Pharmaceutical giant Merck has engaged in acquisition discussions with Swiss biotech MoonLake Immunotherapeutics for more than $3 billion, according to a Financial Times report citing three people familiar with the matter. The potential deal highlights Merck's strategic push to rebuild its pipeline ahead of critical patent expirations.
Acquisition Details and Market Response
MoonLake's shares jumped 19% in extended trading following news of the acquisition talks. According to the Financial Times report, Merck submitted a nonbinding offer for MoonLake earlier this year, which was initially rejected. However, sources indicate that discussions could potentially be revived.
The timing of Merck's approach, coming ahead of late-stage clinical data for MoonLake's flagship drug, positions the Swiss biotech favorably for a potential sale. The report noted that there is no guarantee a deal will materialize, and other potential buyers could emerge.
Strategic Imperative Behind the Move
Merck's interest in MoonLake comes as the company faces significant revenue pressures from multiple fronts. The pharmaceutical giant has relied heavily on its best-selling cancer immunotherapy Keytruda to fuel growth for years, but the drug's patents will begin expiring in 2028, creating a substantial revenue cliff.
Adding to these challenges, Merck has been experiencing declining revenue in China from its Gardasil vaccine, further emphasizing the need for pipeline diversification.
Pipeline Rebuilding Efforts
The potential MoonLake acquisition represents part of Merck's broader strategy to strengthen its drug pipeline before losing exclusivity on Keytruda. The US pharmaceuticals group has been actively seeking opportunities to rebuild its portfolio of experimental treatments.
MoonLake Immunotherapeutics, based in Switzerland, represents a strategic target as biotech companies continue to attract significant acquisition interest from major pharmaceutical players seeking to bolster their development pipelines.
Market Implications
The acquisition talks underscore the competitive landscape in pharmaceutical M&A, where established companies are willing to pay premium valuations for promising biotech assets. The $3+ billion valuation for MoonLake reflects the high stakes involved in securing innovative drug candidates.
Neither Merck nor MoonLake immediately responded to requests for comment regarding the reported acquisition discussions. The potential deal remains subject to various factors, including the outcome of MoonLake's late-stage clinical trials and the emergence of competing offers from other pharmaceutical companies.
