Merck & Co. Inc. is currently engaged in discussions to acquire Revolution Medicines Inc. in a deal valued between $28 billion and $32 billion. This potential acquisition marks a significant step for Merck, a major player in the pharmaceutical industry, as it seeks to bolster its oncology portfolio. Following the announcement, shares of Revolution Medicines surged by 15.14% overnight, closing at $123.65 per share.
Major Deal on the Horizon
According to a report by the Financial Times, the deal is not yet confirmed and could take weeks to finalize. If completed, it would represent the largest transaction in the biotechnology sector since Pfizer Inc. acquired Seagen for $43 billion in 2023. The current merger and acquisition (M&A) activity in the biotech industry is on the rise, with total deal volumes projected to reach $135 billion in 2025, effectively doubling from $67 billion in 2024, as reported by S&P Capital IQ.
This uptick in M&A activity comes at a critical juncture for pharmaceutical companies facing a patent cliff. Several high-revenue drugs are set to lose their patent protections in the coming years, including Merck’s leading cancer treatment, Keytruda, which is expected to face generic competition starting in 2028. Merck has been actively pursuing acquisitions to diversify its portfolio, having purchased Cidara Therapeutics Inc. for $9.2 billion in December 2023 and Verona Pharma plc for $10 billion earlier last year.
Revolution Medicines’ Promising Developments
Revolution Medicines is currently focusing on innovative cancer therapies, particularly a targeted treatment aimed at slowing tumor growth in pancreatic cancer—a disease known for its high mortality rate and limited treatment options. Earlier in 2024, Revolution secured $2 billion in funding through a partnership with Royalty Pharma Plc., which will support its global development efforts.
Competition for Revolution Medicines is heating up, with rumors suggesting that other major pharmaceutical companies, including AbbVie Inc., are also interested in pursuing a bid. AbbVie has publicly denied these claims.
As developments continue, neither Merck nor Revolution Medicines has responded to requests for comments from the media. This story will be updated with more information as it becomes available.
Revolution Medicines’ stock remains a strong performer, reflecting positive momentum according to Benzinga’s Edge Stock Rankings. The company exhibits an upward price trend across short, medium, and long-term time frames, attracting investor attention as the market watches for further news regarding its potential acquisition.
