Merck Ends Acquisition Reports With Revolution Medicines as Valuation Expectations Diverge

Pharmaceutical industry sources reveal that Merck & Co Inc. (MRK) has halted merger discussions with Revolution Medicines following a substantial divergence in price expectations. The biotech firm’s stock reflects the market’s reaction to this failed acquisition attempt, with shares plummeting sharply in trading activity immediately following the news.

Deal Breakdown Sparks Sharp Market Reaction

The termination of acquisition talks sent shockwaves through investor sentiment. Revolution Medicines (RVMD) closed regular trading on January 23, 2026 at $117.68, down $1.09 or 0.92%, but the real blow came during after-hours trading. The stock plummeted to $95.00 in overnight sessions at 9:18 PM EST, representing a dramatic decline of $22.68 or 19.27%. This sharp sell-off underscores how heavily the market had been pricing in the potential transaction and the disappointment of its collapse.

Why Revolution Medicines Attracted Multiple Acquisition Suitors

Revolution Medicines has emerged as a highly attractive target in the biotech sector, drawing interest from multiple pharmaceutical giants. Beyond Merck, AbbVie was also reported to be in advanced acquisition negotiations with the company, though the firm later clarified it is “not in discussions” with Revolution. The biotech company’s cancer-focused pipeline, particularly its pancreatic and colorectal cancer drug candidates, positioned it as a crown jewel for consolidation in the pharmaceutical industry.

The Valuation Standoff and Industry Implications

According to reports from the Wall Street Journal, the acquisition talks cooled when the two sides could not align on pricing terms. Merck had valued the potential deal at approximately $30 billion, but the parties remained unable to bridge their expectations. This valuation gap represents a common challenge in large-scale pharmaceutical acquisitions, where differing assessments of clinical pipeline value can derail even advanced negotiations.

Upcoming Clinical Data Could Reshape Future Acquisition Interest

The trajectory of Revolution Medicines’ story is far from over. The biotech firm is expected to release closely watched clinical trial results for its cancer drug candidates in the first half of 2026. Positive data readouts could reignite acquisition interest from Merck or other pharmaceutical companies seeking to diversify their oncology portfolios. Conversely, disappointing results might validate some buyers’ lower valuation positions.

While current acquisition reports suggest negotiations may not resume imminently between Merck and Revolution, the door remains open for future deal discussions or alternative suitors to emerge. The biotech sector continues to watch this space closely, as Revolution’s clinical milestones will likely play a crucial role in determining whether another acquisition opportunity materializes.

Views and opinions expressed are those of the author and do not necessarily reflect those of Nasdaq, Inc.