Merck buys Terns Pharma for $6.7 billion to boost pipeline

Merck announced on Wednesday its intention to acquire Terns Pharmaceuticals, Inc. for $6.7 billion, marking the latest strategic move to bolster its oncology pipeline. The pharmaceutical giant is moving to diversify its revenue streams as it faces the looming loss of patent protection for its blockbuster therapy, Keytruda, later this decade. The deal offers $53 per share for Terns, representing a 6% premium over its most recent closing price. Keytruda remains a cornerstone of Merck's portfolio, generating more than $30 billion in 2025 and representing nearly half of the company's total revenue. With the loss of exclusivity approaching in 2028 within the United States, Merck has accelerated its acquisition strategy. Since 2021, the company has completed several multi-billion-dollar deals, including the $11.5 billion acquisition of Acceleron Pharma and a $2 billion agreement with Hansoh Pharmaceutical Group Company Limited for an experimental obesity treatment. Through this latest acquisition, Merck gains control of TERN-701, an experimental drug currently in testing for chronic myeloid leukemia (CML). Early-stage study results showed a 75% major molecular response rate in patients previously treated for the disease. Analysts suggest the drug could eventually compete with Scemblix, a leukemia therapy produced by NOVARTIS AG-2ND LINE. RBC Capital Markets analyst Trung Huynh highlighted the long-term potential of the asset. > If Terns delivers on efficacy and durability, multi-billion-dollar peak sales are realistic, as CML represents a large, durable market with a $20 billion global opportunity. The transaction is expected to close in the second quarter of the year, resulting in a charge of approximately $5.8 billion. While the deal is viewed as strategically sound by industry experts, some analysts noted that the relatively low premium could invite competing offers from other major pharmaceutical players, such as AbbVie Inc. or Bristol-Myers Squibb Company. In addition to its leukemia program, Terns is also developing treatments for obesity and metabolic liver diseases, further expanding Merck's reach into high-growth therapeutic areas.