Merck acquires cancer biotech Terns in USD6b deal
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The news: Merck agreed to acquire California-based Terns Pharmaceuticals in a USD6 billion cash deal, as the New Jersey-based drug maker seeks to get ahead of the expiry of its oncology drug Keytruda’s patent.
The numbers: Under the terms of the transaction, Merck will acquire Terns for USD53 per share in cash for an approximate equity value of USD6.7 billion.
This equates to approximately USD5.7 billion net of acquired cash and represents an approximate premium of 31% to the 60-day and 42% to the 90-day volume-weighted average stock price on 24 March, 2026.
The context: Merck has been looking for new opportunities to drive growth before generic competition and lower prices for its cancer drug Keytruda’s patents begin expiring in 2028. Merck acquired Verona Pharma in a USD10 billion transaction last year, followed by the purchase of flu-prevention biotech Cidara Therapeutics for USD9.2 billion.
Terns has been developing pills to treat cancer, obesity and metabolic-liver diseases and its TERN-701 drug achieved promising study results for the treatment of a blood cancer known as chronic myeloid leukemia in 2025.
What they said: In a press release on the transaction, Robert M. Davis, chairman and CEO of Merck said: “This transaction further diversifies and strengthens our position in oncology as we continue to look for opportunities to broaden our portfolio into other therapeutic areas.”
The sources: Businesswire press release, WSJ, Bloomberg
