Merck to buy biotech firm Sirna for $1.1 bn
Merck & Co Inc on Monday said it agreed to acquire biotechnology firm Sirna Therapeutics Inc for $1.1 billion in cash to gain a stronger foothold in the promising drug-development technology of RNA interference.
Merck agreed to pay $13 per share for Sirna more than double Monday’s Nasdaq closing stock price of $6.45.
After the stock market closed, shares of Sirna nearly doubled in extended trading to $12.67. Shares of the stock doubled during several minutes of after-hours trading following the announcement.
Sirna has been working to create a new class of medicines based on RNA interference technology and has shown “great promise” in the area of cancer research, Merck said. “RNA interference is a hot area of drug development, although it will probably take another five years for any significant drug using the technology to gain visibility,” said Mehta Partners analyst Shaojing Tong. He speculated Merck was buying Sirna more for its know-how than its few early-stage experimental drugs. RNA, or ribonucleic acid, is the molecule that transmits the genetic information encoded in DNA.
By using chemically altered double-stranded RNA molecules as drugs, the technology is meant to block production of proteins linked to an array of diseases — including cancer, hepatitis C and respiratory ailments. Merck has an ongoing drug-development partnership with Alnylam Pharmaceuticals Inc, which many analysts consider the leader in RNA interference because of its large number of patents.
But that partnership suffered a setback last year when Alnylam suspended development of its experimental drug to treat the leading cause of blindness. Alnylam cited competition from other recently approved treatments for the condition, the “wet” form of macular degeneration. Sirna’s lead product, now in mid-stage trials, is attempting to fight the same eye condition.
The drug, Sirna-027, is being studied as part of a collaboration with Allergan Inc into diseases of the eye. Sirna also has a strategic alliance with GlaxoSmithKline for the development of compounds for the treatment of respiratory diseases. Sirna also has programs in areas such as infectious diseases, metabolism, and dermatology, Merck said.
Earlier this month, Americans Andrew Fire and Craig Mello won the Nobel Prize in Medicine for their discovery of RNA interference.
—Reuters
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