Merck to take on superbugs with Cubist Pharma buy

Mon Dec 8, 2014 6:44pm EST
 
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By Vidya L Nathan and Ben Hirschler

(Reuters) - Merck & Co Inc (MRK.N: Quote) said it would buy Cubist Pharmaceuticals Inc CBST.O for $8.4 billion plus assumption of debt, giving the major drugmaker an entry into the market for drugs that combat so-called superbugs.

The deal is the latest sign that large pharmaceutical companies are turning their attention back to antibiotics after decades of low investment.

The spread of superbugs that evade even the most powerful antibiotics threatens modern medicine, the World Health Organization said in April, warning of "a post-antibiotic era" in which common infections were killers once again.

The U.S. Centers for Disease Control and Prevention estimated last year that more than 2 million people in the United States are sickened every year by superbug infections, with at least 23,000 dying as a result. (1.usa.gov/1w5Hhml)

Merck said on Monday that the deal, which will give it access to Cubist's antibiotic Cubicin, is expected to add more than $1 billion to revenue in 2015 after closing in the first quarter, but will be neutral to non-GAAP earnings per share until 2016.

Cubist's third-quarter sales rose 16 percent, driven by strong sales of Cubicin.

Cubist may lose patent protection for Cubicin earlier than expected, after a Friday federal court ruling that invalidated four of its patents. If the ruling stands, it will allow Hospira Inc to launch a generic version of the drug in 2016.

Merck could not immediately be reached for comment on the ruling.   Continued...

 
Cubist Pharmaceuticals' antibiotic Cubicin.     REUTERS/Handout