Merck & Co. has agreed to acquire cancer drugmaker Harpoon Therapeutics Inc. for $680 million as it seeks to solidify its leadership position in the profitable oncology space.
The drugmaker will pay $23 a share for South San Francisco-based Harpoon, it said in a statement on Monday that confirmed an earlier report by Bloomberg News. Merck is offering more than double Harpoon’s last closing share price on Friday.
Harpoon, whose stock gained 41% in the past year, rose as much as 113% as of 2:09 p.m. in New York, the most since December 2022. Merck shares fell 0.6%.
Merck is looking for new sources of growth as its top-selling medicine, the cancer immunotherapy Keytruda, is likely to face pricing pressure at the end of this decade. Keytruda generated $20.9 billion in 2022, making it one of the best-selling drugs in the world.
Early Opportunities
Deal activity in the pharma world has gotten more competitive and prices are starting to rise, Merck Chief Executive Officer Rob Davis said in an interview, but the company’s scientists can spot good opportunities early, as in the case of Harpoon.
Deals worth up to $15 billion tend “to be a sweet spot, a focal point for us,” Davis said. While the company is open to larger purchases, he isn’t interested in a massive, transformative merger.
Harpoon is developing drugs that harness the body’s immune system to fight cancer, including a type of lung tumor and multiple myeloma. Its technology involves T-cell engagers, drugs that aim to use a patient’s own immune system to kill tumor cells. The company’s lead candidate targets a molecule called delta-like ligand 3 that’s found at high levels in small cell lung cancer and neuroendocrine tumors.
The drug is currently in an early-stage trial as a single agent for patients with certain advanced cancers and is being studied in combination with an existing immunotherapy for small cell lung cancer.
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