SLS Vs. TERN: Which Pharma Stock Has More Upside As Merck Eyes $6B Cancer Bet Ahead Of Keytruda Patent Cliff

• SLS and TERN are advancing leukemia therapies, with TERN-701 targeting CML and GPS positioned as a Phase 3 maintenance immunotherapy in AML.
• Sellas is approaching a Phase 3 Regal survival readout, a key catalyst investors are watching closely through 2026.
• Retail sentiment diverged, with TERN shifting to 'extremely bullish' while SLS moved to 'bearish.'

Shares of Sellas Life Sciences Group, Inc. (SLS) and Terns Pharmaceuticals, Inc. (TERN) drew retail attention on Wednesday as Merck reportedly neared a $6 billion deal for the latter, intensifying the race among smaller oncology players as investors hunt the next pipeline winners ahead of Keytruda’s 2028 patent cliff.

SLS stock slid 8% to its worst session in nearly two months, while TERN stock rose nearly 1%, marking its second consecutive day of gains.

Both companies are advancing leukemia therapies: Terns’ TERN-701 targets chronic myeloid leukemia (CML), while Sellas’ Galinpepimut-S (GPS) is being studied as a maintenance immunotherapy in acute myeloid leukemia (AML), with a Phase 3 readout ahead.

Merck Sees $70B Opportunity Beyond Keytruda Era

The deal, reported by the Financial Times, comes as Merck continues to prepare for Keytruda’s expected loss of exclusivity in 2028, while defending additional patent protections extending into 2029 and advancing its newer Keytruda QLEX formulation to transition patients ahead of biosimilar competition.

CEO Robert Davis said the company sees about $70 billion in commercial opportunities by the mid-2030s, reflecting a strategy that increasingly positions future launches as part of a broader oncology transition rather than relying on a single blockbuster therapy.

SLS Offers Higher Standalone Upside Than TERN

Despite takeover-driven momentum around Terns, analyst estimates tracked by Koyfin suggest SLS may currently offer the larger standalone upside.

SLS carries a 12-month average target of $8.67, implying a 73% upside potential from its last close. The stock holds a consensus analyst rating of 'Strong Buy', with one analyst assigning 'Buy', two assigning 'Hold.' 

By comparison, TERN carries a 12-month average target of $58.11, representing a 16% upside from current levels. The stock also holds a consensus 'Strong Buy' rating supported by two analysts assigning 'Strong Buy', nine assigning 'Buy', and none assigning 'Hold', 'Sell', or 'Strong Sell.'

While takeover expectations are currently shaping positioning in Terns, analyst targets suggest investors continue to view SLS as offering the larger catalyst-driven upside from present levels.

Sellas Calls 2026 ‘Pivotal Year’ Ahead Of Regal Readout

Investor positioning in SLS remains closely tied to its Phase 3 Regal trial evaluating GPS as a maintenance treatment for patients with AML whose disease returned and then remitted after additional therapy.

The event-driven study will reach final analysis once 80 survival events are recorded. The contract research organization monitoring the trial had logged 72 events as of late December, bringing the readout closer to the threshold required to trigger the final analysis.

CEO Angelos Stergiou said 2026 is shaping up to be a “pivotal year,” citing continued clinical execution, expansion into earlier treatment settings and its “strongest financial position” so far. Sellas ended 2025 with $71.8 million in cash and reported receiving an additional $42.6 million from warrant exercises early in 2026.

Terns’ Leukemia Drug Boosts Takeover Appeal

The reported takeover interest in Terns Pharmaceuticals comes amid growing demand for leukemia therapies as big pharma companies adjust their oncology portfolios ahead of the post-Keytruda transition cycle.

TERN-701 targets the abnormal BCR-ABL protein that drives CML, using a more precise approach designed to limit unwanted side effects seen with earlier treatments while maintaining strong effectiveness. Updated results from the Cardinal study also showed durable responses and relatively low rates of treatment discontinuation due to serious side effects.

How Did Stocktwits Users React?

On Stocktwits, retail sentiment toward SLS shifted to 'bearish' from the 'extremely bullish' zone over the past six months despite message volumes surging more than 400% over the past year. 

Meanwhile, sentiment toward TERN moved in the opposite direction, climbing to 'extremely bullish' from the 'bearish' zone over the past six months alongside a 25% increase in message activity over the last year.

Over the past year, SLS has climbed over 300%, while TERN has surged more than 1,300%, significantly outperforming its smaller-cap peer.

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