agreement and the impact of the
announcement and pendency of the transactions on Prometheus’s
business; the risk that stockholder litigation in connection with
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; the impact of the global
outbreak of novel coronavirus disease (COVID-19); the impact of
pharmaceutical industry regulation and health care legislation in
the United States and internationally; global trends toward health
care cost containment; technological advances, new products and
patents attained by competitors; challenges inherent in new product
development, including obtaining regulatory approval; Merck’s
ability to accurately predict future market conditions;
manufacturing difficulties or delays; financial instability of
international economies and sovereign risk; dependence on the
effectiveness of Merck’s patents and other protections for
innovative products; and the exposure to litigation, including
patent litigation, and/or regulatory actions.
Merck 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 Merck’s
2022 Annual Report on Form 10-K and Merck’s other filings with the
Securities and Exchange Commission (SEC) available at the SEC’s
Internet site (www.sec.gov).
Forward-Looking Statements of Prometheus Biosciences
Prometheus cautions readers that statements contained in this
press release regarding matters that are not historical facts are
forward-looking statements. These statements are based on
Prometheus’ current beliefs and expectations. Such forward-looking
statements include but are not limited to statements regarding the
company’s plans to advance PRA023 into Phase 3 trials in UC and CD,
including the timing thereof. The inclusion of forward-looking
statements should not be regarded as a representation by Prometheus
that any of its plans will be achieved. Actual results may differ
from those set forth in this press release due to the risks and
uncertainties inherent in our business, including, without
limitation: topline results Prometheus reports are based on
preliminary analysis of key efficacy and safety data, and such data
may change following a more comprehensive review of the data
related to the clinical trial and such topline data may not
accurately reflect the complete results of a clinical trial;
interim results of a clinical trial do not predict final results
and the clinical outcomes may materially change following more
comprehensive reviews of the data, as follow-up on the outcome of
any particular patient continues and as more patient data become
available, including from Cohort 2 of the ARTEMIS-UC trial;
potential delays in the commencement, enrollment and completion of
clinical trials and preclinical studies; the results of clinical
trials are not necessarily predictive of future results;
Prometheus’ dependence on third parties in connection with product
manufacturing, research and preclinical and clinical testing;
Prometheus’ ability to develop diagnostics for its therapeutic
product candidates; unexpected adverse side effects or inadequate
efficacy of its product candidates that may limit their
development, regulatory approval and/or commercialization, or may
result in recalls or product liability claims; planned future
trials of PRA023 may not support regulatory registration;
regulatory developments in the United States and foreign countries;
Prometheus’ ability to maintain undisrupted business operations due
to the COVID-19 pandemic, including delaying or otherwise
disrupting its preclinical studies, clinical trials, manufacturing
and supply chain; and other risks described in the company’s prior
press releases and filings with the Securities and Exchange
Commission (SEC), including under the heading “Risk Factors” in
Prometheus’ most recent annual report on Form 10-K and any
subsequent filings with the SEC. You are cautioned not to place
undue reliance on these forward-looking statements, which speak
only as of the date hereof, and Prometheus undertakes no obligation
to update such statements to reflect events that occur or
circumstances that exist after the date hereof. All forward-looking
statements are qualified in their entirety by this cautionary
statement, which is made under the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230416005034/en/
Merck Investor Contact: Peter Dannenbaum (908) 740-1037
Merck Media Contact: Robert Josephson (203) 914-2372
Prometheus Investor/Media Contact: Noel Kurdi (646) 241-4400
nkurdi@prometheusbiosciences.com
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