Merck & Co in talks to buy Cubist Pharmaceuticals for more than $7 bn
06 December 2014
US pharmaceutical giant Merck & Co Inc is in talks to buy Cubist Pharmaceuticals Inc for more than $7 billion, The New York Times yesterday reported, citing people briefed on the matter.
Merck is likely to offer around $100 a share, a 34-per cent premium over Cubist's closing share price on Friday, valuing the Massachusetts-based company around $7.5 billion, the report said.
Cubist closed on Friday at $74.36, giving it a market cap of around $5.7 billion.
A deal could be announced as early as next week, the report added.
Cubist Pharmaceuticals is a biopharmaceutical company focused on the research, development, and commercialisation of pharmaceutical products for unmet medical needs in the acute care environment.
It develops drugs for potentially life-threatening infections caused by dangerous bacteria categorised as serious and urgent public health threats, such as Methicillin-resistant Staphylococcus aureus (MRSA) and Clostridium difficile.
Cubist's best selling drug Cubicin for treating serious skin infections was approved by the US Food and Drug Administration in 2003 and for bloodstream infections in 2006. The drug generates more than 80 per cent of Cubist's revenue and is expected to generate $2 billion by 2017.
Merck & Co is the second-largest drug maker in the US and the world's seventh largest pharmaceutical company by market capitalisation and revenue.
The New Jersey-based company, which operates in more than 140 countries, develops medicines, vaccines, biologic therapies, and animal health products.