Merck proved its willingness to acquire multi-billion-dollar biotechs Monday with its $3.85 billion acquisition of Idenix (IDIX), a drug company focused on treatments for human viral diseases including hepatitis B and C and HIV/AIDS.
The acquisition undermines comments made by Merck CEO Ken Frazier in an April earnings conference call that Merck would drive shareholder value through "innovation rather than consolidation." And it spurred investors on StockTwits.com to debate the next biotech that could be consumed by Merck or another pharma giant.
Merck entered a definitive agreement to buy Idenix for $24.50 per share in cash. The stock jumped 233.33% Monday morning to $24.10, reflecting the merger costs that could slightly erode the purchase price.
Merck said Idenix's "promising portfolio" of hepatitis C treatment candidates was the main driver of the deal. "Idenix's investigational hepatitis C candidates complement our promising therapies in development and will help advance our work to develop a highly effective, one-daily, all oral, ribavirin-free, pan-genotypic regimen that has a duration of treatment as short as possible for millions of patients in need around the world," said Merck Research Laboratories president Roger Perlmutter.