Merck & Co Inc (NYSE:MRK, XETRA:6MK) announced on Wednesday that it will acquire US biotech firm Terns Pharmaceuticals (NASDAQ:TERN) for $53 per share in cash, valuing the company at approximately $6.7 billion.
This marks Merck’s third multibillion-dollar acquisition in the past year as the company looks to strengthen its portfolio ahead of its top-selling cancer drug Keytruda losing patent protection in 2028.
Terns is developing TERN-701, an oral therapy for chronic myeloid leukemia. Phase 1 trial data reported last December showed a major molecular response rate of up to 75% at 24 weeks, with a tolerable safety profile that supports daily dosing.
“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,” Merck CEO Robert Davis said in a statement.
Terns’ shares have risen sharply in recent months amid investor interest in its experimental leukemia drug. Under the terms of the deal, Merck will purchase all outstanding Terns shares at a 31% premium over the biotech’s average stock price over the previous 60 days.
Shares of Merck added 2% at about $119 following the announcement, while Terns' stock was up 5% at about $53.
The transaction is expected to close in the second quarter, pending regulatory approval.