Merck Strikes $6.7 Billion Deal for Terns Pharmaceuticals to Expand Cancer Portfolio
Merck is bulking up its portfolio ahead of its best-selling cancer drug Keytruda losing patent protection in 2028.
Merck to buy Terns Pharmaceuticals for $6.7 billion to boost cancer pipeline
Merck announced on Wednesday that it has agreed to acquire Terns Pharmaceuticals in a deal valued at approximately $6.7 billion, as the pharmaceutical giant moves aggressively to strengthen its oncology portfolio. The acquisition comes as Merck faces the looming threat of losing patent exclusivity on Keytruda, its blockbuster cancer immunotherapy that has become the world's top-selling drug, with revenues exceeding $25 billion annually.
Under the terms of the agreement, Merck will acquire all outstanding shares of Terns Pharmaceuticals at a significant premium to the company's recent trading price. Terns has been developing a promising pipeline of therapeutic candidates targeting various forms of cancer, and Merck views these assets as complementary to its existing oncology research efforts. The deal is expected to close in the coming months, subject to regulatory approvals and customary closing conditions.
The acquisition is part of a broader strategy by Merck to prepare for the patent cliff facing Keytruda, which is set to lose its exclusivity in 2028. Once generic and biosimilar competitors enter the market, Merck could see a dramatic decline in revenue from the drug that has been the cornerstone of its financial performance for years. The company has been actively pursuing deals and partnerships to diversify its cancer treatment portfolio and ensure sustained growth beyond the Keytruda era.
Industry analysts have noted that Merck is not alone in its pursuit of acquisitions to offset upcoming patent losses, as several major pharmaceutical companies are engaged in similar dealmaking. However, the size and frequency of Merck's recent transactions underscore the urgency with which the company is addressing its pipeline needs. Investors will be closely watching how Merck integrates Terns' assets and whether the combined research efforts can produce the next generation of breakthrough cancer therapies.