Merck No Longer in Talks to Buy Revolution Medicines
Companies had been discussing roughly $30 billion deal
- Merck is no longer in discussions to acquire Revolution Medicines, due to an inability to agree on a price for the biotech, according to people familiar with the matter.
- Revolution Medicines, valued at around $16 billion before deal talks, saw its stock rise to over $22 billion following acquisition reports.
- Revolution Medicines is developing drugs targeting the RAS molecular driver in cancers, with its pancreatic-cancer drug potentially generating $10 billion in 2035 sales.
Merck MRK -0.92%decrease; red down pointing triangle is no longer in discussions to buy biotech Revolution Medicines RVMD -0.99%decrease; red down pointing triangle, according to people familiar with the matter.
Merck had recently been in talks to acquire RevMed in a deal that could have valued the cancer-drug biotech at around $30 billion.
The talks cooled after the two couldn’t come to an agreement on price, some of the people said.
It is always possible talks could restart or another suitor for RevMed could emerge. RevMed is expected to release closely watched testing data for its pancreatic and colorectal cancer drug candidates during the first half of this year.
The Journal reported earlier this month that AbbVie was in advanced talks for a deal for Revolution, which was drawing interest from multiple suitors. AbbVie later said it “is not in discussions” with Revolution.
Revolution had a market value of around $16 billion before news of the deal talks earlier in January. The stock rose following the reports, giving the company a value above $22 billion as of Friday.
Merck Chief Executive Robert Davis said at the J.P. Morgan Healthcare Conference earlier this month the company has been largely focused on deals up to $15 billion in size. He added that the company is willing to do even bigger deals but will be focused and disciplined.
Revolution is developing drugs that target a molecular driver of cancers known as RAS. Revolution’s experimental drugs seek to block the driver, thereby thwarting common cancers including lung, pancreatic and colon that have proven difficult to treat.
For decades, researchers have pursued therapies that hit RAS because of its key role in multiple cancers and other diseases, but the target had appeared “undruggable” because of the technical challenges hitting it.
Revolution Medicines’ drug candidates promise to crack the problem. If its pancreatic-cancer drug candidate proves to work safely, it could dominate treatment of the disease and generate $10 billion in 2035 worldwide sales, Mizuho Securities analysts said.
Cancer treatment is among the most important—and lucrative—markets for the pharmaceutical industry. Its drugs command six-figure yearly prices and notched more than $240 billion in worldwide sales last year, according to market-research firm Evaluate.