Merck Germany Buys US Cancer Drugmaker SpringWorks Therapeutics For Around $4 Billion

SpringWorks Therapeutics, Inc. (NASDAQ:SWTX) shares are trading higher on Monday after the company inked a deal to be acquired by Merck & Company, Inc. (NYSE:MRK) for $47 per share in cash.

The acquisition price translates to an equity value of around $3.9 billion and an enterprise value of $3.4 billion (3.0 billion euros), based on SpringWorks' cash position of $461.9 million as of December 31, 2024.

As per media reports in February, Merck Germany reacted to press reports and confirmed advanced discussions with SpringWorks Therapeutics.

The offer represents a 26% premium over SpringWorks' 20-day volume-weighted average share price of $37.38 as of February 7, 2025, the day before initial market rumors of a potential acquisition surfaced.

Also Read: SpringWorks Therapeutics Secures FDA Approval For Second Cancer Drug

The deal will be financed through a combination of available cash and newly issued debt.

The acquisition aligns with Merck, Darmstadt, Germany's Healthcare division strategy, as detailed during its Capital Markets Day in October 2024, which emphasizes sourcing external innovation through licensing high-quality assets at various development stages and pursuing selective acquisitions that offer early value creation.

Additionally, the move supports the company's strategic aim to expand its Healthcare presence in the United States.

The acquisition, unanimously approved by both companies' boards, is expected to close in the second half of 2025, subject to shareholder and regulatory approvals.

As of December 31, 2024, Merck Germany had cash and cash equivalents of 2.52 billion euros.

Synergies: Once completed, the acquisition is expected to immediately contribute to Merck's revenue and become accretive to its earnings per share pre by 2027.

Notably, SpringWorks' portfolio of rare tumor treatments, including a first-in-class, systemic standard-of-care therapy for adults with desmoid tumors and the only approved treatment for adults and children with symptomatic plexiform neurofibromas (PN) associated with neurofibromatosis type 1 (NF1), is projected to drive immediate and sustainable revenue growth for Merck KGaA, Darmstadt, Germany.

In November 2023, The FDA approved SpringWorks Therapeutics' Ogsiveo (nirogacestat), an oral gamma-secretase inhibitor, for adult patients with progressing desmoid tumors who require systemic treatment.

Ogsiveo is the first drug to be approved for the treatment of patients with desmoid tumors, a rare subtype of soft tissue sarcomas.

Ogsiveo net product revenues were $61.5 million and $172.0 million in the fourth quarter of 2024 and full year 2024, respectively.

Peter Guenter, member of the Executive Board and CEO of Healthcare at Merck KGaA, Darmstadt, Germany, said, "Together, Merck KGaA, Darmstadt, Germany and SpringWorks are the perfect combination to improve outcomes for patients with rare tumors and bring therapeutic innovations to more patients worldwide while building on and reinforcing the early success of SpringWorks in the United States."

Last week, SpringWorks disclosed that its marketing authorization application (MAA) for FDA-approved treatment, OGSIVEO (nirogacestat) is currently under review by the European Medicines Agency (EMA), with a decision from the Committee for Medicinal Products for Human Use (CHMP) anticipated in the second quarter of 2025.

Investors can gain exposure to the stock via iShares Genomics Immunology and Healthcare ETF (NYSE:IDNA) and Virtus LifeSci Biotech Products ETF (NYSE:BBP).

Price Action: SWTX shares are trading higher by 3.20% at $46.15 at the last check Monday.

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