Merck Buys Cubist for $8.4B

Hours after the pharmaceutical giant announced the acquisition, a federal judge invalidated key patents behind the antibiotic maker’s most lucrative product.

Bob Grant
Bob Grant

Bob Grant is Editor in Chief of The Scientist, where he started in 2007 as a Staff Writer.

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Dec 11, 2014

WIKIMEDIA, EPSOS.DEPharmaceutical company Merck doubled down this week on the antibiotic game by shelling out $9.5 billion—$8.4 billion to buy out shares and $1.1 billion to cover debt—for Cubist Pharmaceuticals, a Lexington, Massachusetts-based company that specializes in developing the next generation of superbug-fighting drugs. But just hours after Merck announced the deal on Tuesday (December 9), a federal judge in Delaware invalidated four of the five patents behind Cubicin, an antibiotic that brings in about $1 billion per year for Cubist, and ruled that the remaining one will expire in mid-2016—two years earlier than expected.

Merck seemed to remain upbeat after the announcement of the federal ruling. “The company continues to believe the acquisition of Cubist will create strong fundamental value for Merck’s shareholders,” the firm said in a statement. “The combined strength of both companies will provide both incremental and long-term value, and Merck expects the transaction...

The Wall Street Journal’s Pharmalot reported “speculation that Merck may want to back out.” But the deal, which is slated to be completed early next year, is written such that Merck has little room to do so without likely incurring a lawsuit and hefty fines. And the pharma giant shows no signs of cutting and running. Meanwhile, both Merck and Cubist stocks dipped following Tuesday’s federal court decision.

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