Merck & Co. dipped into the biotech world on Thursday, agreeing to acquire Afferent Pharmaceuticals, whose lead drug is being evaluated as a treatment for refractory, chronic cough and idiopathic pulmonary fibrosis with cough.
Josh Beckerman of The Wall Street Journal had the news:
The deal will include an upfront payment of $500 million and milestones of up to $750 million.
San Mateo, Calif.-based Afferent focuses on targeting the P2X3 receptor for neurogenic conditions.
Last month, Afferent reported that its lead candidate, AF-219, significantly reduced cough frequency in the first cohort of a two-cohort, Phase 2b study of chronic cough patients.
In July, Afferent said it completed a $55 million Series C financing led by Fidelity Management & Research Co.
Merck’s recent financial results have been hurt by generic versions of Remicade, a treatment for inflammatory diseases, and allergy-symptom treatment Nasonex.
Sarah Pringle of TheStreet.com notes the deal is Merck’s largest in more than a year:
Merck’s last transformative transaction was a play to beef up its antibiotics portfolio and add scale in the hospital acute care arena. The Whitehouse Station, N.J., company in January 2015 completed its acquisition of Cubist Pharmaceuticals for $9.5 billion including debt.
More recent deals for the company include its January purchase of IOmet Pharma. Regulatory filings show Merck paid $150 million up front, plus a potential $250 million dependent on certain milestones. The company has valued the deal at $227 million.
Thursday’s transaction comes after a federal judge earlier this week sided with Gilead Sciences, reversing an earlier ruling in Merck’s favor relating to a drug-patent suit for a Hepatitis C therapy. After determining misconduct by a Merck witness in the trial, U.S. District Judge Beth Labson Freeman’s ruling means the company will not collect $200 million from Gilead.
An Associated Press story noted that Afferent focuses on chronic cough medications:
Merck & Co., based in Kenilworth, New Jersey, says it’s agreed to pay $500 million up front for Afferent, and up to $750 million more if the company meets goals for approval and eventual sales of medicines in development.
Afferent, based in San Mateo, California, focuses on creating treatments for “neurogenic conditions” — health problems caused when certain nerves become hypersensitive, for months or years, following an infection, injury or inflammation. Those conditions, affecting millions of people, include chronic pain and respiratory, cardiovascular and urologic disorders.
Afferent’s medicine furthest along in development, known as AF-219, is in mid-stage human testing for treating coughs lasting more than eight weeks that don’t respond to existing treatments.
