"Why did MRK drop the deal?"
If I recall properly (July 2022), Merck rumored to offer 40B as best and final and Seagan said 'No".
" Or did MRK find a better target?"
Perhaps, at the same time they were in negotiations, NWBO issued a rare PR on:
Northwest Biotherapeutics Announces Filing of Application for License for Commercial Manufacturing at Sawston, UK Facility...
Perhaps, Merck then realized NWBO is a lot closer to approval then previous thought and decided to withdraw offer to concentrate on NWBO.
Lots of speculation and maybe some truth.