Merck to buy Terns Pharmaceuticals (NASDAQ: TERN) in $6.7B cash deal
Rhea-AI Filing Summary
Terns Pharmaceuticals agreed to be acquired by Merck through a cash tender offer and follow‑on merger. Merck will offer $53.00 per share for all outstanding Terns common stock, implying an approximate equity value of $6.7 billion, or about $5.7 billion net of acquired cash. The price reflects a premium of 31% to Terns’ 60‑day and 42% to its 90‑day volume‑weighted average share prices as of March 24, 2026. Closing requires more than 50% of shares to be tendered, expiration or termination of the Hart‑Scott‑Rodino waiting period and absence of blocking legal orders. After the offer, a short‑form merger will make Terns a wholly owned Merck subsidiary and all remaining shares will receive the same cash price. In‑the‑money options, RSUs and certain pre‑funded warrants will be cashed out, while out‑of‑the‑money options will be cancelled. The agreement includes a $235 million termination fee payable by Terns in specified circumstances and a $270 million reverse termination fee payable by Merck if antitrust obstacles prevent closing. Merck expects to account for the deal as an asset acquisition, recording an estimated $5.8 billion charge, or about $2.35 per share, in Q2 2026 if it closes as planned.
Positive
- Transformative premium takeout for Terns shareholders: Merck’s all‑cash offer of $53.00 per share values Terns at about $6.7 billion, or roughly $5.7 billion net of cash, representing premiums of 31% and 42% to the 60‑ and 90‑day VWAPs.
Negative
- None.
Insights
All‑cash Merck acquisition gives Terns holders a large premium but remains subject to antitrust and tender conditions.
Merck plans to acquire Terns Pharmaceuticals via a tender offer at $53.00 per share, valuing the equity at about $6.7 billion. The offer delivers a sizable premium of 31% to Terns’ 60‑day and 42% to its 90‑day volume‑weighted average prices, representing a clearly thesis‑changing outcome for Terns shareholders.
The structure is a standard two‑step acquisition: a front‑end tender requiring more than 50% of shares, followed by a short‑form merger that gives remaining holders the same cash consideration. Equity awards that are in‑the‑money and RSUs convert into cash, simplifying the post‑deal capital structure, while out‑of‑the‑money options lapse.
Regulatory and closing risk is addressed through explicit fees. Terns owes a $235 million termination fee if it accepts a superior proposal or makes certain adverse recommendation changes, while Merck must pay a $270 million reverse termination fee if antitrust issues or failure to obtain HSR clearance by the End Date prevent closing. Merck expects an accounting charge of about $5.8 billion, or $2.35 per share, in Q2 2026 if the transaction completes as outlined.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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| Item 1.01 | Entry into a Material Definitive Agreement. |
On March 24, 2026, Terns Pharmaceuticals, Inc., a Delaware corporation (the “Company” or “Terns”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, Merck Sharp & Dohme LLC, a New Jersey limited liability company (“Parent” or “Merck”), and Thailand Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Parent (“Purchaser”).
Pursuant to the Merger Agreement, upon the terms and subject to the conditions thereof, Parent will cause Purchaser to commence a tender offer (the “Offer”) to purchase all of the outstanding shares of common stock, par value $0.0001 per share, of the Company (the “Shares”), at a price of $53.00 per Share (the “Offer Price”), without any interest thereon and subject to any withholding of taxes.
The obligation of Purchaser to accept for payment, and pay for, any Shares validly tendered (and not validly withdrawn) pursuant to the Offer is subject to satisfaction or waiver of certain conditions set forth in the Merger Agreement, including, among other things, (a) there being validly tendered and not validly withdrawn Shares that represent one more Share than 50% of the total number of Shares then issued and outstanding, as calculated in accordance with the terms of the Merger Agreement, (b) any waiting period (or any extension thereof) applicable to the Offer under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR Act”), having expired or been terminated and (c) there not having been issued and remaining in effect any governmental order or law prohibiting or making illegal the Transactions (as defined below).
