Merck has completed its acquisition of Terns Pharmaceuticals, adding TERN-701, a novel investigational oral treatment for chronic myeloid leukemia, to its oncology pipeline in a deal that will result in a charge to research and development expense of approximately $5.8 billion, or approximately $2.35 per share, reflected in both second quarter and full-year 2026 results.
Merck completed the cash tender offer at $53.00 per share, with approximately 86.36% of Terns shares validly tendered by the expiration deadline of May 4, 2026. All tendered shares have been accepted for payment, and following the merger, Terns became a wholly-owned subsidiary of Merck with its common stock delisted from the Nasdaq Global Select Market. The transaction is expected to negatively impact GAAP and non-GAAP EPS by approximately $0.12 per share in 2026, representing costs associated with advancing TERN-701 and financing.
TERN-701 is a novel investigational oral allosteric BCR::ABL1 tyrosine kinase inhibitor designed to bind to the ABL myristoyl pocket, targeting a potentially best-in-disease profile for patients with chronic myeloid leukemia. The U.S. Food and Drug Administration recently granted TERN-701 Breakthrough Therapy Designation for adults with Philadelphia chromosome-positive CML in the chronic phase who have been previously treated with two or more tyrosine kinase inhibitors and do not carry the T315I mutation. The designation is based on data from the ongoing Phase 1/2 CARDINAL trial.
The acquisition adds to Merck’s broader hematology pipeline, which includes three candidates in Phase 3 development: bomedemstat, an investigational LSD1 inhibitor; nemtabrutinib, a non-covalent BTK inhibitor; and zilovertamab vedotin, an antibody-drug conjugate targeting ROR1. A fourth candidate, MK-1045, a CD19xCD3 T-cell engager, is in Phase 1b/2 evaluation.
KEY QUOTES:
“The Terns acquisition reflects Merck’s continued focus on science-driven, value-enhancing business development aimed at bringing meaningful innovation to patients.”
“We believe TERN-701 has the potential to become a differentiated treatment option for certain patients with chronic myeloid leukemia, and we look forward to working with the Terns team to advance its clinical development.”
Robert M. Davis, Chairman and Chief Executive Officer, Merck
