Merck KGaA to buy biotech SpringWorks for $3.9B
Merck KGaA has agreed to buy biotechnology company SpringWorks Therapeutics, announcing Monday a $3.9 billion deal after months of negotiations over an acquisition.
The German pharmaceutical firm will pay $47 per SpringWorks share, a small premium to the stock's closing price Friday but 17% higher than the $40.28 it closed at on Feb. 7, the last trading day before reports emerged of the companies' discussions.
SpringWorks has developed two drugs that are approved in the U.S. to treat rare tumors. Ogsiveo is cleared for adults with desmoid tumors, while Gomekli won the Food and Drug Administration's OK in February for adults and children with neurofibromatosis type 1 who experience symptoms from a type of benign tumor.
Merck KGaA's proposed acquisition of SpringWorks is the first biotech buyout worth more than $1 billion to be announced since mid-January, when Johnson & Johnson agreed to purchase Intra-Cellular Therapies for $14.6 billion. The deals in between have been smaller and more opportunistic, reflecting a negotiating environment that's been frozen by uncertainty over tariffs and a gyrating stock market.
Some of that turmoil may have played a role in drawing out discussions between German Merck and SpringWorks, which in February confirmed the two companies were in 'advanced talks.'
While sizable in dollar terms, the deal that emerged nearly two months later values SpringWorks at a relatively low premium, even after adjusting for the share price run-up that followed reports on the companies' negotiations. Shares in SpringWorks were trading as high as $93.59 in early 2021, when the market for biotech stocks was booming.
Merck KGaA, which provides bioprocessing services in addition to developing new drugs, has been hunting for deals as part of a strategy it rolled out last fall.
The buyout is 'a major step in our active portfolio strategy' to position the company 'as a globally diversified, innovation and technology powerhouse,' CEO Belén Garijo said in a statement. 'Beyond this planned transaction, we will continue to explore M&A opportunities across our three complementary business sectors.'
Once the deal is complete, Merck KGaA expects the addition of SpringWorks to immediately contribute to revenue via sales of the biotech's two approved drugs. The company said it will fund the acquisition via available cash and new debt, while retaining 'the ability to pursue larger transactions.'
Merck KGaA also touted the buyout as a way to expand its presence in the U.S.
The companies expect the transaction to close this quarter, contingent on their receipt of required regulatory sign-offs.
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Merck KGaA Evonik Treibacher GmbH Belinka Perkemija, D.O.O. Fengchen Group Co., Ltd. Acuro Organics Limited Kishida Chemical Co.,Ltd. Catalynt Junsei Chemical Co.,Ltd. Noah Chemicals Wanli Chemical Central Drug House Sae Manufacturing Specialties Corp. Meru Chem Pvt. Ltd. Pat Impex India Molekula Group Kylin Chemicals Co., Ltd. Kingsfield Inc. Spectrum Chemical Dominion Chemical Company Belchem Industries (India) Pvt. Ltd. Surpass Chemical Company, Inc. American Elements Atom Scientific Ltd Zhejiang Jiehua New Materials Co., Ltd. For more information about this report visit About is the world's leading source for international market research reports and market data. We provide you with the latest data on international and regional markets, key industries, the top companies, new products and the latest trends. 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