Merck Cidara acquisition will see Merck & Co. acquire Cidara Therapeutics Inc. for about $9.2 billion, a move aimed at cushioning a looming sales decline as Keytruda, its top-selling cancer drug, nears a critical patent expiration.
Key Points
Merck will launch a cash tender offer at $221.50 per share—more than twice Thursday’s closing price—according to a joint statement released Friday. The deal delivers a sharp premium to Cidara shareholders as Merck targets new growth drivers to offset expected revenue erosion in the coming years.
Investors reacted swiftly ahead of the U.S. market open. Cidara shares surged 103% in premarket trading in New York, while Merck slipped about 1.4%. As of Thursday’s close, Cidara’s stock had already climbed 294% this year. Merck finished up 1.6% on Thursday but remains down 6.6% year-to-date.
Why the Merck Cidara acquisition matters
Merck is preparing for a significant patent cliff that could trim sales by an estimated $18 billion over the next five years. The company faces a 2028 patent expiration for Keytruda, the best-selling drug in pharmaceutical history, which accounted for nearly half of Merck’s revenue last year.
Against that backdrop, the Merck Cidara acquisition underscores a deliberate expansion strategy. In July, Merck agreed to buy respiratory drugmaker Verona Pharma Plc for around $10 billion. “Merck continues to go for a string-of-pearls approach to M&A rather than sizing up for an asset that could uniquely solve its patent cliff,” Mizuho’s Jared Holz wrote in a note Friday.
That “string-of-pearls” design suggests Merck is knitting together targeted, late-stage or near-commercial assets that can add incremental growth and diversify revenue, rather than pursuing a single transformative megamerger.
CD388: A potential new pillar in influenza prevention
Cidara’s lead program, CD388, is a long-acting therapy designed to help prevent flu in people at higher risk of complications. It is not a vaccine and does not rely on stimulating an immune response. CD388 is currently in late-stage trials, with Cidara positioning it as an additional option alongside vaccines and antivirals.
Merck Chief Executive Officer Rob Davis called CD388 an “important driver of growth through the next decade.” That view aligns with the company’s need to broaden its portfolio as Keytruda’s market exclusivity winds down.
The public health context remains pressing. The flu continues to cause tens of thousands of deaths in the U.S. each year. By some measures, last winter was the country’s worst flu season in 15 years, and last season’s vaccines were only about 56% effective. If late-stage data are positive, CD388 could expand the prevention toolkit, particularly for patients who are most vulnerable to severe outcomes.
Dealmaking heat: Competitive bids and rising totals
The Financial Times earlier reported the transaction and said Merck prevailed after a heated bidding war. The Merck Cidara acquisition arrives amid a spate of competitive pharma deals, as large drugmakers hunt for pipeline assets to replenish growth.
Just last week, Pfizer Inc. beat Novo Nordisk A/S in a high-profile bidding contest for obesity biotech Metsera Inc., agreeing to pay $10 billion for the three-year-old company. Industrywide, the value of biotechnology and pharmaceutical deals has risen 31% this year to about $187 billion, according to data compiled by Bloomberg. That tally includes Johnson & Johnson’s $14 billion-plus acquisition of Intra-Cellular Therapies Inc. and Novartis AG’s recently announced takeover of Avidity Biosciences Inc.
Within that context, the Merck Cidara acquisition reflects the escalating competition for late-stage or de-risked assets that can contribute to growth sooner rather than later.
Deal terms and market reaction
The Merck Cidara acquisition is structured as an all-cash tender offer at $221.50 per share, representing a substantial premium to Cidara’s recent trading levels. The immediate market response was stark: Cidara surged 103% in premarket action while Merck slipped 1.4%, a typical pattern when acquirers face near-term dilution or integration questions.
As of Thursday’s close, Cidara had already rallied 294% year-to-date, highlighting investor expectations for its pipeline. Merck rose 1.6% on Thursday but is down 6.6% for the year, reflecting broader concerns about the Keytruda patent timeline and the pace of new product backfilling future revenue.
