Merck & Co. announced that it has terminated its negotiations to acquire Revolution Medicines, Inc., the oncology biotech that has built a platform around targeting RAS‑driven cancers. The decision was reported by the Wall Street Journal on January 25, 2026, and was echoed by other outlets the following day.
The talks collapsed after Merck and Revolution could not reconcile a valuation that the two parties had been negotiating. Merck had been willing to pay a price in the range of $28 billion to $32 billion, while Revolution’s board had insisted on a valuation closer to $30 billion. Merck ultimately deemed the price too high for its strategic fit and chose to walk away.
Merck’s CEO, Robert Davis, has publicly stated that the company’s acquisition strategy focuses on deals valued at $15 billion or less. The proposed Revolution Medicines transaction would have exceeded that threshold, and Merck’s risk assessment concluded that the potential upside did not justify the premium. The company’s disciplined approach to capital deployment has guided its recent M&A activity.
Revolution Medicines remains a clinical‑stage company with no revenue and a net loss of approximately $600 million for the most recent fiscal year. Its pipeline centers on the RAS(ON) platform, with daraxonrasib in Phase III trials for pancreatic and colorectal cancer. The company’s valuation has been driven largely by expectations of future sales from these assets, but the lack of current revenue and the high burn rate underscore the risk profile that Merck weighed in its decision.
The termination of the talks removes the acquisition premium that had been priced into Revolution’s market value, but it does not alter the company’s underlying science or its ongoing clinical development. Merck’s exit signals that even large pharmaceutical firms will be cautious when a target’s valuation exceeds their predefined thresholds, while Revolution Medicines will continue to pursue its RAS(ON) platform and seek alternative partnership or funding opportunities.
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