Merck, the US drugs giant, declared that it was buying Idenix Pharmaceuticals for $3.85 billion to bolster its pipeline of hepatitis C treatments for the widespread and largely undetected liver disease.
Merck's tie-up with Idenix, which has three hepatitis C treatments in development, presents a challenge to Gilead Sciences, the US maker of the new blockbuster antiviral hepatitis C treatment Sovaldi.
AdvertisementMerck will pay $24.50 per Idenix share, more than three times its closing price Friday of $7.23, under the terms of the agreed takeover.
Idenix, which specializes in the treatment of human viral diseases, is focused on oral antiviral therapeutics to treat hepatitis C virus infection.
"Idenix's investigational hepatitis C candidates complement our promising therapies in development," said Roger Perlmutter, the head of Merck Research Laboratories.
Perlmutter said the Idenix acquisition would help advance the company's work to develop a once-daily oral drug with a short span for the treatment.
The liver disease caused by the hepatitis C virus can remain largely unnoticed for decades, with diagnoses often only discovered after a person develops cirrhosis, end-stage liver disease and liver cancer.
No vaccine exists for the disease. But new treatments like Gilead Sciences's Sovaldi (sofosbuvir), recently approved in the United States and the European Union, have been shown to cure more than 90 percent of those treated, up from 50 to 60 percent for the previous generation of drugs.
But the price tag in the United States for Sovaldi is $84,000 for a 12-week treatment.
- WHO calls for screening -
In April, the World Health Organization (WHO) called for a dramatic increase in screening and treatment of hepatitis C, saying most of the 185 million people infected worldwide do not know they have it.
The UN agency said that higher demand for treatment would help drive down the cost of drugs.
Hepatitis C is most commonly spread by sharing needles or other equipment to inject drugs or inadequate infection control in healthcare settings.
It is the most widespread blood-borne infection in the United States, affecting an estimated 3.2 million people, according to the US Centers for Disease Control and Prevention.
Egypt has the world's highest infection rate of hepatitis C, at more than 10 percent of the population, because syringes are routinely re-used, according to WHO.
The country, which has prioritized tackling the disease, has negotiated a 12-week treatment price of just $900 from Gilead.
Sovaldi accounted for half of Gilead's 2014 first-quarter sales of antiviral product, racking up $2.3 billion in sales in its first three months on the market in the US and Europe.
Idenix, headquartered in Cambridge, Massachusetts, has filed several patent infringement lawsuits against Gilead in the US and Europe over Sovaldi.
Shares in Idenix soared 233.2 percent to $24.09 in midday trade in New York. Merck was flat and Gilead slumped 3.7 percent to $79.32.
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