A breakthrough therapy designation is a regulatory fast-track given to a drug or treatment that shows early signs of providing a major improvement over existing options for a serious condition. Think of it as a VIP lane that can speed up development and more intensive guidance from regulators, which matters to investors because it can shorten time to market, reduce development risk and potentially increase a company’s value — though it does not guarantee approval.
bcr::abl1medical
A BCR::ABL1 fusion is a genetic abnormality where parts of two genes join to create a single hybrid gene that makes an abnormal protein driving uncontrolled growth in certain blood cancers. Investors care because this specific, identifiable target determines which drugs and diagnostic tests will work, influencing clinical trial success, drug sales and diagnostic revenue — like finding a particular lock that a new key (therapy) is built to fit.
tyrosine kinase inhibitormedical
A tyrosine kinase inhibitor is a type of drug that blocks specific proteins in cells that act like on/off switches for growth and survival signals, often used to stop cancer cells from multiplying. For investors, these drugs matter because their clinical trial results, regulatory approvals, safety profiles, and patent status drive sales potential and company valuation—think of them as precision tools whose effectiveness and market exclusivity determine commercial success.
chronic myeloid leukemiamedical
A cancer of the blood-forming cells in the bone marrow that causes too many abnormal white blood cells to be produced because of a specific genetic change; left untreated it can disrupt normal blood function and the immune system. Investors watch it because the disease has clear biological targets and well-defined treatment pathways, so advances, clinical trial results, regulatory approvals, or pricing shifts for therapies can quickly change the commercial outlook for drug makers — like a new, precision brake applied to an over-revving engine.
tender offerfinancial
A tender offer is a proposal made by a person or company to buy shares from existing shareholders at a set price, usually higher than the current market value, within a specific time frame. It matters to investors because it can lead to a change in ownership or control of a company, and shareholders must decide whether to sell their shares at the offered price.
phase 1/2medical
Phase 1/2 is a combined early-stage clinical trial that first tests a new drug or treatment for safety and the right dose, then quickly expands to check if it shows any signs of working in patients. For investors, results from a Phase 1/2 study offer an early read on both risk and potential reward—like a prototype test that both confirms a product won’t harm users and suggests whether it could sell—helping guide valuation and development decisions.
gaapfinancial
GAAP, or Generally Accepted Accounting Principles, are a set of standardized rules and guidelines that companies follow when preparing their financial statements. They ensure consistency, transparency, and comparability across different companies, making it easier for investors to understand and compare financial information accurately. This helps investors make informed decisions based on trustworthy and uniform financial reports.
non-gaapfinancial
Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.
Addition of TERN-701, a novel investigational oral allosteric BCR::ABL1 tyrosine kinase inhibitor, further diversifies Merck’s oncology pipeline
RAHWAY, N.J.--(BUSINESS WIRE)--
Merck (NYSE: MRK), known as MSD outside of the United States and Canada, today announced the successful completion of the acquisition of Terns Pharmaceuticals, Inc. (“Terns”) (Nasdaq: TERN).
“The Terns acquisition reflects Merck’s continued focus on science‑driven, value‑enhancing business development aimed at bringing meaningful innovation to patients,” said Robert M. Davis, chairman and chief executive officer, Merck. “We believe TERN‑701 has the potential to become a differentiated treatment option for certain patients with chronic myeloid leukemia, and we look forward to working with the Terns team to advance its clinical development.”
TERN-701 was recently granted Breakthrough Therapy Designation (BTD) by the U.S. Food and Drug Administration (FDA) for the treatment of adults with Philadelphia chromosome-positive chronic myeloid leukemia (CML) in the chronic phase without the T315I mutation previously treated with two or more tyrosine kinase inhibitors (TKIs). The BTD designation for TERN-701 is based on data from the ongoing Phase 1/2 CARDINAL trial (NCT06163430).
Transaction details
Merck completed the cash tender offer, through a subsidiary, for all the outstanding shares of common stock of Terns at a purchase price of $53.00 per share, without interest and subject to any applicable tax withholding. As of the tender offer expiration at one minute after 11:59 p.m., Eastern Time, on May 4, 2026, 100,091,794 shares of Terns common stock were validly tendered and not validly withdrawn, representing approximately 86.36% of the total number of Terns’ issued and outstanding shares of common stock as of such date and time. All such shares have been accepted for payment in accordance with the terms of the tender offer, and Merck, on behalf of its subsidiary, will promptly pay for such shares.
