Merck KGaA to Acquire SpringWorks for $3.9B, Expanding Rare Cancer Footprint

Two months after saying it was in advanced talks to acquire SpringWorks Therapeutics, Merck KGaA, Darmstadt, Germany, has announced it agreed to purchase the developer of drugs for severe rare disease and cancer for $3.9 billion.Merck KGaA said the deal will grow its U.

S. presence and expand the reach of SpringWorks’ drugs, including one approved in February.More pointedly, Merck KGaA signaled that its purchase of SpringWorks could be the first of several potential merger-and-acquisition (M&A) deals by the healthcare, life science, and electronics giant.



“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,” Belén Garijo, chair of the executive board and CEO of Merck KGaA, Darmstadt, Germany, said Monday in a statement.“The agreed acquisition of SpringWorks is a major step in our active portfolio strategy to position Merck KGaA, Darmstadt, Germany as a globally diversified, innovation and technology powerhouse,” Garijo added. “For our Healthcare sector, it sharpens the focus on rare tumors, accelerates growth, and strengthens our presence in the United States.

”SpringWorks complements Merck KGaA’s recent oncology focus by having advanced to approvals a pair of rare tumor-fighting drugs. One is Ogsiveo® (nirogacestat), a gamma secretase inhibitor indicated for adults with progressing desmoid tumors who require systemic treatment, approved by the FDA in 2023.In February, SpringWorks won its second product approval for Gomekli (mirdametinib), indicated both for children ages 2+ and adults with neurofibromatosis type 1 (NF1) who have symptomatic plexiform neurofibromas (PNs) not amenable to complete resection.

Gomekli is the first approved treatment for any form of NF1 in adults.SpringWorks has also submitted a marketing authorization application for the drug that has been validated by the European Medicines Agency (EMA), with a Committee for Medicinal Products for Human Use (CHMP) recommendation expected in Q2 2025, potentially to be followed by approval later this year.First in class“It is the first in class.

Obviously, we think we’re best in class for children, too,” SpringWorks CEO Saqib Islam told GEN Edge earlier this year.Gomekli is the second FDA-approved drug for NF1. The first is AstraZeneca’s Koselugo® (selumetinib), which was authorized by the agency in 2020 solely to treat children ages 2 and older.

Also focusing on NF1 is Healx, an artificial intelligence (AI)-based drug developer focused on treating rare diseases.In February, Healx dosed the first patient in a Phase II trial (INSPIRE-NF1, NCT06541847) assessing its lead pipeline candidate HLX-1502 in NF1 patients with PNs, aggressive tumors linked to functional impairments and malignant transformation. HLX-1502 is an oral small-molecule mitochondrial dysregulator designed to prevent proliferation, growth, and viability of NF1 cells, and is being positioned by Healx as an alternative to existing treatments targeting the mitogen-activated protein kinase (MEK) pathway, such as Koselugo and Gomekli.

Along with the Gomekli approval, which occurred under Priority Review, the FDA also granted SpringWorks a pediatric disease priority review voucher (PRV) of undisclosed value. Gomekli previously received the agency’s Orphan Drug and Fast Track designations.SpringWorks is studying additional development of the drug (under its generic name mirdametinib) in combination with BeiGene’s rapidly accelerated fibrosarcoma (RAF) dimer inhibitor (lifirafenib) in a Phase Ib/II trial in RAS/RAF mutant and other mitogen-activated protein kinase (MAPK) pathway aberrant solid tumors, and as a monotherapy in pediatric low-grade gliomas.

In gliomas, SpringWorks and St. Jude Children’s Research Hospital are partnering on the Phase II portion of a Phase I/II trial (NCT04923126) after sharing positive Phase I data at the 29th Annual Meeting & Education Day of the Society for Neuro-Oncology. “This MEK inhibitor is quite brain penetrant, which is why they [St.

Jude] were originally interested in it, and that’s why they’re looking at it in that indication,” Saqib said.Merck KGaA’s rare tumor focus was also evident last month, when the company exercised its option with Shanghai-based Abbisko Therapeutics to commercialize pimicotinib (ABSK021) in the United States and the rest of the world, in return for paying Abbisko an $85 million option fee.Pimicotinib is an oral, highly selective small-molecule inhibitor of CSF-1R that is being developed to treat tenosynovial giant cell tumors (TGCTs), a group of rare, typically non-life-threatening tumors that involve the synovium, bursae, and tendon sheath, and which were previously known as pigmented villonodular synovitis (PVNS).

Merck KGaA and Abbisko also agreed to explore pimicotinib in additional indications that include chronic graft-versus-host disease (cGvHD).“Should accelerate sales growth”“From a strategic perspective, we see the deal as a continuation of recent efforts to strengthen the oncology portfolio with a focus on rare tumors,” Thibault Boutherin, co-head of European Pharmaceuticals & Life Science equity research and an executive director with Morgan Stanley, and colleagues observed in a note, as reported by Bloomberg News. “The acquisition should accelerate sales growth of Merck’s healthcare division, which has been a key point of concern.

”Bloomberg Intelligence analyst Michael Shah has projected Merck KGaA will see up to €1.5 billion ($1.6 billion) in additional annual sales by 2030 from SpringWorks.

Merck KGaA generated €2 billion (about $2.3 billion) in sales from its oncology drug franchise last year, up 12.7% from 2023—but 60% of that sales volume came from a single drug, Erbitux® (cetuximab), which is indicated for forms of head and neck cancer as well as colorectal cancer.

Erbitux lost European exclusivity in 2014 and U.S. exclusivity two years later, though no biosimilars of the drug have yet emerged.