As soon as practicable following consummation of the Offer, subject to the terms and conditions of the Merger Agreement and in accordance with Section 251(h) of the General Corporation Law of the State of Delaware, Purchaser will merge with and into the Company (the “Merger” and, together with the Offer and the other transactions contemplated by the Merger Agreement, the “Transactions”), with the Company surviving the Merger as a wholly owned subsidiary of Parent.
At the effective time of the Merger (the “Effective Time”), each Share then issued and outstanding (other than Shares (a) held at the commencement of the Offer and immediately prior to the Effective Time by the Company (or held in the Company’s treasury), Parent, Purchaser or any other direct or indirect wholly owned subsidiary of the Company, Parent or Purchaser or (b) irrevocably accepted for purchase pursuant to the Offer) will be converted into the right to receive the Offer Price (the “Merger Consideration”), without any interest thereon and subject to any withholding of taxes.
In addition, at the Effective Time, (a) each option to purchase Shares that is outstanding and unexercised immediately prior to the Effective Time, whether or not vested and which has a per share exercise price that is less than the Merger Consideration (each, an “In the Money Option”), will be cancelled and converted into the right to receive (without interest) a cash payment equal to (i) the excess of (A) the Merger Consideration over (B) the exercise price payable per Share of such In the Money Option, multiplied by (ii) the total number of Shares subject to such In the Money Option, (b) each option to purchase Shares other than an In the Money Option that is outstanding and unexercised as of immediately prior to the Effective Time, whether or not vested, will be cancelled with no consideration payable in respect thereof and (c) each restricted stock unit award covering Shares (each, a “Company RSU”) that is outstanding as of immediately prior to the Effective Time, whether or not vested, will be cancelled and the holder thereof will be entitled to receive (without interest) a cash payment equal to the product of (i) the Merger Consideration and (ii) the number of Shares subject to such Company RSU.
As of the time at which all Shares tendered (and not validly withdrawn) pursuant to the Offer are accepted by Purchaser for payment (the “Offer Acceptance Time”), each pre-funded warrant to purchase Shares issued on September 10, 2024 (each, a “Company Warrant”) that is issued and outstanding as of immediately prior to the Offer Acceptance Time will be automatically deemed to be exercised in full in a “cashless exercise” (as defined in, and pursuant to the terms of, such Company Warrant) and will be converted into the right to receive cash in an amount equal to the product of (a) the total number of Shares issuable upon such cashless exercise of such Company Warrant as of immediately prior to the Offer Acceptance Time pursuant to the terms thereof and (b) the Offer Price, subject to any withholding of taxes.
Effective as of the Effective Time, the Company will terminate its 2017 Equity Incentive Plan, 2021 Incentive Award Plan and 2022 Employment Inducement Award Plan, each as amended and restated from time to time, and all outstanding grants of equity and equity-based awards.
The Merger Agreement includes representations, warranties and covenants of the parties customary for a transaction of this nature. From the date of the Merger Agreement until the earlier of the Effective Time and the valid termination of the Merger Agreement, the Company has agreed, subject to certain exceptions, to use commercially reasonable efforts to operate its and its subsidiaries’ business and operations in the ordinary course in all material respects and has agreed to certain other operating covenants, as set forth more fully in the Merger Agreement.
The Company has also agreed to customary “no-shop” restrictions on its ability to solicit alternative acquisition proposals from third parties and engage in discussions or negotiations with third parties regarding alternative acquisition proposals. Notwithstanding these restrictions, the Company may under certain circumstances, subject to entry into an acceptable confidentiality agreement, provide information to third parties and engage in or otherwise participate in discussions or negotiations with third parties, in each case, with respect to a bona fide written alternative acquisition proposal that the board of directors of the Company (the “Company Board”) has determined in good faith, after consultation with its financial advisors and outside legal counsel, constitutes or could reasonably be expected to lead to a Superior Proposal (as defined in the Merger Agreement) and that failure to take such action would be inconsistent with the fiduciary duties of the Company Board under applicable law. The Merger Agreement also requires that the Company Board, among other things, not (a) withhold, withdraw or modify (or publicly propose or resolve to withhold, withdraw or modify), the recommendation of the Company Board that the stockholders of the Company accept the Offer and tender their Shares to Purchaser pursuant to the Offer (the “Company Board Recommendation”), (b) approve, recommend or declare advisable, or publicly propose to approve, recommend or declare advisable, any alternative acquisition proposal or (c) approve, recommend or declare advisable, or propose to approve, recommend or declare advisable, or allow the Company to execute or enter into any contract with respect to, any alternative acquisition proposal, whether such agreement is binding or non-binding (any action described in clauses (a), (b) and (c), a “Company Adverse Recommendation Change”). Notwithstanding these restrictions, the Company Board is permitted, subject to the terms and conditions set forth in the Merger Agreement, including certain notice requirements and matching rights in favor of Parent, to: (i) in circumstances involving the receipt of an alternative acquisition proposal that the Company Board determines in good faith, after consultation with the Company’s financial advisors and outside legal counsel, constitutes a Superior Proposal, (A) make a Company Adverse Recommendation Change or (B) subject to payment of the termination fee described below, terminate the Merger Agreement to enter into a binding written definitive agreement with respect to a Superior Proposal; or (ii) make a Company Adverse Recommendation Change in response to an Intervening Event (as defined in the Merger Agreement).
