On 25 March, Merck (MSD) announced the $6.7bn acquisition of Terns Pharmaceuticals via a subsidiary, as part of its strategic preparations for the looming expiration of Keytruda’s patent exclusivity. With this strategic move, MSD aims to augment and diversify its oncology portfolio by deepening its footprint in haematological malignancies through the addition of Terns’s lead candidate, TERN-701.
TERN-701 is an oral allosteric BCR-ABL tyrosine kinase inhibitor (TKI), recently advanced to Phase I/II (CARDINAL) for patients with BCR-ABL1–positive chronic myelocytic leukaemia (CML) who have received at least one prior TKI. Building on encouraging interim data presented at the American Society of Hematology (ASH) 2025, TERN-701 secured FDA fast track designation in December 2025, signalling substantial confidence from both the company and regulators in its therapeutic promise. MSD’s ambitions extend further, with Phase III trials already planned for first-line and second-line settings. According to GlobalData analysis, TERN-701’s current likelihood of approval (LoA) stands at 20%, indicating notable early-stage potential.
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Upon launch, TERN-701 will contend directly with Novartis’s Scemblix (asciminib), a therapy already established across all lines for CML. Although Scemblix has built its commercial and clinical reputation on strong efficacy and safety, the competitive landscape may soon shift. In the Phase III ASCEMBL trial based on 157 patients, Scemblix achieved major molecular response (MMR) and deep molecular response (DMR) rates of 25.5% and 10.8%, respectively, at 24 weeks. These results are eclipsed by the CARDINAL trial data for TERN-701 based on 32 patients, with MMR and DMR rates of 75% and 36%, respectively, highlighting its potential to redefine standards of response in CML. It should be highlighted that although both trials had a median of three prior TKI regimens, the proportion of patients with baseline BCR-ABL1 levels exceeding 10% was lower for TERN-701 (47%) than for Scemblix (62%). This disparity may contribute in part to TERN-701’s superior efficacy, but does not fully explain it.
Further confidence in TERN-701’s disruptive capabilities comes from longer-term response data and patient switching findings at 96 weeks, when Scemblix’s MMR rate reached only 37.6%; notably, six out of ten patients previously treated with Scemblix achieved MMR within 24 weeks of switching to TERN-701, underscoring Terns’s intent to capture substantial market share from Novartis. TERN-701’s safety profile also appears favourable, with Grade 3 or higher adverse events (AEs) occurring in 32% of patients compared to 50% for patients receiving Scemblix, and a lower incidence of AEs leading to discontinuation of 2% compared to Scemblix’s 5.8%. Additionally, unlike Scemblix, which requires a cumbersome three-hour fasting period before dosing, TERN-701 is unaffected by food intake, which further enhances patient experience.
Nevertheless, while TERN-701’s profile is compelling, several key hurdles remain before it can overcome its established competitors. Chief among these is the current lack of data on complete cytogenetic response, and the necessity of confirming the durability and robustness of its safety in larger, later-phase trials. Regulatory scrutiny is likely to focus on these aspects as the therapy advances toward pivotal studies and potential approval.
MSD’s acquisition of Terns Pharmaceuticals is thus a calculated, forward-looking manoeuvre to secure the next generation of haematology assets at a pivotal moment for its oncology franchise. If TERN-701 can live up to its early clinical promise, it has the potential to overtake Scemblix, which is forecast by GlobalData to reach $1.1bn, approximately a third of the CML market, in the eight major markets (US, France, Germany, Italy, Spain, UK, Japan, and Canada) by 2030, allowing MSD to reinforce its leadership in targeted cancer therapies and secure a meaningful edge against shifting market dynamics post-Keytruda.
