NEW YORK, March 26, 2026, 08:13 EDT
In U.S. premarket action Thursday, Terns Pharmaceuticals was pegged at $52.86, matching Wednesday’s close and sitting roughly 14 cents under Merck’s $6.7 billion all-cash bid for the biotech. Terns had surged 5.8% by the end of Wednesday’s session.
The slim spread signals that investors are betting the deal will likely go through as planned. This is not just about Terns—Merck is under pressure to diversify, aiming to soften its reliance on Keytruda ahead of the drug’s looming U.S. exclusivity loss in 2028.
Merck and Terns announced Wednesday that Merck plans to launch a tender offer, snapping up all outstanding shares for $53 apiece, then close a merger. The deal, expected to wrap in the second quarter of 2026, pegs the equity value around $6.7 billion—netting out cash, closer to $5.7 billion.
At the center of the deal: TERN-701, an oral tyrosine kinase inhibitor—TKI for short—aimed at shutting down the BCR::ABL signal in chronic myeloid leukemia, the slow-progressing blood cancer. In Terns’ Phase 1/2 CARDINAL trial, the drug delivered a 75% major molecular response rate at 24 weeks among evaluable patients who got the recommended dose. Merck, in a note to investors, said that figure reflects how much leukemia-driving cells dropped.
Merck chief executive Robert Davis called the deal a move that “builds on our growing presence in hematology.” Over at Terns, CEO Amy Burroughs pointed to Merck’s “scale and resources” as key to pushing “advance TERN-701” forward. Terns Pharmaceuticals, Inc.
Analysts wasted no time comparing the deal to Novartis’s Scemblix, still the key yardstick in this space. William Blair’s Andy Hsieh said Merck isn’t paying up for the full potential of the drug. Over at RBC Capital Markets, analyst Trung Huynh called multibillion-dollar peak sales “realistic,” assuming TERN-701 meets expectations on efficacy and durability. bloomberg.com
The volume spike told the story: Terns saw 81.3 million shares change hands on Wednesday, a massive jump from just 2.5 million the prior session. That flurry came after Reuters broke the news late Tuesday—Merck was close to striking an all-cash deal for the company.
The deal isn’t done yet. Terns must get over half its shares tendered, and the merger still hinges on antitrust sign-off, per the filing. Under the no-shop agreement, Terns can’t solicit rival offers, but the door stays open if a better bid shows up. If Terns ditches Merck for a higher offer, it’s on the hook for a $235 million breakup fee; Merck, for its part, could owe Terns $270 million if antitrust issues kill the transaction.
That risk isn’t off the table yet. Leerink’s Andrew Berens noted, “many investors were hoping for a higher price,” particularly with new TERN-701 results coming later this year. Huynh points out the slim 6% premium might keep the door open for moves from AbbVie or Bristol Myers Squibb. Right now, Terns’ shares holding just under the offer price signal investors are fixated on whether the deal closes—or if another bidder steps in. Reuters
