Revolution Medicines (RVMD) stock plunged more than 19% in Monday’s pre-market trading after the Wall Street Journal reported that Merck (MRK) has ended talks to acquire the cancer-drug biotech as the two companies couldn’t reach an agreement on price. Earlier this month, the Financial Times reported that Merck was holding discussions to acquire Revolution Medicines in a deal valued at $28 billion to $32 billion. RVMD stock has rallied 48% year-to-date (as of Friday’s closing).
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Revolution Medicines Seen as an Attractive Takeover Target
The Wall Street Journal reported that the discussions between Merck and Revolution Medicines could resume, or another company interested in acquiring RVMD could emerge. Interestingly, the media outlet had previously reported that AbbVie (ABBV) was in advanced talks to acquire Revolution Medicines. However, AbbVie denied any such discussions.
Overall, several companies have reportedly expressed interest in acquiring Revolution Medicines. The biotech is attracting attention for its pipeline of innovative treatments targeting RAS-addicted cancers. Specifically, Revolution is expected to release testing data for its pancreatic and colorectal cancer drug candidates during the first half of 2026. Citing Mizuho analysts, the Wall Street Journal noted that if RVMD’s pancreatic-cancer drug candidate proves effective, it could dominate treatment of the disease and generate $10 billion in global sales by 2035.
Notably, several pharma giants are seeking attractive targets, as they face the risk of patent expirations and competition from generics. In particular, Merck has been making strategic acquisitions ahead of the loss of patent for its blockbuster cancer treatment Keytruda. Last year, the company announced the acquisition of flu-prevention company Cidara Therapeutics for $9.2 billion and bought respiratory drug company Verona Pharma for $10 billion.
Stifel Weighs in on Merck-Revolution Medicines News
Reacting to the news, Stifel analyst Laura Prendergast reiterated a Buy rating on Revolution Medicines stock with a price target of $170. The 4-star analyst expects investors to buy the pullback in RVMD stock.
This “M&A clearing event will be viewed as a buying opportunity for many sector specialists,” said Prendergast. The analyst expects investor focus to move to Revolution Medicines’ “catalyst-rich” 2026.
Is RVMD a Good Stock to Buy?
Wall Street is highly bullish on Revolution Medicines stock, with a Strong Buy consensus rating based on 17 unanimous Buys. The average RVMD stock price target of $112.21 indicates 4.6% downside risk from current levels.
