In April 2025, Merck KGaA acquired SpringWorks Therapeutics, a Connecticut-based company specializing in rare diseases, for $3.9 billion, making its largest acquisition in a decade. A year later, the German conglomerate reiterated its focus on M&A, primarily to strengthen its pharmaceutical pipeline, when it announced its first quarter results.
“We will expand our M&A scope,” new CEO Kai Beckmann said on a conference call.
In explaining the company’s business update (PDF), Beckman said M&A is a “crucial” growth vehicle for innovation, and that acquiring external innovation is necessary to build a risk-balanced pharmaceutical pipeline.
“Combining our core strengths in biology, chemistry, and physics with data and AI will make us an agile company that can deliver services faster and at scale,” Beckman said.
Merck KGaA has three unrelated Phase 3 programs, but the company’s healthcare CEO Dany Bar-Zohar said the early to mid-term pipeline is “pretty slim.”
“We need to build on that to ensure that we grow beyond the mid-term guidance of low to mid-single digits that we have laid out for 2030 and beyond, even 2031 and beyond,” Bar-Zohar said. “This is something we need to start building now.”
After the failure of the BTK inhibitor evobrutinib in 2024, Merck KGaA is relying heavily on three late-stage oncology assets, including pimicotinib and the antibody-drug conjugate presemtavert-tocentecan, which are under review by the FDA. The company also noted the second-half U.S. launch of its fertility drug Pergoveris, which is being evaluated as part of the FDA’s new Commissioner’s National Priority Review Voucher (CNPV) program.
Merck KGaA reported first-quarter sales of 5.1 billion euros, down from 5.3 billion euros in the same period last year. Healthcare sales were down 3%. This was primarily due to a 5% decline in sales of oncology products and a 9% decline in sales of neurology and immunology therapeutics. The division, which includes the multiple sclerosis drug Mavenclad, saw sales decline 7%.
The company raised its revenue forecast by €10 million at the midpoint of its guidance range, as competition from Mavenclad is expected to be two months later than previously expected. The company also attributed the 16% increase in Process Solutions revenue to customers stocking up on lab supplies in anticipation of supply chain disruptions due to the Iran war.
The guidance upgrade sent Merck KGaA shares up 8%.
