Merck KGaA to Acquire SpringWorks Therapeutics for $3.9 Billion

On April 28, Merck KGaA and SpringWorks Therapeutics jointly announced that the two companies have reached a definitive agreement for Merck KGaA to acquire SpringWorks Therapeutics. The acquisition will be executed at $47 per share, representing an equity value of approximately $3.9 billion; or based on an enterprise value of $3.4 billion calculated from SpringWorks Therapeutics' cash balance as of December 31, 2024, along with a 26% premium over the unaffected 20-day volume-weighted average price as of February 7, 2025 (the day before the market first speculated on a potential deal between Merck Group), at a price of $37.38 per share.

Previously in February, when faced with the Reuters' disclosure of Merck's acquisition of SpringWorks information, both companies simultaneously "denied the rumors": SpringWorks refused to comment on the grounds of "not responding to market speculation," and Merck also did not respond to media inquiries, merely stating that it would continue to evaluate various business development options. The simultaneous official announcement of this news by Merck and SpringWorks means that the previous acquisition negotiations between the two parties have proceeded smoothly, and Merck's largest M&A deal in recent years is about to be successfully concluded.

The transaction has been unanimously approved by all attendees of the Merck and SpringWorks Therapeutics boards and is expected to be completed in the second half of 2025, subject to customary closing conditions, including approval by SpringWorks shareholders and the required regulatory approvals.

SpringWorks Therapeutics, Inc. was founded in 2017 as a biotech company focused on the development of drugs for cancer and rare diseases. It went public on the NASDAQ Stock Exchange in 2019. SpringWorks Therapeutics has strong "Pfizer" elements in its background. Its founder is Lara S. Sullivan, the former head of Pfizer's R&D department, and its four core pipelines are licensed from Pfizer. Additionally, SpringWorks Therapeutics received venture capital investment from Pfizer, which participated in the company’s Series A and Series B financing rounds in 2017 and 2019, respectively.

Currently, SpringWorks Therapeutics has two core products approved for marketing: the γ-secretase inhibitor Ogsiveo (Nirogacestat) and the MEK inhibitor GOMEKLI (Mirdametinib).

Nirogacestat was approved by the FDA for marketing in November 2023. It is the world's first γ-secretase inhibitor approved for the treatment of desmoid tumors. Its sales in 2024 exceeded $500 million, with projected peak sales reaching $1 billion. Mirdametinib was approved by the FDA in February 2025 for the treatment of children and adult patients with neurofibromatosis type 1-related plexiform neurofibromas (NF1-PN), making it the world’s first approved drug in this field.

In addition, SpringWorks Therapeutics' pipeline also includes Brimarafenib, a RAF fusion dimer inhibitor for MAPK-mutant solid tumors, currently in Phase I clinical trials; SW-682, a TEAD inhibitor for the treatment of advanced solid tumors with Hippo pathway mutations, currently in Phase I clinical trials; and SW-3431, a TEAD inhibitor for the treatment of rare uterine cancers, currently in early-stage testing.

For Merck, SpringWorks Therapeutics’ portfolio complements its layout in the rare oncology field and represents a significant move in seeking external innovation. Belén Garijo, Chair of the Executive Board and CEO of Merck Group, stated, “The agreement to acquire SpringWorks marks an important step in our active portfolio strategy, aiming to position Merck KGaA as a globally diversified, innovative, and technological leader. This acquisition strengthens our focus on rare tumors and enhances our presence in the United States. Beyond this planned transaction, Merck will continue to explore M&A opportunities across three complementary business areas based on strategic alignment, financial soundness, and long-term value creation.”

For SpringWorks, this acquisition provides an opportunity to expand its business beyond the U.S. market based on Merck's extensive global resources. "From the outset, SpringWorks has focused on creating transformative solutions for patients with serious diseases," said Saqib Islam, CEO of SpringWorks. "We have successfully launched two best-in-class drugs in the U.S. and are committed to delivering our therapies globally. By partnering with Merck KGaA, leveraging both companies' resources and expertise, we will create a brighter future for patients while also opening new opportunities for SpringWorks employees."

Compared with other MNCs that have been aggressively acquiring and "buying globally" around the world, Merck KGaA has not engaged in frequent BD and acquisitions in the past year, aside from today's announced acquisition. It has only clearly disclosed one acquisition deal and one pipeline collaboration:

In December 2024, HUB Organoids, the pioneer in organoid technology, announced on its official website that Merck had signed a definitive agreement to acquire HUB Organoids. The terms of the transaction were not disclosed.

In April 2025, Merck and Hengrui Medicine jointly announced a collaboration. Hengrui Medicine granted Merck the exclusive commercialization rights in China (excluding Hong Kong, Macao, and Taiwan) for SHR7280, a self-developed Class 1 new drug and oral small-molecule gonadotropin-releasing hormone (GnRH) receptor antagonist (with indications covering medically assisted reproduction and gynecology). According to the agreement terms, Hengrui Medicine will receive an upfront payment of 15 million euros. Additionally, Hengrui Medicine is entitled to receive milestone payments for the licensed product and double-digit percentage royalties on annual net sales within the licensed territory.

Merck’s cautious and low-profile approach is actually traceable. Regarding its 2024 business revenue, Belen Garijo, CEO of Merck Group, has publicly stated that the sales growth recovery in its existing businesses means that Merck can adopt a cautious attitude towards acquiring other expensive companies. Belen Garijo also revealed that Merck currently has no plans for any transformative deals in the pharmaceutical sector but is considering smaller deals with late-stage pipelines.

SpringWorks Therapeutics, Inc. precisely meets the requirement of being "smaller in scale with late-stage pipelines." It focuses on rare tumors, blood cancers, and metastatic solid tumors defined by specific biomarkers. Its product pipeline is "small but refined," and two of its products have already been approved for marketing.

Moreover, the low-profile Merck Group has not been smooth in the R&D of its cancer drug pipeline in recent years. In December 2023, its BTK inhibitor evobrutinib failed in two Phase III clinical trials, EVOLUTION RMS 1 and EVOLUTION RMS 2, for the treatment of relapsing multiple sclerosis, and was eventually terminated by the company. In June 2024, after an interim analysis of the Phase III clinical trial TrilynX (for untreated locally advanced squamous cell carcinoma of the head and neck) of its IAP inhibitor Xevinapant by the Independent Data Monitoring Committee, it was found that the primary endpoint goal of extending event-free survival (EFS) was unlikely to be achieved, and the company also subsequently terminated further development.

In addition, Merck is also facing issues such as the slowing sales of the anticancer drug Bavencio and the upcoming patent expiration of Mavenclad, a treatment for multiple sclerosis. Therefore, SpringWorks Therapeutics, with its two commercialized products, is indeed a "timely rescue" for Merck. The acquisition announcement also indicates that upon completion of the transaction, this business merger will immediately contribute to Merck's revenue and is expected to increase Merck's earnings per share in 2027. It is anticipated that after completing this acquisition, Merck will welcome a new growth curve in its performance.

Reference: "Incubated by Pfizer, Now Proposed to Be Acquired by Merck"