Merck KGaA, the German pharmaceutical giant, is on the brink of acquiring SpringWorks Therapeutics, a U.S.-based biotech firm focusing on rare cancers, for an estimated $3.5 billion. This potential deal, which could be finalized as soon as Monday, April 28, 2025, comes at a time when Merck is looking to strengthen its oncology portfolio following a series of setbacks in its drug development pipeline.
According to reports from The Wall Street Journal and Bloomberg, Merck KGaA is negotiating a purchase price of approximately $47 per share for SpringWorks, which has seen its stock fluctuate significantly since rumors of the acquisition first surfaced in February. Following the initial news of negotiations, SpringWorks’ share prices surged by about 34%, but they have since settled lower, closing just below $45 on April 24, 2025.
SpringWorks, which was spun out of Pfizer in 2017, has developed a promising pipeline of drugs, including Ogsiveo (nirogacestat), approved for treating desmoid tumors, and Gomekli (mirdametinib), which recently received FDA approval for neurofibromatosis type 1. These drugs are expected to contribute significantly to Merck's revenue, with Gomekli projected to generate up to $564 million in global sales by 2030 and Ogsiveo anticipated to reach $1.2 billion in sales by the same year.
The acquisition would mark one of the largest pharmaceutical deals for Merck KGaA in recent years, following its $17 billion purchase of Sigma-Aldrich in 2015. Analysts have noted that this deal could help Merck recover from recent failures in its clinical trials, including the termination of its BTK inhibitor evobrutinib in March 2024 after it failed to demonstrate significant efficacy in treating multiple sclerosis.
Merck KGaA has faced several challenges in its drug development efforts. In April 2023, the FDA placed a partial clinical hold on evobrutinib due to reported cases of liver injury, and by December 2023, the drug had failed two Phase III studies. Additionally, the company had to halt development of xevinapant, a drug aimed at treating head and neck cancer, after it did not show significant survival benefits in clinical trials.
Despite these setbacks, Merck has been actively pursuing opportunities to bolster its oncology pipeline. Earlier in April 2025, the company signed a $1.4 billion collaboration with Caris Life Sciences to develop novel antibody-drug conjugate targets. This strategic move reflects Merck's commitment to expanding its cancer treatment offerings.
As the negotiations with SpringWorks progress, the market is watching closely. Analysts have set an average price target of $72.50 for SpringWorks, with estimates ranging from $63 to $84, indicating a potential upside of over 61% from its current trading price. The positive outlook has been echoed by brokerage firms, which currently rate SpringWorks as an "Outperform" based on its promising pipeline and recent FDA approvals.
Merck KGaA's pursuit of SpringWorks highlights the competitive landscape of the pharmaceutical industry, where companies are increasingly looking to acquisitions as a means to enhance their product offerings and market presence. The potential acquisition could not only enhance Merck's oncology portfolio but also provide a much-needed boost following its recent clinical challenges.
In summary, the impending deal between Merck KGaA and SpringWorks Therapeutics represents a significant step for both companies. For Merck, it could signify a critical expansion of its capabilities in oncology, while for SpringWorks, it offers the potential for greater resources and support to advance its innovative therapies. As the market awaits the finalization of this deal, the implications for both companies and the broader pharmaceutical landscape remain to be seen.
