Merck KGaA bets on RNAi with $1.3B Silence buyout

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Dive Brief:

• Merck KGaA is buying into RNA medicine, announcing Monday the $1.3 billion buyout of UK-based Silence Therapeutics to gain control of a medicine that has delivered positive Phase 2 data in the rare blood disorder polycythemia vera.
• Per deal terms, the bigger drugmaker will pay $20 in cash for every U.S.-listed Silence share. The deal thereby carries a 130% premium, the second highest this year among the bigger-ticket transactions tracked by BioPharma Dive. Key shareholders representing 14% of Silence’s voting power have already agreed to the deal, which German Merck expects to close in the first quarter of 2027.
• Merck KGaA will take ownership of a so-called short-interfering RNA therapy that, if approved, will compete with a Takeda Pharmaceutical and Protagonist Therapeutics medicine named Mimrylo, along with older treatments like Incyte’s Jakafi. Reviewing Phase 2 data, Wall Street analysts concluded that Silence’s drug, “divesiran,” could be “best in class” and has the potential to match Mimrylo’s forecasted blockbuster sales.

Dive Insight:

Merck KGaA CEO Kai Beckmann described the transaction as part of an effort to “transform our pipeline toward areas of high specialization and unmet medical need, with an ongoing commitment to external innovation,” following on a buyout of Springworks Therapeutics last year that brought in drugs for two rare tumor disorders.

In that case, Merck KGaA obtained already approved products. With Silence, it will need to invest in a Phase 3 program, although the big drugmaker has more resources to complete the program than the $72 million in cash and equivalents that Silence had in hand as of June 30.

After analyzing that Phase 2 data, analysts from Cantor Fitzgerald suggested that, because of its strong efficacy, divesiran might not need the nearly 300 patients that Takeda and Protagonist enrolled in their Phase 3 Mimrylo trial. They also argued that Silence's drug “meaningfully exceeded the efficacy shown by” Mimrylo.

“This deal takes the execution risk off the table in an increasingly competitive space and delivers near-term shareholder value from what appears to be a competitive bid process,” William Blair analyst Myles Minter, who covers Silence, wrote in a client note.

In polycythemia vera, a faulty gene stimulates the bone marrow to make too many red blood cells, increasing the risk of dangerous blood clots. The disease can also lead to an enlarged spleen, ulcers and gout. Treatment often consists of blood withdrawals, and if those don’t work well enough, patients can receive drugs like Jakafi, hydroxyurea, busulfan or a type of interferon.

Mimrylo and divesiran both work by increasing levels of a hormone called hepcidin, which suppresses iron metabolism. Divesiran does so by silencing a gene called TMPRSS6, which is being targeted by a similar drug Agios Pharmaceuticals is developing.

In mid-stage testing, divesiran was able to significantly reduce the number of blood draws in people who got it compared to those who got a placebo. It also reduced red blood cell levels below a threshold triggering the need for blood draws in significantly more people who got it, compared to those in the control arm.