Merck to buy drug developer Pandion Therapeutics for $1.85 bln

Merck & Co Inc said on Thursday it would buy drug developer Pandion Therapeutics Inc for about $1.85 billion in cash, expanding its portfolio of drugs that target autoimmune diseases.

The $60-per-share deal represents about 134% premium to Pandion's closing price on Wednesday. Shares of Pandion rose 131.6% to a record high of $59.37 before the bell, while Merck shares were up about 1%.

Pandion's lead drug candidate, PT101, met its main goals of safety and tolerability last month in an early-stage trial in patients with autoimmune diseases. In November, Merck agreed to buy privately-held VelosBio for $2.75 billion to strengthen its cancer drug portfolio as the drugmaker looks to reduce its reliance on its blockbuster cancer therapy Keytruda.

The deal between Merck and Pandion is expected to close in the first half of 2021, the companies said in a joint statement. Merck was represented by Credit Suisse Securities, Covington & Burling, while Centerview Partners LLC and Skadden, Arps, Slate, Meagher & Flom LLP represented Pandion.

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