Sigma-Aldrich Corp.

Germany's Merck KGaA has bought out rare disease specialist SpringWorks for $3.9 billion. Connecticut-based SpringWorks is a 2017 spin out of Pfizer. Merck KGaA’s long courtship of SpringWorks Therapeutics has come to fruition as the German drugmaker has bought out the Connecticut biopharma for an equity value of $3.9 billion, the companies said on Monday.The deal, which works out to $47 per share, enhances Merck KGaA’s presence in the U.S. and bolsters its oncology portfolio, as SpringWorks brings two approved drugs and a handful of rare disease pipeline candidates.  When word of the potential acquisition first surfaced in early February, SpringWorks’ share price shot up to $60 and its market cap rose from $3 billion to $4 billion. But as the rumors had cooled by early this month, SpringWorks’ value had returned to its previous level.Then last week came reports of renewed interest from the companies in pulling off the transaction.Merck KGaA said that it paid a premium of 26% based on SpringWorks’ volume-weighted price of $37.38 on February 7, which was the day prior to the initial market speculation about a potential deal.Over the last five days, as deal talks ginned back up, Merck KGaA’s share price has increased by 6%, while that of SpringWorks grew by 21%.In a statement, Merck KGaA CEO Belén Garijo called the buyout “a major step in our active portfolio strategy to position our company as a globally diversified, innovation and technology powerhouse.”Outside of Merck KGaA's electronics business, the SpringWorks deal represents the company's largest acquisition since its 2015 buyout of St. Louis manufacturing specialist Sigma-Aldrich for $17 billion. The German company also acquired Massachusetts manufacturer Millipore for $7 billion in 2010 and Swiss biotech Serono for $13.3 billion in 2006.SpringWorks traces its roots to 2017, when it was spun out of Pfizer with two drugs then in phase 3, which have since been approved. “We have successfully launched two best-in-class medicines in the United States, and with the aspiration to deliver our therapies worldwide, our journey is at a pivotal juncture,” Saqib Islam, CEO of SpringWorks, said in a release. In late 2023, SpringWorks earned an FDA nod for Ogsiveo, a treatment for ultra-rare desmoid tumors. The drug is off to a promising launch, achieving sales of $61 million in the fourth quarter and $172 million for 2024.Two months ago, SpringWorks gained FDA approval for MEK inhibitor Gomekli to treat neurofibromatosis type 1 (NF1), a rare genetic disease. It is the first treatment for adults and children with the disorder and is competing with AstraZeneca and Merck's (U.S.) drug Koselugo, which was approved for pediatric patients and rang up sales of $631 million in 2024. Pipeline candidates brought by SpringWorks include cancer drug brimarafenib, an RAF dimer inhibitor which the company is developing along with BeiGene, and SW-682, a TEAD inhibitor which is being investigated for Hippo-mutant solid tumors.Analysts at ODDO BHF gave the acquisition a thumbs up, writing to clients that it “brings to the healthcare business some positive prospects again.” 

Merck KGaA said Monday it has inked a “definitive agreement” to acquire Pfizer spinout SpringWorks Therapeutics for an equity value of around $3.9 billion, rounding off several months of negotiations. The deal price of $47 per share represents a 26% premium to SpringWorks’ 20-day volume-weighted average share price of around $37 on Feb. 7, according to a Monday release . The buyout will help boost Merck KGaA’s focus on rare tumors and increase its presence in the US, CEO Belén Garijo said in the release. SpringWorks is based in Stamford, CT. The German pharma will obtain two marketed drugs for benign tumor indications as part of the acquisition — Ogsiveo for desmoid tumors and Gomekli for neurofibromatosis type 1. Ogsiveo achieved $172 million in sales last year following an FDA approval in November 2023. Merck KGaA shared the $47 per share price tag last Thursday after it was leaked by the Wall Street Journal earlier the same day, although there was no definitive agreement at that time. The company originally confirmed it was in talks with SpringWorks in February after it was earlier reported by the media that discussions were underway. SpringWorks is the latest Pfizer spinout to be acquired by a large pharma company after Cerevel Therapeutics was purchased by AbbVie for $8.7 billion. The rare tumor biotech has other candidates in development and a joint venture with BeiGene called MapKure that was formed in 2019 to work on treatments for MAPK mutant solid tumors. The SpringWorks deal is one of the largest acquisitions by Merck KGaA in recent memory. The conglomerate’s multibillion-dollar deals have included the 2019 purchase of semiconductor company Versum Materials and the 2015 acquisition of life sciences company Sigma-Aldrich. Its most recent was the approximately $600 million acquisition of transfection reagent manufacturer Mirus Bio in May 2024. Additional reporting by Kyle LaHucik.

Merck KGaA (MRCG.DE), the German healthcare and technology powerhouse, announced on Monday that it is in advanced negotiations to acquire U.S. biotech firm SpringWorks Therapeutics (SWTX.O), known for its focus on cancer and rare diseases. This move could significantly bolster Merck's oncology portfolio, especially following recent setbacks in its late-stage drug trials. In a statement, Merck confirmed that discussions are ongoing but noted that no legally binding agreement has been reached, and the outcome remains uncertain. The talks follow an earlier report from Reuters, which indicated that a deal could be finalized in the coming weeks, with sources requesting anonymity due to the confidential nature of the negotiations. SpringWorks shares soared 34% on Monday, pushing the company's market value to approximately $4 billion. The stock initially jumped nearly 49% after news of the talks broke, reaching its highest levels since April 2022. However, shares of Merck KGaA closed down 3.7% amid broader market fluctuations. The U.S. healthcare sector is witnessing a resurgence in deal-making activity after a slowdown in 2024, largely due to pharmaceutical companies focusing on integrating past acquisitions. For example, Johnson & Johnson recently agreed to acquire Intra-Cellular Therapeutics for about $14.6 billion. SpringWorks, based in Stamford, Connecticut, is a commercial-stage biotech company that develops treatments for various cancers, particularly rare tumors and uterine cancer. Its drug for treating desmoid tumors has already received U.S. approval, and it anticipates another approval for a product addressing neurofibromatosis type-1 later this month. Should the acquisition succeed, it would represent one of Merck's largest pharmaceutical transactions in recent years, enhancing its cancer treatment pipeline at a crucial time. The company has faced significant challenges, including halting development on its Xevinapant drug for head and neck cancer and experiencing failures in trials for its Evobrutinib multiple sclerosis treatment. Analysts at JPMorgan expressed optimism regarding the potential acquisition, noting that it could complement Merck’s existing oncology operations, which account for about 25% of its healthcare sales in 2024. They believe that the products offered by SpringWorks could counterbalance the impact of competition and loss of exclusivity that Merck is currently facing. Merck has a history of ambitious acquisitions, including its $17 billion purchase of Sigma-Aldrich in 2015 and the €5.8 billion acquisition of Versum in 2019. In a recent interview, Merck's CEO mentioned that improving sales growth would allow for a more cautious approach to future acquisitions, especially in a market where valuations remain high. As the discussions progress, the pharmaceutical industry will be watching closely to see if Merck KGaA can successfully finalize this transformative deal.