Drug giant Merck & Co Inc. (MRK) is reportedly in talks to acquire antibiotics maker Cubist Pharmaceuticals Inc. (CBST) for about $102 a share, valuing the company that makes drugs to fight superbugs, in the range of $8 billion, according to CNBC.
On valuation measures, Cubist shares are currently priced at 86.67x this year’s forecasted earnings compared to the industry’s 16.36x earnings multiple. Ticker has a PEG and forward P/E ratio of 3.18 and 41.08, respectively. Price/Sales for the same period is 4.88, while EPS is 40.86. Currently there are 11 analysts that rate CBST a ‘Buy’, 9 rate it a ‘Hold’. No analysts rates it a ‘Sell’. CBST has a median Wall Street price target of $83.50 with a high target of $97.00.
The New York Times reported earlier Friday evening that a deal between the companies could be announced as early as next week. While it is not clear if Merck would pay for Lexington, Massachusetts-based Cubist with cash, stock or a combination of the two, the plans are not finalized and talks could still break up, CNBC said.
Cubist Pharmaceuticals shares fell 0.21% on Friday to close at $74.36, with a market value of less than $6 billion, while Merck & Co., the second largest U.S. drugmaker after Pfizer (PFE), rose 0.94% to $61.49, with a market value of $175.30 billion.