Following an initial report from Reuters, Merck KGaA confirmed that it is in talks with SpringWorks for a potential acquisition, though details of its offer have yet to be revealed.
German pharma Merck KGaA is currently in “advanced discussions” with SpringWorks Therapeutics regarding a potential acquisition.
The news, first reported by Reuters Monday and confirmed by Merck KGaA a few hours later, sent the cancer biotech’s stocks soaring 34% and brought its value to approximately $4 billion at market close.
Merck KGaA insisted in its news release that “no legally binding agreement has been entered into” despite the ongoing negotiations. Certain unspecified but important conditions have yet to be met and “there is no certainty that any transaction will materialize,” according to the pharma.
Still, in the original Reuters report, three anonymous sources claimed that if the discussions are successful, the acquisition deal could be inked in the coming weeks. Specific details of Merck KGaA’s offer—particularly the purchase price—have yet to be revealed. Analysis from Wedbush suggested a $77 per share price, and with approximately 74 million shares outstanding, that would bring the total price to about $5.7 billion.
SpringWorks’ growth prospects seem bright, with an FDA decision due by the end of the month for its investigational MEK blocker mirdametinib, proposed for neurofibromatosis type 1-associated plexiform neurofibromas. If approved, mirdametinib will be the first therapy approved for both children and adults with the condition.
SpringWorks therefore presents an attractive acquisition target for Merck KGaA, which has been on somewhat of a losing streak in the past two years. In December 2023, for instance, the German pharma’s investigational BTK inhibitor evobrutinib failed a Phase III study in relapsing multiple sclerosis. Earlier that year, in April, the FDA placed evobrutinib on partial clinical hold after detecting signals of liver injury.
Ultimately, Merck KGaA announced in March 2024 that it would no longer be developing evobrutinib for multiple sclerosis. In June 2024, the pharma suffered another Phase III flop, this time for xevinapant in locally advanced head and neck cancer.
If the acquisition pushes through, Merck KGaA will gain ownership over SpringWorks’ desmoid tumor therapy Ogsiveo, which in 2024 brought in $172 million, according to a preview of its full-year financial results presented at the 43rd J.P. Morgan Healthcare Conference last month. The Connecticut-based biotech had a cash position of nearly $462 million at the end of the year.
Merck KGaA’s acquisition of SpringWorks, if it materializes, will continue biopharma’s dealmaking rally this year. Earlier this week, Bain Capital bought Japanese company Mitsubishi Tanabe for $3.3 billion, while GSK and Johnson & Johnson opened JPM25 with back-to-back buys worth $1 billion and $14.6 billion, respectively.
