Stay informed with free updates
Simply sign up to the Pharmaceuticals sector myFT Digest — delivered directly to your inbox.
US pharmaceutical group Merck is in talks to buy Revolution Medicines, a cancer drugmaker with a market capitalisation of more than $20bn in what would be the latest big deal in the red-hot biotechnology sector.
Merck has not finalised a deal for the Redwood City, California-based biotech, said people familiar with the matter. A tie-up would be at least several weeks away, they added.
A price tag of $28bn to $32bn was being discussed as part of negotiations, one of the people said. That would mark the biggest healthcare deal in at least two years since Pfizer’s $43bn takeover of cancer biotech Seagen.
Other large pharmaceutical groups were circling Revolution Medicines and another suitor might prevail, the people added. A transaction is not a foregone conclusion.
Shares in Revolution Medicines rose 4.6 per cent during Thursday’s trading session, after the FT’s report. They rallied another 15 per cent in extended trading, giving the company a market value of $24bn.
Merck did not immediately respond to requests for comment. Revolution Medicines declined to comment.
The challenge of looming patent cliffs has triggered a wave of biotech deals by large pharma groups in recent months, driving total deal volumes to $135bn last year, more than double 2024 levels, according to S&P Capital IQ data.
Revolution Medicines is running early-stage trials for a new targeted therapy that stalls tumour growth in the most common type of pancreatic cancer, one of the deadliest forms of the disease that has scant treatment options.
The biotech is also trialling its drug, which works by inhibiting a gene mutation, for patients with non-small cell lung cancer. Revolution Medicines’ share price has more than doubled over the past year.
The group is awaiting vital data and approvals needed to sell its drugs, which are unlikely to reach market until the end of the year at the earliest, analysts say. That means the potential tie-up Merck is considering would be the biggest pre-commercial biotech deal.
Merck has been on a buying spree to fill an impending revenue hole when blockbuster cancer treatment Keytruda begins to lose patent protection in 2028. Last year, it struck a $10bn deal for respiratory drugmaker Verona Pharma and acquired flu prevention biotech Cidara Therapeutics for $9.2bn.