SpringWorks is in the air for Merck KGaA

Rumours emerged on Monday that Merck KGaA is interested in buying SpringWorks, swiftly followed by a confirmation that the companies are in “advanced discussions”. If the deal comes off, it would mark a departure for Merck, which in oncology has traditionally struck small licensing agreements – with mixed success.

SpringWorks’ market cap is around $4bn, following a 34% surge on Monday, but for its money Merck would get a relatively risk-free portfolio: SpringWorks already has one approved drug in Ogsiveo, and might soon have another in mirdametinib.

Desmoid competition

Evercore ISI’s Cory Kasimov puts peak sales of both drugs at around $1bn apiece. The gamma secretase inhibitor Ogsiveo, which became the first approved drug for desmoid tumours in late 2023, sold $171m in 2024, slightly ahead of consensus, and SpringWorks is looking to expand into new uses, with phase 2 data in ovarian granulosa cell tumours due this year.

However, the company could soon have a competitor in desmoid tumours, in the shape of Immunome’s similarly acting varegacestat, with that project’s pivotal Ringside trial set to read out in the second half of 2025.

Mirdametinib, meanwhile, is awaiting an imminent FDA approval decision in neurofibromatosis type 1 plexiform neurofibromas; AstraZeneca’s rival MEK inhibitor Koselugo is indicated for children, but comes with warnings of cardiomyopathy and ocular, GI and skin toxicities. It’s hoped that mirdametinib could be a better tolerated, more convenient option, and could gain a green light in both adults and children.

SpringWorks’ clinical-stage portfolio is rounded out by the TEAD inhibitor SW-682, although this mechanism has produced lacklustre data so far.

Win some, lose some

Merck has also had its fair share of recent disappointments, including last year’s pivotal failure of xevinapant, which it had licensed from Debiopharm in 2021 for €188m up front.

Another big oncology hope, the anti-PD-L1/TGF-β fusion protein bintrafusp alfa, also fell by the wayside. Merck had been developing that asset alongside GSK.

However, there has been a recent deal success, with pimicotinib, licensed from Abbisko, scoring in a late-stage trial in tenosynovial giant cell tumour (TGCT). However, there are questions about how many products the TGCT niche can support.

Merck’s largest buy was the $17bn purchase of the lab equipment specialist Sigma-Aldrich, completed in 2015. A swoop for SpringWorks wouldn’t be quite on this scale, but it would still be a big deal for the German group.

Recent Merck KGaA licensing deals

Source: OncologyPipeline.