Merck Terns Acquisition Strengthens CML Pipeline
Merck Terns acquisition adds an oral CML candidate and refocuses oncology M&A valuation and trader positioning as Keytruda nears patent expiry.
KEY TAKEAWAYS
- Merck agreed to acquire Terns for $53.00 per share, valuing Terns at about $6.7 billion.
- The deal adds TERN-701, an oral allosteric BCR-ABL inhibitor in Phase 1/2 for CML.
- Merck framed the purchase as bolstering oncology ahead of Keytruda's 2028 patent expiry.
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Merck & Co. (MRK) on March 25, 2026 announced the acquisition of Terns Pharmaceuticals (TERN) to add an oral chronic myeloid leukemia (CML) candidate, aiming to bolster its oncology pipeline as Keytruda approaches patent expiry in 2028.
Deal Terms and Clinical Development
Merck agreed to acquire Terns for $53.00 per share in cash, valuing the company at about $6.7 billion in equity and $5.7 billion net of acquired cash, according to a press release. The all-cash transaction will be executed through a Merck subsidiary under a definitive agreement and is subject to customary regulatory approvals.
Terns’ lead asset, TERN-701, is an investigational oral allosteric BCR-ABL1 tyrosine kinase inhibitor in Phase 1/2 development for certain CML patients. The ongoing CARDINAL trial has shown durable responses and low rates of treatment discontinuation due to serious adverse events. A pivotal trial is expected to begin around the end of 2026.
TERN-701 is positioned to compete directly with Novartis’s Scemblix (asciminib). Early data suggest TERN-701 may offer higher molecular response rates, a cleaner safety profile without pancreatic toxicity, and once-daily dosing with or without food, unlike Scemblix, which requires empty-stomach administration.
Strategic Context and Market Impact
Merck framed the acquisition as part of its effort to strengthen its hematology and oncology pipeline ahead of Keytruda’s 2028 patent expiration. Keytruda generated roughly $29.5 billion to $32 billion in annual revenue in recent years.
Novartis’s Scemblix recorded about $1.3 billion in sales in 2025 and is projected to reach peak sales of up to $4 billion. Terns closed on March 24 with a market capitalization near $5.3 billion, implying a roughly 13% premium to pre-announcement trading levels.
This deal follows Merck’s recent acquisitions of Verona Pharma for $10 billion and Cidara Therapeutics for $9.2 billion in 2025, reflecting an accelerated M&A push in oncology.
Terns also has metabolic programs that Merck may advance, including TERN-501, a thyroid hormone receptor beta (THR-β) agonist for obesity and fatty liver disease, and TERN-801, a glucose-dependent insulinotropic polypeptide receptor (GIPR) antagonist for weight loss. Both were previously slated for out-licensing. An earlier obesity program, TERN-601, an oral GLP-1 agonist, was shelved in 2025 after being deemed commercially uncompetitive.
