Remember Merck buying Cubist? And the problems that immediately came up around the company’s patent estate? Merck stuck to their decision, with lots of talk about how they were committed to it no matter what, but one always had to wonder what the sequel would be. Here’s David Shlaes at the time:
This announcement is bittersweet for me. This clearly continues a string of good news for antibiotics and antibiotic R&D. It is further proof that large pharmaceutical companies now agree that antibiotics can provide a return on investment and that they are willing to put there money where there mouths are. The acquisition of Cubist will also bolster the appetite of investors beyond the excitement provided by Cubists own acquisitions of Optimer and Trius last year.
On the negative side, there are always the “synergies” that go along with these mergers. The Merck investment in their antibiotic R&D portfolio has been exceedingly modest over the last decade or so. Will this change or will Merck now go about ridding itself of the Cubist R&D organization to achieve its promised cost-savings? On the risk side, essentially all of Cubist’s late stage antibiotics have come from external sources. Their own discovery organization has contributed little to the late stage pipeline. Merck’s own discovery organization has provided only MK-7655 – a knock off or avibactam – and little else for many years. How Merck will deal with the two discovery groups is a matter of concern and remains a complete unknown at least to me.
Well, by golly, here come those synergies. The Boston Business Journal says that Merck is cutting Cubist’s entire early-stage drug discovery staff, laying off all 120 of them. So anyone who thought that this might be about some sort of long-term commitment to antibiotic discovery, well, think again. This is about getting Cubist’s existing drugs, back to some unspecified point in development, but the discovery work gets raked off into the compost pile. I would not be feeling good about the prospects for the whole Lexington site, given that a Merck spokesman is quoted talking about re-evaluating footprints, etc.
Very nice. It’s true that Cubist’s own efforts were not the driver for the Merck acquisition, nowhere near, but still. After the Schering-Plough merger, and now this treatment of Cubist, you have to wonder if Merck has decided to follow the 2000s-era Pfizer strategy of M&A. You know, the one that made them what they are today, and that’s worked out so well for everyone.