Merck & Co. is spending billions of dollars to bolster its cancer drug portfolio, announcing Wednesday plans to acquire Terns Pharmaceuticals for a medicine that could disrupt treatment for a type of blood malignancy.
Per deal terms, Merck will pay $53 per share in cash for Terns, an offer that values the company at about $6.7 billion overall. Compared to Terns’ closing price on Tuesday, the proposal represents only a 6% premium, one of the lowest paid for a publicly traded drugmaker in recent years, according to BioPharma Dive data. But Terns’ share price has also skyrocketed over the last year and climbed about 25% since the start of 2026 alone. Merck noted how the bid is roughly 31% higher than Terns’ mean stock price over the last two months, and a 42% premium when averaging out the last three months.
News of the pending acquisition was first reported by The Financial Times.
The deal hands Merck a treatment that has the chance to challenge multiple established medicines in the treatment of chronic myeloid leukemia, a slow-growing cancer of the blood and bone marrow.
The drug, a type of targeted, oral treatment called TERN-701, is currently being studied in an early-stage trial. Results from that trial, presented at the American Society of Hematology meeting last year, have suggested TERN-701 could threaten the dominance of Novartis’ Scemblix, a medicine expected to generate more than $4 billion in peak yearly sales. Terns’ drug has “demonstrated unequivocal improvement in both efficacy and safety,” with the potential for more convenient dosing, Wiliam Blair analyst Andy Hsieh wrote in a Wednesday note to clients.
“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,” said Dean Li, Merck’s research chief, in a statement. Early evidence shows TERN-701 “may have the potential to provide a meaningfully differentiated option for certain patients living with CML.”
For Merck, the deal is the latest move in a concerted push to prepare for when Keytruda, its top moneymaker, loses patent exclusivity later this decade. Last year, the company spent $9.2 billion on Cidara Therapeutics, the maker of a preventive flu medication, and $10 billion on Verona Pharma for a lung disease treatment. It had also reportedly been mulling an acquisition of cancer drug developer Revolution Medicines before deal talks fell apart.
Those purchases have given Merck what its CEO Rob Davis recently referred to as the “broadest and widest pipeline” the company has had in years. Merck is hoping this pipeline will help it reach $70 billion in annual sales next decade, after Keytruda’s patent loss.
Adding Terns’ drug to the mix is “strategically sound and incrementally positive” for Merck, showing its “willingness to pursue differentiated oncology assets early,” wrote RBC Capital Markets analyst Trung Huynh.
Still, Hyunh acknowledged how the deal’s small premium “opens the door” for competing offers. Terns would also be a strategic fit for AbbVie or Bristol Myers Squibb, for instance.
Merck “has gotten out ahead of the competition in this deal, but we wouldn't rule out a competitive process given the potential to bring in a differentiated, best-in-class oncology asset at reasonable cost,” he added.
Terns has two other drugs for cardiometabolic disease and obesity its pipeline. The company lists both as "available for partnering" on its website, and Merck didn't mention either in its statement Wednesday.
