Merck to acquire Terns for $6.7bn in push to offset Keytruda patent loss

Merck & Co. has agreed to acquire Terns Pharmaceuticals for $6.7bn, as it seeks to strengthen its oncology pipeline ahead of looming patent expiries on its top-selling drug Keytruda.

The US group will pay $53 a share in cash, a modest premium to Terns’ recent trading price, with the deal expected to close in the second quarter. It marks Merck’s third multibillion-dollar acquisition in the past year, underscoring an increasingly acquisitive strategy.

The transaction centres on Terns’ experimental therapy for chronic myeloid leukaemia, which analysts believe could become a multibillion-dollar product and potentially compete with Scemblix, developed by Novartis.

Merck is betting the drug, still in early-stage trials, can address limitations in existing treatments, where a significant share of patients cycle through therapies without achieving durable responses.

Robert M. Davis said the acquisition reflected the company’s willingness to act on “compelling science”, positioning the candidate as a potential driver of growth in the next decade.

The deal forms part of a broader effort to reduce reliance on Keytruda, which generates more than $30bn in annual sales and is set to lose exclusivity from 2028. Merck has already deployed capital into a series of large transactions, as it looks to rebuild its pipeline and sustain growth beyond its flagship therapy.