Merck begins offer for Cubist shares in $8.4 billion deal

By The Associated Press | Posted - Dec. 19, 2014 at 9:10 a.m.



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WHITEHOUSE STATION, N.J. (AP) — The drugmaker Merck is launching its previously-disclosed $8.4 billion offer to buy Cubist Pharmaceuticals shares in a deal that aims to strengthen its ability to treat serious infections, an issue drawing growing concern globally.

Merck said earlier this month that it will pay $102 in cash for each share of Cubist, which represented a 37 percent premium to the stock's closing price before the deal was announced. The offer expires Jan. 20.

Cubist specializes in treating so-called "superbugs," or antibiotic-resistant infections. The Lexington, Massachusetts, company draws most of its revenue from the antibiotic Cubicin, but Merck also likes the drugmaker's pipeline of treatments under development. That includes Zerbaxa, which targets complicated urinary tract and intra-abdominal infections.

The Food and Drug Administration is expected to make a decision on that drug soon, and European regulators also are reviewing it.

The Centers for Disease Control and Prevention has called antibiotic-resistant infections a threat to both health and economic stability.

Antibiotics are used to kill or suppress the bacteria behind illnesses ranging from strep throat to urinary-tract infections. The drugs are considered one of the greatest advances in the history of medicine and have saved countless lives. But in recent decades some common bacteria have grown resistant to antibiotics that were once highly effective.

Merck, based in Whitehouse Station, New Jersey, is the world's fifth-largest drugmaker. Its stock climbed 58 cents to $59.56 in morning trading Friday, while Cubist rose $1.07 to $98.84. Broader market indexes were slightly higher.

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The Associated Press

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