MSD concludes Terns acquisition to expand CML pipeline

Following a successful tender offer and subsequent merger, the companies announced the completion of the transaction, making Terns a wholly owned subsidiary of MSD.

The US Food and Drug Administration (FDA) recently granted breakthrough therapy designation to TERN-701.

The designation covers adults with Philadelphia chromosome-positive CML in the chronic phase without the T315I mutation, who were previously treated with two or more tyrosine kinase inhibitors.

It was supported by ongoing data from the Phase I/II CARDINAL trial.

MSD completed the cash tender offer through a subsidiary, buying all outstanding Terns common stock at $53 per share, without interest and subject to applicable tax withholding.

The tender expired on 4 May 2026. A total of 100.1 million shares, or 86.36% of outstanding Terns stock, were validly tendered and not withdrawn.

MSD accepted all such shares in line with the offer’s terms and will promptly pay for them accordingly.

Following the tender completion, MSD will purchase all outstanding Terns shares at the time of the merger.

With this, Terns is now a wholly owned subsidiary, and its shares will no longer be traded on the Nasdaq Global Select Market.

The transaction will be treated as an asset acquisition, resulting in a charge to research and development of $5.8bn ($2.35 per share) within the second quarter and full year 2026 reported results.

Generally accepted accounting principles (GAAP) and non-GAAP earnings per share are expected to be negatively impacted by $0.12 per share in 2026, reflecting advancement and financing costs for TERN-701.

TERN-701 is a novel oral investigational allosteric breakpoint cluster region::abelson murine leukaemia viral oncogene homolog 1 (BCR::ABL1) tyrosine kinase inhibitor.

It binds to the ABL myristoyl pocket, with the potential to improve therapies for CML.

Merck chairman and CEO Robert Davis said: “The Terns acquisition reflects Merck’s continued focus on science-driven, value-enhancing business development aimed at bringing meaningful innovation to patients.

“We believe TERN-701 has the potential to become a differentiated treatment option for certain patients with chronic myeloid leukaemia, and we look forward to working with the Terns team to advance its clinical development.”

Last month, MSD and Google Cloud formed a multi-year partnership, investing up to $1bn, to advance agentic AI enterprise transformation.