Merck makes a big move into new cancer treatments with a $6.7 billion buyout deal
By Tomi Kilgore
Merck to pay a 6% premium to buy the outstanding shares of Terns Pharmaceuticals, which is developing an oral treatment for leukemia
Merck to spend $6.7 billion to buy Terns Pharmaceuticals, which is developing an oral treatment for leukemia.
Merck is making a big push into new cancer treatments, with the announcement Wednesday of a $6.7 billion deal to buy Terns Pharmaceuticals.
The deal comes as Merck (MRK) is within a few years facing the end of patent protection for its blockbuster cancer drug Keytruda, which had sales of $31.64 billion in 2025 - nearly half of total sales.
"This transaction further diversifies and strengthens our position in oncology as we continue to look for opportunities to broaden our portfolio into other therapeutic areas," said Merck CEO Robert Davis.
Terns (TERN) is developing an oral "potential best-in-class candidate" to treat certain patients with chronic myeloid leukemia, which is currently being evaluated in Phase 1/2 trials. The drug candidate - TERN-701 - was granted orphan-drug designation by the U.S. Food and Drug Administration in March 2024, which provides incentives to develop treatments for rare diseases.
Terns shares jumped 5.2% into record territory in premarket trading, and Merck's stock gained 0.4%.
Under terms of the buyout deal, Merck will pay $53 for each Terns share outstanding, representing a 6% premium to Tuesday's closing price of $50.
Prior to the deal announcement, Terns's stock had rallied 23.8% in 2026 and 1,406% over the past 12 months. The Financial Times had reported late Tuesday that a deal was imminent.
The deal is expected to close in the second quarter of 2026, with Merck anticipating it will record a charge of about $5.8 billion, or $2.35 a share.
Merck's stock has gained 10.6% in 2026, while the S&P 500 index SPX has slipped 4.2%.
-Tomi Kilgore
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
03-25-26 0735ET
Copyright (c) 2026 Dow Jones & Company, Inc.The articles, information, and content displayed on this webpage may include materials prepared and provided by third parties. Such third-party content is offered for informational purposes only and is not endorsed, reviewed, or verified by Morningstar.
Morningstar makes no representations or warranties regarding the accuracy, completeness, timeliness, or reliability of any third-party content displayed on this site. The views and opinions expressed in third-party content are those of the respective authors and do not necessarily reflect the views of Morningstar, its affiliates, or employees.
Morningstar is not responsible for any errors, omissions, or delays in this content, nor for any actions taken in reliance thereon. Users are advised to exercise their own judgment and seek independent financial advice before making any decisions based on such content. The third-party providers of this content are not affiliated with Morningstar, and their inclusion on this site does not imply any form of partnership, agency, or endorsement.
Popular
4 Stocks to Buy for the Long-Term While They’re Still Undervalued
6 ETFs To Diversify Away From AI
Why This Vanguard ETF Is One of the Best
The Best AI Stocks to Buy Now
United States