Merck closes Terns, inks $9.3B deal

Merck just made two different oncology bets at once, and they solve two different problems. One is about buying a later-stage blood-cancer asset outright. The other is about keeping a pipeline of newer antibody-drug conjugates, or ADCs, flowing in behind it. On May 5, Merck closed its acquisition of Terns Pharmaceuticals, while its separate Kelun-Biotech alliance kept drawing attention because that older pact is still one of Merck’s biggest external ADC feeders. ### What did Merck actually close? The closed deal was Terns — not a company built around ADCs, and not the Kelun collaboration. Merck finished the tender offer and merger on May 5, 2026, turning Terns into a wholly owned subsidiary. The price stayed at $53 a share in cash, which Merck had first announced on March 25. ### What did Merck buy from Terns? The main prize is TERN-701. That is an oral allosteric BCR::ABL1 tyrosine kinase inhibitor for chronic myeloid leukemia, or CML. In plain English, Merck bought a targeted blood-cancer drug candidate that could strengthen its hematology lineup rather than another broad immunotherapy asset. ### Why is TERN-701 the center of gravity? Because Merck is telling you exactly that. In the close announcement, Merck said TERN-701 further diversifies its oncology pipeline, and in the original March deal announcement it called the asset a potential best-in-class candidate for certain CML patients. The drug is already in the Phase 1/2 CARDINAL trial, so this is not a pure platform buy — it is a bet on a named program with real clinical positioning. ### How far along is that CML program? Far enough that the story is more concrete than “interesting science.” Merck said TERN-701 recently received FDA Breakthrough Therapy Designation for adults with Philadelphia chromosome-positive chronic-phase CML without the T315I mutation after treatment with two or more prior TKIs. That matters because it points to a defined patient niche where Merck thinks faster development could be justified. ### So where does the $9.3 billion Kelun number fit? That number belongs to a different deal entirely. Merck’s Kelun-Biotech agreement dates back to December 2022 and covers seven investigational preclinical ADC candidates, with $175 million upfront and up to $9.3 billion in potential milestones if everything goes right. So the headline pairing can sound like one combined transaction, but it is really one deal closing now and one older collaboration still mattering strategically. ### Why does the Kelun alliance still matter now? Because Merck is trying to build past Keytruda, and ADCs are one of the clearest ways to do that. The Kelun relationship already produced sacituzumab tirumotecan, or sac-TMT, a TROP2-directed ADC that Merck said in November was being studied in 15 global Phase 3 trials across six tumor types. Merck even brought in Blackstone Life Sciences for $700 million in development funding tied to sac-TMT, which tells you this is no side project. ### Are these two moves connected? Not directly in structure, but yes in strategy. Terns gives Merck a more immediate hematology asset in CML. Kelun gives Merck a longer-duration stream of ADC shots on goal in solid tumors and potentially beyond. Basically, one move adds a specific near-to-midstage program, while the other keeps replenishing the broader oncology engine. That is especially relevant as Merck looks for growth drivers beyond its current blockbuster base. ### What’s the catch? The Terns deal is expensive even after adjusting for cash — about $5.7 billion net of acquired cash when announced, with Merck now expecting an approximately $5.8 billion research-and-development charge in 2026. And the Kelun economics are classic biotech “up to” math — huge on paper, but dependent on development and approval success across multiple assets. So the ambition is obvious, but so is the execution risk. ### Bottom line? This is not one tidy M&A story. It is Merck showing two ways to buy oncology growth — acquire a focused CML asset outright, and keep licensing external ADC optionality at scale. The common thread is simple: Merck wants more cancer drugs that can matter after Keytruda, and it is spending accordingly.