According to a Reuters report,German pharmaceutical manufacturer Merck KGaA is in advanced negotiations to acquire SpringWorks Therapeutics, an American biotechnology company focused on cancer and rare diseases. SubsequentlyMerck Says Talks to Buy SpringWorks Therapeutics Underway, Confirming Earlier Reuters ReportThree sources said that the deal could be completed in the coming weeks, but did not say the detailed terms under discussion.
SubsequentlySpringWorks Therapeutics' stock price closed 34% higher on Monday, while Merck KGaA's stock listed in Germany closed 3.7% lower.
SpringWorksPreviouslyEncountered some issues in clinical researchSetbacks, currently undergoing restructuring,Market Value of 4 BillionDollars. Its product line includes one marketed product — the oral gamma-secretase inhibitor Ogsiveo (nirogacestat), which received FDA approval in 2023 for the treatment of fibromas, in addition toClinical research is also underway for the treatment of ovarian granulosa cell tumors, as well as combination therapy with BCMA-targeted drugs for relapsed/refractory multiple myeloma.
Another key pipeline of SpringWorks is the MEK inhibitor mirdametinib, which is currently under priority review by the FDA for the treatment of plexiform neurofibromas associated with neurofibromatosis type 1. A decision is expected to be made on February 28.If mirdametinib is approved as expected, it will become the second commercial drug from SpringWorks Therapeutics following Ogsiveo for fibromas, and also the first FDA-approved treatment for both adult and pediatric patients with symptomatic plexiform neurofibromas (PN) associated with Neurofibromatosis Type 1 (NF1).In addition, its pipeline also includes the RAF fusion dimer inhibitor brimarafenib (for MAPK-mutant solid tumors, in early-stage development) and the TEAD inhibitor SW-3431 (for the treatment of rare uterine cancer, also in early testing).This potential acquisition comes after two major R&D setbacks at Merck. In June last year, Merck halted two Phase III trials of its leading oncology candidate drug xevinapant following disappointing results in head and neck cancer treatment. Prior to that, its BTK inhibitor evobrutinib also failed in the treatment of multiple sclerosis.Merck Group reported in its latest quarterly report that adjusted quarterly earnings increased by 12%, attributed to a temporary reduction in drug development expenses and a rebound in demand for its specialty materials.JPMorgan analysts wrote in a report: "Given Merck Group's existing franchise in the oncology field, which accounts for about 25% of its healthcare sales in 2024, we believe the acquisition of SpringWorks Therapeutics could be complementary and generate synergies.""Most importantly, considering the projected scale of SpringWorks' products, we believe the potential value of these assets is sufficient to offset the erosion caused by LOE and competition faced by Merck."Merck & Co. said in a statement Monday about the speculation: "We continually evaluate options that can support our business and enhance our strategic position as a leading science and technology company." Chief Executive Belén Garijo has previously said that more than 50% of the company's future drug launches will come from external sources.
