Merck Acquires Terns Pharmaceuticals for $6.7 Billion

On March 25, 2026, Merck, known as MSD outside the United States andCanada, announced it has entered into a definitive agreement to acquire Terns Pharmaceuticals for $53.00 per share in cash, representing an approximate equity value of $6.7 billion.1 The price reflects a premium of roughly 31% to Terns' 60-day and 42% to its 90-day volume-weighted average stock price. Both companies' boards have approved the transaction, which is expected to close in the second quarter of 2026, pending antitrust clearance and a majority tender of Terns shares.

The deal centers on TERN-701, an investigational oral drug candidate that works by binding to the ABL myristoyl pocket, a mechanism distinct from the ATP-binding site targeted by most existing therapies.1 The acquisition signals continued industry investment in allosteric inhibition as a strategy for overcoming resistance in hematologic malignancies, a challenge that has defined much of the therapeutic evolution in this space since the first BCR::ABL1 inhibitor was approved 25 years ago.

"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," said Robert M. Davis, chairman and chief executive officer, Merck, in a press release.1 "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."

What Does the Clinical Data Tell Us So Far?

TERN-701 is currently being evaluated in the Cardinal trial, a global, multi-center, Phase I/II dose escalation and expansion study enrolling patients with Philadelphia chromosome-positive chronic phase chronic myeloid leukemia who had previously received at least one tyrosine kinase inhibitor and experienced treatment failure, suboptimal response, or intolerance.1 The dose escalation portion completed in January 2025 with no dose-limiting toxicities observed up to the maximum dose of 500mg once daily.

The dose expansion phase, initiated in April 2025, randomized patients to either 320mg or 500mg once daily cohorts of up to 40 patients each.1 In January 2026, the trial was expanded further to include approximately 20 patients with specific BCR::ABL1 resistance mutations, including T315I.

Encouraging rates of major molecular response and deep molecular response were observed by week 24, including in patients with high disease burden who had received multiple prior lines of therapy, among them those previously treated with an allosteric inhibitor.1 The safety profile to date has been characterized by predominantly low-grade treatment-emergent adverse events, a low rate of severe adverse events and discontinuations, no clinically meaningful changes in blood pressure, and low rates of lipase elevation.

"Based on early clinical evidence, TERN-701, a novel allosteric BCR::ABL1 inhibitor, may have the potential to provide a meaningfully differentiated option for certain patients living with chronic myeloid leukemia," said Dean Y. Li, MD, PhD, president, Merck Research Laboratories, in a press release.1

The FDA granted Orphan Drug Designation for TERN-701 for the treatment of chronic myeloid leukemia in March 2024, a regulatory milestone that carries development incentives relevant to teams planning submission timelines and manufacturing scale-up strategies.

Why Does This Acquisition Matter Beyond the Balance Sheet?

This deal reflects a broader pattern in tracking pipeline consolidation.1 Large-scale acquirers are moving earlier into clinical development, accepting Phase I/II data as a basis for multi-billion-dollar commitments when the mechanism and unmet need are sufficiently compelling. Chronic myeloid leukemia remains an area of genuine therapeutic need despite the field's progress. Resistance mutations, tolerability issues with existing agents, and the desire for faster and deeper molecular responses continue to drive demand for next-generation 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 significant need for innovative, well-tolerated therapies with faster time to onset of molecular response leading to deeper responses and better disease control," added Li.1

This transaction is expected to generate a charge of approximately $5.8 billion, or roughly $2.35 per share, recorded in both second quarter and full year 2026 results.1 Merck's existing hematology pipeline, which includes candidates in Phase III for leukemias, lymphomas, and myeloproliferative neoplasms, provides an organizational infrastructure into which TERN-701 development can be integrated.

"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 for patients who need them most," said Amy Burroughs, chief executive officer, Terns, in the press release.1 "I am immensely proud of the Terns team and our work towards making a difference for people living with chronic myeloid leukemia. Finally, we extend our heartfelt thanks to the investigators, patients, and community advocates whose dedication and support make the development of TERN-701 possible."

Beyond Oncology: Merck's Long-Term Vaccine Data Adds Context to Its R&D Ambitions

The Terns acquisition arrives as Merck continues to demonstrate the long-term value of its existing portfolio.2 At the EUROGIN International Multidisciplinary HPV Congress in Vienna from March 18-21, the company presented data showing sustained effectiveness of its human papillomavirus vaccines 14 and 18 years post-vaccination, respectively, alongside findings on HPV-related oropharyngeal cancers affecting both men and women. Merck is simultaneously defending mature franchises with decades-long efficacy data while acquiring early-stage assets like TERN-701. It reflects a pipeline strategy that balances near-term revenue protection with longer-horizon oncology bets.

References

1. Merck & Co., Inc. Merck to acquire Terns Pharmaceuticals, Inc., expanding its hematology pipeline with TERN-701, a novel candidate for chronic myeloid leukemia (CML). Rahway (NJ): Merck & Co., Inc.; Mar 25, 2026. Available from: https://www.merck.com/news/merck-to-acquire-terns-pharmaceuticals-inc-expanding-its-hematology-pipeline-with-tern-701-a-novel-candidate-for-chronic-myeloid-leukemia-cml/
2. Merck & Co., Inc. Merck to present new data reinforcing long-term efficacy of GARDASIL9 and GARDASIL at the EUROGIN International Multidisciplinary HPV Congress 2026. Rahway (NJ): Merck & Co., Inc.; March 16, 2026. Available from: https://www.merck.com/news/merck-to-present-new-data-reinforcing-long-term-efficacy-of-gardasil9-and-gardasil-at-the-eurogin-international-multidisciplinary-hpv-congress-2026/