Merck and Sanofi buy smaller cancer drug firms at big premiums, fueling investor excitement

The drug giants Merck and Sanofi each said they would acquire a smaller drug maker for more than $2 billion Monday — in each case, more than double the smaller company’s market capitalization — cheering investors about large companies’ appetite to execute buyouts in the biotechnology sector.

Merck, of Kenilworth, N.J., is purchasing ArQule of Burlington, Mass., a developer of pills aimed at treating multiple cancers, for $2.7 billion, or $20 per share, a 107% premium to the stock’s closing price