Pharma Case Study: Merck’s $11.5B acquisition of Acceleron

Merck will acquire Acceleron Pharma, Inc. XLRN for $180 per share in cash for an approximate total equity value of $11.5 billion in a bid to build its rare diseases portfolio. Here we will going to analyze the deal effectively.

Reason #1 : Merck will get the access to potential blockbuster Sotatercept

The deal gives Merck access to Acceleron’s rare disease drug candidate, sotatercept, which the company expects could bring in billions of dollars in sales, and comes as Keytruda moves toward the loss of market exclusivity in 2028.

The lung cancer treatment accounted for 36.7%, or $4.18 billion, of Merck’s total sales in the second quarter. Sotatercept is currently in a late-stage study, testing it as a treatment for a rare cardiovascular disease called pulmonary arterial hypertension (PAH), a type of high blood pressure that affects blood vessels in the lungs. Merck sees PAH as a roughly $7.5 billion market by 2026.

Merck is targeting a U.S. launch for sotatercept in 2024-2025 and its market exclusivity for PAH is expected to extend through 2036-2037.

Reason #2 :Merck will get the access to Reblozyl

The deal also adds FDA-approved blood-related disorder drug Reblozyl, which Acceleron markets with partner Bristol Myers Squibb, to Merck’s portfolio. Luspatercept, sold under the brand name Reblozyl, is a medication used for the treatment of anemia in beta thalassemia and myelodysplastic syndromes. The U.S. Food and Drug Administration awarded orphan drug status in 2013, and fast track designation in 2015, for both indications.