BOSTON — Merriden Pharmaceuticals has agreed to buy Halvard Bio, a 140-person biotech in Cambridge, for $2.1 billion in cash, the companies said Monday. The deal comes eight weeks after Halvard reported that its lead drug slowed the decline of kidney function in a mid-stage trial.
Merriden will pay $38 a share, about twice what Halvard was worth a month ago and 41 percent more than Friday’s closing price. Both boards have approved the deal, which is expected to close early next year.
It is the third buyout of a biotech for more than $2 billion this year, and the second in kidney disease, a field that drug companies largely ignored for two decades.
The drug
Halvard’s drug, called HLV-207, is a daily pill for a genetic form of kidney disease that affects about 100,000 people in the United States. Many of them need dialysis or a transplant by middle age.
In the trial of 212 patients, the drug slowed the yearly loss of kidney function by about 40 percent compared with placebo. The most common side effects were nausea and headaches. A larger, final-stage trial is enrolling now, and its results are expected in about two years.
«Forty percent is a big number in this disease, but this was a mid-stage study, and those numbers often shrink,» said Dr. Ingrid Solberg, a nephrologist who was not involved in the research. «I’ll believe it when I see the final trial.»
The deal, in numbers
- Price: $38 a share, $2.1 billion in cash
- Premium: 41 percent over Friday’s close
- Halvard’s value a month ago: about $1 billion
- Employees: about 140, most in Cambridge
- Expected close: early next year
- Next milestone: final-stage trial results in about two years
Why Merriden paid up
Merriden’s best-selling product, a blood thinner, loses patent protection in three years, and the company has told investors for more than a year that it needs to buy its way into new areas. Kidney disease is one of the few big markets where there is little competition and a clear way to measure whether a drug works.
«The window was closing,» said Paul Okonkwo, a biotech analyst at Fenwright Securities. «Once the final trial reads out, if it’s good, you’re paying $5 billion, not $2 billion. Merriden is buying the risk early.»
Halvard’s chief executive, Simone Arceneaux, will stay on to run the kidney program inside Merriden for at least a year, according to a regulatory filing. She founded the company seven years ago with two former colleagues from a university lab, and with seed money from a family foundation started by a patient’s parents.
The foundation, which owns about 3 percent of Halvard, will receive roughly $60 million. Its director said the board would put all of it into research grants.
Halvard employees learned about the deal at a 7 a.m. meeting. Two of them said there were cupcakes. One said nobody ate them until noon, after the email about retention bonuses came out.