US pharmaceutical company Merck is acquiring Terns Pharmaceuticals for around $6.7 billion
Expanding its haematology pipeline with TERN-701, a novel candidate for chronic myeloid leukaemia (CML)
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Merck, known as MSD outside of the United States and Canada, and Terns Pharmaceuticals, Inc. announced that the companies have entered into a definitive agreement under which Merck, through a subsidiary, will acquire Terns for $53.00 per share in cash for an approximate equity value of $6.7 billion. This equates to approximately $5.7 billion net of acquired cash and represents an approximate premium of 31% to the 60-day and 42% to the 90-day volume-weighted average stock price on March 24, 2026.
“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,” said Robert M. Davis, chairman and chief executive officer, Merck. “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.”
Terns’ lead candidate, TERN-701, is a novel investigational oral allosteric BCR::ABL1 tyrosine kinase inhibitor (TKI) currently being evaluated in the Phase 1/2 CARDINAL trial (NCT06163430) for patients with Philadelphia chromosome-positive (Ph+), chronic phase chronic myeloid leukemia (CML) previously treated with at least one prior TKI and who experienced treatment failure, suboptimal response or treatment intolerance. In March 2024, the U.S. Food and Drug Administration (FDA) granted Orphan Drug Designation for TERN-701 for the treatment of CML.
“This acquisition reflects our team’s deep commitment to innovation in oncology and developing high impact medicines,” said Amy Burroughs, chief executive officer, Terns. “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. I am immensely proud of the Terns team and our work towards making a difference for people living with CML. Finally, we extend our heartfelt thanks to the investigators, patients, and community advocates whose dedication and support make the development of TERN-701 possible.”
In clinical trials to date, TERN-701 has shown promising activity, with encouraging rates of major molecular response and deep molecular response observed by week 24. Importantly, this includes responses in patients with high disease burden who previously received multiple lines of therapy, including many who were treated with an allosteric TKI. The majority of treatment-emergent adverse events were reported as low grade with a low incidence of severe adverse events and discontinuations. No clinically meaningful changes in blood pressure have been observed, and rates of lipase elevation have been low.
“The first approval of a BCR::ABL1 tyrosine kinase inhibitor 25 years ago transformed the prognosis for many patients with chronic myeloid leukemia. Despite new therapeutic options, there is significant need for innovative, well-tolerated therapies with faster time to onset of molecular response leading to deeper responses and better disease control,” said Dr. Dean Y. Li, president, Merck Research Laboratories. “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.”
The transaction has been approved by both Merck’s and Terns’ Boards of Directors. Under the terms of the merger agreement, Merck, through a subsidiary, will acquire all of the outstanding shares of Terns. The acquisition is subject to a majority of Terns’ stockholders tendering their shares in a tender offer that will be initiated by a subsidiary of Merck. The closing of the proposed transaction will be subject to certain conditions, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and other customary conditions. The transaction is expected to be accounted for as an asset acquisition and close in the second quarter of 2026, resulting in a charge of approximately $5.8 billion, or approximately $2.35 per share, included in both second quarter and full year 2026 GAAP and non-GAAP results.
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