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Genmab (GMAB) announced this morning it will acquire Merus (MRUS) for $97 per share in an all-cash deal valued at about $8.0 bln, bringing Merus's late-stage oncology asset petosemtamab into GMAB's pipeline strategy. The offer represents a 41% premium to MRUS's Friday closing price, with the transaction expected to close by early Q1 2026.

• The acquisition accelerates Genmab's shift to a fully owned model, expanding its late-stage pipeline and positioning the company for multiple proprietary launches by 2027.
• Petosemtamab, Merus's lead asset, is a bispecific antibody in Phase 3 trials for head and neck cancer. It has been granted two FDA Breakthrough Therapy Designations for head and neck cancer indications.
• The $8 bln deal will be funded with $2.5 bln in cash and $5.5 bln in new, largely prepayable debt. Management is targeting leverage below 3x within two years and sees potential for a 2027 launch, with petosemtamab contributing meaningfully to revenue by 2029.
• Risks remain as petosemtamab is still unapproved, and setbacks in Phase 3 would weigh heavily on returns. The high purchase price and added leverage also create financial pressure if trial results disappoint.

Briefing.com Analyst Insight

While GMAB is trading modestly lower on the news, likely reflecting investor unease over the sizable premium and added leverage, the deal underscores a strategic push to secure a fully owned late-stage oncology asset. Petosemtamab could provide a meaningful lift if Phase 3 data support earlier efficacy, but the therapy remains unapproved, and setbacks would weigh heavily given the $8 bln price tag. The reliance on debt financing also raises execution risk, putting pressure on management to deliver trial success and reduce leverage in a timely manner.