Germany’s Merck KGaA has struck a deal to buy U.S. biotech company SpringWorks Therapeutics for an equity value of $3.9 billion to add rare cancer therapies ahead of expected revenue losses linked to expiring patents. The deal came at a price tag about 20% lower than what analysts expected due to lack of other serious bidders and the overall devaluation of the U.S. biotech sector. CEO Belen Garijo said the challenges emerging in the United States were reflected in the final bid price. Policy and regulatory changes for the healthcare sector in the United States, including massive layoffs at the U.S. Food and Drug Administration that approves new drugs, have been stalling large life science deals in what had been expected to be a stellar year for mergers and acquisitions. The XBI index that tracks U.S. biotech stocks has fallen 12% this year amid the market uncertainties. “We do believe that SpringWorks was likely between ‘a rock and a hard place’ in discussions,” said JP Morgan analyst Anupam Rama about the deal coming “lower than we and many on the Street had discussed.”

Full report : Merck KGaA to buy rare cancer biotech SpringWorks for $3.9 billion.