Merck (MRK) Stock Acquires Terns Pharma (TERN) for $6.7 Billion to Bolster Cancer Pipeline

TLDR

• Merck is buying Terns Pharma for $6.7 billion to strengthen its cancer pipeline
• The deal gives Merck access to TERN-701, an experimental chronic myeloid leukemia drug
• Merck offered $53 per share, a 6% premium to Terns’ last close
• TERN-701 showed a 75% major molecular response rate in early-stage trials
• The deal is expected to close in Q2 2026 and will result in a ~$5.8 billion charge

Merck announced on Wednesday it will acquire Terns Pharmaceuticals in a deal worth up to $6.7 billion. The move is part of Merck’s push to fill its pipeline before Keytruda, the world’s best-selling prescription drug, begins losing patent protection later this decade.

Keytruda generated more than $30 billion in revenue in 2025 and made up nearly half of Merck’s total sales. Losing exclusivity on that drug is a very real problem, and Merck has been moving fast to prepare.

Since 2021, the company has nearly tripled its late-stage pipeline through internal development and acquisitions. That includes the $11.5 billion purchase of Acceleron, which brought pulmonary arterial hypertension drug Winrevair into the fold.

The Terns deal is the latest in that playbook.

Merck & Co., Inc., MRK

At the center of the acquisition is TERN-701, an experimental drug being tested for chronic myeloid leukemia. CML is a cancer that starts in the bone marrow and leads to the uncontrolled growth of leukemia cells.

In an early-stage study, TERN-701 posted a 75% major molecular response rate in previously treated CML patients. That number has drawn attention from analysts who see it as a possible rival to Novartis’ leukemia drug Scemblix.

The FDA granted TERN-701 Orphan Drug status for CML treatment in March 2024.

Deal Terms

Merck is offering $53 per share for Terns, a 6% premium to where the stock closed before the announcement. Terns stock rose 5.5% in premarket trading following the news.

The deal is expected to close in the second quarter of 2026. It will result in a charge of approximately $5.8 billion, or around $2.35 per share, hitting both quarterly and full-year financials.

Merck’s Broader Cancer Push

Last month, Merck announced plans to spin out a separate division focused entirely on its cancer business. The Terns acquisition fits squarely into that reorganization.

Merck has been deliberate about this transition. The company isn’t waiting for Keytruda’s patents to expire before acting — it’s been stacking deals and advancing pipeline candidates well in advance.

TERN-701 is not yet approved, but its early data and Orphan Drug designation make it one of the more closely watched leukemia candidates in development.

The FDA’s Orphan Drug tag was granted in March 2024 for CML treatment, giving Merck added regulatory benefits if the drug moves forward.

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