Prometheus Biosciences Inc is set to be acquired by Merck & Co for approximately $10.8 billion, according to a joint statement released by the two companies on Sunday.

The acquisition will enable Merck to strengthen its position in the field of immunology, with one of its subsidiaries paying $200 per share for the biotech firm that specializes in developing products for the treatment of immunological diseases.

This represents a substantial 75% premium to the $114.01 closing price for Prometheus Biosceiences shares on Friday, with the latter having had a market capitalization of $5.42 billion at the close of trading.

Merck has been actively pursuing acquisition deals to safeguard itself against any potential loss of revenue resulting from the expiration of patents on its cancer immunotherapy Keytruda, which is set to occur towards the end of the decade.

Chairman and Chief Executive of Merck, Robert Davis, stated that “the agreement with Prometheus Biosceiences will accelerate our growing presence in immunology where there remains substantial unmet patient need. This transaction adds diversity to our overall portfolio.”

Merck had previously forecast 2023 earnings below market estimates, with a projected sharp decline in sales of its COVID-19 antiviral treatment.

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