Sirna Therapeutics Inc. shares almost doubled late Monday after Merck & Co. Inc. agreed to pay $1.1 billion cash to acquire the biotechnology company, expanding its portfolio of drug development platforms.
Shares of Sirna surged $6.28 to change hands for $12.73 in after-hours trading. Merck's offer of $13 per share was a 102% premium over Sirna's closing price of $6.45.
The San Francisco-based company develops therapeutics using RNA interference, which aims to treat diseases by disrupting the expression of disease-causing genes.
"RNAi is a powerful enabler of drug discovery in cells, in animals, and in humans. We can potentially use this technology to target the activity of genes which control the activity of cancer cells, and so produce their destruction without damaging normal cells," Stephen Friend, executive vice president and franchise head of Merck's oncology and neuroscience in its research division, said in a statement.
Andrew Fire and Craig Mello were recently awarded the Nobel Prize in Medicine for their discovery of RNAi.
Merck began researching RNAi in 2001, when it bought Rosetta Inpharmatics Inc.
Sirna's lead product candidate is for the treatment of the wet-form of age related macular degeneration, the leading cause of blindness in the elderly, known as Sirna-027. It's being developed in collaboration with Allergan Inc. It has a separate alliance with GlaxoSmithKline PLC to develop compounds for the treatment of respiratory diseases.
"We had been talking with Merck about a drug development collaboration," said Jim Niedel, managing director of New Leaf Venture Partners, and out of those talks arose the acquisition talks. New Leaf manages the healthcare portfolio of The Sprout Group and holds about 25% of Sirna's shares, Niedel said.
See my post from 10-3-06 where I explain how RNAi works.
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