Merck, a leading developer of medicines and vaccines, has announced its intent to acquire ArQule, a publicly-traded, clinical-stage pharmaceutical firm with a pipeline of promising precision oncology treatments. The two companies entered into a definitive agreement earlier this month for Merck to purchase the Boston-based biotech at $20 per share – which brings its estimated total equity value to $2.7 billion.
Due to recent advances in science and technology, precision medicine is the new frontier for treating and curing severe conditions like cancer. Scientists can use their genetic understanding to treat diseases based on a patient’s individual DNA profile and the specific makeup of the tumor itself. ArQule specifically researches and develops cancer therapies using technology like its ArQule Kinase Inhibitor Platform (AKIP) to design drugs.
“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 of 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.”
It's not the only biopharmaceutical giant spending significant money to scoop up companies with targeted cancer therapies. Both Eli Lilly & Co. and Pfizer made similar deals with LLY.N purchasing Loxo Oncology for $8 billion in January and PFE.N acquiring Array Biopharma for $10.6 billion in June. Merck also recently picked up Peloton Therapeutics for $1.05 billion in May and purchased Tilos Therapeutics for up to $773 million a month later.
Investors, in particular, are keenly interested in Merck's next moves as its oncology franchise depends heavily on Keytruda, its top-performing cancer drug, which will lose market exclusivity in 2028. In a Reuters article, Cantor Fitzgerald's analyst Louise Chen described the acquisition deal as smart and strategic. She pointed out that Merck will leverage Arqule’s experimental blood cancer therapy to augment its own drug pipeline.
“ArQule’s focus on precision medicine has yielded multiple clinical-stage oral kinase inhibitors that have novel and important properties," said Dr. Roger Perlmutter, preside of 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."
Established in 1891, Merck is headquartered in Kennilworth, New Jersey, and now operates in over 140 countries. They employed an estimated 69,000 people worldwide and brought in $42.3 billion in revenue in 2018. Their three central business units include pharmaceuticals, vaccines, and animal health.
