Get the Latest Investment Ideas Delivered Straight to Your Inbox.

TICKERS: ARQL

ArQule Shares Double on Proposed $2.7 Billion Tender Offer from Merck

Source:

ArQule Inc. shares traded more than 100% higher today after the company entered into definitive agreement to be acquired by a Merck subsidiary company for $20 per share. The deal is valued at $2.7 billion and is expected to close in the early part of Q1/20.

This morning, biopharmaceutical company ArQule Inc. (ARQL:NASDAQ), which is engaged in the research and development of therapeutics to treat cancers and rare diseases, and Merck & Co. Inc. (MRK:NYSE) announced that the companies have entered into a definitive agreement under which Merck will acquire ArQule through a subsidiary company for $20 per share in cash for an approximate total equity value of $2.7 billion. Merck believes that the purchase will serve to further diversify its oncology pipeline with expansion into targeted therapies that treat hematological malignancies.

ArQule is focused on kinase inhibitor discovery and development for the treatment of patients with cancer and other diseases. The firm indicated that "its lead investigational candidate, ARQ 531, is a novel, oral Bruton's tyrosine kinase (BTK) inhibitor currently in a Phase 2 dose expansion study for the treatment of B-cell malignancies."

Under the terms of the acquisition agreement, Merck will initiate a tender offer through a subsidiary to acquire all outstanding shares of ArQule. The tender offer, which has not yet commenced, will be subject to certain conditions including the tender of shares representing at least a majority of the total number of ArQule's outstanding shares along with other customary and regulatory requirements. The transaction is expected to close in Q1/20.

ArQule's CEO Paolo Pucci commented, "We are proud that Merck has recognized the contributions that ArQule, together with its scientific collaborators, has made to the field of precision medicine in oncology with ARQ 531 for the treatment of B-cell malignancies and with the rest of our clinical-stage pipeline...With this agreement, ArQule's pipeline will benefit from Merck's vast capabilities and determined engagement to benefit the patients who we have always strived to serve."

Dr. Roger M. Perlmutter, president of Merck Research Laboratories, remarked, "ArQule's focus on precision medicine has yielded multiple clinical-stage oral kinase inhibitors that have novel and important properties...This acquisition strengthens Merck's pipeline with the addition of these strategic assets including, most notably, ARQ 531, a compelling candidate for the treatment of B-cell malignancies."

In a separate release today, ArQule announced final results from the phase 1 study for ARQ 531 at the American Society of Hematology 2019 Annual Meeting & Expo in Orlando, Fla. The firm explained that "ARQ 531 is an orally bioavailable, potent and reversible dual inhibitor of both wild type and C481S-mutant Bruton's tyrosine kinase (BTK) in patients with relapsed or refractory hematologic malignancies."

Dr. Brian Schwartz, the company's chief medical officer, commented, "The final phase 1 data set confirms the potential utility of ARQ 531 for the treatment of these heavily pretreated CLL patients. We were excited to observe such deep and durable responses at a well-tolerated dose in this highly refractory population...In addition, the three responses we observed in Richter's Transformation patients were a welcome outcome and allowed several patients to transition to potentially curative therapies."

Principal investigator of the study, Dr. Jennifer Woyach, associate professor of medicine at The Ohio State University, added, "ARQ 531 was selected and extensively tested preclinically to address the emerging therapeutic needs of patients who have become resistant to covalent BTK inhibitors in a broad set of hematologic malignancies...It is tremendously gratifying to witness the emergence of a potential therapeutic for patients with such a high degree of unmet need, such as C481S-mutant CLL and Richter's Transformation, and beyond. The data presented in this poster provide compelling proof-of-concept for this novel class of reversible BTK inhibitors."

ArQule is a biopharmaceutical company headquartered in Burlington, Mass., engaged in the research and development of targeted therapeutics to treat cancers and rare diseases. The company states that its mission is "to discover, develop and commercialize novel small molecule drugs in areas of high unmet need that will dramatically extend and improve the lives of our patients." The firm's clinical-stage pipeline consists of four drug candidates, which the company indicates are all in targeted, biomarker-defined patient populations.

Merck is a global healthcare company based in Kenilworth, New Jersey. The firm has market cap of more than $225 billion and has customers and operations in more than 140 countries. The company states that it is committed to bringing new hope to people with cancer and that it is driven to support accessibility to its cancer medicines. The firm focuses on providing vaccines and medicines that treat cancer, cardio-metabolic diseases, emerging animal diseases, Alzheimer's disease and infectious diseases including HIV and Ebola.

ArQule Inc. started the day with a market capitalization of about $1.2 billion with approximately 120.7 million shares outstanding, and a short interest of around 16.8% . The stock set a new 52-week price this morning of $19.72. ARQL shares opened today at $19.62 (+$9.955, +103.00%) over Friday's $9.665 closing price. The stock has traded today between $19.58 and $19.72/share and is currently trading at $19.70 (+$10.04, +103.78%).

[NLINSERT]

Disclosure:
1) Stephen Hytha compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.
6) This article does not constitute medical advice. Officers, employees and contributors to Streetwise Reports are not licensed medical professionals. Readers should always contact their healthcare professionals for medical advice.




Want to read more about Biotechnology / Pharmaceuticals investment ideas?
Get Our Streetwise Reports Newsletter Free and be the first to know!

A valid email address is required to subscribe