Under the agreement, Merck will acquire all of the outstanding equity of NovaCardia for $350 million plus the amount of cash on hand at the time of closing, all of which will be paid in Merck stock based on the average closing stock price on the five days prior to closing of the acquisition.
"This acquisition continues to deliver on our strategy of targeted acquisitions in areas of unmet medical need in the therapeutic areas of strategic importance for Merck such as cardiovascular diseases," said Richard Kender, vice president of business development and corporate licensing at Merck.
NovaCardia's lead product candidate KW-3902, an adenosine A1 receptor antagonist, is being studied in Phase 3 clinical trials in patients with acute congestive heart failure (CHF). KW-3902 is believed to block adenosine-mediated constriction of blood flow to the kidneys and inhibit reabsorption of salt and water by the kidney, thereby increasing urine volume and maintaining renal function in patients with CHF.
"We are excited to see our lead product become part of the superb scientific environment of Merck," said Randall E. Woods, president and chief executive officer at NovaCardia. "NovaCardia demonstrated the potential of KW-3902 in clinical trials, and we believe that Merck can expedite the development of this novel agent."
"Merck is very excited to have the opportunity to bring forward potential new treatments for patients with heart failure," said Richard C. Pasternak, M.D., vice president of clinical research at Merck Research Laboratories. "Our acquisition of NovaCardia enhances Merck's considerable internal research efforts committed to the development of new medicines to treat major cardiovascular diseases that are underserved by existing therapies."
"NovaCardia's management team has done an exceptional job advancing KW-3902 into Phase 3 clinical trials, demonstrating the compound's potential and building NovaCardia into a successful company," said Eckard Weber, M.D., founder and chairman of NovaCardia and partner at Domain Associates.
In addition to Domain Associates, NovaCardia's investors include Forward Ventures, Montreux Equity Partners, Versant Ventures, Skyline Ventures and InterWest Partners. NovaCardia will spin-out a new corporate entity to support clinical development of the company's second compound, K201 (JTV-519) for atrial fibrillation.
"This acquisition gives Merck the possibility to expand its cardiovascular product pipeline into congestive heart failure, an area of important unmet medical need and significant burden to the healthcare system," said Guy Eiferman, general manager of the atherosclerosis and cardiovascular franchise at Merck.
The acquisition is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act and other customary conditions. The two companies expect to close the acquisition within 45 days.