Barreling toward the loss of exclusivity on its blockbuster oncology therapy Keytruda, Merck & Co. has reportedly offered $3 billion to buy MoonLake Immunotherapeutics to add an inflammatory disease prospect to its late-phase pipeline.
The Financial Times reports Merck submitted a nonbinding offer that valued MoonLake at more than $3 billion earlier this year. The offer was rejected, but talks could be revived, the FT said. MoonLake’s market cap was $2.6 billion when trading stopped yesterday but climbed on news of Merck’s interest, with the stock rising almost 18% in premarket trading to send the biotech’s share price up to $48.50.
Buying MoonLake would give Merck ownership of sonelokimab, a molecule that could provide a source of revenue growth to help offset the anticipated emergence of biosimilar copies of Keytruda in 2028. The biotech is aiming to report primary endpoint data from phase 3 trials of sonelokimab in September.
The studies are assessing the nanobody, which inhibits IL-17A and IL-17F, in patients with hidradenitis suppurativa. MoonLake licensed the candidate from Merck KGaA in 2021. The molecule originated at the nanobody specialist Ablynx, which is now part of Sanofi.
The hidradenitis suppurativa data could mark the start of a wave of readouts that establish sonelokimab as a challenger for markets across dermatology and rheumatology. Moonlake is running phase 3 studies of the nanobody in psoriatic arthritis and advancing the drug candidate toward pivotal trials in psoriasis, palmoplantar pustulosis and axial spondyloarthritis.
Merck’s reported interest in buying MoonLake fits with the company’s approach to dealmaking under CEO Robert Davis. Speaking at a Bernstein event last week, Davis said (PDF) Merck has used deals to diversify beyond Keytruda to become “a broad-based oncology company.” The next step is to go beyond cancer.
“Increasingly, we're going to be a cardio-metabolic company, an immunology company, an ophthalmology company, a vaccines company,” Davis said. “We've been very thoughtful in leveraging our position to grow out, and we've done that both internally and through business development. The sweet spot of where we've been looking has been that $1 to $15 billion range, with a willingness to go higher.”
Merck has struck a series of deals to bring molecules discovered in China to Western markets, but Davis dismissed the idea the company is leaning more toward the Asian country than anywhere else. The CEO said “it just happens to be that the recency bias in the last couple of deals” has skewed toward China.