Genmab has agreed to acquire Merus for approximately $8 billion, the companies said today, in a deal intended to bolster the buyer’s late-stage pipeline of cancer treatments with a late-stage bispecific antibody lead asset that generated positive Phase II data in May.
By adding lead asset petosemtamab and the rest of Merus’ portfolio, Copenhagen-based Genmab reasons that it has found complementary candidates that align with the rest of its portfolio, as well as its expertise in cancer-focused antibody therapy development and commercialization.
Genmab also believes that Utrecht, Netherlands-based Merus’ pipeline will accelerate a shift from partnered to wholly owned candidates that are expected to expand and diversify its revenue, drive sustained growth into the next decade, and thus contribute to Genmab’s evolution into a biotechnology leader.
“Petosemtamab has the potential to be a transformational therapy for patients living with head and neck cancer,” Genmab President and CEO Jan van de Winkel, PhD, said in a statement. With our proven track record of success, both in clinical development and in commercialization, we are confident that we will be able to unlock the promise of petosemtamab.”
Petosemtamab is an EGFRxLGR5 bispecific antibody which according to Genmab holds the potential to be both first- and best-in-class in head and neck cancer. Petosemtamab has been granted two Breakthrough Therapy Designations (BTD) by the FDA for first- and second line plus head and neck cancer indications.
According to data presented this past spring at the American Society for Clinical Oncology (ASCO) 2025 Annual Meeting, petosemtamab showed an overall survival rate of 79% (30 of 43 evaluable patients) 12 months after it was administered with Merck & Co.’s blockbuster cancer immunotherapy Keytruda® (pembrolizumab) in a Phase II trial (NCT03526835) assessing the combination in patients with PD-L1+ recurrent/metastatic (r/m) head and neck squamous cell carcinoma (HNSCC).
The combination also showed a median progression-free survival of nine months and a confirmed overall response rate of 63% (27 of 43 patients)—including six complete responses, and 21 partial responses as assessed by investigators using Response Evaluation Criteria in Solid Tumors v1.1. The overall response rate and median progression free survival rates were substantially higher than standard of care, Merus said at the time.
‘Standard of care’ opportunity
“By essentially every metric, we believe these interim data are significantly better than pembrolizumab monotherapy, the control arm of our ongoing Phase III trial, and underscores the opportunity petosemtamab holds to become a new standard of care, if approved, in head and neck cancer,” Merus President and CEO Bill Lundberg, MD, stated in May.
Merus is currently running two Phase III trials in first- and second/third line head and neck cancer (NCT06525220 and NCT06496178), with topline interim readout of one or both trials anticipated in 2026. Genmab said it anticipates a potential initial launch for petosemtamab in 2027, subject to clinical results and regulatory approvals.
Among competitors to Merus in HNSCC is Bicara Therapeutics, which at ASCO presented positive Phase I/Ib data for its 1500mg weekly dose of ficerafusp alfa in first-line r/m HNSCC. Ficerafusp alfa is now under study in FORTIFI-HN01 (NCT06788990), a global, pivotal Phase II/III trial of ficerafusp alfa plus Keytruda in first line r/m HNSCC, excluding HPV-positive patients.
Upon an initial anticipated approval, Genmab estimates that petosemtamab will add to its earnings before interest, taxes, depreciation, and amortization (EBITDA) with at least $1 billion in annual sales potential by 2029, and multi-billion-dollar annual revenue potential thereafter.
“We view this deal as positive for Genmab, as it adds an asset with peak sales of $3 billion to $4 billion in head and neck cancer alone,” Matt Phipps, PhD, a partner and group head of biotechnology equity research with William Blair, said today in a research note.
If the deal goes through, it would be the third largest biotech merger-and-acquisition (M&A) deal of 2025, following Johnson & Johnson’s $14.6 billion buyout of Intra-Cellular Therapies and Sanofi’s up-to-$9.5 billion acquisition of Blueprint Medicines.
“While this deal is larger than we had expected for Genmab, we view the opportunistic acquisition positively, as it adds to several other late-stage or approved programs that can drive significant revenue growth in the 2030s, surpassing the revenue peaks from royalties of Darzalex®,” Phipps added, using the brand name for daratumumab, which Genmab co-developed with Johnson & Johnson’s Janssen Biotech, which markets the drug globally.
However, Phipps downgraded William Blair’s rating on Genmab from “Outperform” to “Market Perform,” after questioning if Merus could have fetched an even higher price than $8 billion if Genmab had acquired the company following release of data next year for petosemtamab in colorectal cancer (CRC), as he and colleagues expected.
‘Key question’
“A key question for investors will be how the pending Phase II CRC results played into the decision to sell the company today, as strong data in that indication could have warranted a higher takeout premium,” Phipps commented.
Merus shares on NASDAQ in New York jumped 36% on news of the acquisition deal, from $68.89 Friday to $93.94 as of 11:48 a.m. ET. As of that time, Genmab shares on NASDAQ Copenhagen dipped 0.5% from DKK 1,840.50 ($289.24) to an even DKK 1,832 ($287.90).
Genmab said a wholly owned subsidiary of the company will commence a tender offer for 100% of Merus’ common shares. The boards of both companies have unanimously approved the acquisition transaction, which is expected to close by early first quarter 2026.
The closing of the tender offer is subject to satisfaction of customary closing conditions that include a minimum acceptance condition of at least 80% of Merus’ common shares (a threshold that Genmab could reduce to 75% if all other closing conditions are satisfied), and approval by Merus shareholders of resolutions relating to Merus’ post-closing governance and transactions to be held for that purpose at Merus’ upcoming extraordinary shareholders meeting.
At $97 a share, the acquisition price represents an approximately 41% premium over Merus’ closing stock price Friday and approximately 44% over Merus’ 30-day volume weighted average price of $67.42.
Genmab said it will finance its acquisition of Merus through a combination of cash on hand and approximately $5.5 billion of non-convertible debt financing for which the company has won a commitment from Morgan Stanley Senior Funding.
Genmab finished the second quarter with cash and cash equivalents of $1.296 billion up more than double (108%) from $622 million in Q2 2024.
“We believe Genmab has the right vision and experience to advance petosemtamab in recurrent/metastatic head and neck cancer and beyond,” Lundberg stated today. “I’m immensely proud of the Merus team who have pioneered our foundational platform technologies to make better medicines and who have demonstrated—with an approved product and a product candidate, petosemtamab, in registrational studies—an ability to deliver on our promise to close in on cancer.”
