Merck Acquires Terns Pharmaceuticals for $6.7 Billion

Merck has finalized its acquisition of Terns Pharmaceuticals for $6.7 billion, a strategic move to bolster its oncology pipeline with innovative therapeutics. The acquisition notably includes TERN-701, an investigational oral allosteric BCR::ABL1 tyrosine kinase inhibitor, which is being developed as a potential differentiated treatment option for chronic myeloid leukemia (CML).

The transaction, executed through a cash tender offer, saw Merck purchase Terns' outstanding shares at $53.00 each. This offer resulted in the acquisition of approximately 86.36% of Terns’ shares by the deadline set for May 4, 2026. Following the tender offer, a merger was completed in which Terns became a wholly-owned subsidiary of Merck. Consequently, Terns’ common stock has been delisted from the Nasdaq Global Select Market. The financial terms of this deal will be reflected as an asset acquisition in Merck’s financial statements, leading to a significant charge to research and development expenses estimated at $5.8 billion.

Merck’s CEO, Robert M. Davis, highlighted the acquisition's alignment with the company’s strategy to enhance its portfolio through science-driven and value-enhancing developments. With TERN-701 having received Breakthrough Therapy Designation from the U.S. FDA, Merck is positioning itself to potentially introduce a novel treatment for Philadelphia chromosome-positive CML patients who have exhausted other therapeutic options. This designation is based on encouraging data from the ongoing Phase 1/2 CARDINAL trial.

The acquisition adds momentum to Merck’s hematology ambitions, providing a complementary boost to its existing portfolio of candidates targeting various blood cancers, including different forms of leukemia and lymphoma. As competition in oncology intensifies, particularly in the tyrosine kinase inhibitors space, this acquisition could enhance Merck's competitive positioning, offering potential new life-extending therapies within a crowded field.

Looking ahead, Merck’s integration of Terns Pharmaceuticals will include advancing TERN-701 through further clinical development stages. The company must manage the associated financial impacts, which are projected to reduce Merck’s 2026 earnings per share by approximately $0.12. Investors and stakeholders will be attentive to regulatory feedback and any forthcoming clinical trial results as Merck seeks to leverage TERN-701's potential in addressing unmet needs in oncology.