Merck boosts cancer portfolio with US$6.7 billion Terns deal

A Merck logo is seen on scientist's lab coat in West Point, Pa., on Thursday. (AP / Matt Rourke)

Merck said on Wednesday it would buy biotech Terns Pharma for US$6.7 billion, as the drugmaker races to bolster its cancer pipeline ahead of the looming patent loss for blockbuster therapy Keytruda.

The U.S. drugmaker, which is set to lose patents for Keytruda later this decade, has nearly tripled its late-stage pipeline since 2021 through in-house development and big deals such as the $11.5 billion purchase of Acceleron for pulmonary arterial hypertension drug Winrevair.

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The deal gives Merck access to Terns’ experimental drug TERN-701, which is being tested to treat chronic myeloid leukemia, a cancer that starts in the bone marrow and causes the uncontrolled growth of leukemia cells.

Merck has offered $53 per share for Terns, representing a premium of six per cent to the stock’s last close. Terns stock rose 5.5 per cent before the bell.

In an early-stage study, TERN‑701 showed a 75 per cent major molecular response rate in previously treated leukemia patients, a result analysts say could position it as a potential successor to Novartis’ leukemia drug Scemblix.

In March 2024, the U.S. Food and Drug Administration granted Orphan Drug tag for TERN-701 for the treatment of CML.

The deal, expected to close in the second quarter of this year, will result in a charge of about $5.8 billion, or roughly $2.35 per share, which will be reflected in both quarterly and full-year results.

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Merck’s major growth driver Keytruda, approved for several forms of cancers, is the best-selling prescription medicine in the world. The treatment generated more than $30 billion in 2025 and accounted for nearly half of the company’s total revenue.

Last month, the company unveiled plans to create a separate division for its cancer business.

(Reporting by Siddhi Mahatole in Bengaluru; Editing by Sriraj Kalluvila)