Merck Buys Out Blood Cancer Biotech Imago for $1.35B

Imago BioSciences, a bone marrow disorder-focused biotech based out of California, is being scooped up by Merck & Co. for $1.35 billion in an all-cash deal. Imago’s flagship drug, bomedemstat, is clearly the impetus for the lucrative transaction, as it is expected to pass its phase-2 testing for treatment of myeloproliferative neoplasms and other bone marrow diseases. Merck’s Chief Executive Officer, Robert Davis, said the deal, expected to close in early 2023, “augments our pipeline and strengthens our presence in the growing field of hematology.”

Davis has telegraphed his aggressive deal making strategy since he assumed his position last year, presumably to counteract the expected loss of revenue that will occur following the 2028 expiration of patents on Merck’s market-leading cancer drug, Keytruda. Recent deals include the $11.5 billion acquisition of Acceleron for its cardiovascular drug sotatercept as well as licensing/partnership agreements with Orna Therapeutic, Orion, and Moderna. Cancer biotech Seagen almost made this list as well, but talks were said to have come to a halt after a disagreement on pricing. Davis’ influence on Merck’s business strategy is set to strengthen even more when he becomes Chairman in December.

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“We believe Merck is getting a good price for a good asset,” said Stifel analyst Stephen Willey in a note to investors. The deal’s value is more than double what Stifel estimates bomedemstat’s peak sales in the U.S. have been ($750 million) for its lead indication in essential thrombocythemia.