SpringWorks Therapeutics: A Critical Q2 Milestone for EU Desmoid Tumor Approval

SpringWorks Therapeutics (NASDAQ: SWTX) stands at a pivotal juncture as the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) is expected to issue an opinion on the marketing authorization application (MAA) for its desmoid tumor therapy, nirogacestat, by the second quarter of 2025. This decision will determine whether the drug—already the first and only FDA-approved treatment for adults with desmoid tumors—gains a foothold in the European Union (EU), a market worth pursuing for its underserved patient population and SpringWorks’ strategic ambitions.

The Regulatory Timeline: A Make-or-Break Moment

Nirogacestat, an oral gamma secretase inhibitor, has been a game-changer in the U.S. since its FDA approval in 2023. For the EU, the CHMP’s Q2 2025 opinion is a critical step toward potential marketing authorization, which would make it the first systemic therapy for desmoid tumors in Europe. Desmoid tumors, rare soft-tissue growths with limited treatment options, currently lack approved therapies in the EU, creating a clear unmet need.

The EMA’s review process for nirogacestat is on track, per SpringWorks’ April 27, 2025 press release. However, risks remain. The CHMP could request additional data or studies, delaying approval—a scenario SpringWorks acknowledges in its forward-looking statements. For instance, the company warns that regulatory hurdles or approval denials could disrupt its timeline, though it remains optimistic about the drug’s profile.

Strategic Implications: Merck’s $3.9B Stake and Global Expansion

The CHMP’s decision aligns with SpringWorks’ broader strategy to capitalize on its rare tumor portfolio. Notably, Merck KGaA, Darmstadt, Germany, has agreed to acquire SpringWorks in a deal valued at $3.9 billion, expected to close by late 2025. This acquisition positions Merck to bolster its presence in rare tumors, with nirogacestat and SpringWorks’ other asset, GOMEKLI™ (mirdametinib)—approved for neurofibromatosis type 1-associated plexiform neurofibromas—complementing its pipeline.

The Merck deal underscores nirogacestat’s value. If approved in the EU, the drug could generate significant revenue, especially in markets where surgical options are limited. Analysts at Guggenheim highlighted the strategic synergy, noting that Merck’s European infrastructure could accelerate nirogacestat’s commercialization.

Risks and Market Dynamics: Caution Amid Optimism

While the Q2 timeline is a positive catalyst, several risks temper enthusiasm. First, insider selling has raised eyebrows: executives sold millions of shares in the prior six months, suggesting potential internal uncertainty. Second, institutional sentiment is mixed, with funds like ECOR1 Capital increasing holdings while others like Marshall Wace reduced stakes.

Regulatory risks remain the most pressing. The EMA could demand additional clinical data, such as long-term safety studies or comparisons with existing off-label treatments. For context, desmoid tumors often require prolonged therapy, and regulators may scrutinize nirogacestat’s long-term efficacy and safety profile.

Market Opportunity and Financial Outlook

The EU’s desmoid tumor market, though small, is lucrative due to the drug’s orphan status and lack of alternatives. With an estimated 1,500–2,000 new cases annually in the EU, nirogacestat’s pricing power—pegged at $100,000+ per patient annually in the U.S.—could drive meaningful revenue. Analysts project peak sales exceeding $200 million annually in the EU if approved.

SpringWorks’ pipeline further strengthens its case. Beyond nirogacestat, its tenosynovial giant cell tumor (TGCT) program and collaborations with Merck on other rare tumors position the company for sustained growth. The pending acquisition also mitigates R&D risks, as Merck’s resources could fast-track other candidates through regulatory processes.

Conclusion: A High-Reward, High-Risk Play

SpringWorks’ Q2 2025 CHMP decision is a binary event with outsized implications. A positive opinion would unlock the EU market, validate nirogacestat’s global potential, and likely accelerate Merck’s acquisition timeline. Conversely, a delayed or negative outcome could pressure the stock and cast doubt on the deal’s valuation.

Investors should weigh the $3.9 billion Merck price tag against the risks. Nirogacestat’s FDA approval and Merck’s strategic alignment suggest upside, but regulatory and execution risks linger. For now, the stock’s recent performance—up 25% since January 2025 on merger optimism—hints at investor confidence, even amid insider selling.

In the rare disease space, first-mover advantage is everything. If SpringWorks secures EU approval, it could solidify its position as a leader in rare tumor therapies, justifying Merck’s premium. The next three months will be decisive.