In a bold stroke, Merck today announced it has acquired Idenix and its hepatitis C portfolio for the whopping price of $24.50 per share (about 3.4x the closing price on Friday). Merck will use the Idenix drugs with its own formidible line up of "breakthrough" candidates to hopefully leap frog the competition, notably Gilead's Sovaldi.
Merck's R&D chief, Roger Perlmutter, says Merck will use the Idenix product(s) as part of a three drug cocktail aimed at producing a final product that can be taken orally, with no interferon, and has a sort treament duration, and that is also effective against all genotypes. This would be a massively blockbuster product that could go after a patient population estimated at 170 million worldwide, and represents a market value in excess of $20 B!
In picking up Idenix's IP, Merck also strengthens its position (and that of Idenix) in their lawsuit for patent infringment versus Gilead. Merck is demanding a 10% royalty to settle. For those paying attention, Sovaldi is well on its way to becoming a $10 B drug this year alone. Ten percent of that is? For you non-math majors, that's a cool $1 B -- annually. Cha-Ching! And it only costs Merck $3.85 B to absorb the risk.
Posted by Bruce Lehr June 9th 2014.