SpringWorks Therapeutics, Inc. (SWTX) shares plummeted 5.04% intraday on Tuesday, underperforming the broader market, as concerns arose over the profitability of a potential acquisition by German pharmaceutical giant Merck KGaA.

Reports surfaced on Monday that Merck KGaA is in advanced talks to acquire the U.S. cancer and rare diseases drugmaker SpringWorks Therapeutics. However, analysts have raised questions about the deal's potential impact on Merck's profitability.

Equita analyst Davide Marchesin noted that while the acquisition could boost Merck's cancer-treatment pipeline, "one critical question would be if the acquisition would be accretive from year one." Marchesin highlighted that SpringWorks is currently loss-making despite generating over 350 million euros in annual revenue, potentially casting doubt on the deal's immediate financial benefit for Merck.