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The basics:

• Merck acquires Terns Pharmaceuticals in $6.7B deal
• Adds TERN-701 – leukemia drug with early positive results
• Strengthens Merck’s hematology and oncology pipeline
• Acquisition diversifies portfolio ahead of Keytruda patent expiration

Rahway-based pharma giant Merck plans to spend $6.7 billion to purchase Terns Pharmaceuticals in an effort to boost its hematology pipeline.

As part of the deal, Merck gains access to an experimental drug under development to treat chronic myeloid leukemia, a slow-growing cancer of the blood and bone marrow.

The California-headquartered oncology company’s therapy is still in the early stages of clinical studies. However, Merck CEO Robert Davis believes the pill could serve as a “significant driver of growth in the next decade.”

TERN-701 is for patients whose disease has not responded to or cannot tolerate existing therapies. In March 2024, the U.S. Food and Drug Administration granted the drug Orphan Drug Designation. The FDA status gives special incentives for therapies under development for rare diseases.

Early clinical trial results show that many patients see significant reductions in cancer levels within 24 weeks, according to Tern. The drug has also shown effectiveness in harder-to-treat patients. That includes those with advanced CML who have already received multiple lines of prior therapy.

Both companies’ boards have approved the transaction. The parties expect to close in the second quarter of 2026, according to a March 25 press release.

Davis commented, “The acquisition of Terns builds on our growing presence in hematology with TERN-701, a potential best-in-class candidate for the treatment of certain patients with chronic myeloid leukemia.

“This transaction further diversifies and strengthens our position in oncology as we continue to look for opportunities to broaden our portfolio into other therapeutic areas.”

Losing a ‘Key’ drug

This marks the third multibillion-dollar acquisition for Merck over the past year, as the company looks to boost its pipeline before the 2028 patent expiration of its best-selling cancer drug Keytruda.

Merck received accelerated approval from the FDA in 2014 for Keytruda to treat advanced or unresectable melanoma. Since then, it has been cleared to treat more than 15 types of cancers. As the best-selling prescription drug in the world, Keytruda accounts for nearly half of Merck’s sales, CNBC noted.

Terns CEO Amy Buroughs said the deal with Merck reflects her team’s commitment to innovation in oncology and the development of high impact medicines.

“By working together, we will advance TERN-701, leveraging the deep expertise and significant resources at Merck, a global biopharmaceutical leader with a proven track record of delivering cancer breakthroughs for patients who need them most,” she said.

In an attempt to reduce dependence on Keytruda, Merck snatched up Cidara Therapeutics and its experimental flu drug for $9.2 billion. It also bought respiratory drugmaker Verona Pharma for $10 billion.

Those purchases have given Merck what Davis believes is its “broadest and widest pipeline” in years. The CEO recently said he hopes it will enable the company to reach $70 billion in annual sales within the next decade, according to BioPharma Dive.

In February, Merck announced a restructuring to help strengthen commercial execution and support a growing, diversified portfolio.