The Merger Agreement may be terminated under certain circumstances, including, among others, (i) by either the Company or Parent if the Offer Acceptance Time has not occurred on or prior to September 24, 2026 (the “End Date”), which End Date will automatically be extended up to two times, to December 24, 2026 and then to March 24, 2027, in each case if, by such date, clearance under the HSR Act has not been obtained or if a legal restraint under any antitrust laws is in effect, (ii) by either the Company or Parent if there is a final non-appealable order, injunction or law permanently prohibiting or making illegal the consummation of the Offer or the Merger, (iii) by Parent if the Company Board effects a Company Adverse Recommendation Change, (iv) by the Company in order to enter into a binding written definitive agreement with respect to a Superior Proposal, as discussed above, or (v) by the Company or Parent if the other party breaches its respective representations, warranties, covenants or agreements in the Merger Agreement in a manner that would not permit certain conditions of the Offer to be satisfied (in the case of a termination by Parent) or that would not permit Parent or Purchaser to consummate the Transactions (in the case of a termination by the Company) subject, in certain cases, to the right of the breaching party to cure such breach within thirty days. The Company and Parent may also terminate the Merger Agreement by mutual written consent.
The Merger Agreement provides that, in connection with the termination of the Merger Agreement under specified circumstances, including, among others, (a) termination by the Company to accept and enter into a binding written definitive agreement with respect to a Superior Proposal or (b) termination by Parent due to a Company Adverse Recommendation Change, the Company will be required to pay to Parent a termination fee of an amount in cash equal to $235,000,000.
The Merger Agreement further provides that Parent will be required to pay the Company a reverse termination fee of $270,000,000 in the event the Merger Agreement is terminated by Parent or the Company in certain specified circumstances where (i) there exists a permanent legal restraint under any antitrust laws on the consummation of the Offer or the Merger or (ii) the Offer has not been consummated by the End Date due to failure to receive clearance under the HSR Act for consummation of the Offer or there exists a legal restraint under any antitrust laws on the consummation of the Offer.
The foregoing description of the Merger Agreement and the Transactions does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which is filed as Exhibit 2.1 hereto and which is incorporated herein by reference. The Merger Agreement has been filed to provide information to investors regarding its terms. The Merger Agreement is not intended to provide any other factual information about the Company, Parent or Purchaser, their respective businesses, or the actual conduct of their respective businesses during the period prior to the consummation of the Offer, the Merger or the other Transactions. The Merger Agreement and this summary should not be relied upon as disclosure about the Company or Parent. None of the Company’s stockholders or any other third parties should rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or conditions of the Company, Parent, Purchaser or any of their respective subsidiaries or affiliates. The Merger Agreement contains representations and warranties that are the product of negotiations among the parties thereto and that the parties made to, and solely for the benefit of, each other as of specified dates. The assertions embodied in those representations and warranties are subject to qualifications and limitations agreed to by the respective parties and are also qualified in important part by a confidential disclosure letter delivered by the Company to Parent and Purchaser in connection with the Merger Agreement. The representations and warranties may have been made for the purpose of allocating contractual risk among the parties to the Merger Agreement instead of establishing these matters as facts and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to stockholders or investors. Accordingly, investors should consider the information in the Merger Agreement in conjunction with the entirety of the factual disclosure about the Company in the Company’s public reports filed with the Securities and Exchange Commission (the “SEC”). Information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.
| Item 7.01 | Regulation FD Disclosure. |
On March 25, 2026, the Company issued a joint press release announcing the execution of the Merger Agreement as described above. A copy of the press release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.
