Biotech-Acquisition Mercks Billion Euro Deal: The Reasons Behind the Purchase of Springworks

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Merck is acquiring the American cancer specialist Springworks for three billion euros. Discover all the details of the acquisition here.

The week began with a bang for Merck: CEO Belén Garijo announced the three-billion-euro purchase of the American tumour specialist Springworks. For some time now, the company had been seeking a strategic acquisition. In February, the company confirmed media reports of advanced talks with Springworks Therapeutics without revealing too much. Now, everything is finalised, and "the largest acquisition of the last decade" is set to be completed in the second half of 2025.

Following Serono, this is Merck's second major acquisition in the healthcare sector. The former CEO Karl-Ludwig Kley paid ten billion euros for the Swiss biotech company. Even though the purchase of Serono later proved to be possibly overpriced—none of the compounds in the pipeline ever reached market maturity—the Swiss opened the door for Merck into the biopharmaceutical market and brought expertise in reproductive medicine to Darmstadt.

Two New Drugs with Revenue Potential

Now, Springworks Therapeutics, a spin-off from Pfizer, represents another biopharmaceutical acquisition. This small but distinguished biotech group "with 300 talented individuals" might prove to be a real boon for Belén Garijo and Merck. After the termination of the multiple sclerosis drug Evobrutinib at the end of Phase 3, Merck announced last year that it would also halt studies on the cancer drug Xevinapant—two drugs in which the company had placed great hopes.

The new addition arrives at just the right time to fill the gap in the late-stage pipeline: Springworks has two FDA-approved drugs in its portfolio, with a third in Phase I clinical trials. Peter Guenter, a member of Merck's executive board and CEO of Healthcare, sees blockbuster potential in the cancer drug Ogsiveo (Nirogacestat), and he also has high expectations for the second therapeutic, Gomekli (Mirdametinib), for treating neurofibromatosis in children. Ogsiveo is currently being reviewed by the EMA and is expected to be approved for the European market in the second half of the year.

An Additional Footing in the USA

Springworks, based in Connecticut, also aligns with Garijo's strategy to increase presence in North America and thereby in the USA, still the largest pharmaceutical market in the world. Given the trade dispute with the USA, which was not foreseeable in this form at the time of negotiations, this could prove to be strategically wise. Although the CEO stated that Merck would not let politics influence its M&A decisions, should Trump extend his tariff policies to include medicines, having another foothold in the USA could pay off doubly in the future.

Merck's war chest seems well-stocked: The acquisition will be financed from existing cash reserves and new debt, the press release states. Garijo is also on the lookout for further opportunities, with a focus on life sciences: "We can handle larger transactions as well."

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