Key Highlights
- Merck to acquire Terns Pharmaceuticals in transaction valued at $6.7 billion
- Transaction centers on TERN-701, a clinical-stage drug candidate for chronic myeloid leukemia
- Purchase price set at $53 per share, representing 6% premium over previous closing price
- Early clinical data showed TERN-701 achieved 75% major molecular response in patients
- Transaction anticipated to finalize in Q2 2026 with expected ~$5.8 billion charge
Merck revealed on Wednesday its plans to purchase Terns Pharmaceuticals in a transaction valued at up to $6.7 billion. This strategic acquisition represents Merck’s ongoing efforts to expand its drug development portfolio ahead of anticipated patent expiration for Keytruda, currently the globe’s top-selling prescription medication, expected later in the decade.
Merck agreed to buy Terns Pharmaceuticals in a deal valuing the drugmaker at $6.7 billion https://t.co/9ufVsutvhh
— Bloomberg (@business) March 25, 2026
Keytruda brought in over $30 billion during 2025 and represented approximately half of Merck’s overall revenue. The impending loss of market exclusivity for this blockbuster drug presents a significant challenge, prompting Merck to aggressively prepare for the transition.
Since 2021, the pharmaceutical giant has expanded its late-stage development portfolio by nearly threefold through a combination of internal research and strategic acquisitions. This expansion included the $11.5 billion acquisition of Acceleron, which added Winrevair, a treatment for pulmonary arterial hypertension, to its portfolio.
The Terns transaction follows this established strategy.
The centerpiece of this acquisition is TERN-701, an investigational therapy currently in development for chronic myeloid leukemia. CML is a blood cancer originating in bone marrow that causes abnormal proliferation of white blood cells.
Early clinical trials showed TERN-701 achieved a 75% major molecular response rate among CML patients who had received prior treatments. This impressive result has captured the attention of industry analysts who view the drug as a potential competitor to Scemblix, Novartis’ established leukemia therapy.
The FDA designated TERN-701 with Orphan Drug status for CML in March 2024.
Transaction Details
Merck has proposed $53 per share to acquire Terns, marking a 6% premium above the stock’s closing price prior to the announcement. Following the disclosure, Terns shares climbed 5.5% during premarket trading.
The transaction is projected to complete during the second quarter of 2026. Merck anticipates recording a charge of roughly $5.8 billion, equivalent to approximately $2.35 per share, which will affect both quarterly and annual financial results.
Expanding Merck’s Oncology Focus
Last month, Merck unveiled plans to establish a separate entity dedicated exclusively to its oncology business. The Terns acquisition aligns directly with this corporate restructuring initiative.
Merck has approached this transformation methodically. Rather than waiting for Keytruda’s patent protection to lapse, the company has proactively pursued multiple transactions and advanced numerous pipeline assets.
While TERN-701 has not yet received regulatory approval, its encouraging preliminary data combined with Orphan Drug status have positioned it as one of the most anticipated leukemia therapies currently under development.
The FDA awarded the Orphan Drug designation in March 2024 specifically for CML treatment, providing Merck with additional regulatory advantages should the drug progress toward commercialization.
