Merck & Co. Inc. (MRK) is reportedly in talks to acquire Revolution Medicines Inc. (RVMD) in a deal that could be worth somewhere between $28 and $32 billion. If you're wondering why pharmaceutical giants are suddenly writing massive checks, well, welcome to patent cliff season.

Revolution Medicines shares jumped 4.56% on Thursday, then rocketed another 15.14% overnight after the news broke, trading at $123.65 per share. Nothing quite like acquisition rumors to wake up a stock price.

When Patent Cliffs Meet Buying Sprees

According to the Financial Times, citing sources familiar with the matter, the deal isn't finalized yet and any potential agreement is still weeks away. But the wheels are clearly in motion.

If this goes through, we're looking at the biggest biotech transaction since Pfizer Inc. (PFE) dropped $43 billion on Seagen back in 2023. The deal would add fuel to what's already been a blazing M&A cycle in biotech, with deal volumes hitting $135 billion in 2025, essentially doubling from 2024, according to S&P Capital IQ Data.

Here's the thing: the pharmaceutical industry is staring down a patent cliff that would make anyone nervous. Multiple blockbuster drugs are set to lose their patent protections in the coming years, and for Merck, that includes Keytruda, its massively popular cancer treatment, which loses protection in 2028.

So Merck has been on something of an acquisition spree. This potential Revolution Medicines deal comes just months after the company shelled out $9.2 billion for Cidara Therapeutics Inc. (CDTX) and its flu protection drugs, plus a $10 billion buyout of Verona Pharma earlier last year. That's a lot of shopping in a short period of time.

Neither Merck nor Revolution Medicines immediately responded to MarketDash's request for comment.

What Revolution Medicines Brings to the Table

So what exactly is Merck buying here? Revolution Medicines is running early-stage clinical trials for a targeted therapy designed to slow tumor growth in pancreatic cancer, which happens to be one of the deadliest cancers with remarkably few effective treatment options available.

Earlier this year, Revolution raised $2 billion by partnering with Royalty Pharma Plc. (RPRX) to advance its global development and commercialization strategy. That's serious money backing serious ambitions.

And apparently, Merck isn't the only one interested. There are reportedly other big pharmaceutical companies circling the California-based biotech. Rumors swirled on Thursday that AbbVie Inc. (ABBV) was also in talks, though the company has since denied those reports.

Revolution Medicines scores high on momentum according to market data, showing favorable price trends in the short, medium, and long terms. When you're developing breakthrough cancer therapies and attracting multibillion-dollar acquisition interest, momentum tends to follow.