Merck Expands Hematology Pipeline via USD 6.7 Billion Acquisition of Terns Pharmaceuticals
Merck (NYSE: MRK) has entered into a definitive agreement to acquire Terns Pharmaceuticals (Nasdaq: TERN), a clinical-stage oncology company, for USD 53.00 per share in an all-cash transaction valued at approximately USD 6.7 billion. The Merck Terns Pharmaceuticals acquisition positions the pharma company to consolidate its presence in hematology through TERN-701, an oral allosteric BCR::ABL1 tyrosine kinase inhibitor currently in Phase 1/2 development for chronic myeloid leukemia.
Deal Structure and Financial Terms
The transaction represents approximately USD 5.7 billion net of acquired cash and carries a premium of 31% to the 60-day and 42% to the 90-day volume-weighted average stock price as of March 24, 2026. The deal contains no disclosed milestone payments, contingent value rights, or earn-out provisions. Merck will execute the acquisition through a tender offer requiring a majority of Terns stockholders to tender their shares, with closing expected in Q2 2026 following expiration of the Hart-Scott-Rodino waiting period. The transaction will be accounted for as an asset acquisition, resulting in an approximately USD 5.8 billion charge (approximately USD 2.35 per share) recognized in both Q2 and full-year 2026 GAAP and non-GAAP results. The asset acquisition classification means the acquired in-process R&D will be expensed immediately rather than capitalized.
TERN-701: Mechanism and Clinical Status
TERN-701 is a BCR-ABL1 tyrosine kinase inhibitor designed to bind to the ABL myristoyl pocket, an allosteric site distinct from the ATP-binding domain targeted by earlier-generation TKIs. CML is driven by the Philadelphia chromosome, a translocation between chromosomes 9 and 22 that produces constitutive activation of the BCR::ABL1 fusion protein, which fuels malignant white blood cell proliferation. The compound is being evaluated in the CARDINAL trial (NCT06163430), a global multi-center dose escalation and expansion study enrolling patients with Ph+ chronic phase CML who experienced treatment failure, suboptimal response, or intolerance to at least one prior TKI. The dose escalation portion completed in January 2025 with no dose-limiting toxicities observed up to 500 mg QD. Dose expansion initiated in April 2025 across two cohorts (320 mg and 500 mg QD), and in January 2026 an additional cohort was added to evaluate activity against BCR::ABL1 resistance mutations including T315I, M244V, and F359I/C/V. The FDA granted Orphan Drug Designation for TERN-701 in CML in March 2024. Clinical data reported to date indicate rates of major molecular response and deep molecular response by week 24, including in patients with high disease burden who had received multiple prior therapy lines, with low rates of severe adverse events and discontinuations.
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