NEW YORK (The Deal) -- Merck (MRK) is making an all-cash $3.85 billion tender offer for Cambridge, Mass.-based Idenix Pharmaceuticals (IDIX), in a strategic bid to strengthen Merck's hepatitis C drug program.
Roger Perlmutter, president, Merck Research Laboratories, laid out the strategic basis for the deal in a nutshell: "Idenix has established a promising portfolio of hepatitis C candidates based on its expertise in nucleoside/nucleotide chemistry and prodrug technologies. Idenix's investigational hepatitis C candidates complement our promising therapies in development and will help advance our work to develop a highly effective, once-daily, all-oral, ribavirin-free, pan-genotypic regimen that has duration of treatment as short as possible for millions of patients in need around the world."
The deal, announced Monday and already approved by the boards of Merck and Idenix, must pass muster with regulatory authorities and is expected to close in the third quarter.
Merck said it projects the HCV market to top $20 billion by 2018, based on data from research group EvaluatePharma.
Merck will pay $24.50 in cash per share of Idenix stock.
The announcement made for quite a pop in Idenix shares. They ended trading Friday at $7.23 and prices soared nearly 232%, trading at $24 in New York Monday morning.
Idenix specializes in developing nucleosides and nucleotides, or nucs. It claims a large patent estate in those compounds. "Nucs are scarce and thus perhaps quite valuable" noted ISI Group biotechnology/pharma analyst Mark Schoenebaum. "Part of Merck's purchase price almost certainly applied some kind of value to Idenix's patent portfolio," he wrote in a same-day note.