For Merck KGaA, Erbitux racked up €1.2 billion (about $1.4 billion) in 2024 ex-U.

S. and Canada sales, up 15.7% year-over-year (Eli Lilly markets Erbitux within the U.

S. and Canada, but does not disclose its sales of that drug).The cancer franchise accounts for 23.

5% of total sales for Merck KGaA’s Healthcare business, which generated €8.5 billion (about $9.7 billion) last year, 7% organic growth from 2023, with earnings before interest, taxes, depreciation, and amortization (EBITDA) of €3 billion ($3.

4 billion), a 22.7% organic sales jump from a year earlier.“We see MRK KGaA Healthcare sales declining at 0.

2% CAGR [compound annual growth rate] from 2025-28,” Anupam Rama, a U.S. biotech analyst with J.

P. Morgan, noted in February.One reason he cited was growing competition for Bavencio® (avelumab), a programmed death ligand-1 (PD-L1) blocking antibody indicated for forms of Merkel cell, urothelial, and renal cell cancers.

The other reason is not cancer-related: Mavenclad® (cladribine), a purine antimetabolite indicated for relapsing forms of multiple sclerosis, faces expiration of two U.S. patents covering the 10 mg tablet in 2026, though a third does not expire until 2038.

“We have the unique opportunity with SpringWorks to establish a leadership position in rare tumors and build a strong foundation for further investments in this area, where a large unmet medical need exists,” said Peter Guenter, member of the executive board and CEO of Healthcare at Merck KGaA, Darmstadt, Germany. “For us, the planned acquisition will create long-term, sustainable growth for our healthcare business.”Merck KGaA said its planned acquisition of SpringWorks will immediately add revenue and accelerate mid- to long-term growth for the buyer’s healthcare business.

Last October, during its Capital Markets Day, Merck KGaA said it would continue to pursue external innovation via “in-licensing high-quality compounds at various stages of development”—as well as by “focused acquisitions that promise early value creation.”21% stock surgeInvestors jumped on SpringWorks stock last week as speculation about a buyout by German Merck resurfaced. SpringWorks shares surged 21% between April 21 and Thursday, from $37.

06 to $44.93, before dipping 0.5% to $44.

72 on Friday—a day after Merck KGaA re-confirmed it was in late-stage discussions with SpringWorks, in response to a report in The Wall Street Journal.On Monday, after the deal was announced, SpringWorks shares on NASDAQ rose only 3% in early trading, to $46.18, and stayed flat early Tuesday, crawling to $46.

19 as of 10:36 a.m. ET.

Merck KGaA shares on the Deutsche Börse Xetra rose 0.6% Monday, from €122.25 ($139.

27) to €122.95 ($140.23), then dipped 0.

8% Tuesday to €121.95 ($139.08).

At $3.9 billion, the deal is far less than the $6 billion to $7.5 billion value range—$80 to $100 a share—for a SpringWorks buyout projected in February by Yaron Werber, MD, a managing director and senior biotechnology analyst with TD Cowen.

Werber based his projection on 4–5x the projected $1.5 billion peak sales of both Gomekli and Ogsiveo, according to numerous published reports.Higher sales projections for both drugs have since emerged.

GlobalData’s Pharma Intelligence Center has projected a combined more than $1.7 billion in sales by 2030 for both SpringWorks drugs—$1.2 billion for Ogsiveo, $564 million for Gomekli.

MKP Advisors has projected potential peak-year sales of $1 billion for Ogsiveo and Gomekli, Dow Jones has reported.However, biotechs and pharmas are among companies affected by the overall stock market decline of recent months based on investor fears of U.S.

tariffs triggering a recession, which has dented momentum for additional M&A deals that had been expected to build after a strong start to 2025, reflected in Johnson & Johnson’s $14.6 billion acquisition of Intra-Cellular Therapies.Improving resultsThe prospect of a buyout by Merck KGaA is believed to explain why SpringWorks canceled a scheduled earnings call with analysts to discuss fourth-quarter and full-year 2024 results.

SpringWorks finished 2024 with a net loss of $258.1 million, a 21% improvement from its $325.1 million net loss in 2023, thanks to some of the $172.

042 million in net product revenue generated by its Ogsiveo. The drug produced $5.447 million in net product revenue during its first month on the market in December 2023.

At $47 per share cash, the acquisition deal represents a 26% premium over SpringWorks’ unaffected 20-day volume-weighted average price of $37.38 on February 7, a day before market speculation emerged about a potential transaction between Merck KGaA and SpringWorks. Merck KGaA first confirmed talks with SpringWorks on February 11 after news of the potential deal was reported by Reuters.

The acquisition deal has been approved by the boards of both Merck KGaA and SpringWorks, and is expected to close in the second half of this year, subject to satisfying customary closing conditions, including approval by SpringWorks shareholders and regulatory approvals.“Along with my successor Danny Bar-Zohar, we look forward to completing this strategic transaction and making a meaningful difference for patients whose lives are so profoundly affected by these complex and challenging tumors,” said Guenter, who will step down as Merck KGaA’s CEO of Healthcare effective June 1 in favor of Bar-Zohar, the Healthcare business’ global head of R&D and chief medical officer.Headquartered in Stamford, CT, SpringWorks has “just under 400” employees, Saqib told GEN Edge, adding: “We’re not expecting very much headcount growth this year, given that we’ve already hired sales forces for Ogsiveo and for Gomekli as well.

So, we expect pretty moderate and steady headcount through 2025.”The post Merck KGaA to Acquire SpringWorks for $3.9B, Expanding Rare Cancer Footprint appeared first on GEN - Genetic Engineering and Biotechnology News.

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