Merck Acquires Terns Pharmaceuticals for $6.7 Billion to Bolster Cancer Pipeline
Merck will acquire Terns Pharmaceuticals for $6.7 billion to bolster its cancer pipeline ahead of Keytruda's 2028 patent expiration. The deal gives Merck access to TERN-701, an oral tyrosine kinase inhibitor for chronic myeloid leukemia. Merck projects over $70 billion in commercial opportunities from its pipeline by the mid-2030s.
Merck has announced the acquisition of US biotech Terns Pharmaceuticals for $6.7 billion. The pharma giant will purchase Terns for $53 per share in cash, for an equity value of around $6.7 billion, with the deal expected to close in the second quarter. The proposal represents a six percent premium compared with Terns' closing price on Tuesday, though Merck noted the bid is roughly 31% above the biotech's mean stock price during the last two months.
If the deal goes through, Merck will acquire Tern's lead asset, the oral tyrosine kinase inhibitor TERN-701. The drug is currently in early-phase trials, with positive results suggesting it could threaten the dominance of Novartis' Scemblix, which is expected to generate more than $4 billion in peak yearly sales. Terns has a mid-stage chronic myeloid leukaemia drug which Merck will be keen to get its hands on.
Keytruda, Merck's flagship immunotherapy drug, will lose its patent in 2028 and so the company has been manoeuvring to try and bolster its cancer pipeline. The company projects more than $70 billion in potential non-risk-adjusted commercial opportunities from its current pipeline by the mid-2030s. This figure is more than twice the prior peak consensus sales estimate of $35 billion for Keytruda in 2028 and represents a $20 billion increase from what the company had expected just a year ago.
Merck is pinning hopes on its new products, key pipeline progress and the expansion of the commercial portfolios through recent mergers and acquisitions to deliver sustainable growth in the post-Keytruda period. In 2025, the company invested $9.2 billion in Cidara Therapeutics, the maker of a preventive flu medication and $10 billion in Verona Pharma, which develops a treatment for lung disease.
Merck's new products with blockbuster potential are its 21-valent pneumococcal conjugate vaccine, Capvaxive, and pulmonary arterial hypertension drug, Winrevair. Capvaxive and Winrevair recorded sales worth $759 million and $1.4 billion, respectively, in 2025. Another new product, Welireg, a novel HIF-2α inhibitor approved for treating various types of cancer indications, generated sales worth $716 million in 2025.
The company is seeing a strong launch for Ohtuvayre, a first-in-class maintenance therapy for chronic obstructive pulmonary disease, with multibillion-dollar commercial potential. Added to the portfolio through the 2025 acquisition of Verona, the drug generated $178 million in fourth-quarter 2025 sales. Merck recently acquired Cidara Therapeutics, which added the latter's lead pipeline candidate, MK-1406, a first-in-class, long-acting, strain-agnostic antiviral agent currently being evaluated in late-stage studies for the prevention of seasonal influenza.
Keytruda faces competition from other PD-L1 inhibitors, including Bristol Myers' Opdivo, Roche's Tecentriq and AstraZeneca's Imfinzi. Bristol Myers recorded $10.05 billion in Opdivo sales in 2025, up 8% year over year. Tecentriq generated CHF 3.56 billion in sales in 2025, increasing 3% year over year. Imfinzi generated sales of $6.06 billion in 2025, up 28%, driven by demand growth in bladder and liver cancer indications.