Merck completes US$6.7B acquisition of Terns Pharmaceuticals to strengthen the leukemia drug pipeline

USA—Merck & Co., known as MSD outside the United States and Canada, has completed its acquisition of Terns Pharmaceuticals in a transaction valued at approximately US$6.7 billion.

The move strengthens Merck’s hematology and oncology pipeline through the addition of TERN-701, an investigational therapy for chronic myeloid leukemia (CML), as the pharmaceutical giant continues to expand through science-focused acquisitions.

The acquisition follows Merck’s announcement in late March that it would acquire the California-based clinical-stage biotech company for US$53.00 per share, representing a significant premium over Terns’ recent average trading price.

The deal also came shortly after the expiration of the waiting period under the U.S. Hart-Scott-Rodino Antitrust Improvements Act, clearing a major regulatory hurdle ahead of closing.

Commenting on the acquisition, Merck chairman and chief executive officer Robert M. Davis said the transaction reflects the company’s continued commitment to science-driven, value-enhancing business development.

He noted that TERN-701 has the potential to become a differentiated treatment option for certain patients with chronic myeloid leukemia and said Merck looks forward to advancing its clinical development with the Terns team.

TERN-701 at the center of the deal

The acquisition centers on TERN-701, a novel oral allosteric BCR::ABL1 tyrosine kinase inhibitor designed to target the ABL myristoyl pocket.

The investigational therapy recently received Breakthrough Therapy Designation from the U.S. Food and Drug Administration for the treatment of adults with Philadelphia chromosome-positive chronic-phase CML who lack the T315I mutation and have previously received two or more tyrosine kinase inhibitors.

The designation was based on encouraging data from the ongoing Phase 1/2 CARDINAL trial, which is evaluating the therapy’s safety and efficacy in patients with relapsed or resistant disease.

Industry analysts view the designation as a significant regulatory milestone that could accelerate TERN-701’s development timeline.

Transaction structure and financial impact

Merck completed the acquisition through a cash tender offer conducted by a subsidiary.

As of the offer’s expiration on May 4, 2026, approximately 100.1 million shares, representing 86.36% of Terns’ outstanding common stock, had been validly tendered.

Following the tender offer, Merck finalized the acquisition through a merger that converted all remaining outstanding shares into the right to receive US$53.00 in cash per share.

Terns has now become a wholly owned subsidiary of Merck, and its common stock has ceased trading on the Nasdaq Global Select Market.

Merck said it expects to record a US$5.8 billion research and development charge, equivalent to about US$2.35 per share, in its second-quarter and full-year 2026 financial results.

The company also expects an additional earnings-per-share impact of approximately US$0.12 this year as it funds TERN-701’s continued clinical development and associated financing costs.