Merck To Acquire Terns In $6.7B Deal – Signaling Fresh Push In Competitive Cancer Drug Race

• The acquisition centers on Terns’ oral CML treatment, TERN-701, currently in mid-stage clinical trials.
• TERN-701 received orphan drug designation in 2024, highlighting its potential for the treatment of rare leukemias.
• The deal is expected to be completed in the second quarter of 2026.

Merck & Co. Inc. (MRK) has struck a multibillion-dollar deal to expand its oncology pipeline, agreeing to acquire clinical-stage biotech firm Terns Pharmaceuticals Inc. (TERN) for $53 per share in cash, at an approximate $6.7 billion valuation. 

The offer represents a 6% premium over Terns’ closing price as of Tuesday. 

Focus On Cancer Drug Development

Central to the acquisition is Terns’ experimental therapy, TERN-701, an oral treatment targeting specific mutations linked to chronic myeloid leukemia. The drug candidate is currently under evaluation in mid-stage clinical trials. 

“The acquisition of Terns builds on our growing presence in hematology with TERN-701, a potential best-in-class candidate for the treatment of certain patients with chronic myeloid leukemia.”

-Robert M. Davis, Chairman and CEO, Merck

Following the announcement, Terns Pharmaceuticals’ stock traded over 4% higher in Wednesday’s premarket. On Stocktwits, retail sentiment around the stock flipped to ‘bullish’ from ‘neutral’ territory the previous day amid ‘high’ message volume levels. 

Regulatory Momentum And Trial Outcomes

U.S. regulators granted TERN-701 orphan drug status in 2024, signaling its potential as a treatment for a rare form of leukemia. Early trial findings have shown encouraging outcomes, including meaningful molecular responses within months of treatment.

“Based on early clinical evidence, TERN-701, a novel allosteric BCR::ABL1 inhibitor, may have the potential to provide a meaningfully differentiated option for certain patients living with CML,” said Dean Y. Li, President, Merck Research Laboratories.

The companies anticipate finalizing the acquisition deal in the second quarter of 2026.

MRK stock has gained over 10% year to date. 

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