Merck Bets $6.7B on Terns to Take On Novartis in Leukemia Market
Merck to acquire Terns Pharmaceuticals, gaining TERN-701 for chronic myeloid leukemia treatment. Deal strengthens oncology pipeline ahead of Keytruda patent cliff.
Merck to buy Terns for $6.7B, taking a leukemia drug that could challenge Scemblix
Merck & Co. announced on Wednesday that it has agreed to acquire Terns Pharmaceuticals in a deal valued at approximately $6.7 billion, adding a promising chronic myeloid leukemia treatment to its oncology portfolio. Under the terms of the agreement, Merck will pay a significant premium over Terns' recent trading price, reflecting the high value the pharmaceutical giant places on the biotech company's lead asset. The acquisition is expected to close in the second half of 2025, pending regulatory approval and customary closing conditions.
At the center of the deal is TERN-701, an investigational allosteric BCR-ABL inhibitor being developed for the treatment of chronic myeloid leukemia. The drug has shown encouraging results in early-stage clinical trials and is positioned as a potential competitor to Novartis' Scemblix, which has already gained traction in the CML market since its approval. Analysts have noted that TERN-701's differentiated mechanism and promising efficacy data could allow it to carve out a meaningful share of the growing CML treatment landscape, which represents a multibillion-dollar commercial opportunity.
The acquisition comes as Merck faces mounting pressure from the approaching patent cliff for Keytruda, its blockbuster cancer immunotherapy that generated more than $25 billion in annual sales last year. With key patents set to expire later this decade, Merck has been actively pursuing deals to replenish its pipeline and offset the anticipated revenue decline. The Terns deal follows a series of strategic moves by Merck to bolster its oncology and broader therapeutic portfolios through acquisitions and licensing agreements.
Industry observers have largely praised the transaction as a strategic fit for Merck, though some have questioned the premium being paid for a drug still in clinical development. Terns Pharmaceuticals, which had also been advancing candidates in metabolic diseases, will see its pipeline fully absorbed into Merck's research and development operations. The deal underscores the intensifying competition among major pharmaceutical companies to secure next-generation cancer therapies as several top-selling drugs approach the end of their exclusivity periods.