Merck KGaA to acquire SpringWorks for $3.9 billion

Merck KGaA has recently finalized a definitive agreement to acquire SpringWorks Therapeutics, a company that spun out from Pfizer, for approximately $3.9 billion. This acquisition marks the culmination of several months of negotiations between the companies. The agreed purchase price is $47 per share, which represents a 26% premium over SpringWorks’ 20-day volume-weighted average share price of around $37 as of February 7.

This strategic acquisition is poised to significantly enhance Merck KGaA’s focus on rare tumors and will strengthen its presence in the United States, according to CEO Belén Garijo. SpringWorks Therapeutics is headquartered in Stamford, Connecticut, and specializes in developing treatments for rare forms of cancer and tumor conditions.

As part of the acquisition, Merck KGaA will gain control over two marketed drugs targeted at benign tumor indications. These include Ogsiveo, which is approved for the treatment of desmoid tumors, and Gomekli, which targets neurofibromatosis type 1. Ogsiveo, in particular, has shown commercial success, achieving sales of $172 million following its approval by the FDA in November 2023.

The agreement on the $47 per share transaction was disclosed by Merck KGaA last Thursday, following an earlier leak by the Wall Street Journal. Despite previous media reports, no definitive agreement had been reached until now. Merck KGaA initially confirmed its interest in SpringWorks in February, following speculations about ongoing discussions.

SpringWorks Therapeutics is the latest in a series of Pfizer spinouts to be acquired by larger pharmaceutical giants. Prior to this, Cerevel Therapeutics was acquired by AbbVie for $8.7 billion. SpringWorks not only has ongoing research and development projects but also maintains a joint venture with BeiGene, known as MapKure, established in 2019 to focus on developing treatments for MAPK mutant solid tumors.

The acquisition of SpringWorks is one of the largest undertaken by Merck KGaA in recent years. The German conglomerate has a history of multibillion-dollar deals, which include the purchase of semiconductor company Versum Materials in 2019 and the life sciences company Sigma-Aldrich in 2015. The most recent acquisition by Merck KGaA before this was the approximately $600 million purchase of Mirus Bio, a manufacturer of transfection reagents, in May 2024.

This acquisition reflects Merck KGaA’s commitment to expanding its portfolio in the area of oncology and rare diseases, aligning with its strategy to strengthen its position in the pharmaceutical market, especially in the U.S. Through its acquisition of SpringWorks, Merck KGaA aims to leverage the innovative treatments and ongoing research to enhance its capabilities and market offerings in treating rare cancers and tumor conditions.