Merck Ends Acquisition Talks with Revolution Medicines, Reports WSJ

• The talks collapsed over pricing disagreements, though discussions could potentially restart or another buyer may emerge for Revolution Medicines
• Revolution Medicines has a market capitalization of approximately $22.7 billion and its key asset is daraxonrasib, an experimental drug that received FDA fast-track review status
• The proposed deal was initially valued between $28 billion and $32 billion, representing a significant premium over Revolution's current market value

Summary: Merck Ends Acquisition Talks with Revolution Medicines

Key Development:

Merck has terminated acquisition discussions with Revolution Medicines, a cancer drug developer, after failing to agree on price terms, according to a Wall Street Journal report on January 25.

Deal Details:

• The Financial Times previously reported the potential deal was valued between $28 billion and $32 billion
• Revolution Medicines currently has a market capitalization of approximately $22.7 billion
• Negotiations could potentially restart, or alternative suitors may emerge for Revolution Medicines

Strategic Asset:

The acquisition would have given Merck access to daraxonrasib, Revolution's experimental cancer drug currently in late-stage clinical trials. The drug has received a fast-track review designation from the FDA, indicating its potential significance in cancer treatment.

Market Context:

This marks another high-profile pharmaceutical deal falling through due to valuation disagreements. The substantial gap between the reported deal value ($28-32 billion) and Revolution's current market cap ($22.7 billion) suggests Merck was willing to pay a significant premium, though not enough to satisfy Revolution's price expectations.

Implications:

• Revolution Medicines remains an independent company and potential acquisition target for other pharmaceutical companies
• Merck will need to pursue alternative strategies to strengthen its oncology pipeline
• The collapse highlights ongoing challenges in large pharmaceutical M&A, particularly around valuation in the competitive oncology sector

Neither company has officially commented on the report. The breakdown represents a setback for Merck's efforts to expand its cancer drug portfolio through strategic acquisitions.