Merck Emerges as Lead Suitor for Revolution Medicines at $28-32 Billion

January 9, 2026 · by Fintool Agent

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Merck-0.41% has emerged as the lead suitor to acquire cancer drugmaker Revolution Medicines+10.48% in a deal valued between $28 billion and $32 billion, according to the Financial Times, a dramatic escalation from earlier reports that Abbvie-1.81% was pursuing the company at a lower valuation.

If consummated, this would be the largest pharmaceutical acquisition since Pfizer's+0.75% $43 billion purchase of Seagen in 2023—and a defining move in Merck's strategy to diversify ahead of Keytruda's 2028 patent expiration.

Revolution shares jumped 16% in after-hours trading on the news, extending a stunning run that has seen the stock more than triple from its September 2025 lows.

The Bidding War: From AbbVie to Merck

The situation evolved rapidly over 48 hours. On January 7, the Wall Street Journal reported that AbbVie was in advanced talks to acquire Revolution Medicines for approximately $20 billion. But AbbVie swiftly denied the report, telling Reuters it "is not in discussions with Revolution Medicines."

Now Merck has emerged with a significantly higher offer—representing a 40-60% premium to the earlier AbbVie reports. The Financial Times noted that the deal is not yet finalized and could be "at least several weeks away." Other large pharmaceutical companies are still circling, and another suitor could yet prevail.

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Why Merck Needs This Deal

The strategic rationale for Merck is clear: Keytruda's patent cliff is approaching, and the company needs to diversify its oncology portfolio urgently.

Keytruda generated $8.1 billion in Q3 2025 alone, up 8% year-over-year, driven by strong demand across metastatic indications and robust uptake in earlier-stage cancers. 1 For full-year 2024, Keytruda generated approximately $29 billion in revenue—accounting for roughly 40% of Merck's pharmaceutical sales.

But that dominance creates existential risk:

S&P Global Ratings has flagged Merck's product concentration as a "material weakness," with more than half of 2024 pharma revenue coming from a single product. The company is set to lose nearly $45 billion in revenue-generating products by 2030.

On the Q3 2025 earnings call, CFO Caroline Litchfield emphasized the company's BD strategy: "Business development remains a high priority, and we are well-positioned to pursue additional science-driven value-enhancing transactions." 5

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Revolution's Prize: The RAS Oncology Platform

Revolution Medicines has built what may be the industry's most advanced platform for targeting RAS mutations—genetic alterations present in approximately 30% of all human cancers and historically considered "undruggable."

The company's lead asset, daraxonrasib (RMC-6236), is a multi-selective RAS(ON) inhibitor with FDA Breakthrough Therapy and Orphan Drug designations for pancreatic cancer.

Phase 3 Clinical Program

Clinical Data Driving the Premium

Phase 1/1b results have been compelling. In second-line PDAC patients with KRAS G12X mutations treated at the 300mg dose:

• Objective response rate: 36%
• Median progression-free survival: 8.8 months
• Disease control rate: 91%

For context, current standard-of-care chemotherapy in second-line PDAC delivers median PFS of approximately 3-4 months with ORRs in the mid-single digits.

Mizuho analysts estimate Revolution's portfolio of RAS inhibitors could generate more than $10 billion in potential risk-adjusted global sales by 2035.

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Compare daraxonrasib's clinical results to Amgen's Lumakras and Mirati's KrazatiWhat is the total addressable market for RAS-targeted cancer therapies?Show me Revolution Medicines' cash position and burn rate

Stock Reaction: A 240% Rally Extends

Revolution shares have delivered extraordinary returns as M&A speculation intensified:

Current market cap: ~$22 billion, with a 52-week range of $29.17 to $120.49. The stock is now trading at 155% above its 50-day moving average of $73.85.

Merck's Recent Dealmaking

Merck has been actively diversifying through acquisitions:

"The success of Keytruda has enabled us to build a diversified oncology pipeline," said Dean Li, President of Research Laboratories, on the Q3 2025 call. 1

What to Watch

1. Deal terms and timing: FT suggests weeks away—pricing, structure, and regulatory considerations remain
2. Competing bids: Other large pharma companies are reportedly still evaluating Revolution
3. RASolute 302 data: Phase 3 readout expected in 2026 could influence final valuation
4. Regulatory path: Revolution's breakthrough designations may support expedited review timelines
5. Integration strategy: How Merck plans to advance the broader RAS(ON) portfolio

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What other pharma companies might be interested in acquiring Revolution Medicines?Model the deal's impact on Merck's EPS and leverage ratiosCompare this deal to Pfizer-Seagen in terms of strategic fit and premium paid

Related:

• Merck Company Profile-0.41%
• Revolution Medicines Company Profile+10.48%
• Abbvie Company Profile-1.81%