Merck has announced the acquisition of Terns Pharmaceuticals in a deal valued at approximately $6.7 billion, significantly strengthening its oncology and hematology portfolio with the addition of the experimental cancer therapy TERN-701.
The acquisition centers around TERN-701, an investigational oral therapy being developed for Chronic Myeloid Leukemia (CML), a type of blood and bone marrow cancer. The drug is currently in Phase 1/2 Clinical Development and has shown encouraging early results in patients who previously failed or could not tolerate existing therapies.
TERN-701 belongs to a newer class of Allosteric BCR::ABL1 Tyrosine Kinase Inhibitors, designed to target leukemia cells differently from traditional treatments. Early clinical data demonstrated promising molecular response rates and a favorable safety profile, increasing expectations that the therapy could emerge as a potential Best In Class Treatment for certain CML patients.
Under the terms of the agreement, Merck will pay $53 per share in cash, representing a significant premium over Terns’ recent stock price averages. The transaction is expected to close in the second quarter of 2026, subject to regulatory approvals and shareholder tender conditions.
The acquisition reflects Merck’s broader strategy to diversify its oncology business ahead of the expected 2028 Patent Expiration of Keytruda, its blockbuster immunotherapy drug that currently contributes a major share of company revenue. Analysts view the Terns acquisition as part of Merck’s aggressive push to build the next generation of cancer treatments through targeted acquisitions and pipeline expansion.
Industry experts believe TERN-701 has the potential to compete strongly against existing CML therapies, including Novartis’ Scemblix, due to its early efficacy data, safety profile, and convenience as an oral therapy. Some analysts have even suggested the acquisition price may undervalue the long term commercial potential of the drug candidate.
The deal also highlights a growing trend in the pharmaceutical industry, where major drugmakers are increasingly acquiring Late Stage Oncology and Precision Medicine Companies to strengthen future growth pipelines amid looming patent cliffs.
“The acquisition of Terns builds on our growing presence in hematology with TERN-701, a potential best in class candidate for chronic myeloid leukemia.”
By
HB Team
