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Merck takes aim at superbugs with $9.5 billion deal for Cubist

December 8, 2014, 12:38 PM UTC
RAHWAY, NJ - NOVEMBER 29: A man walks by a sign at a Merck plant November 29, 2005 in Rahway, New Jersey. U.S. pharmaceutical giant Merck, announced plans to cut some 7,000 jobs, or 11 percent of its global workforce, by the end of 2008. (Photo by Marko Georgiev/Getty Images)
Photograph by Marko Georgiev — Getty Images

Merck & Co Inc said on Monday it would buy Cubist Pharmaceuticals Inc in a deal valued at $9.5 billion, giving the major drugmaker an entry into the market for drugs that target so-called superbugs.

Merck (MRK) and British rival AstraZeneca Plc have turned their attention to newer kinds of antibiotics that attack superbugs — strains of bacteria that are resistant to several types of antibiotics — after the 2013 threat report from the U.S. Centers for Disease Control and Prevention.

The CDC estimated that more than 2 million people in the United States are sickened every year by such infections, with at least 23,000 dying as a result.

Cubist’s lead drug, Ceftolozane/Tazobactamis, is widely expected to win marketing approval from the U.S. Food and Drug Administration later this month as a treatment for complicated urinary tract infections.

Merck will pay $102 per share for Cubist, a premium of 37 percent to the Lexington, Massachussetts-based company’s closing share price of $74.36 on Friday.

The deal includes assumption of $1.1 billion in debt.