Merck announced on March 25 2026 that it will acquire Terns Pharmaceuticals for an equity value of approximately $6.7 billion, paying $53.00 in cash per share. The offer represents a premium of about 31 % to Terns’ 60‑day volume‑weighted average price and 42 % to its 90‑day average, and a 6 % premium over the closing price on March 24 or 25. The transaction is structured as a tender offer by a Merck subsidiary and is expected to close in the second quarter of 2026, with both companies’ boards having approved the deal.
Merck’s rationale is to strengthen its oncology pipeline ahead of the anticipated loss of exclusivity for Keytruda in 2028. The acquisition adds TERN‑701, an oral allosteric BCR::ABL1 inhibitor that binds to the ABL myristoyl pocket—a mechanism distinct from existing ATP‑binding inhibitors. Early clinical data show encouraging major and deep molecular response rates, even in patients who have failed prior therapies, and analysts project peak sales that could exceed $4 billion. The deal fits into Merck’s broader M&A strategy, following recent purchases of Cidara Therapeutics and Verona Pharma.
Terns has pivoted from a metabolic‑disease focus to a pure‑play oncology company after the success of TERN‑701. At the end of 2025, the company held roughly $1 billion in cash and marketable securities, giving it a strong negotiating position. The acquisition provides Terns shareholders with a premium exit while giving Merck a differentiated CML asset that could challenge existing treatments such as Novartis’ Scemblix.
"The acquisition of Terns builds on our growing presence in hematology with TERN‑701, a potential best‑in‑class candidate for the treatment of certain patients with chronic myeloid leukemia. This transaction further diversifies and strengthens our position in oncology as we continue to look for opportunities to broaden our portfolio into other therapeutic areas," said Robert M. Davis, Chairman and CEO of Merck.
"Based on early clinical evidence, TERN‑701, a novel allosteric BCR::ABL1 inhibitor, may have the potential to provide a meaningfully differentiated option for certain patients living with CML," added Dr. Dean Y. Li, President of Merck Research Laboratories.
"This acquisition reflects our team's deep commitment to innovation in oncology and developing high‑impact medicines. By working together, we will advance TERN‑701, leveraging the deep expertise and significant resources at Merck, a global biopharmaceutical leader with a proven track record of delivering cancer breakthroughs for patients who need them most," said Amy Burroughs, CEO of Terns.
The market reacted positively to the announcement. Analysts noted the strategic fit and the premium paid, though some expressed concerns about the modest premium relative to TERN‑701’s potential. William Blair analysts highlighted that the offer does not fully capture the asset’s value, while RBC Capital and BMO Capital emphasized Merck’s confidence in the drug’s differentiation. Barclays reiterated an Overweight rating on Merck, and RBC Capital’s Trung Huynh noted investor disappointment over the low premium but maintained an Outperform rating for Merck.
Overall, the acquisition positions Merck to address future revenue gaps and expands its oncology portfolio, while giving Terns a path to commercialize TERN‑701 with Merck’s resources and expertise.
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