Merck to Acquire Terns Pharmaceuticals: A Strategic Move in Hematology

In a significant development in the biopharmaceutical industry, Merck & Co Inc. (NYSE: MRK), also known as MSD outside the U.S. and Canada, has announced its intention to acquire Terns Pharmaceuticals, Inc. (Nasdaq: TERN) for $53.00 per share, translating to an approximate equity value of $6.7 billion. This acquisition, which equates to approximately $5.7 billion net of acquired cash, represents a premium of 31% over Terns' 60-day and 42% over its 90-day volume-weighted average stock price as of March 24, 2026.

Chairman and CEO Robert M. Davis emphasized the strategic importance of this acquisition, stating, "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."

At the heart of this acquisition is Terns’ lead candidate, TERN-701, an investigational oral allosteric BCR::ABL1 tyrosine kinase inhibitor (TKI). Currently under evaluation in the Phase 1/2 CARDINAL trial, TERN-701 targets patients with Philadelphia chromosome-positive (Ph+), chronic phase chronic myeloid leukemia (CML) who have had prior treatment failures or intolerances with existing TKIs. Notably, in March 2024, the U.S. Food and Drug Administration (FDA) granted Orphan Drug Designation for TERN-701, highlighting its potential impact on patient outcomes.

In early clinical trials, TERN-701 has demonstrated promising efficacy, with significant rates of major molecular response and deep molecular response observed by week 24. The data indicates that the treatment is well-tolerated, with low-grade adverse events and a minimal incidence of severe reactions, making it an attractive option in the competitive oncology landscape.

Amy Burroughs, CEO of Terns, expressed her enthusiasm about the partnership, stating, "This acquisition reflects our team’s deep commitment to innovation in oncology and developing high-impact medicines." She acknowledged the potential of TERN-701 and the resources Merck brings to further its development.

Dr. Dean Y. Li, President of Merck Research Laboratories, further elaborated on the significance of TERN-701, noting, "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."

The acquisition has received the green light from both Merck’s and Terns’ Boards of Directors. Under the merger agreement, Merck will acquire all outstanding shares of Terns, pending successful tendering of shares by a majority of Terns’ stockholders. The transaction is expected to close in the second quarter of 2026, subject to customary conditions, including antitrust reviews under the Hart-Scott-Rodino Antitrust Improvements Act.

Financially, the acquisition is anticipated to result in a charge of approximately $5.8 billion, or around $2.35 per share, reflected in both the second quarter and full-year 2026 GAAP and non-GAAP results.

As Merck continues to expand its hematology portfolio, this acquisition positions the company to enhance its competitive edge in the oncology sector. The integration of TERN-701 into Merck's existing pipeline of hematology candidates, which includes other promising treatments in various stages of development, signals a robust commitment to addressing unmet medical needs in blood cancers.

The acquisition aligns with Merck’s long-term strategy of leveraging scientific innovation to deliver impactful therapies to patients globally. Both companies plan to hold an investor call on March 25, 2026, to discuss the implications of the transaction and engage with stakeholders.

Merck's acquisition of Terns Pharmaceuticals marks a pivotal moment in the biopharmaceutical landscape, particularly within the field of hematology. With a focus on innovative treatments like TERN-701, Merck is set to reinforce its position as a leader in oncology, promising hope for patients battling chronic myeloid leukemia and potentially transforming therapeutic outcomes in this challenging domain.