Merck in Talks to Acquire Revolution Medicines for Up to $32 Billion
A deal would be a major strategic bet on next-generation oncology to bolster Merck's pipeline as its blockbuster drug Keytruda faces patent expiration.
Merck & Co. is reportedly in discussions to acquire cancer-drug developer Revolution Medicines in a deal that could be valued at as much as $32 billion, a major strategic move aimed at securing its long-term leadership in oncology.
The potential acquisition, first reported by the Financial Times, would represent one of the largest pharmaceutical deals in recent years. Shares of Revolution Medicines (RVMD) surged on the news, while Merck's (MRK) stock also saw gains, indicating investor approval for the bold strategic step.
The discussions highlight Merck's aggressive strategy to build its drug pipeline as it prepares for the 2028 patent expiration of its top-selling cancer therapy, Keytruda. The drug is a market titan, but its eventual exposure to generic competition necessitates significant investment in new sources of revenue. An acquisition of Revolution Medicines would be a direct and substantial effort to replenish its portfolio with promising, next-generation cancer treatments.
Revolution Medicines specializes in a highly sought-after area of cancer research: developing therapies that target RAS-addicted cancers. The RAS family of proteins, when mutated, are responsible for a large portion of all human cancers—including many forms of pancreatic, colorectal, and lung cancer—and have been notoriously difficult to target with drugs. A breakthrough in this area has long been considered a "holy grail" in oncology, and Revolution Medicines has multiple drug candidates in clinical development.
A deal valued between $28 billion and $32 billion would represent a significant premium for Revolution Medicines, which had a market capitalization of approximately $19.86 billion. The price tag, representing between 10% and 12% of Merck's own $271 billion market value, underscores the perceived value of RVMD's specialized pipeline and the competitive landscape for cutting-edge oncology assets.
Interestingly, Merck's shares rose about 2.2% in trading following the reports, a positive reaction for an acquiring company facing a multi-billion dollar expenditure. This suggests that Wall Street views the strategic fit as sound, prioritizing long-term growth over short-term capital preservation. Revolution Medicines stock also climbed, gaining over 4.5% as investors priced in the likelihood of a high-premium buyout.
The report also noted that a final agreement could be several weeks away and that other large pharmaceutical companies have shown interest in Revolution Medicines, raising the possibility of a competitive bidding situation. Prior speculation had linked AbbVie to a potential buyout, though those talks were later denied, highlighting the intense interest from major industry players in acquiring RVMD's assets.
Both Merck and Revolution Medicines have so far declined to comment on the speculation. If completed, the acquisition would be a defining move for Merck, shaping its post-Keytruda era and positioning it at the forefront of one of the most challenging and potentially rewarding frontiers in the fight against cancer.