Merck KGaA in late-stage talks to acquire SpringWorks for USD 3.5 billion
Bengaluru: Merck KGaA, a science and technology company, is in late-stage negotiations to buy SpringWorks Therapeutics, a US based commercial-stage biopharmaceutical company for approximately $3.5 billion.
Merck notes that no final decision has been taken and no legally binding agreement has been entered into.
The potential acquisition would grant Merck access to a recently approved rare disease drug and bolster its portfolio of experimental cancer treatments.
Merck said that the parties are in discussions on the basis of a price of around $47 per share, which gives a valuation of roughly $3.5 billion, according to Reuters calculations.
The SpringWorks acquisition would rank as one of the biggest pharma deals for the German healthcare and technology group in recent years, boosting its ongoing efforts to build out its cancer treatment pipeline.
In 2015, Merck agreed to buy U.S. lab equipment supplier Sigma-Aldrich for $17 billion.
Reuters reported in February that the companies were in advanced talks, which Merck subsequently confirmed. SpringWorks' shares have fallen 17% since then.
Shares of SpringWorks settled 9 per cent higher at close, after the Wall Street Journal first reported that Merck is nearing a deal, which could be completed as soon as Monday. The stock was trading closer to $60 in February.
SpringWorks, which has a market value of more than $3 billion, did not respond to a Reuters request for comment.
The deal could accelerate growth in Merck, particularly as sales of its cancer drug Bavencio slow and multiple sclerosis treatment Mavenclad faces loss of exclusivity, said Barclays analyst Emily Field.
The Connecticut-based drugmaker, which went public in 2019, focuses on developing drugs to treat several rare cancers and genetic disorders.
Its monotherapy, Ogsiveo, has been approved in the U.S. to treat desmoid tumours - abnormal growth that occurs in connective tissues.
In February, the U.S. health regulator approved SpringWorks' genetic disorder drug Gomekli.
Merck has recently suffered high-profile setbacks in late-stage drug trials, prompting it to halt development of its head and neck cancer drug xevinapant. A major trial testing multiple sclerosis drug evobrutinib failed in December 2023.
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