Merck KGaA made its largest acquisition in a decade in April 2025, when it snapped up Connecticut rare disease specialist SpringWorks Therapeutics for $3.9 billion. A year later, as the German conglomerate presented its first-quarter earnings, it reiterated its focus on M&A, largely to fuel its pharma pipeline.
“We will broaden our M&A scope,” new CEO Kai Beckmann said during a conference call.
In laying out the company’s business update (PDF), Beckmann said M&A is a growth lever that is “critical” for innovation and that acquiring external innovation is needed to build a risk-balanced pharma pipeline.
“By combining our core strengths in biology, chemistry and physics with data and AI, we will become a more agile company that delivers at greater speed and scale,” Beckmann said.
While Merck KGaA has three unrelated phase 3 programs, the company’s Healthcare CEO, Danny Bar Zohar, called its early- to midstage pipeline “rather slim.”
“We need to build that in order to sustain, or to ensure, that we grow beyond that low-to-mid single-digit mid-term guidance that we gave you beyond 2030, beyond 2031,” Bar Zohar said. “This is something that we need to start building now.”
After the 2024 failure of BTK inhibitor evobrutinib, Merck KGaA is relying heavily on a trio of late-stage oncology assets, including pimicotinib, which is under review by the FDA, and antibody-drug conjugate precemtabart tocentecan. The company is also pointing to a second-half launch in the U.S. of the fertility drug Pergoveris, which is being assessed under 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 fell 3%, driven largely by a 5% decline in oncology product sales and a 9% drop in neurology and immunology treatment sales. That segment includes multiple sclerosis drug Mavenclad, which posted a 7% sales decline.
The company raised its revenue projection by 10 million euros at the midpoint of its guidance range, as competition for Mavenclad is expected to arrive two months later than previously anticipated. The company also attributed a 16% increase in Process Solutions revenue to stockpiling of lab supplies by clients anticipating supply chain disruptions tied to the war in Iran.
With the upgraded guidance, Merck KGaA’s share price increased by 8%.