MSD will buy cancer specialist Terns Pharmaceuticals in a deal worth $6.7bn, as the drugmaker continues its string of multibillion-dollar acquisitions to prepare for a future without Keytruda-enabled oncology dominance.

MSD, known as Merck & Co. in the US, will acquire Terns for $53 per share in cash, representing a 6% premium on the biopharma’s last market close of $50 on 24 March. The transaction is expected to close in Q2 2026.

Terns’ lead candidate is an oral allosteric BCR-ABL1 tyrosine kinase inhibitor (TKI) being developed for a type of blood cancer. The asset, dubbed TERN-701, is currently in a Phase I/II trial (NCT06163430) for patients with Philadelphia chromosome-positive (Ph+) chronic myeloid leukaemia (CML). Patients enrolled are those who did not respond to at least one prior TKI.

While there are already TKIs approved for CML, such as Novartis’ Scemblix (asciminib), Terns believes its therapy could offer patients “best-in-disease” treatment. Novartis states Scemblix could generate at least $4bn in peak annual sales, reflecting the drugmaker’s current dominance. Analysts forecast that Terns will provide significant competition, declaring TERN-701’s data in CML superior to that of previously approved treatments.

William Blair analyst Andy Hsieh said in a research note: “Given what we view as unprecedented data in CML, we believe MSD’s offer does not fully capture the potential of TERN-701. The compound has demonstrated unequivocal improvement in both efficacy and safety while concurrently providing patients with better convenience of daily dosing with no food effect.”

In a Phase I trial, TERN-701 demonstrated an overall major molecular response (MMR) rate of 75% at week 24, while 64% of the patients achieved MMR. This was more than double the response rate of Scemblix. The data also supported TERN-701’s daily dosing and had no food effect. Scemblix, conversely, must be taken on an empty stomach.

Since the readout in December 2025, shares in Nasdaq-listed Terns are up around 22.5%, not accounting for a forecasted further increase following MSD’s takeover.

Further reacting to the acquisition, Hsieh said: “It is our opinion that TERN-701 is well-positioned to disrupt the treatment paradigm of CML and challenge the dominance of Novartis’s Scemblix franchise.”

For MSD, the Terns acquisition represents another business opportunity to shore up its pipeline as blockbuster immunotherapy Keytruda’s (pembrolizumab) patent expiry approaches. In November, MSD bought antiviral medicine developer Cidara Therapeutics in a $9.2bn deal. This followed the buyout of cardio-pulmonary specialist Verona Pharmaceuticals for $10bn in July 2025.

In a statement following the Terns acquisition, MSD’s CEO Robert Davis said: “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.”