Merck lowered its acquisition offer for Terns Pharmaceuticals by $1 billion in early February, following new clinical data on Terns’ lead leukemia drug, according to a securities filing posted on Apr. 8.
The adjustment in Merck’s proposal highlights how critical clinical trial results can affect the valuation of biotechnology companies and influence major pharmaceutical deals.
Initially, Merck proposed to purchase Terns at $61 per share, totaling about $7.7 billion. At the same time, another unnamed large pharmaceutical company offered $58 per share before raising its bid to match Merck’s. However, after both companies received updated Phase 1 CARDINAL study data for TERN-701—Terns’ main asset for chronic myeloid leukemia—both parties reconsidered their offers. The new findings showed that the major molecular response (MMR) achievement rate was lower than previously reported in December 2025.
Following this disclosure, Merck reduced its offer to $50 per share. According to the securities filing from Terns, "Merck believed that the MMR achievement rate for TERN-701 would likely be at the low end of the range discussed by Terns management." The unnamed bidder withdrew completely after concluding that "TERN-701 [was not] sufficiently differentiated or sufficiently de-risked to proceed," as stated in Terns’ filing.
Despite lowering its bid, Merck still found value in acquiring TERN-701 and ultimately agreed with Terns on a final price of $53 per share—a total of approximately $6.7 billion as announced last month. Leerink Partners commented on Tuesday evening: "We continue to think that the deal price underestimates the potential for TERN-701 in chronic myeloid leukemia," projecting peak global revenues could reach around $6.2 billion by 2040.
When completed—which Leerink expects will happen in early May—the acquisition will give Merck a potential competitor against Novartis' Scemblix and support its strategy ahead of Keytruda's loss of exclusivity expected in 2028.