Following the completion of the tender offer, Merck completed the acquisition of Terns through a merger of Merck’s wholly-owned subsidiary with and into Terns, with Terns being the surviving corporation, in which all shares of Terns common stock issued and outstanding at the effective time of the merger were converted into the right to receive cash equal to the $53.00 offer price per share, without interest and subject to any applicable tax withholding. At the completion of the merger, Terns became a wholly-owned subsidiary of Merck and Terns’ common stock will no longer be listed or traded on the Nasdaq Global Select Market.
The transaction is expected to be accounted for as an asset acquisition, resulting in a charge to research and development expense of approximately $5.8 billion, or approximately $2.35 per share, included in both second quarter and full year 2026 GAAP and non-GAAP results. Additionally, GAAP and non-GAAP EPS are expected to be negatively impacted by approximately $0.12 per share in 2026, representing costs associated with advancing TERN-701 and costs of financing.
About TERN-701
TERN-701 is a novel investigational oral allosteric BCR::ABL1 tyrosine kinase inhibitor (TKI) designed to bind to the ABL myristoyl pocket, with a potentially best-in-disease profile that could improve upon existing treatments for certain patients with chronic myeloid leukemia (CML).
About chronic myeloid leukemia
Chronic myeloid leukemia (CML) is a slow growing type of blood cancer that leads to an overproduction of white blood cells that accumulate in the blood and bone marrow, disrupting the production of healthy blood cells. CML is commonly associated with the Philadelphia chromosome, a translocation between chromosomes 9 and 22 that results in constitutive activation of the BCR::ABL1 fusion protein, which fuels cancer growth.
About Merck in hematology
Merck is advancing a pipeline of hematology candidates targeting a diverse range of targets across leukemias, lymphomas and myeloproliferative neoplasms. Candidates in Phase 3 development include: bomedemstat (MK-3543), an investigational, orally available lysine-specific demethylase 1 (LSD1) inhibitor; nemtabrutinib (MK-1026), an investigational, non-covalent Bruton’s tyrosine kinase (BTK) inhibitor; and zilovertamab vedotin (MK-2140), an investigational antibody-drug conjugate (ADC) that targets receptor tyrosine kinase-like orphan receptor 1 (ROR1). Additionally, MK-1045, an investigational CD19xCD3 T-cell engager, is currently being evaluated in a Phase 1b/2 trial.
About Merck
At Merck, known as MSD outside of the United States and Canada, we are unified around our purpose: We use the power of leading-edge science to save and improve lives around the world. For more than 130 years, we have brought hope to humanity through the development of important medicines and vaccines. We aspire to be the premier research-intensive biopharmaceutical company in the world – and today, we are at the forefront of research to deliver innovative health solutions that advance the prevention and treatment of diseases in people and animals. We foster a diverse and inclusive global workforce and operate responsibly every day to enable a safe, sustainable and healthy future for all people and communities. For more information, visit www.merck.com and connect with us on X (formerly Twitter), Facebook, Instagram, YouTube and LinkedIn.
Forward-Looking Statement of Merck & Co., Inc., Rahway, N.J., USA
This news release of Merck & Co., Inc., Rahway, N.J., USA (the “company”) contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. “Forward-looking statements” describe future expectations, plans, results, or strategies and are generally preceded by words such as “anticipates,” “expects,” “intends,” “believes,” “may,” “plan” or “will.” There can be no guarantees with respect to pipeline candidates that the candidates will receive the necessary regulatory approvals or that they will prove to be commercially successful. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements.
Such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, such as general industry conditions and competition; general economic factors, including interest rate and currency exchange rate fluctuations; the impact of pharmaceutical industry regulation and health care legislation in the United States and internationally; global trends toward health care cost containment; technological advances, new products and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approval; the company’s ability to accurately predict future market conditions; manufacturing difficulties or delays; financial instability of international economies and sovereign risk; dependence on the effectiveness of the company’s patents and other protections for innovative products; and the exposure to litigation, including patent litigation, and/or regulatory actions.
The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise, except to the extent required by law. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the company’s Annual Report on Form 10-K for the year ended December 31, 2025, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and the company’s other filings with the SEC available at the SEC’s Internet site (www.sec.gov).
