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Rahway-based pharma giant Merck finalized its $6.7 billion acquisition of Terns Pharmaceuticals.

When the deal closed May 5, the California-headquartered oncology company became a wholly owned subsidiary of Merck, according to a press release. After paying $53 per share in cash, Merck now owns 100% of Terns. Additionally, Terns’ stock is no longer traded on the market.

As part of the transaction, Merck gained access to an experimental drug. Currently under development, TERN-701 treats chronic myeloid leukemia, a slow-growing cancer of the blood and bone marrow.

TERN-701 is designed for patients whose disease has not responded to or cannot tolerate existing therapies. According to Merck Chairman and Chief Executive Officer Robert Davis, it “has the potential to become a differentiated treatment option.”

“The Terns acquisition reflects Merck’s continued focus on science-driven, value-enhancing business development aimed at bringing meaningful innovation to patients,” Davis said. “ … [W]e look forward to working with the Terns team to advance its clinical development.”

FDA designations

The U.S. Food and Drug Administration recently granted breakthrough therapy designation (BTD) to the Terns’ therapy for certain patients with the slow-growing cancer.

The FDA also previously awarded an Orphan Drug Designation for the treatment. The status gives special incentives for therapies under development for rare diseases.

Merck has been busy trying to boost its pipeline ahead of the 2028 patent expiration of its best-selling cancer drug Keytruda.

Within the past year, the company made two other multibillion-dollar acquisitions as part of a broader strategy to reduce dependence on Keytruda:

• Cidara Therapeutics and its experimental flu drug for $9.2 billion
• Respiratory drugmaker Verona Pharma for $10 billion

Those purchases give 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.