Merck has announced the acquisition of US biotech Terns Pharmaceuticals for $6.7bn.
In a statement released this morning, the pharma giant said it will purchase Terns for $53 per share in cash, for an equity value of around $6.7bn, with the deal expected to close in the second quarter.
However, the proposal represents only a six per cent premium compared with Terns' closing price on Tuesday, though Terns' share price has risen sharply in the past year, with Merck itself noting that the bid is roughly 31% above the biotech's mean stock price during the last two months.
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.
In 2025, the company invested $9.2bn in Cidara Therapeutics, the maker of a preventive flu medication and $10bn in Verona Pharma, which develops a treatment for lung disease.
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 $4bn in peak yearly sales).
Incorporating Terns' drug into its strategy would therefore be a wise decision for Merck.