Merck to buy Imago BioSciences for $1.35 billion

Yahoo Finance Live anchors discuss reports that Merck will acquire Imago BioSciences for $1.35 billion.

Video transcript

[AUDIO LOGO]

BRAD SMITH: I want to talk about this company as well here, just before we get to the opening bell. Shares of Imago and-- Imago BioSciences and Merck here-- after the company announced an agreement to be acquired by Merck in a cash deal with a value of $1.35 billion, now Merck is going to pay $36 for each Imago share that's more than Imago's closing price. Is it "Image-Go" or "Ima-Go"? I'm still trying to figure that out.

JULIE HYMAN: "Ih-MA-go."

BRAD SMITH: "Ih-MA-go."

BRIAN SOZZI: I like "ih-MA-go." It's the Julie Hyman trade here with the biotechs.

BRAD SMITH: The pronunciation is sketchy right now. But at least on the Merck side, year to date, Merck has been doing well. Year to date, it's up by about 35%, 36%. You also have a period where over the next couple of years, you're going to see these patent roll-offs, which is going to be significant in terms of the number of deals that Merck is going to be looking for as well. And in Keytruda, 2028 is when that patent rolls off. And that's a significant driver of revenue for them.

JULIE HYMAN: Yeah, you know, it's really interesting the strategy that you're seeing from some of these large biotech companies. They have something like a Keytruda, which has a lot of customers out there, a lot of patients out there. And then what some of the large companies are doing is focusing on these more rare diseases, cancer as well, which unfortunately, obviously, affects a lot of people.

But this particular company is making therapies for something called myeloproliferative neoplasms, which affects the bone marrow's production of platelets and red blood cells. So we're talking about a relatively rare condition. But that also makes it more sort of protected, if you will. In other words, there's not as much of a patent threat for some of these rare disease treatments as there would be for something that is such a big market, like a [INAUDIBLE] or like an Alzheimer's treatment, for example. So you see this kind of activity by some of the big drug companies.

BRIAN SOZZI: And Pfizer has spent billions of dollars this year-- this past year buying Biohaven Pharmaceuticals, a global blood therapeutic. It's billions of dollars here to further its leadership in these areas. Boy, every time I talk about this segment, I'm reminded by how little I know about my body. Just hearing these segments, I'm like, wow, I don't really know anything.

BRAD SMITH: You're going to find out a lot more because--

BRIAN SOZZI: I don't want to find out.

BRAD SMITH: --Merck is going to continue spending. The R&D is going to double in oncology, neurology, and immunology for the next few years.