Merck acquires Terns Pharmaceuticals

What happened: On March 25, 2026, Merck & Co. Inc. (MRK) announced a definitive agreement to acquire Terns Pharmaceuticals, Inc. (TERN) for $53.00 per share, valuing the deal at approximately $6.7 billion. The acquisition, primarily financed with new debt, is expected to close in the second quarter of 2026, pending tender and regulatory approvals. The deal is centered around Terns' lead candidate, TERN-701, a potential "best-in-class" treatment for chronic myeloid leukemia (CML).

Market impact: The acquisition drove a significant increase in Terns' stock price, surging over 25% in March. Merck, a much larger peer, is expanding its oncology portfolio, which could intensify competition in the CML treatment space. The deal also signals Merck's strategy to prepare for the loss of exclusivity for its blockbuster drug, Keytruda, by investing in promising pipeline candidates.

What to watch next: Investors should monitor the tender offer's progress and regulatory approvals, with key catalysts being the tender offer's expiration (expected in late April) and regulatory clearances from the U.S. Federal Trade Commission (FTC) and other relevant authorities. Additionally, watch Merck's upcoming earnings releases (Q1 2026 on April 28) for any further details or updates on the acquisition's integration and impact on earnings guidance.