Big pharma’s patent cliff is fast approaching

Aprice tagmsdpra of $10.8bn would look hefty for most acquisitions of smallish and newish companies. But for Merck, a drugs giant known as outside America, the money it is spending to buy Prometheus Biosciences, a biotech firm based in California, is relatively small change. In the world of big pharma such deals have the potential to generate enormous returns.Even though Prometheus makes no profits to speak of and has no approved drugs on its slate, the big prize for Merck is 023, a drug approaching the late-stage of clinical trials developed by Prometheus to treat ulcerative colitis, Crohn’s disease and other nasty autoimmune conditions. For now, Prometheus is burning through cash at a fast-rising rate. Merck’s decision to scoop it up is a bet on what comes next.