Merck to buy Terns Pharmaceuticals for $6.7 billion to boost cancer pipeline

Key Points:

• Merck is acquiring U.S. biotech firm Terns Pharmaceuticals for $6.7 billion in cash to strengthen its oncology pipeline, marking its third multibillion-dollar acquisition in the past year ahead of Keytruda's patent expiration in 2028.
• Terns is developing a promising leukemia drug, TERN-701, which aims to address treatment gaps in chronic myeloid leukemia and potentially rival Novartis' Scemblix; Merck views this drug as a significant growth driver for the next decade.
• The deal values Terns at $53 per share, a premium over its recent closing price, and is expected to close in the second quarter; Terns' stock surged on acquisition news, reflecting investor enthusiasm.
• Merck's CEO Robert Davis emphasized the company's commitment to advancing innovative science and preparing for Keytruda's upcoming generic competition by diversifying its portfolio through strategic acquisitions.
• Over the past year, Merck's shares have risen 32%, supported by investor confidence in the company's ability to sustain growth through new oncology assets and other therapeutic areas amid the impending loss of Keytruda's market exclusivity.