Pandion Shares Trade Up 134% on $1.85 Billion Acquisition by Merck

Source: Streetwise Reports   02/25/2021

Pandion Therapeutics shares reached a new 52-week high after the company reported it agreed to be acquired by pharmaceutical giant Merck & Co. in an all cash transaction for $60 per share.

Clinical-stage biopharmaceutical company Pandion Therapeutics Inc. (PAND:NASDAQ), which focuses on developing modular therapeutics for treating autoimmune and inflammatory diseases, today announced that it entered into a definitive agreement to be acquired by a wholly owned subsidiary of Merck & Co. Inc. (MRK:NYSE) for $60 per share in cash. The firms advised that this price equates to a total equity value of approximately $1.85 billion.

Merck Research Laboratories’ President Dr. Dean Y. Li commented, “This acquisition builds upon Merck’s strategy to identify and secure candidates with differentiated and potentially foundational characteristics…Pandion has applied its TALON technology to develop a robust pipeline of candidates designed to re-balance the immune response with potential applications across a wide array of autoimmune diseases.”

Pandion noted that “it is advancing a pipeline of precision immune modulators targeting critical immune control nodes and that its lead candidate, PT101, is an engineered IL-2 mutein fused to a protein backbone designed to selectively activate and expand regulatory T cells (Tregs) for the potential treatment of ulcerative colitis and other autoimmune diseases.”

Pandion Therapeutics’ CEO Dr. Rahul Kakkar stated, “Pandion grew out of our founders’ personal and scientific mission to change the way patients living with autoimmune diseases are treated. In just a few years, we have taken that mission from idea to clinical proof of mechanism with PT101, our lead IL-2 mutein. We are proud that Merck has recognized our team’s innovation and drive in creating a pipeline of diverse candidates that activate natural immune regulatory mechanisms and thereby have the potential to achieve better clinical responses for patients…We believe Merck is well positioned to bring our novel approach to the millions of those living with autoimmune diseases, and we look forward to seeing these molecules progress in the clinic.”

The companies advised that according to the terms of the purchase agreement, Merck will initiate a tender offer of $60 per share to acquire all of the outstanding shares of Pandion through a subsidiary company. In order to go forward at least one half of the shares held by Pandion investors must tendered in the offer.

The transaction is expected to close in H1/21 following the successful completion of the tender offer, though the transaction remains subject to customary closing conditions and regulatory approvals including the expiration of the waiting period as mandated under the Hart-Scott-Rodino Antitrust Improvements Act.

Merck & Co., Inc. is headquartered in Kenilworth, N.J., and is one of the world’s largest global healthcare companies with a market cap of around $190 billion. The firm is known as MSD outside of the U.S. and Canada. The company provides healthcare services and develops, manufactures and markets animal health products, biologic therapies, prescription medicines and vaccines worldwide.

Pandion Therapeutics is a clinical-stage biopharmaceutical company based in Watertown, Mass. The firm is engaged in developing novel innovative modular therapeutics to meet unmet medical needs in the area of autoimmune and inflammatory diseases. The company noted that “its TALON (Therapeutic Autoimmune reguLatOry proteiN) drug design and discovery platform enables the company to create a pipeline of product candidates using immunomodulatory effector modules, with the ability to also combine an effector module with a tissue-targeted tether module in a bifunctional format.”

Pandion Therapeutics began the day with a market cap of around $756.6 million with approximately 29.52 million shares outstanding. PAND shares opened more than 130% higher today at $59.39 (+33.76, +131.72%) compared to yesterday’s closing price of $25.63. The stock has traded today between $59.21 and $60.38 per share and is currently trading at $60.06 (+$34.43 +134.35%).

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