Merck to Acquire Terns Pharma for $6.7 Bn to Strengthen Cancer Pipeline

The acquisition provides Merck access to Terns’ lead candidate, TERN-701, an experimental therapy currently being evaluated for chronic myeloid leukemia (CML), a type of cancer originating in the bone marrow.

Pharma major Merck will acquire biotech firm Terns Pharma for $6.7 billion to bolster its oncology pipeline ahead of looming patent expirations for its top-selling drug, Keytruda.

The acquisition provides Merck access to Terns’ lead candidate, TERN-701, an experimental therapy currently being evaluated for chronic myeloid leukemia (CML), a type of cancer originating in the bone marrow.

The drug has shown a 75% major molecular response rate in early-stage studies among previously treated patients, positioning it as a potential competitor in the leukemia treatment segment.

Merck has offered $53 per share for Terns, representing a 6% premium to its last closing price. Shares of Terns rose 5.5% in premarket trading following the announcement. The deal is expected to close in the second quarter of 2026.

TERN-701 has also received Orphan Drug designation from the U.S. Food and Drug Administration in March 2024 for the treatment of CML, supporting its development in a niche patient population.

The acquisition aligns with Merck’s broader strategy to expand its oncology portfolio. The company has significantly increased its late-stage pipeline since 2021 through a combination of internal development and acquisitions, including the $11.5 billion purchase of Acceleron.

Keytruda, Merck’s flagship immunotherapy, remains the company’s primary revenue driver, generating over $30 billion in 2025 and accounting for nearly half of total sales. However, with patent protections set to expire later this decade, the company is accelerating efforts to diversify its oncology offerings.

Merck recently also announced plans to establish a dedicated division for its cancer business, signaling a continued focus on oncology as a core growth area.

The Terns acquisition is expected to result in a charge of approximately $5.8 billion, or about $2.35 per share, which will be reflected in both quarterly and full-year financial results.

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