At a Glance
- Company: Merck & Co.; Terns Pharmaceuticals (NASDAQ: TERN)
- Location: New Jersey (Merck); Foster City, California (Terns)
- Deal value: $6.7B all-cash; $53 per share (31% premium to 60-day average)
- Focus area: TERN-701, oral allosteric BCR-ABL1 inhibitor for CML
- Next steps: Tender offer; deal close expected Q2 2026
What happened?
Merck agreed on 25 March 2026 to acquire Terns Pharmaceuticals in an all-cash deal valued at approximately $6.7 billion, or $53 per share. The offer represents a 31% premium to Terns’ 60-day average share price and a roughly sixfold increase from where the stock traded just six months ago. Both boards have approved the transaction, which is expected to close in Q2 2026 subject to a majority tender and regulatory clearance.
Why does it matter?
TERN-701 could be worth more than $4 billion at peak sales, according to analysts at BMO Capital Markets, representing a significant revenue opportunity as Merck faces the loss of exclusivity on its blockbuster immunotherapy Keytruda in 2028. The drug targets the same CML niche as Novartis’ Scemblix, which generated $1.285 billion in revenue last year, but appears to offer stronger efficacy and a more convenient daily dosing schedule that could disrupt the current treatment paradigm.
Who’s behind it?
Terns Pharmaceuticals was founded in 2018 with assets from Eli Lilly’s MASH and metabolic pipeline before pivoting to oncology. Merck CEO Robert Davis called TERN-701 “a potential best-in-class candidate” for CML and said the deal builds on Merck’s growing presence in haematology while diversifying its oncology portfolio. This is Merck’s third multi-billion dollar acquisition in the past year, following deals for Verona Pharma and Cidara Therapeutics.
How was it achieved?
TERN-701 is an oral allosteric inhibitor of BCR-ABL1, the abnormal fusion protein that drives CML, and was granted FDA Orphan Drug Designation in 2024. Phase 1/2 data reported in December 2025 showed a major molecular response rate as high as 75% at 24 weeks, with a tolerability profile that supports daily oral dosing, prompting William Blair analysts to describe the results as “unprecedented.”
What’s next?
Merck will initiate a subsidiary tender offer for Terns shares and is expected to close the deal in Q2 2026, after which it will oversee global development and regulatory filings for TERN-701. RBC Capital Markets noted that Merck’s willingness to acquire before dose escalation is complete signals high conviction, but also flagged that the price could attract competing bids from AbbVie or Bristol Myers Squibb.
What are people saying?
CEO Robert Davis: “Builds on our growing presence in haematology… further diversifies and strengthens our position in oncology.” BMO Capital Markets: “One of the best deals Merck has made since its spree began ahead of the Keytruda LOE.”