Merck is putting a lot of money on Prometheus Biosciences, which promises to treat autoimmune diseases. This is because the expiration of one of Merck's key patents is approaching.
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In a deal announced Sunday (Apr. 16), the New Jersey-based pharmaceutical giant offered $10.8 Billion to purchase the California-based firm. 16).
Prometheus shareholders must approve the transaction before it can close. This is expected to happen in the third quarter 2023. Prometheus currently has no approved products. According to Robert Davis, Merck's chief executive, if all goes according to plan, could launch a study on Prometheus PRA023 in the fourth or first quarters of next year.
Merck is at risk of losing a lucrative source of revenue with the Prometheus purchase. Merck's patents on its Keytruda cancer drug, worth $165,000, that harnesses the immune system of the body to fight cancer with dramatic results, will expire by 2028. This will allow biosimilars to be produced, increasing competition, and possibly lowering prices. The treatment was first approved in 2014.
Merck is increasing its presence in the cardiovascular and autoimmune treatment areas to lessen the impact. Prometheus, a pioneer in precision medicine, is developing novel therapeutics and companion diagnostics for the treatment and diagnosis of immune-mediated disease.
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The PRA023 is currently the star candidate of the seven-year-old Prometheus. It's a novel late-stage candidate that can treat ulcerative colitis and Crohn's Disease, as well as other autoimmune disorders.
The company will announce two exciting Phase 2 trials in December 2022. In the ulcerative colitis study, 26.5% (versus 1.5% for placebo) of those who received the anti-TL1A PRA023 antibody achieved clinical remission within the 12th weeks. The Crohn's study lacked a placebo arm, but it provides early evidence of PRA023 improving outcomes when compared with historical placebo endoscopic or clinical remission rates.
The results were a benchmark for Pfizer, Roivant and their joint venture to develop a new drug. Prometheus shares rose more than 160% the day after the announcement.
Keytruda is currently administered intravenously in a medical office every three to six weeks. Merck conducts clinical trials on two subcutaneously injected versions of the drug to protect its patents at least for another 20-year period. These new patents may extend exclusivity until 2036 or beyond.
In a letter, a group led by Elizabeth Warren wrote: "If this company succeeds, it will lead to billions in new profits for this lifesaving drug - at extraordinary cost to taxpayers and patients." These efforts by Merck seem to be part of a pattern of abuse of the patenting system by drug manufacturers that has been going on for years.
Merck was reported to have been looking at buying biotech company Seagen in July for $40 million to expand its portfolio of cancer drugs. Pfizer, a rival, won the bid and bought the oncology medication company in March for $43 billion.
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