The information contained in this Item 7.01 of this report, including Exhibit 99.1 attached hereto, is furnished pursuant to Item 7.01 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or subject to the liabilities of that section. The information shall not be deemed incorporated by reference into any other filing with the SEC made by the Company regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such filing.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
| Exhibit Number | Description | |
| 2.1* | Agreement and Plan of Merger, dated as of March 24, 2026, by and among Terns Pharmaceuticals, Inc., Merck Sharp & Dohme LLC and Thailand Merger Sub, Inc. | |
| 99.1 | Joint press release issued by Merck & Co., Inc. and Terns Pharmaceuticals, Inc., dated March 25, 2026. | |
| 104 | Cover Page Interactive Date File (embedded within the Inline XBRL document) | |
| * | Schedules to the Merger Agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon its request. |
Additional Information and Where to Find It
The Offer described in this document has not yet commenced. This document is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell any shares of the common stock of Terns or any other securities, nor is it a substitute for the tender offer materials described herein. At the time the planned tender offer is commenced, a tender offer statement on Schedule TO, including an offer to purchase, a letter of transmittal and related documents, will be filed by Merck and the Purchaser with the Securities and Exchange Commission (the “SEC”), and a solicitation/recommendation statement on Schedule 14D-9 will be filed by Terns with the SEC.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE TENDER OFFER MATERIALS (INCLUDING AN OFFER TO PURCHASE, A RELATED LETTER OF TRANSMITTAL AND OTHER TENDER OFFER DOCUMENTS) AND THE SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 REGARDING THE OFFER, AS THEY MAY BE AMENDED FROM TIME TO TIME, WHEN THEY BECOME AVAILABLE CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION THAT INVESTORS AND SECURITY HOLDERS SHOULD CONSIDER BEFORE MAKING ANY DECISION REGARDING TENDERING THEIR SECURITIES, INCLUDING THE TERMS AND CONDITIONS OF THE OFFER.
Investors and security holders may obtain a free copy of the Offer to Purchase, the related Letter of Transmittal, and the Solicitation/Recommendation Statement (when available) and other documents filed with the SEC at the website maintained by the SEC at www.sec.gov or by directing such requests to the Information Agent for the tender offer, which will be named in the tender offer statement. In addition, Merck and Terns file annual, quarterly and current reports and other information with the SEC, which are available to the public from commercial document-retrieval services and at the SEC’s website at www.sec.gov. Copies of the documents filed with the SEC by Merck may be obtained at no charge on Merck’s internet website at www.merck.com or by contacting Merck at 126 East Lincoln Avenue P.O. Box 2000, Rahway, NJ 07065 USA, or by phone at (908) 740-4000. Copies of the documents filed with the SEC by Terns may be obtained at no charge from Terns’ internet website at www.ternspharma.com or by contacting Terns at 1065 East Hillsdale Blvd., Suite 100, Foster City, CA 94404 or (650)-525-5535.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements about the Company within the meaning of the federal securities laws, including regarding the potential sale of the Company. All statements other than statements of historical facts contained in this filing are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “design,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “positioned,” “potential,” “predict,” “seek,” “should,” “target,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. The Company has based these forward-looking statements largely on its current expectations, estimates, forecasts and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. In light of the significant uncertainties in these forward-looking statements, you should not rely upon forward-looking statements as predictions of future events. These statements are subject to risks and uncertainties that could cause the actual results and the implementation of the Company’s plans to vary materially, including (a) risks related to the timing of the Offer, the Merger and the other Transactions or that the Offer, the Merger and the other Transactions may not be completed at all, (b) whether sufficient stockholders of Terns will tender their Shares in the Offer, (c) the risk that competing offers or acquisition proposals will be made, (d) the