Germany's Merck in advanced talks to acquire US biotech firm SpringWorks (updated)

SpringWorks Therapeutics

11/02/2025 24:52

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      Reuters first to report on talks earlier on Monday 
    

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      SpringWorks' shares hit highest level since April 2022
    

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      U.S. company has market value of around $4 billion  
    

  
 (Recasts with Merck saying it is in talks; adds analyst comment
and background in paragraphs 12-14)
    By Sabrina Valle and Patricia Weiss
       NEW YORK/FRANKFURT, Feb 10 (Reuters) - Merck KGaA
 MRCG.DE , the German healthcare and technology group, said on
Monday it is in advanced talks to acquire U.S. cancer and rare
diseases drugmaker SpringWorks Therapeutics  SWTX.O . 
        Merck, in a statement, said its negotiations to buy
SpringWorks are ongoing, confirming 
    an earlier report
     from Reuters. The Darmstadt, Germany-based company said
that no legally binding agreement has been signed and there is
no certainty a deal will materialize.
  
        SpringWorks declined to comment.
  
    If the talks are successful, a deal could be signed in the
coming weeks, three sources told Reuters earlier in the day,
requesting anonymity as the discussions are confidential. They
did not disclose the exact terms being discussed.
    SpringWorks' shares closed 34% higher on Monday, giving the
company a market value of around $4 billion. The stock initially
jumped nearly 49% on the Reuters report, and touched its highest
level since April 2022. 
    Merck's German-listed shares closed down 3.7%. 
    Dealmaking in the U.S. healthcare sector is showing signs of
picking up, after a slowdown in activity in 2024 as large
pharmaceutical companies took a breather to integrate big
acquisitions they completed the previous year. Johnson & Johnson
 JNJ.N  last month agreed to buy Intra-Cellular Therapeutics for
about $14.6 billion.
    Stamford, Connecticut-based SpringWorks, which listed its
shares in New York in 2019, is a commercial-stage biotech firm
that develops drugs to treat various forms of cancer, including
rare tumors and uterine cancer. Its monotherapy drug for the
treatment of desmoid tumors, which are dense, soft-tissue
tumors, has been approved in the United States. The company is
expecting the approval of a product that treats
neurofibromatosis type-1, a rare genetic disorder, later in
February. 
        
  
        STRATEGIC BET 
  
    A transaction for SpringWorks would rank as one of the
biggest pharma deals for Merck in recent years and boost its
efforts to build out its cancer treatment pipeline. 
    Merck has suffered high-profile setbacks recently in
late-stage drug trials, prompting it to halt development of head
and neck cancer drug Xevinapant. A major trial testing multiple
sclerosis drug Evobrutinib failed in December 2023.
    In its most recent quarterly earnings, Merck reported a 12%
rise in adjusted quarterly earnings, helped by temporarily lower
spending on drug development and a rebound in demand for its
specialty materials. 
    "Given Merck KGaA’s existing franchise in oncology, which
constitutes about 25% of its healthcare sales in 2024, we see
the potential acquisition of SpringWorks as likely complementary
and giving potential for synergies," analysts at JPMorgan wrote
in a note. 
        "Most importantly, given the projected size of the
SpringWorks products, we see the assets potentially more than
offsetting the erosion from LOEs (levels of evidence) and
competition that Merck is facing."
  
    Merck has not shied away from splashy takeovers in the past.
In 2015, the company agreed to buy U.S. lab equipment supplier
Sigma-Aldrich for $17 billion, its biggest-ever deal. In 2019,
Merck acquired U.S. electronics materials manufacturer Versum
for 5.8 billion euros ($5.97 billion).  
    In an interview in January, Merck's CEO said a recovery in
sales growth at its major businesses would allow the company to
take a cautious approach to buying other companies, which are
expensively priced.
    
($1 = 0.9708 euros)

 (Reporting by Sabrina Valle in New York and Patricia Weiss in
Frankfurt; Additional reporting by Milana Vinn in New York and
Bipasha Dey in Bengaluru; Editing by Anirban Sen, Susan Fenton,
Nick Zieminski and Leslie Adler)
 ((Anirban.Sen@thomsonreuters.com; Twitter: @asenjourno; Reuters
Messaging: Signal/Telegram/Whatsapp - +1-646-705-9409))