Merck & Company is reported to be close to finalising an all-cash acquisition of Terns Pharmaceuticals, with the transaction value running at roughly $6 billion. People familiar with the matter say the deal could close in the coming days and would place a premium on Terns' market capitalisation, which sits at about $5.3 billion.
The target, Terns Pharmaceuticals, is developing a treatment aimed at chronic myeloid leukaemia (CML), a relatively rare cancer that affects blood and bone marrow. Terns' leading candidate is positioned to compete with Scemblix, a CML therapy marketed by a rival pharmaceutical company.
For Merck, the potential purchase represents another step to broaden its drug pipeline as pressure mounts from the looming loss of exclusivity for Keytruda, its blockbuster oncology medicine. Keytruda currently generates about $30 billion in annual sales and could face the loss of exclusivity as early as 2028. Strengthening the pipeline through acquisitions has been a clear element of Merck's recent strategy.
Merck has moved quickly on acquisition opportunities in recent months, having completed purchases including Verona Pharma for $10 billion and Cidara Therapeutics for $9.2 billion last year. These transactions form part of the company's effort to offset anticipated revenue declines tied to future patent expiries.
Details on the proposed Terns transaction indicate the price is set to deliver shareholders a premium to the company's current market value. The offer is all-cash and could be finalised shortly, according to the people familiar with the deliberations.
From a market perspective, the acquisition - if completed - would add a CML-targeted asset to Merck's oncology portfolio and place Terns' investigational therapy in the hands of a larger commercial and development organization. The deal exemplifies active consolidation in the pharmaceutical sector as firms seek to replenish pipelines amid patent cliffs and competitive pressures.
There remain open questions about timing and formal announcement. Those close to the potential transaction indicate the final steps toward a definitive agreement could happen in the near term, but no additional terms or regulatory outcomes have been disclosed publicly.
Summary
Merck is approaching completion of an all-cash acquisition of Terns Pharmaceuticals valued at about $6 billion, above Terns' roughly $5.3 billion market cap. The deal would bring a CML-focused asset into Merck's portfolio as the company seeks pipeline growth ahead of possible Keytruda patent expiry.
- Strategic context - The move fits Merck's recent pattern of acquisitions to shore up its drug pipeline.
- Target focus - Terns' lead asset targets chronic myeloid leukaemia and could compete with an existing CML drug marketed by a rival.
- Financials - The proposed transaction is all-cash and would value Terns above its current market capitalization.
Key sectors impacted: Pharmaceuticals, healthcare, and capital markets.