Benzinga | Oct 13, 2021 03:32PM EDT

Holocene Advisors Says Believes Merck's Proposed Offer of $180 Per Share for Acceleron Significantly Undervalues Company

Long-term Holder Does Not Intend to Tender Shares into Merck's Offer

Holocene Advisors, LP ("Holocene"), a fundamental investment management firm and significant shareholder of Acceleron Pharma Inc. (NASDAQ:XLRN) ("Acceleron" or the "Company"), today announced that it does not intend to tender its shares into Merck & Co.'s (NYSE:MRK) proposed $180 per share offer for the Company announced on September 30, 2021.

Holocene stated the following:

"As a large shareholder in Acceleron, we believe the Company's management team has done an excellent job of creating value for shareholders; however, a transaction now, at this price, is not compelling. While Merck ultimately could be an attractive partner for Acceleron, we believe its $180 per share offer significantly undervalues the Company based on a discounted cash flow analysis and recent comparable transactions, and does not compensate XLRN shareholders adequately, given Acceleron's strong pipeline and attractive long-term business prospects.

"Acceleron's lead pipeline asset, sotatercept, has the potential to be a foundational and disease-modifying agent for the treatment of pulmonary arterial hypertension (PAH) and generate billions of dollars in sales. Additionally, royalties on Reblozyl, a potential blockbuster drug to treat anemia in patients with myelodysplastic syndromes (MDS), provide further valuation support as well as a meaningful source of cash flow to fund Acceleron's expanding novel pipeline. We believe that Acceleron's value will continue to significantly increase over time as more clinical data is released and the Company's assets are further derisked.

"While we normally do not comment on such matters, we believe that if this transaction is allowed to proceed on these terms, XLRN shareholders would be deprived of substantial value."

About Holocene Advisors, LP

Holocene is an investment management firm registered as an investment advisor with the Securities and Exchange Commission (the "SEC") that operates out of New York City. Holocene pursues a sector-diversified, beta-neutral long/short equity strategy with a focus on alpha generation through deep, fundamental research and financial modeling, conducted by sector-focused investment teams. Holocene manages significant holdings in the Healthcare space, including biopharmaceutical companies.