Idenix + Merck

I keep hearing about this company from time to time. It is a penny stock. Why is anyone interested in it? Can the Op or someone give their best reasons for liking it. That would be more helpful than all of the "Rumors" which I really dont believe anyway.

 

Look for a deal to be announced at AASLD - Guaranteed!

 

Listen Up. I am at the Home Office and This deal IS GOING TO HAPPEN. The two companies have been in negotiations for several years.

 

Right... This premise is undoubtedly originating with the same person who was utterly convinced that Merck and Gilead would co-promote in HCV. Did that happen? Pay no attention to Crazytown.

 

I agree with you JG ... "CRAZYTOWN"

 

just blame it on those pesky Divalent Linkers

 

This is confirmed- Merck buying Idenix for $3.85 billion

 

First time ever on CP: Poster admits to being wrong, wrong wrong! And I'm glad to have been wrong. Cha Ching -finally. This is the one hope I had for holding IDIX. Selling now, profit locked.

 

This is publicly confirmed you morons....it's a done deal. Pay attention stupid !

 

Who are you calling stupid? Your response doesn't fit the post- did you even read it? Genius?

 

OP, here. I am glad that everyone that paid attention made lots of money. I still think Idenix is worth much more than what they paid.Now I think one should buy MRK with a small amount of your profits. Chow!

 

Fortune magazine reporting...

 

http://www.marketwatch.com/story/merck-to-buy-idenix-for-385-billion-2014-06-09-9103235?mod=latestnewssocialflow&link=sfmw

 

Merck is turning into the equivalent of an ambulance chasing lawyer. The mail reason behind this acquisition is to get a bigger bite out of the patent squabble with Gilead over Soldani. Merck cares nothing for this pipeline and is betting that its under $4B investment will pay out bigger if they win 10% of Soldani's sales in the copyright infringement case.

Pathetic from a scientific poi t of view. This acquisition is all about the profits and naught about the patients. New Merck indeed.

 

There go the proceeds of the consumer division sale.

12 billion
- 2 billion in drugs Bayer didn't want
- 1 billion commission for bankers
- 4 billion for Idenix

5 billion left. Shareholders will never see a dime.

 

The rest goes to Ken and his Cronies!

 

Hey don't knock it. At least someone is making money.

 

http://www.fool.com/investing/general/2014/06/13/could-this-buyout-go-down-as-one-of-the-worst-deal.aspx

Good post. The Motley Fool has your back and develops the point further with some additional twists

Does this deal make sense?
Under the terms of the buyout Merck agreed to pay $3.85 billion, or $24.50 per share in cash, to acquire all outstanding shares of Idenix. Assuming everything stays on track the deal would close in the third quarter, and it'll represent a 239% premium to last Friday's closing price.

The move was made by Merck to get its hands on Idenix's lead drug samatasvir, an NS5A inhibitor, as well as its two additional clinical-stage nucleotide prodrugs, IDX21437 and IDX21459. Merck's press release notes that Idenix's pipeline will help complement its own developing hepatitis C pipeline, and should help broaden its chances of getting a hepatitis C therapy to pharmacy shelves.

On one hand I have to admit there are scenarios where this deal makes sense. Idenix's proprietary technology could be one way for Merck to cash in on its purchase. Idenix is already squaring off toe-to-toe with Gilead Sciences (NASDAQ: GILD ) over Sovaldi claiming that Gilead is infringing on one of its key patents. If Idenix were to win it could be set up with a hefty upfront payment or perhaps even a steady royalty payment.

In addition, the ability to possibly combine samatasvir or Idenix's nucleotide prodrugs with either of its own investigational oral hepatitis C compounds, MK-5172 and MK-8472, could give Merck even more opportunities to develop a blockbuster. Merck is looking for ways to avoid the patent cliff, and testing as many hepatitis C combination therapies as possible could prove to be a smart move.

Source: EMD Group.

Among the worst biotech deals ever
But, in my opinion this has all the makings of being a complete dud for Merck.

Putting aside the potential royalty or upfront revenue from Gilead Sciences, let's look at what Merck is actually purchasing: namely two midstage therapies in samatasvir and IDX21437, and a single phase 1 investigational drug in IDX21459, as well as a number of preclinical nucleotide inhibitors currently being studied.

These generally early stage compounds would already be considered a serious stretch to be purchased for $3.85 billion, but if you take a closer look at the pipeline history behind Idenix the premium Merck paid seems even pricier.

As a refresher, since 2010 Idenix has had four of clinical compounds placed on hold by the Food and Drug Administration (five if you count IDX184 which was actually placed on hold twice!). Subsequent to those holds Idenix wound up discontinuing IDX320, IDX184, and IDX19368, all of which were once considered to be an instrumental component to Idenix's long-term success. At the moment it still has IDX20963 on FDA hold with the regulatory agency requesting additional preclinical safety data from Idenix. With Idenix failing to get any of its pipeline therapies beyond a phase 2 study what exactly is Merck hoping to accomplish with a nearly $3.9 billion purchase?

Worse yet, it's as if Merck's completely ignored the fact that Gilead Sciences and possibly AbbVie (NYSE: ABBV ) haven't completely beaten it to pharmacy shelves by years!

Gilead's Sovaldi has drastically improved patient quality of care for genotype 2 & 3 patients who no longer need to take interferon (which is known to cause flu-like symptoms in patients), and the potential approval of Sovaldi in combination with ledipasvir has the potential to expand that to genotype 1 patients as well. Not to mention that Gilead's multiple studies with Sovaldi have consistently produced sustained virologic response (SVR) rates (i.e., undetectable levels of disease) in 90% or more of patients.

By a similar token AbbVie has filed new drug application paperwork for its direct-acting antiviral combo which could mean an approval before 2014 is over. It, too, can be given to genotype 1 patients without the need for interferon and also produced SVR's consistently at 90% or above in clinical trials.

Source: Cameron Neylon, Flickr.

What this means for Merck and Idenix is that unless samatasvir or some combination of samatasvir and one of Merck's compounds can consistently produce mid-90% SVR's there's probably little chance of it unseating Sovaldi or AbbVie's DAA.

We also have to consider what sort of chance Merck and Idenix have at penetrating the HCV marketplace with the assumption that samatasvir probably has little chance of making it to pharmacy shelves, even under the most ideal study conditions and results, prior to 2017. By then Gilead and AbbVie will have established themselves, potentially leaving but scraps of market share left over for the latecomers.

Finally, investors should keep in mind the precedent set by Bristol-Myers Squibb (NYSE: BMY ) when it purchased Inhibitex for $2.5 billion in 2012 only to have the company's lead drug (which eventually was known as BMS-986094) scrapped in midstage studies due to safety concerns. The end result was Bristol taking a $1.8 billion writedown tied to its Inhibitex purchase all because it desperately wanted to be a part of the HCV race.

Only time will tell
Could a similar fate await Merck? It's possible. If Idenix is successful in its case against Gilead it could net Merck a moderate revenue stream, though probably not enough to recoup its $3.85 billion investment. The real wildcard is whether or not Idenix can overcome its numerous safety obstacles and get a drug past phase 2 trials. Based on four years of history I'm not certain that's possible. Although time will truly tell the tale, based on the information we have right now as investors I'm calling the potential for this deal to be a dud much higher than 50-50.

 

NOT!

 

No way Merck is going to enter the fray with any success. Five years from now this $3.85B R&D expenditure will be remembered as just another financial blunder.

http://www.reuters.com/article/2014/06/20/us-health-hepatitis-bristol-idUSKBN0EV0BL20140620