Merck announced its acquisition of Terns Pharmaceuticals for $6.7 billion, offering $53 per share in cash, which represents a 6% premium to Tuesday's closing price according to CNBC's calculations [1]. This marks Merck's third multibillion-dollar acquisition in the past year as the company seeks to expand its portfolio ahead of the anticipated loss of patent protection for its best-selling cancer drug, Keytruda, in 2028 [1].
Terns Pharmaceuticals is developing a medicine for a type of leukemia that analysts believe could become a multibillion-dollar drug and potentially rival Novartis' Scemblix [1]. Investor excitement has surged over Terns' experimental drug, which demonstrated promising results in an early trial late last year [1]. As a result, Terns' stock has skyrocketed over the past year, with shares rising 5.3% in premarket trading on Wednesday and up as much as 15% in earlier trading following media reports about the impending deal [1]. Merck's stock remained largely flat in premarket trading [1].
The deal is expected to close in the second quarter [1].
CONCLUSION
Merck's acquisition of Terns Pharmaceuticals for $6.7 billion underscores its strategic push to strengthen its cancer drug pipeline ahead of Keytruda's patent expiration. The market responded positively to Terns, reflecting investor confidence in its promising leukemia treatment, while Merck's shares remained stable. This high-impact deal positions Merck to potentially compete with Novartis in the leukemia drug market.