Merck & Co., Inc. (NYSE: MRK) has halted discussions to acquire Revolution Medicines, Inc. (NASDAQ: RVMD), a clinical-stage cancer drug developer, due to unresolved differences in company valuation. Earlier this year, reports indicated that Merck was in negotiation for a deal potentially ranging between $28 billion and $32 billion, with a consensus valuation around $30 billion for Revolution Medicines.
The valuation debate reportedly led Merck to withdraw from talks, underscoring the company's measured approach to deal sizes, particularly in the oncology sector. According to unnamed sources familiar with negotiations, Merck's disciplined acquisition strategy aligns with Chief Executive Robert Davis's remarks at the J.P. Morgan Healthcare Conference, where he noted a preference for deals under $15 billion, albeit remaining open to larger transactions under favorable conditions.
Industry observers had also noted that AbbVie Inc. had engaged in advanced talks to acquire Revolution Medicines, but the company denied current discussions following those reports. Revolution Medicines witnessed a notable increase in market value from about $16 billion to over $22 billion amid the acquisition speculation. However, this increase was temporary, reflecting market sensitivity to deal rumors.
Revolution Medicines is advancing targeted therapies focusing on the RAS molecular driver pathway, a target noted for its complexity in drug development. The company's investigational pancreatic cancer drug is projected by Mizuho Securities to generate up to $10 billion annually by 2035, illustrating the significant commercial potential driving acquisition interest.
Despite negotiations ending, sources indicate that discussions could potentially resume or that alternative bidders may show interest. The biotech company's forthcoming clinical trial updates, expected in the first half of the year for pancreatic and colorectal cancer candidates, are anticipated to maintain investor and industry attention.
One of Revolution Medicines' lead candidates, daraxonrasib (RMC-6236), was added to the FDA's Commissioner's National Priority Voucher program in October 2025. It is undergoing two global Phase 3 trials: RASolute 302 targeting patients with previously treated metastatic pancreatic ductal adenocarcinoma, and RASolve 301 for those with metastatic non-small cell lung cancer.
Revolution Medicines’ shares declined by 22.74%, trading near $90.88 in premarket trading following the announcement, while Merck’s stock experienced a modest rise of 0.15%, reaching $108.34.