Merck buying Cubist Pharmaceuticals for $8.4B

Shares of Cubist Pharmaceuticals (CBST) soared 36% Monday after Merck (MRK) announced it's buying the Cambridge, Mass. drugmaker for $102 per share.

Cubist Pharmaceuticals Inc. does advanced antibiotic research and is noted for its research on superbugs -- diseases that have developed immunity to antibiotic treatment.

The deal is valued at $8.4 billion and is a 37% premium to the company's average price the previous five days. Merck will also assume $1.1 billion in Cubist's debt.

"Cubist is a global leader in antibiotics and has built a strong portfolio of both marketed and late-stage pipeline medicines," said Kenneth C. Frazier, Merck's CEO.

Cubist is the maker of the antibiotic Cubicin and a group of other powerful antibiotics. Another antibiotic, Zerbaxa, is expected to get approval from U.S. regulators this month. The drug fights urinary tract infections.

Drug companies haven't been concentrating on antibiotics in recent years, but the rise of antibiotic-resistant diseases as spurred new interest in them.

Cubist stock was up $26.36 to $100.72 in afternoon trading. Merck was up 3 cents to $61.52.