Why Merck Is Buying Prometheus Biosciences For About $10.8 Billion

By Amit Chowdhry ● Apr 19, 2023

Merck (known as MSD outside the United States and Canada) and Prometheus Biosciences recently announced that the companies have entered into a definitive agreement under which Merck, through a subsidiary, has agreed to buy Prometheus for $200 per share in cash for a total equity value of approximately $10.8 billion.

What Prometheus does: Prometheus is known as a clinical-stage biotechnology company that is pioneering a precision medicine approach for the discovery, development, and commercialization of novel therapeutic and companion diagnostic products for the treatment of immune-mediated diseases. And the company’s lead candidate PRA023 is a humanized monoclonal antibody (mAb) directed to tumor necrosis factor (TNF)-like ligand 1A (TL1A), a target associated with both intestinal inflammation and fibrosis.

Plus Prometheus is developing PRA023 for the treatment of immune-mediated diseases including ulcerative colitis (UC), Crohn’s disease (CD), and other autoimmune conditions. In December 2022, the company announced positive results for PRA023 from ARTEMIS-UC, a Phase 2, placebo-controlled, study evaluating safety and efficacy in patients with moderate to severely active UC, and APOLLO-CD a Phase 2A, open-label, study evaluating safety and efficacy in patients with moderate to severe CD. The findings were recently presented at the 18th Congress of European Crohn’s and Colitis Organisation (ECCO).

Under the terms of the acquisition agreement, Merck, through a subsidiary, will acquire all of the outstanding shares of Prometheus. The acquisition is subject to Prometheus Biosciences’ shareholder approval. The closing of the proposed transaction will be subject to certain conditions.

Why did Merck buy Prometheus: Prometheus is going to Merck’s growing presence in immunology where there remains a substantial unmet patient need. Plus the deal will also diversify Merck’s overall portfolio.


“At Merck, we are committed to delivering on our purpose to save and improve lives and continue to identify and secure opportunities where compelling science and value creation align. The agreement with Prometheus will accelerate our growing presence in immunology where there remains substantial unmet patient need. This transaction adds diversity to our overall portfolio and is an important building block as we strengthen the sustainable innovation engine that will drive our growth well into the next decade.”

– Robert M. Davis, chairman and chief executive officer, Merck

“Prometheus was established to revolutionize the treatment of immune-mediated diseases through the application of a powerful precision medicine approach. This agreement with Merck, a leader in biopharmaceutical research and development, allows Prometheus to maximize the potential for PRA023, while continuing to apply our technology and expertise to fuel further discoveries to address the needs of patients with immune disorders.”

– Mark McKenna, chairman and chief executive officer of Prometheus Biosciences

“By applying a portfolio of powerful analytic tools to a comprehensive collection of IBD samples, Prometheus identified important disease insights that have now yielded a promising late-stage candidate. I look forward to working with the talented Prometheus team to establish a new paradigm of precision treatment for immune diseases.”

– Dr. Dean Y. Li, president, Merck Research Laboratories