Merck to Buy Drug Developer
By CANDACE CUMBERBATCH
July 25, 2007 10:47 a.m.[WSJ]
Merck & Co. said Wednesday it has agreed to buy NovaCardia Inc., a privately held clinical-stage pharmaceutical company focused on cardiovascular diseases.
Under the pact, Merck will acquire all of the outstanding equity of San Diego-based NovaCardia for $350 million plus the amount of cash on hand at the time of closing. Merck will pay for NovaCardia in Merck stock, to be valued based on the average closing stock price on the five days prior to closing of the deal.
"This acquisition continues to deliver on our strategy of targeted acquisitions in areas of unmet medical need in the therapeutic areas of strategic importance for Merck, such as cardiovascular diseases," said Richard Kender, vice president of business development and corporate licensing at Merck.
NovaCardia's lead product candidate, KW-3902, is being studied in late-stage clinical trials in patients with acute congestive heart failure. In March, NovaCardia filed with the Securities and Exchange Commission to raise up to $86.3 million in an initial public offering.
Merck, Whitehouse Station, N.J., is rebounding from setbacks such as last year's loss of patent protection for its Zocor cholesterol drug and the 2004 withdrawal of pain drug Vioxx from the market because of safety concerns. The pharmaceutical company has cut jobs, closed plants and launched products such as the first cervical-cancer vaccine, Gardasil.
On Monday, Merck said it posted a 12% increase in second-quarter profit on strong sales of drugs for allergies and cholesterol, as well as vaccines. The improved sales of cholesterol drugs Vytorin and Zetia also helped Merck's joint-venture marketing partner for those products, Schering-Plough Corp., report a quarterly profit more than double year-earlier levels.
--Peter Loftus contributed to this article.
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