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Merck, known as MSD outside of the United States and Canada, announced the successful completion of the acquisition of Terns Pharmaceuticals, Inc. (Terns).
“The Terns acquisition reflects Merck’s continued focus on science-driven, value-enhancing business development aimed at bringing meaningful innovation to patients,” said Robert M. Davis, chairman and chief executive officer, Merck. “We believe TERN-701 has the potential to become a differentiated treatment option for certain patients with chronic myeloid leukaemia, and we look forward to working with the Terns team to advance its clinical development.”
TERN-701 was recently granted Breakthrough Therapy Designation (BTD) by the US Food and Drug Administration (FDA) for the treatment of adults with Philadelphia chromosome-positive chronic myeloid leukaemia (CML) in the chronic phase without the T315I mutation previously treated with two or more tyrosine kinase inhibitors (TKIs). The BTD designation for TERN-701 is based on data from the ongoing phase 1/2 CARDINAL trial (NCT06163430).
Transaction details:
Merck completed the cash tender offer, through a subsidiary, for all the outstanding shares of common stock of Terns at a purchase price of $53.00 per share, without interest and subject to any applicable tax withholding. As of the tender offer expiration at one minute after 11:59 p.m., Eastern Time, on May 4, 2026, 100,091,794 shares of Terns common stock were validly tendered and not validly withdrawn, representing approximately 86.36% of the total number of Terns’ issued and outstanding shares of common stock as of such date and time. All such shares have been accepted for payment in accordance with the terms of the tender offer, and Merck, on behalf of its subsidiary, will promptly pay for such shares.
Following the completion of the tender offer, Merck completed the acquisition of Terns through a merger of Merck’s wholly-owned subsidiary with and into Terns, with Terns being the surviving corporation, in which all shares of Terns common stock issued and outstanding at the effective time of the merger were converted into the right to receive cash equal to the $53.00 offer price per share, without interest and subject to any applicable tax withholding. At the completion of the merger, Terns became a wholly-owned subsidiary of Merck and Terns’ common stock will no longer be listed or traded on the Nasdaq Global Select Market.
The transaction is expected to be accounted for as an asset acquisition, resulting in a charge to research and development expense of approximately $5.8 billion, or approximately $2.35 per share, included in both second quarter and full year 2026 GAAP and non-GAAP results. Additionally, GAAP and non-GAAP EPS are expected to be negatively impacted by approximately $0.12 per share in 2026, representing costs associated with advancing TERN-701 and costs of financing.
TERN-701 is a novel investigational oral allosteric BCR::ABL1 tyrosine kinase inhibitor (TKI) designed to bind to the ABL myristoyl pocket, with a potentially best-in-disease profile that could improve upon existing treatments for certain patients with chronic myeloid leukaemia (CML).
Chronic myeloid leukaemia (CML) is a slow growing type of blood cancer that leads to an overproduction of white blood cells that accumulate in the blood and bone marrow, disrupting the production of healthy blood cells. CML is commonly associated with the Philadelphia chromosome, a translocation between chromosomes 9 and 22 that results in constitutive activation of the BCR::ABL1 fusion protein, which fuels cancer growth.
Merck is advancing a pipeline of haematology candidates targeting a diverse range of targets across leukaemias, lymphomas and myeloproliferative neoplasms. Candidates in phase 3 development include: bomedemstat (MK-3543), an investigational, orally available lysine-specific demethylase 1 (LSD1) inhibitor; nemtabrutinib (MK-1026), an investigational, non-covalent Bruton’s tyrosine kinase (BTK) inhibitor; and zilovertamab vedotin (MK-2140), an investigational antibody-drug conjugate (ADC) that targets receptor tyrosine kinase-like orphan receptor 1 (ROR1). Additionally, MK-1045, an investigational CD19xCD3 T-cell engager, is currently being evaluated in a phase 1b/2 trial.
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