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Merck’s $11.5bn acquisition of Acceleron delayed

Merck’s acquisition of Acceleron will take longer than expected as it refiles its paperwork, giving the FTC more time for review and itself more time to sell the deal to investors

Merck & Co – known as MSD outside the US and Canada – has signalled that its $11.5bn acquisition of Acceleron may have hit a bump in the road, after the company withdrew its notification of the buyout last week, although it stated it would refile it this week.

Merck withdrew its Premerger Notification and Report Form, filed on 14 October, to give the Federal Trade Commission (FTC) additional time for review. By refiling the form 'on or about' 1 November, Merck then has 'a waiting period applicable to the pending acquisition' that will expire on 16 November.

Merck announced plans to acquire Acceleron at the end of September to boost its cardiovascular portfolio through lead candidate sotatercept – a potentially first-in-class therapy for pulmonary arterial hypertension in phase 3 trials – as well as with marketed anaemia drug Reblozyl (luspatercept-aamt).

The acquisition is expected to close in the fourth quarter of 2021.

The withdrawal of its notification was prompted by a campaign from hedge fund, Avoro Capital Advisors, which owns a 7% stake in Acceleron.

Last week, the group released a letter to shareholders claiming that Merck’s offer undervalued the company. 'We expect that, by the end of 2022, Acceleron will have results from its phase 3 STELLAR trial that is enrolling the prevalent PAH population, which we believe will support a higher share price,' wrote the investors.

The fund stressed that Merck would be a 'great partner' for Acceleron, so the problem was 'not the fit', rather 'the timing and the price'.

On a call with investors last week, Merck CEO Robert Davis said sotatercept had a multibillion-dollar peak sales potential, with commercial exclusivity well into the next decade.

The refiling allows anti-competition regulators at the FTC more time to review the offer and gives Merck more time to collect the required shares from Acceleron investors.

This is not the first time a major pharma company has had to refile a premerger notice; Sanofi did it when acquiring Translate Bio, and AstraZeneca refiled the notification during an FTC review of its takeover of Alexion, both of which went ahead.

Article by
Hugh Gosling

2nd November 2021

From: Sales

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