Merck KGaA to Acquire SpringWorks Therapeutics for $3.9 Billion to Strengthen Rare Oncology Portfolio

Apr 28, 2025 17:04 CST Updated 17:04

Merck Group

Pharmaceutical R&D Developer

Just announced by Merck KGaA in GermanyAcquisition Agreement of SpringWorks Therapeutics, a U.S. Biotech Company,Aiming to Acquire Drugs for Rare Tumors to Boost Its Oncology Business. The cash offer price of $47 per share represents an equity value of approximately $3.9 billion, with an enterprise value of $3.4 billion (€3 billion) after deducting SpringWorks' cash holdings.

The deal is one of Merck's largest in years, but the price is about 22% lower than the approximately $60 per share analysts expected after Reuters reported on February 10 that the two companies were in advanced negotiations.Related Reading:Merck KGaA Plans to Acquire Springworks）

Merck Cuts Price Forecast on April 24, Says Late-Stage Talks Underway for Approximately $47 Per Share Offer for SpringWorks Stock.

This transaction will be financed through existing cash and new debt. Merck expects the deal to boost its 2027 earnings per share adjusted for special items and stated that it will still have the capacity for larger-scale transactions.

SpringWorks went public in New York in 2019 and is committed to developing drugs for the treatment of cancer and rare tumors. The company has two products on the market: Ogsiveo.Used for the treatment of fibroids,This is a malignant tumor affecting soft tissues, with sales of $172 million in 2024; Gomekli was approved in February this year for the treatment of NF1-PN characterized by neurofibromas.

Peter Guenter, Head of Healthcare at Merck, stated: "SpringWorks provides us with a unique opportunity to...Rare Tumor Field"Establishing a leadership position and laying a solid foundation for further investment in this field."

The transaction is expected to be completed in the second half of 2025, subject to the approval of SpringWorks shareholders and regulatory authorities.

As Merck itself mentioned in its statement, this acquisition is aimed at the field of rare tumor treatments, which does not quite align with the current industry trend favoring broad-spectrum therapies for various cancer types (for more information:Pan-cancer replaces precision biomarker therapy as the target of tumor transactions). The fact that the transaction price eventually dropped also indicates a low level of interest from other bidders. JPMorgan Chase analyst Anupam Rama previously stated that the lack of other serious bidders and the challenging macroeconomic environment could lead to a reduced valuation.

In Merck's view, although the indications for these two products are rare, they address significant unmet needs in the rare disease field and are consideredOgsiveo's sales performance of $172 million in its second year on the market was commendable. Additionally, the two companies are complementary in terms of product portfolio and commercialization footprint and capabilities.