Genmab’s $8bn takeover of Merus: What it means for biotech M&A and the race to control antibody innovation

Genmab A/S, listed on both the Copenhagen and Nasdaq exchanges, made headlines on September 29, 2025, when it revealed plans to acquire Netherlands-based Merus N.V. in a cash deal valued at approximately $8.0 billion. The acquisition will be executed at $97.00 per share, representing a premium of 41 percent to Merus’ closing price just before the announcement. Both companies’ boards have given unanimous approval, and the deal is expected to close in the first quarter of 2026 pending regulatory clearances and shareholder votes.

The transaction reflects Genmab’s long-standing strategy of moving away from revenue-sharing models towards fully owned pipelines. Over the past two decades, the Danish biotechnology company has co-developed some of the world’s most successful antibody-based therapies through licensing and partnerships with large pharmaceutical firms. However, the reliance on shared revenue streams limited the company’s ability to capture the full upside of its innovations. By acquiring Merus, Genmab positions itself as a fully integrated biopharma player, with complete ownership of a late-stage oncology program that could underpin multiple new launches through 2027 and beyond.

Chief executive Jan van de Winkel described the move as a turning point in Genmab’s evolution, arguing that the combination has the potential to accelerate its trajectory toward becoming a global biotechnology leader. For Merus, whose CEO Bill Lundberg praised the scientific fit, the transaction secures financial stability and a pathway to bring its leading candidate, petosemtamab, to market under the wing of a proven commercialization partner.

What makes petosemtamab a critical late-stage oncology asset and why does it matter for Genmab’s portfolio?

The centerpiece of this acquisition is petosemtamab, an EGFRxLGR5 bispecific antibody currently being investigated in Phase 3 clinical trials for head and neck cancer. The drug has already received two Breakthrough Therapy Designations from the U.S. Food and Drug Administration, highlighting its potential as both a first-in-class and best-in-class treatment option.

Petosemtamab has shown highly encouraging results in Phase 2 studies, presented at the American Society of Clinical Oncology’s annual meeting earlier in 2025. Patients receiving the drug demonstrated improved overall response rates and median progression-free survival compared to the prevailing standard of care. These data have generated considerable excitement within the oncology research community and among institutional investors who follow the biotech sector.

For Genmab, which has historically built its reputation around antibody innovation, petosemtamab fits neatly into its pipeline of differentiated therapies. The company already has experience commercializing antibody treatments in oncology, and adding Merus’ lead candidate creates a diversified late-stage portfolio. If successful in Phase 3 trials, petosemtamab could be commercialized as early as 2027, further solidifying Genmab’s position as a major force in antibody therapeutics.

How is the $8 billion acquisition structured and what financing strategy has Genmab chosen?

The purchase will be executed via a tender offer through a wholly owned Genmab subsidiary. Under the agreement, Merus shareholders will be offered $97.00 per share in cash, and those not tendering their shares will still be entitled to equivalent compensation through statutory buyout provisions in the Netherlands.

Financing for the deal will come from Genmab’s balance sheet and a $5.5 billion non-convertible debt package arranged by Morgan Stanley. The debt is structured to be prepayable, a critical feature that aligns with Genmab’s pledge to deleverage quickly. Management has communicated its goal of reducing gross leverage to under three times EBITDA within two years of the deal closing. Importantly, the transaction is not subject to financing contingencies, which provides reassurance to shareholders and underlines Genmab’s confidence in its financial capacity.

By using a balanced mix of cash and debt, Genmab is avoiding excessive dilution of its existing shareholders. At the same time, the company is signaling discipline in how it intends to manage integration costs and clinical development expenses. This approach has been interpreted by analysts as prudent, particularly in a biotech M&A environment where financial engineering often plays as big a role as scientific synergy.

How did investors react to the Genmab–Merus announcement in the equity markets?

Equity markets provided an immediate, contrasting reaction to the announcement. Merus stock surged by nearly 36 percent on the Nasdaq, closing at $93.67, reflecting the acquisition premium and investor confidence in the likelihood of deal completion. For Merus shareholders, the transaction crystallizes value well above recent trading ranges, rewarding long-term investors who held through years of clinical development.

In contrast, Genmab’s shares on the Copenhagen exchange dipped by 0.46 percent to close at 1,832 Danish kroner. The modest decline reflected investor caution around the short-term financial impact of the acquisition. Debt-funded transactions in the biotech sector often trigger concern about leverage and integration risk, even when the long-term strategic rationale is compelling.

Institutional investors appeared to take a measured view. The general consensus was that while Genmab will absorb near-term dilution in margins and carry higher debt, the EBITDA accretion forecast by 2029 provides enough runway for value creation. Market sentiment among long-only funds suggests that many are willing to tolerate short-term pressure in exchange for the multi-billion-dollar revenue potential of petosemtamab if clinical and regulatory milestones are met on schedule.

What long-term growth and revenue projections are tied to petosemtamab and how do they influence investor outlook?

Genmab has publicly stated that petosemtamab could achieve at least $1 billion in annual sales by 2029, with multi-billion-dollar revenue potential in the years that follow. The company anticipates that EBITDA will turn accretive by the same year. While this timeline requires patience from investors, the upside is significant, particularly because revenue from petosemtamab would be wholly retained by Genmab rather than split with partners.

The potential expansion of petosemtamab into earlier lines of therapy and possibly other indications adds further optionality. Such optionality is highly valued in the oncology space, where successful therapies often see rapid uptake across adjacent cancer types once initial approvals are secured. For institutional investors, this expands the addressable market and creates multiple catalysts for valuation re-rating over time.

This growth outlook underpins the optimism that even though Genmab shares dipped slightly after the announcement, the long-term trajectory could reward those who hold through the integration phase.

What risks and regulatory hurdles could affect the closing and future integration of Merus?

The acquisition is still subject to customary closing conditions, including regulatory approvals in the United States and Europe, as well as approval by Merus shareholders. Potential risks include delays in trial timelines, unexpected regulatory feedback, and integration complexities.

Cross-border transactions in biotech often face scrutiny from competition regulators and may require concessions or undertakings related to future product development. Beyond regulatory matters, Genmab must also ensure that Merus’ talent pool, particularly its research and development teams, remains engaged and motivated during and after the transition. Retention of key scientific personnel is often as critical as financing in ensuring the success of pipeline integration.

From a financial perspective, while the debt structure is manageable, global macroeconomic volatility could impact interest costs. Furthermore, if Phase 3 trials for petosemtamab deliver underwhelming results, investor confidence could weaken significantly, and Genmab would carry the burden of integration without the payoff of a commercial blockbuster.

Why is the Genmab acquisition of Merus seen as a signal for oncology-focused M&A momentum in the biotech sector?

The Genmab–Merus acquisition stands out as one of the most notable oncology M&A transactions of 2025. It highlights how mid-cap biotechnology firms with differentiated late-stage assets are becoming prime acquisition targets for companies seeking to control their revenue destiny.

For Genmab, the deal is not just about adding a promising antibody therapy. It is about redefining its business model and ensuring that future revenues fully accrue to its shareholders. While the modest decline in Genmab’s stock price shows that some investors remain cautious, the overwhelmingly positive reaction in Merus’ stock underlines confidence in the strategic and financial rationale of the deal.

In the broader context of biotechnology M&A, the transaction underscores the increasing premium being placed on oncology assets with Phase 3 validation. As large-cap pharmaceutical firms seek to replenish pipelines and extend revenue streams beyond looming patent cliffs, more acquisitions of this scale can be expected. For investors, this means oncology-focused biotech remains one of the most dynamic corners of the capital markets heading into 2026.