Merck (NYSE:MRK), known as MSD outside the U.S. and Canada, has entered into a definitive agreement to acquire clinical-stage oncology firm Terns Pharmaceuticals (NASDAQ:TERN) for approximately $6.7 billion in equity value.
Under the terms of the deal, Merck will pay $53 per share in cash, representing a 42% premium over Terns’ 90-day volume-weighted average stock price as of March 24, 2026.
The acquisition is centered on Terns' lead candidate, TERN-701, an investigational oral allosteric BCR::ABL1 tyrosine kinase inhibitor (TKI).
Currently in Phase 1/2 clinical trials, TERN-701 is being developed for patients with Philadelphia chromosome-positive (Ph+) chronic myeloid leukemia (CML) who have shown resistance or intolerance to prior therapies.
The drug, which received FDA Orphan Drug Designation in March 2024, has demonstrated promising molecular response rates and a favorable safety profile in early data.
Merck Chairman and CEO Robert M. Davis noted that the deal builds on the company's growing presence in hematology and further diversifies its oncology franchise.
The transaction allows Merck to leverage its global scale and regulatory expertise to accelerate the development of TERN-701, aiming to provide a differentiated, well-tolerated option for CML patients who require faster and deeper molecular responses than current treatments provide.
The Boards of Directors of both companies have approved the merger, which will be executed via a tender offer for all outstanding Terns shares.
The deal is expected to close in the second quarter of 2026, subject to customary closing conditions and antitrust clearance.
Merck expects to record a charge of approximately $5.8 billion, or $2.35 per share, in its second-quarter and full-year 2026 results to account for the asset acquisition.