Merck Sharp and Dohme announces Cubist Pharmaceuticals takeover

Merck Sharp and Dohme has agreed a deal to acquire Cubist Pharmaceuticals, a specialist developer of novel antibiotics.

The total transaction is worth $9.5 billion (6.07 billion pounds), including an equity valuation of $8.4 billion and $1.1 billion in net debt – based on projected cash balances – and other considerations.

Cubist develops antibiotics to treat serious infections caused by a broad range of drug-resistant bacteria, including its product Cubicin, the only approved daily therapy for treating S. aureus bacteremia and complicated skin and skin structure infections.

It is believed that the deal will augments the company's strong foundation and opportunity for growth in the hospital acute care market.

Kenneth Frazier, chairman and chief executive officer at Merck Sharp and Dohme, said: "Cubist is a global leader in antibiotics and has built a strong portfolio of both marketed and late-stage pipeline medicines."

This comes after the company recently announced that it will be allying with NewLink Genetics to develop a new Ebola vaccine, in order to help address the current outbreak in west Africa.