Merck KGaA to buy US biotech SpringWorks for US$3.9 billion

The German multinational pharmaceutical company Merck KGaA have signed a deal to buy US biotech company SpringWorks Therapeutics at an equity value of US$3.9 billion in a move to add rare cancer therapeutics to their pipelines.

As Merck gears up for expected revenue losses from several expiring patents, the deal went through at 20% lower than analyst expectations. This could be due to an overall devaluation of the US biotech sector, with a lack of serious bidders in the running. Continuing and emerging challenges within the US have also been cited as potential factors in the final bid price.

The Connecticut-based commercial-stage biotech focuses on severe rare diseases and cancer. CEO of Merck Belen Garijo commented in a press release that “The agreed acquisition of SpringWorks is a major step in our active portfolio strategy to position Merck as a globally diversified, innovation, and technology powerhouse. For our Healthcare sector, it sharpens the focus on rare tumours, accelerates growth, and strengthens our presence in the US. Beyond this planned transaction, we will continue to explore M&A opportunities across our three complementary business sectors, always with a firm focus on strategic fit, financial robustness, and long-term value creation.” SpringWorks portfolio includes a systemic standard-of-care therapy for adults with desmoid tumours, and the first and only approved therapy for adults and children with neurofibromatosis type 1. This rare tumour portfolio is set to complement Merck’s own work in rare tumours, including an option for worldwide commercialisation rights for pimicotinib, an investigation therapy for patients with tenosynovial giant cell tumour.

Though 2025 had been expected to continue the rise in M&A deals across the life sciences sector, policies and regulatory changes to the US healthcare and life sciences sectors are appearing to stall the expected progress. US biotech stocks have reportedly fallen 12% this year amid these uncertainties, according to the XBI Index. A JP Morgan analyst stated to Reuter that “We do believe that SpringWorks was likely between a rock and a hard place in discussions… with the deal coming lower than we and many on the Street had discussed.” Despite this, SpringWorks managed to sign the deal, though only after receiving drug approval in the US and favourable opinions from the EU. The deal is Merck’s largest since the 2007 acquisition of Serono for US$13 billion adjusted.

Sources:

1. Germany’s Merck KGaA in US$3.9 billion deal to buy US biotech firm SpringWorks [Accessed April 30, 2025] https://www.reuters.com./business/healthcare-pharmaceuticals/germanys-merck-kgaa-39-bln-deal-acquire-us-biotech-firm-springworks-2025-04-28/

2. Merck to Acquire US Biopharma Company SpringWorks Therapeutics to Accelerate Sustainable Growth of Healthcare Business [Accessed April 30, 2025] https://www.merckgroup.com/en/news/agreement-to-acquire-springworks-28-04-2025.html