possibility that various conditions to the consummation of the Offer or the Merger may not be satisfied or waived, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the Transactions, (e) risks associated with acquisitions, such as the risk that the effects of disruption from the Transactions on Terns’ business and the fact that the announcement and pendency of the Transactions may make it more difficult to establish or maintain relationships with employees and business partners, (f) risks related to diverting management’s attention from Terns’ ongoing business operations, (g) the risk that stockholder litigation in connection with the Transactions may result in significant costs of defense, indemnification and liability and (h) other risks and uncertainties pertaining to Terns’ business, including the risks and uncertainties detailed in Terns’, Parent’s and Purchaser’s filings with the SEC, including but not limited to the Tender Offer Solicitation/Recommendation Statement to be filed with the SEC in connection with the Offer and the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
Except as required by law, Terns undertakes no obligation to update publicly any forward-looking statements for any reason.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| TERNS PHARMACEUTICALS, INC. | ||||||
| Date: March 25, 2026 | By: | /s/ Caryn McDowell | ||||
| Caryn McDowell | ||||||
| Chief Legal Officer and Corporate Secretary | ||||||
Exhibit 99.1
|
News Release |
Merck to Acquire Terns Pharmaceuticals, Inc., Expanding Its Hematology Pipeline
With TERN-701, a Novel Candidate for Chronic Myeloid Leukemia (CML)
Terns’ lead candidate TERN-701 is an investigational oral allosteric BCR::ABL1 tyrosine
kinase inhibitor currently in Phase 1/2 development for certain patients with CML
Merck to hold investor call at 8 a.m. EDT today
RAHWAY, N.J., and FOSTER CITY, Calif., March 25, 2026 – Merck (NYSE: MRK), known as MSD outside of the United States and Canada, and Terns Pharmaceuticals, Inc. (“Terns”) (Nasdaq: TERN), a clinical-stage oncology company, today announced that the companies have entered into a definitive agreement under which Merck, through a subsidiary, will acquire Terns for $53.00 per share in cash for an approximate equity value of $6.7 billion. This equates to approximately $5.7 billion net of acquired cash and represents an approximate premium of 31% to the 60-day and 42% to the 90-day volume-weighted average stock price on March 24, 2026.
“The acquisition of Terns builds on our growing presence in hematology with TERN-701, a potential best-in-class candidate for the treatment of certain patients with chronic myeloid leukemia,” said Robert M. Davis, chairman and chief executive officer, Merck. “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.”
Terns’ lead candidate, TERN-701, is a novel investigational oral allosteric BCR::ABL1 tyrosine kinase inhibitor (TKI) currently being evaluated in the Phase 1/2 CARDINAL trial (NCT06163430) for patients with Philadelphia chromosome-positive (Ph+), chronic phase chronic myeloid leukemia (CML) previously treated with at least one prior TKI and who experienced treatment failure, suboptimal response or treatment intolerance. In March 2024, the U.S. Food and Drug Administration (FDA) granted Orphan Drug Designation for TERN-701 for the treatment of CML.
“This acquisition reflects our team’s deep commitment to innovation in oncology and developing high impact medicines,” said Amy Burroughs, chief executive officer, Terns. “By working together, we will advance TERN-701, leveraging the deep expertise and significant resources at Merck, a global biopharmaceutical leader with a proven track record of delivering cancer breakthroughs for patients who need them most. I am immensely proud of the Terns team and our work towards making a difference for people living with CML. Finally, we extend our heartfelt thanks to the investigators, patients, and community advocates whose dedication and support make the development of TERN-701 possible.”
In clinical trials to date, TERN-701 has shown promising activity, with encouraging rates of major molecular response and deep molecular response observed by week 24. Importantly, this includes responses in patients with high disease burden who previously received multiple lines of therapy, including many who were treated with an allosteric TKI. The majority of treatment-emergent adverse events were reported as low grade with a low incidence of severe adverse events and discontinuations. No clinically meaningful changes in blood pressure have been observed, and rates of lipase elevation have been low.
