Cubist has its Zerbaxa OK. Can Merck make the launch justify its $9.5B buyout?

Merck's ($MRK) $9.5 billion Cubist ($CBST) buyout got off to a rocky start when a U.S. court nixed all but one patent covering top-seller Cubicin. And now, it'll be up to brand-new FDA approval Zerbaxa to turn things around.

Analysts expect the antibiotic, green-lighted Friday to treat infections caused by Gram-negative bacteria, to bring in about $560 million in 2018 sales. While that won't completely fill Cubicin's footprints--the drug has already raked in $700 million through the first 9 months of 2014--it'll be welcome revenue for Merck, which some industry-watchers say overpaid for the Massachusetts-based company.

That sentiment began circling right away, with the Cubicin patent decision coming down the very same day Merck went public with its deal pact. The outcome likely means the drug will go up against "several" generics when Cubicin loses protection, according to Leerink Partners analyst Seamus Fernandez. That'll likely be in late 2016, assuming the company wins 6 months of pediatric exclusivity--considerably earlier than the 2019 or 2020 date Cubist was hoping for. And that means Merck could have spent up to $3 billion too much.

Merck CEO Ken Frazier

But a power launch for Zerbaxa could change that, Fernandez wrote in a recent note to investors. Leerink analysts think the $560 million mark implies "solid U.S. uptake with relatively muted" sales outside the country, which means there's room for Merck to flex its commercial muscles. And as the pharma giant's CEO, Ken Frazier, said when announcing the deal, it plans to do just that.

"Cubist ... has built a strong portfolio of both marketed and late-stage pipeline medicines," Frazier said in a statement. "Combining this expertise with Merck's strong capabilities and global reach will enable us to create a stronger position in hospital acute care while addressing critical areas of unmet medical need, such as antibiotic resistance."

- read Cubist's Zerbaxa release

Special Report: The top 10 pharma companies by 2013 revenue - Merck

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