Los Angeles-based Cedars-Sinai Medical Center could receive $800 million in the coming months if Merck completes its acquisition of Prometheus Biosciences, which develops precision therapies for immune-mediated diseases, according to an April 19 Pensions & Investments report.
On April 16, pharmaceutical company Merck announced a $10.8 billion deal to acquire Prometheus as it looks to strengthen its immunology pipeline. The deal is expected to close in the third quarter, pending approval from Prometheus stockholders.
Cedars-Sinai Medical Center, part of Cedars-Sinai Health System, holds more than 4 million shares of Prometheus, equating to a 8.42 percent stake in the company, the highest among 10 other prominent shareholders listed by Market Screener.
"While the acquisition is an exciting development, it does not change the challenging operating environment facing hospitals and academic medical centers, including Cedars-Sinai, nor our multibillion-dollar capital commitments in coming years in order to continue serving Los Angeles and the nation," a spokesperson for Cedars Sinai said in a statement provided to Becker's.
According to Cedars-Sinai Health System's most recent annual financial report — for the year ended June 30 — it reported an operating gain of $259.2 million, down from $405.7 million the prior year. However, investment losses for the year ended June 30 totaled $437.5 million, down from a gain of $589.7 million the previous year, resulting in a net profit of $317.9 million, down from $1.1 billion the year prior.