“The first approval of a BCR::ABL1 tyrosine kinase inhibitor 25 years ago transformed the prognosis for many patients with chronic myeloid leukemia. Despite new therapeutic options, there is significant need for innovative, well-tolerated therapies with faster time to onset of molecular response leading to deeper responses and better disease control,” said Dr. Dean Y. Li, president, Merck Research Laboratories. “Based on early clinical evidence, TERN-701, a novel allosteric BCR::ABL1 inhibitor, may have the potential to provide a meaningfully differentiated option for certain patients living with CML.”
The transaction has been approved by both Merck’s and Terns’ Boards of Directors. Under the terms of the merger agreement, Merck, through a subsidiary, will acquire all of the outstanding shares of Terns. The acquisition is subject to a majority of Terns’ stockholders tendering their shares in a tender offer that will be initiated by a subsidiary of Merck. The closing of the proposed transaction will be subject to certain conditions, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and other customary conditions. The transaction is expected to be accounted for as an asset acquisition and close in the second quarter of 2026, resulting in a charge 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.
A copy of the merger agreement for the transaction will be filed with the Securities and Exchange Commission (“SEC”) and will be publicly available free of charge at the SEC’s website at www.sec.gov. Copies of the documents filed with the SEC by Merck may be obtained at no charge from Merck’s website at www.merck.com or by contacting Merck at 126 East Lincoln Avenue, P.O. Box 2000, Rahway, NJ 07065 USA, or (908) 740-4000. Copies of the documents filed with the SEC by Terns may be obtained at no charge from Terns’ website at www.ternspharma.com or by contacting Terns at 1065 East Hillsdale Blvd., Suite 100, Foster City, CA 94404 or (650) 525-5535 Ext.101.
Investor Call
Merck will hold an investor call Wednesday, March 25, 2026 at 8 a.m. EDT to discuss the proposed transaction. Journalists who wish to ask questions should contact a member of Merck’s Global Media Relations team at the conclusion of the call. Investors, journalists and the general public may access a live audio webcast of the call via this weblink.
All participants may join the call by dialing (800) 369-2154 (U.S. and Canada Toll-Free) or (517) 308-9422 and using the access code 8711041.
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Advisors
Centerview Partners LLC and Jefferies LLC acted as financial advisors to Terns and Freshfields LLP acted as Terns’ legal advisor.
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 the efficacy, safety and convenience of existing treatments for CML.
About the CARDINAL study
TERN-701 is currently being evaluated in the CARDINAL trial (NCT06163430), a global multi-center dose escalation and dose-expansion clinical trial to assess safety, tolerability and efficacy in patients with Philadelphia chromosome-positive (Ph+) chronic phase CML previously treated with at least one prior TKI and experienced treatment failure, suboptimal response, or treatment intolerance. The dose escalation portion of the CARDINAL trial completed in January 2025 with no dose limiting toxicities observed up to the maximum dose of 500mg QD. Terns initiated the dose expansion portion of the trial in April 2025 with patients randomized to one of two dose cohorts (320mg or 500mg QD) with up to 40 patients per arm. In January 2026, an additional cohort was added to the CARDINAL trial to evaluate TERN-701 500 mg QD in approximately 20 patients with BCR::ABL1 resistance mutations including T315I, M244V, F359I/C/V and others.
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 Terns Pharmaceuticals
Terns Pharmaceuticals is a clinical-stage oncology company reimagining known biology to deliver high impact medicines. Terns’ lead program, TERN-701, is a highly selective, oral, allosteric BCR::ABL1 inhibitor with a potentially best-in-disease profile that could meaningfully improve upon the efficacy, safety and convenience of existing treatments for chronic myeloid leukemia. For more information, please visit: www.ternspharma.com.
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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 and Terns Pharmaceuticals, Inc., Foster City, Calif., USA
This release of Merck & Co., Inc., Rahway, N.J., USA (the “company”) and Terns 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.” Forward-looking statements in this release include, but are not limited to, statements related to the potential benefits of and future plans for TERN-701; the ability of the company and Terns to complete the transactions contemplated by the transaction agreement, including the parties’ ability to satisfy the conditions to the consummation of the transaction contemplated thereby, statements about the expected timetable for completing the transaction, the company’s and Terns’ beliefs and expectations and statements about the benefits sought to be achieved in the company’s proposed acquisition of Terns, the potential effects of the acquisition on both the company and Terns, and the possibility of any termination of the transaction agreement.
