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Investing.com -- Shares of Springworks Therapeutics (NASDAQ:SWTX) surged over 37% on Monday following reports that Germany’s Merck (NSE:PROR) KGaA is in advanced talks to acquire the U.S. biotech company, according to Reuters.
The discussions, which remain confidential, could result in a deal being signed in the coming weeks, three sources familiar with the matter told Reuters.
However, they did not disclose the specific financial terms under discussion.
The report notes that in a statement, Merck said it continuously assesses opportunities to support its businesses and enhance its strategic position but did not confirm any active negotiations.
A potential acquisition of Springworks, which has a market value of $3 billion, would be one of Merck’s largest pharmaceutical deals in recent years, strengthening its focus on oncology and rare disease treatments, said Reuters.
Springworks, which went public in 2019, specializes in developing cancer drugs and has a U.S.-approved monotherapy treatment for desmoid tumors.
Merck, valued at €61.25 billion ($63.13 billion), has faced recent drug development setbacks, including the failure of its multiple sclerosis treatment evobrutinib and the decision to halt the development of cancer drug xevinapant.
Acquiring Springworks could help bolster Merck’s pipeline amid these challenges.
The U.S. healthcare sector has seen renewed M&A activity, with Johnson & Johnson’s $14.6 billion acquisition of Intra-Cellular Therapeutics in January signaling a potential uptick in biotech dealmaking, Reuters noted.