Merck & Co. announced over the weekend that it has stepped back from discussions to acquire Revolution Medicines, according to The Wall Street Journal. Sources indicate negotiations stalled due to a valuation gap, with Revolution’s enterprise value speculated to be in the tens of billions. While Merck has not ruled out rekindling talks, investors reacted sharply to the news, driving Merck shares down over one percent in Monday trading. The move underscores Merck’s disciplined approach to M&A pricing even as it seeks to bolster its oncology pipeline.

In recent SEC filings, several major institutions altered their positions in Merck & Co. Cullen/Frost Bankers reduced its holdings by 7.0%, trimming 17,082 shares during the third quarter for proceeds totaling nearly $19 million. Meanwhile, Charles Schwab Investment Management increased its stake by 9.4%, adding more than 4.6 million shares valued at approximately $4.3 billion. New entrants included DLD Asset Management and Norges Bank, each establishing positions worth close to $2.9 billion. Overall, institutional ownership now represents just over three-quarters of the company’s float.

Merck reported fourth-quarter EPS of $1.94, missing consensus estimates by $0.14, though revenue growth in its oncology division remained robust. The company declared a quarterly dividend of $0.85 per share, up 5% from the prior payout, marking the 15th consecutive year of dividend increases. In the wake of the earnings release, analysts at BMO Capital Markets and Bank of America raised their price targets, citing momentum in the Keytruda franchise and the late-stage pipeline. Consensus ratings on Merck shares remain at Hold, with an average target implying modest upside.