MSD acquires Terns Pharmaceuticals for USD6.7B to challenge CML’s dominance

USA—MSD has agreed to acquire cancer specialist Terns Pharmaceuticals in a deal valued at USD6.7 billion, marking the drugmaker’s latest multibillion-dollar move to strengthen its oncology pipeline ahead of looming patent pressures.

Under the terms of the agreement, MSD will pay USD53 per share in cash, a 6% premium over Terns’ closing price of USD50 on March 24.

The transaction is expected to close in Q2 2026.

At the heart of the deal is TERN-701, an oral drug being developed to treat chronic myeloid leukaemia (CML), a type of blood cancer.

TERN-701 belongs to a class of drugs called BCR-ABL1 tyrosine kinase inhibitors (TKIs) and is currently in a Phase I/II clinical trial targeting patients with Philadelphia chromosome-positive CML who did not respond to at least one prior TKI therapy.

Although treatments for CML already exist — most notably Novartis’ Scemblix (asciminib), which Novartis projects could reach at least USD4 billion in peak annual sales — analysts believe TERN-701 could offer a meaningful step forward.

In a Phase I trial, the drug achieved an overall major molecular response (MMR) rate of 75% at week 24, with 64% of patients reaching MMR — more than double the response rate seen with Scemblix.

Beyond efficacy, TERN-701 also offers a convenient once-daily dosing schedule with no food restrictions, an advantage over Scemblix, which must be taken on an empty stomach.

William Blair analyst Andy Hsieh described the data as unprecedented in CML, noting that the compound demonstrated clear improvements in both efficacy and safety, along with better patient convenience.

He also argued that MSD’s offer undervalues TERN-701’s full potential, noting that the drug is well-positioned to disrupt the CML treatment landscape and challenge Novartis’ dominance.

Terns’ shares on the Nasdaq have climbed roughly 22.5% since the data readout in December 2025.

Filling the gap left by Keytruda

For MSD, this acquisition is part of a broader strategy to diversify its pipeline before its blockbuster immunotherapy Keytruda (pembrolizumab) loses patent protection.

The company acquired antiviral developer Cidara Therapeutics for USD9.2 billion in November, following its USD10 billion acquisition of cardio-pulmonary specialist Verona Pharmaceuticals in July 2025.

Commenting on the Terns deal, MSD CEO Robert Davis said the transaction further diversifies and strengthens the company’s position in oncology while also broadening its portfolio into other therapeutic areas.