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 unanticipated delays in or negative results from Terns’ clinical studies and other risks related to clinical development, delays in or unanticipated action by regulatory authorities, risks related to government contracts, having to use cash in ways other than as expected and other risks, uncertainties associated with Terns’ business in general; the risk that competing offers or acquisition proposals will be made; the possibility that various conditions to the consummation of the proposed transaction contained in the transaction agreement may not be satisfied or waived (including, but not limited to, the failure to obtain a sufficient number of tendered shares from Terns’ shareholders); the effects of disruption from the transactions contemplated by the transaction agreement and the impact of the announcement and pendency of the transactions on Terns’ business; the risk that shareholder litigation in connection with the transaction may result in significant costs of defense, indemnification and liability; 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,
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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.
Neither Terns nor Merck undertakes any 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 Merck’s Annual Report on Form 10-K for the year ended December 31, 2025, Terns’ Annual Report on Form 10-K for the year ended December 31, 2024, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings subsequently made with the SEC available at the SEC’s Internet site (www.sec.gov).
ADDITIONAL INFORMATION REGARDING THE PROPOSED TRANSACTION
The tender offer described in this release has not yet commenced. This release is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell any shares of the common stock of Terns or any other securities, nor is it a substitute for the tender offer materials described herein. At the time the planned tender offer is commenced, a tender offer statement on Schedule TO, including an offer to purchase, a letter of transmittal and related documents, will be filed by Merck and Thailand Merger Sub, Inc. with the SEC, and a solicitation/recommendation statement on Schedule 14D-9 will be filed by Terns with the SEC.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE TENDER OFFER MATERIALS (INCLUDING AN OFFER TO PURCHASE, A RELATED LETTER OF TRANSMITTAL AND OTHER TENDER OFFER DOCUMENTS) AND THE SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 REGARDING THE OFFER, AS THEY MAY BE AMENDED FROM TIME TO TIME, WHEN THEY BECOME AVAILABLE CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION THAT INVESTORS AND SECURITY HOLDERS SHOULD CONSIDER BEFORE MAKING ANY DECISION REGARDING TENDERING THEIR SECURITIES, INCLUDING THE TERMS AND CONDITIONS OF THE OFFER.
Investors and security holders may obtain a free copy of the Offer to Purchase, the related Letter of Transmittal, other tender offer documents and the Solicitation/Recommendation Statement (when available) and other documents filed with the SEC at the website maintained by the SEC at www.sec.gov or by directing such requests to the Information Agent for the tender offer, which will be named in the tender offer statement. In addition, Merck and Terns file annual, quarterly and current reports and other information with the SEC, which are available to the public from commercial document-retrieval services and at the SEC’s website at www.sec.gov. Copies of the documents filed with the SEC by Merck may be obtained at no charge on Merck’s internet website at www.merck.com or by contacting Merck at 126 East Lincoln Avenue P.O. Box 2000, Rahway, NJ 07065 USA, or by phone at (908) 740-4000. Copies of the documents filed with the SEC by Terns may be obtained at no charge from Terns’ internet website at www.ternspharma.com or by contacting Terns at 1065 East Hillsdale Blvd., Suite 100, Foster City, CA 94404 or (650)-525-5535 Ext.101.
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| Merck Investor Contacts: | Peter Dannenbaum (732) 594-1579
Steven Graziano (732) 594-1583 |
Terns Investor Contact: | Justin Ng investors@ternspharma.com | |||
| Merck Media Contacts: | John Cummins john.cummins2@merck.com
Carly Myar carly.myar@merck.com |
Terns Media Contact: | Jenna Urban media@ternspharma.com | |||
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FAQ
What did Merck agree to pay to acquire Terns Pharmaceuticals (TERN)?
How will the Merck–Terns Pharmaceuticals (TERN) acquisition be structured?
What conditions must be met for the Terns (TERN) merger with Merck to close?
How are Terns (TERN) options, RSUs and warrants treated in the Merck deal?
What termination and reverse termination fees apply in the Terns–Merck transaction?
When is the Merck acquisition of Terns (TERN) expected to impact Merck’s earnings?
Filing Exhibits & Attachments
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