Integration fit: Where CD388 could slot in
Merck is one of the biggest vaccine makers. While CD388 is not a vaccine, a successful launch could complement the company’s existing respiratory and preventive portfolio by addressing a different mechanism of flu prevention. Because CD388 is intended for individuals at higher risk of complications, it targets a clinically significant, clearly defined population.
For Merck, the strategic calculus is clear: expand in areas where unmet needs are large, clinical endpoints are well understood, and payer decision-making is grounded in clear risk-benefit profiles. In that frame, the Merck Cidara acquisition offers a focused, late-stage asset that, if approved, could contribute meaningfully in the years leading up to and following Keytruda’s 2028 expiration.
Governance, timing, and advisers
The purchase has been approved by both companies’ boards and is expected to close in the first quarter of 2026, subject to customary conditions. Merck plans to update investors on a call Monday morning, providing an early window into how the company expects CD388 to fit within its broader portfolio and near-term revenue plans.
On the advisory front, BofA Securities Inc. and Gibson Dunn LLP advised Merck. Cidara was advised by Evercore and Goldman Sachs & Co., with Cooley LLP serving as legal counsel. Those lineups underscore the high-stakes, highly competitive nature of the process leading up to the agreement.
Strategic through-line: Managing the Keytruda transition
The Merck Cidara acquisition is part of a broader strategy to navigate a multi-year transition as Keytruda’s exclusivity winds down. Management has signaled a willingness to deploy capital toward targeted deals that can deliver clinically meaningful innovation and near-term revenue, rather than leaning on a single transformative merger.
In July, the company acquired Verona Pharma in a transaction of a similar size—around $10 billion—reinforcing a systematic approach to bolstering the pipeline. Investors and analysts will be assessing whether this “string-of-pearls” pattern, as Mizuho’s Jared Holz described it, can cumulatively offset the projected $18 billion in patent-driven erosion over five years.
What to watch next
The next catalysts for the Merck Cidara acquisition include details from Monday’s investor call, the tender offer timeline, and any interim disclosures on the late-stage progress of CD388. As regulatory reviews advance and closing conditions are addressed, attention will shift to the potential launch path and commercial positioning relative to existing vaccines and antivirals.
Analysts will also watch how Merck prioritizes CD388 within its broader respiratory and prevention strategy and how the company sequences this asset alongside other recent additions such as Verona Pharma. The bigger picture remains consistent: ensuring that Merck’s pipeline can sustain growth as Keytruda’s 2028 patent expiration approaches.
Bottom line
If completed, the Merck Cidara acquisition would add a late-stage flu-prevention therapy with the potential to become a meaningful growth contributor during a pivotal period for Merck. With competitive dealmaking intensifying across pharma and biotech—and overall transaction value up sharply this year—the company’s latest move signals continued urgency in securing assets that can deliver durable value.
By combining a significant premium for Cidara shareholders with a clear strategic rationale, Merck is placing another calculated bet that incremental, well-chosen acquisitions can help bridge the gap to a post-Keytruda era.
FAQ’s
How much is the Merck Cidara acquisition, and what’s the offer per share?
Merck agreed to acquire Cidara for about $9.2 billion via an all‑cash tender offer at $221.50 per share, more than double Thursday’s close.
Why is Merck pursuing the Cidara deal now?
Merck faces a 2028 patent expiration for Keytruda and an expected $18 billion sales hit over five years. Cidara’s CD388 could become a new growth driver if approved.
What is CD388, and how is it different from a flu vaccine?
CD388 is a long‑acting flu prevention therapy for high‑risk people. It isn’t a vaccine and doesn’t depend on triggering an immune response; it’s in late‑stage trials.
When is the Merck Cidara acquisition expected to close?
The deal has board approval at both companies and is expected to close in the first quarter of 2026, pending customary conditions and regulatory review.
