Merck Buys Terns Pharma for $6.7B: Leukemia Drug Deal

Merck & Co. Announced Wednesday it will acquire Terns Pharmaceuticals for $6.7 billion, a move aimed at bolstering its cancer drug pipeline as its blockbuster immunotherapy, Keytruda, faces impending patent expiration.

The all-cash deal, valuing Terns at $53 per share, represents a 6% premium over the biotech firm’s closing price on Tuesday, according to STAT News. Shares of Terns surged in recent months, increasing six-fold, driven by the potential of its lead drug candidate, TERN-701 and speculation surrounding a potential acquisition.

TERN-701 is a small molecule drug currently in development for the treatment of chronic myeloid leukemia (CML). Merck hopes the drug will eventually compete with Novartis’ Scemblix, a leading treatment for CML, according to a LinkedIn post by Kyle LaHucik of Endpoints News.

The acquisition comes as Merck prepares for the loss of exclusivity for Keytruda in 2028. Keytruda is currently Merck’s top-selling drug, and the company is actively seeking to diversify its portfolio and secure future revenue streams. The Wall Street Journal reported the deal is intended to boost Merck’s drug pipeline ahead of Keytruda’s patent expiry.

Terns Pharmaceuticals was founded in 2018, initially focusing on treatments for fatty liver disease and obesity, acquiring three MASH drug candidates from Eli Lilly. The company maintains research and development operations in both the United States, and China.

According to Seeking Alpha, the $6 billion deal is an all-cash buyout intended to strengthen Merck’s cancer portfolio. The acquisition is subject to customary closing conditions.