Update: Rumour confirmed as MSD buys Terns for $6.7bn
MSD's glut of pipeline-boosting deals in the build-up to a looming patent cliff has continued with a $6.7 billion bid to acquire Terns Pharma.
The Financial Times first reported that talks between the companies were at an advanced stage, with an all-cash deal poised to be announced in the coming days, and MSD has just confirmed its $53-per-share offer, a 31% premium on Terns' average share price in the last 60 days. The $6.7 billion purchase price is offset by the biotech's current cash reserves of around $1 billion.
MSD – known as Merck & Co in the US and Canada – has been bolting on programmes to its pipeline for the last few years as it braces for the loss of patent protection for cancer immunotherapy Keytruda (pembrolizumab), the world's top-selling drug with sales of nearly $32 billion last year, from 2028.
Buying Terns will give it ownership of TERN-701, an oral BCR-ABL inhibitor that is due to start a pivotal trial in chronic myeloid leukaemia (CML) around the end of 2026 and promises to improve on rival therapies, like Novartis' market-leading STAMP inhibitor Scemblix (asciminib), in efficacy, safety, and convenience.
Novartis has said peak sales of Scemblix could reach $4 billion, after reporting an 87% increase to nearly $1.3 billion last year, driven by a label expansion to include newly diagnosed patients.
Terns has said it thinks TERN-701 has the potential to become a 'best-in-disease' therapy, as clinical results to date suggest it can improve on Scemblix's molecular response rates in CML, with a cleaner safety profile and no signs of the pancreatic toxicity that is sometimes seen with Novartis' drug.
TERN-701 is dosed orally once a day, like Scemblix, but can be taken with or without food, while the latter has to be taken on an empty stomach.
Following the CML programme, Terns also has a THR-β agonist (TERN-501) intended for use alone or in combination with other metabolic therapies for obesity and fatty liver diseases, and a GIPR antagonist (TERN-801) for weight loss.
Those two candidates had been earmarked for out-licensing as Terns focused on TERN-701, but MSD may opt to take them forward if the takeover goes through. The company had also been developing an oral GLP-1 agonist for obesity, TERN-601, but shelved the programme last year after concluding its profile was uncompetitive with rival projects further along in development.
The Terns rumour is the second linking MSD to a sizeable takeover this year, coming after reports it reached late-stage discussions to buy Revolution Medicines for around $30 billion, but could not finalise terms. Last year, it also acquired Verona Pharma for $10 billion and Cidara Therapeutics for $9.2 billion, respectively adding respiratory and infectious disease therapies to its portfolio.
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