Merck, announced a definitive agreement to acquire Terns Pharmaceuticals, Inc., a clinical-stage oncology company. Under the agreement, Merck will acquire Terns through a subsidiary for $53 per share in cash, valuing the company at approximately $6.7 billion in equity. After accounting for acquired cash, the deal represents a net value of about $5.7 billion. The offer also reflects a 31% premium to Terns’ 60-day volume-weighted average stock price and a 42% premium to the 90-day average, calculated as of March 24, 2026. The acquisition marks another strategic step by Merck to strengthen its presence in oncology and expand its pipeline of innovative cancer therapies.
Focus on Promising CML Drug Candidate
A key driver behind the acquisition is TERN-701, Terns’ lead drug candidate designed for the treatment of chronic myeloid leukemia (CML). The investigational therapy is an oral allosteric BCR::ABL1 tyrosine kinase inhibitor (TKI) currently being evaluated in the Phase 1/2 CARDINAL clinical trial (NCT06163430). The trial focuses on patients with Philadelphia chromosome-positive (Ph+) chronic phase CML who have previously received at least one TKI therapy and experienced treatment failure, intolerance, or suboptimal response. Notably, the U.S. Food and Drug Administration (FDA) granted Orphan Drug Designation to TERN-701 in March 2024, highlighting its potential significance for patients with rare diseases such as CML.
Merck Highlights Strategic Value of the Deal
Merck leadership emphasized that the acquisition aligns with the company’s broader strategy to expand its oncology capabilities. Robert M. Davis, Chairman and Chief Executive Officer of Merck, stated, “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. This transaction further diversifies and strengthens our position in oncology as we continue to look for opportunities to broaden our portfolio into other therapeutic areas.”
Terns Leadership Welcomes Collaboration
Terns Pharmaceuticals highlighted the potential benefits of combining its research expertise with Merck’s global development capabilities. Amy Burroughs, Chief Executive Officer of Terns, said, “This acquisition reflects our team’s deep commitment to innovation in oncology and developing high-impact medicines. By working together, we will advance TERN-701, leveraging the deep expertise and significant resources at Merck, a global biopharmaceutical leader with a proven track record of delivering cancer breakthroughs”. She also acknowledged the contributions of researchers, investigators, and patients involved in the development of the therapy.
Early Clinical Results Show Encouraging Outcomes
Clinical studies conducted so far suggest that TERN-701 may offer promising therapeutic potential. Early trial data have demonstrated encouraging rates of major molecular response and deep molecular response within 24 weeks of treatment. Importantly, these responses were observed even among patients with high disease burden who had previously undergone multiple treatment lines, including those treated with other allosteric TKIs.
The therapy has also demonstrated a manageable safety profile, with most treatment-related adverse events reported as low grade. Severe adverse events and treatment discontinuations have remained relatively low, while researchers observed no clinically meaningful changes in blood pressure and only limited cases of lipase elevation.
Addressing Unmet Needs in Chronic Myeloid Leukemia
According to Dr. Dean Y. Li, President of Merck Research Laboratories, informed that advances in targeted therapies have significantly improved outcomes for CML patients. However, there remains a need for more effective and well-tolerated treatment options. “The first approval of a BCR::ABL1 tyrosine kinase inhibitor 25 years ago transformed the prognosis for many patients with chronic myeloid leukemia. Despite new therapeutic options, there is still a need for innovative therapies that deliver faster molecular responses and improved disease control,” he said. Dr. Li added that TERN-701’s novel mechanism of action could potentially provide a differentiated treatment option for certain CML patients.
Transaction Structure and Expected Timeline
Both Merck’s and Terns’ Boards of Directors have approved the transaction. Under the merger agreement, Merck will acquire all outstanding shares of Terns through a tender offer initiated by a Merck subsidiary. The acquisition remains subject to several regulatory and shareholder conditions. These include approval by a majority of Terns’ shareholders and the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, along with other customary closing conditions. Merck expects the transaction to close in the second quarter of 2026. As per the press release, overall, the acquisition reinforces Merck’s strategy to strengthen its oncology pipeline, accelerate innovation in cancer therapies, and address unmet medical needs in hematologic malignancies such as chronic myeloid leukemia.
