Merck Acquires U.S. Biopharma Company Exelead for $780 Million

Merck Biotech Stock

On January 6, Merck KGaA (MKKGY) announced it had signed an acquisition agreement with U.S. biotech company Exelead. Merck is a pharmaceutical company in based in Darmstadt, Germany. It’s not to be confused with the American Merck & Co., Inc.

As part of the acquisition, Merck agreed to pay about $780 million in cash. However, the money will probably not end up in the USA, but in Italy. This is because privately owned Exelead is a wholly owned subsidiary of Rome-based Essetifin SpA.

Exelead is Active in the Lucrative Field of mRNA Technology

Through the acquisition, Merck intends to further expand its capacities in the booming field of mRNA technologies. And this isn’t only due to the COVID-19 pandemic. Merck CEO Belén Garijo also emphasized this in a statement on the acquisition of Exelead:

“New modalities, particularly mRNA, represent a highly attractive business opportunity as pharmaceutical and biotech companies increasingly look to this technology – even beyond COVID-19… The acquisition of Exelead will enable Merck to offer its customers leading services as a contract developer and manufacturer, enabling them to benefit even more from the enormous potential of the rapidly growing market for mRNA therapeutics,” Garijo added.

Specifically, Exelead specializes in the development and manufacturing of complex injectable medical carrier materials. This so-called “drug delivery technology” is a key component for mRNA therapeutics to combat COVID-19 and many other diseases, according to Merck.

The U.S. biotechnology company has headquarters and manufacturing operations in Indianapolis. Exelead has more than ten years of experience in drug carrier development. It employs more than 200 highly skilled people.

However, Exelead is not only active in the development of medical carrier materials. It also offers its biotechnological research know-how as a service to other companies.

In addition, the Indianapolis-based company is also active as a biopharmaceutical contract manufacturer. As such, Exelead has also been supporting the U.S. pharmaceutical company Pfizer in the production of the Pfizer-BioNTech COVID-19 vaccine for several months.

Already the Second Acquisition for Merck in the mRNA Sector

Merck says it will stay committed to accelerating the growth of its innovative Process Solutions business. It will accomplish this through targeted small to medium-sized acquisitions with high impact. The acquisition of Exelead, for example, is already the second purchase in the mRNA sector within a year.

Merck had already announced the acquisition of Hamburg-based AmpTec GmbH. It’s a leading contract manufacturer and developer of mRNA, in January 2021. The Hamburg-based biotechnology company employs more than 40 people. It’s unknown how much the Darmstadt-based company had to leave on the table for AmpTec.

However, the news about the acquisition of the U.S. biotech company Exelead didn’t trigger any jumps of joy on the stock exchange. Merck’s share price fell by 1.4% last Thursday in an overall weak stock market environment.

What’s Next for Merck

In its press release on the acquisition of Exelead, Merck stated that it intends to continue investing in the mRNA sector. In addition to potential further acquisitions in this sector, the company said it will also pursue capacity expansion at Exelead’s existing site in Indianapolis.

Merck expects the transaction to close as early as the first quarter of 2022. However this is subject to regulatory approvals and satisfaction of other customary closing conditions.

Dr. Gregor Bauer
Dr. Gregor Bauer
Dr. Gregor Bauer credits his trading success to combining fundamental aspects of a trade with expert technical analysis. A Certified Financial Technician from the International Federation of Technical Analysts (IFTA), he’s rated as one of Germany’s top 300 economic experts.
Dr. Gregor Bauer
Dr. Gregor Bauer
Dr. Gregor Bauer credits his trading success to combining fundamental aspects of a trade with expert technical analysis. A Certified Financial Technician from the International Federation of Technical Analysts (IFTA), he’s rated as one of Germany’s top 300 economic experts.

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