Merck & Co. has stopped talks to acquire cancer-focused biotech Revolution Medicines, citing a disagreement over valuation. The Wall Street Journal reported the drug giant had considered a deal that could have valued the company at around $30 billion. News of the collapsed negotiations sent Revolution Medicines' shares down 20.9% in premarket trading.

The impasse reportedly centered on the purchase price, as Merck maintains a disciplined approach to its oncology acquisition strategy. This development follows intense speculation that had already lifted the biotech's market capitalization from $16 billion to over $22 billion earlier this month. Merck CEO Rob Davis recently stated the company is focused on deals up to $15 billion.

Revolution Medicines is developing experimental drugs targeting RAS, a molecular driver in difficult-to-treat cancers like lung and pancreatic tumors. Key clinical data is expected in the first half of this year. While a deal could still materialize if results are favorable, Merck remains focused on defending its position ahead of Keytruda's patent expiration.