MSD has announced the successful completion of its acquisition of Terns Pharmaceuticals, Inc., marking a significant move to strengthen its oncology pipeline and expand its portfolio of targeted cancer therapies.
The acquisition centers on TERN-701, an investigational drug candidate being developed for the treatment of chronic myeloid leukemia (CML). The therapy has already received Breakthrough Therapy Designation from the U.S. Food and Drug Administration, highlighting its potential to address unmet medical needs in patients who have limited treatment options after prior therapies.
MSD Chairman and CEO Robert M. Davis said the deal aligns with the company’s strategy of pursuing science-driven acquisitions that deliver meaningful innovation. He noted that TERN-701 could become a differentiated treatment option for patients with Philadelphia chromosome-positive CML who have previously been treated with two or more tyrosine kinase inhibitors and do not carry the T315I mutation.
The Breakthrough Therapy Designation for TERN-701 is supported by early clinical findings from the ongoing Phase 1/2 CARDINAL trial, which is evaluating the safety and efficacy of the drug in this specific patient population. The designation is intended to expedite the development and review of therapies that show substantial improvement over existing treatments.
Under the terms of the transaction, MSD acquired all outstanding shares of Terns through a cash tender offer priced at $53 per share. At the close of the offer on May 4, 2026, approximately 86.36% of Terns’ shares had been tendered and accepted for payment. The acquisition was finalized through a subsequent merger, resulting in Terns becoming a wholly owned subsidiary of MSD. Following the completion of the deal, Terns’ shares have been delisted from the Nasdaq Global Select Market.
Financially, the transaction is expected to be accounted for as an asset acquisition, leading to a one-time research and development charge of approximately $5.8 billion. This charge will be reflected in both second-quarter and full-year 2026 financial results. Additionally, MSD anticipates a modest impact on earnings per share, estimated at around $0.12 for the year, primarily due to continued investment in TERN-701’s development and financing costs.
The acquisition underscores MSD’s continued commitment to oncology innovation and its focus on advancing therapies for patients with difficult-to-treat cancers. By integrating Terns’ clinical programs and expertise, the company aims to accelerate the development of next-generation treatments and reinforce its leadership in the global oncology market.