Merck & Co Inc. ( MRK ) on Wednesday agreed to acquire Terns Pharmaceuticals Inc. ( TERN ) , as the U.S. drugmaker accelerates efforts to offset looming revenue risks tied to its blockbuster cancer immunotherapy Keytruda.

The deal consideration is $53.00 per share in cash for an approximate equity value of $6.7 billion.

The Financial Times was the first to report the deal.

Pipeline Pressure Mounts Ahead Of Keytruda Expiry

The deal reflects Merck's ( MRK ) broader strategy to replenish its pipeline ahead of Keytruda's expected patent expiry as early as 2028.

Keytruda, a cancer immunotherapy, generates about $30 billion annually, making it central to the company's growth trajectory.

Merck ( MRK ) has been among the most aggressive acquirers in biotech, striking major deals in recent months.

In 2025, Merck ( MRK ) acquired Verona Pharma plc for approximately $10 billion, gaining access to a respiratory disease drug.

In November 2025, Merck ( MRK ) acquired influenza drug maker Cidara Therapeutics Inc. for $221.50 per share in cash, for a total transaction value of approximately $9.2 billion.

Terns Acquisition Signals Oncology Focus

The acquisition would center on Terns' early-stage treatment for chronic myeloid leukemia (CML), a rare blood and bone marrow cancer caused by genetic mutations.

Terns is expected to begin late-stage clinical trials by late 2026 or early 2027, positioning the asset as a longer-term growth opportunity.

In 2025, the company shared data at the American Society of Hematology, from the ongoing CARDINAL trial of TERN-701 for previously treated CML patients.

The Phase 1 data showed 64% major molecular response (MMR) achievement by 24 weeks in a refractory patient population.

Competitive Landscape And Market Opportunity

William Blair on Wednesday wrote that Merck's ( MRK ) offer does not fully capture the potential of TERN-701.

"TERN-701 is well-positioned to disrupt the treatment paradigm of

CML and challenge the dominance of Novartis' AG's ( NVS ) Scemblix franchise," analyst Andy Hsieh added in an investor note.

Hsieh noted that the offer leaves room for another potential bidder with a more attractive offer.

Dealmaking Momentum Across Biotech

Merck's ( MRK ) acquisition push comes as the pharmaceutical industry faces an estimated $320 billion in revenue losses through 2030 due to patent expirations.

Chief Executive Officer Rob Davis has indicated a preference for deals under $15 billion but remains open to larger transactions.

Earlier, Merck ( MRK ) reportedly ended discussions to acquire cancer drug developer Revolution Medicines, Inc. ( RVMD ) after the two sides disagreed on valuation.

Earlier in January, the Financial Times reported that Merck ( MRK ) is reportedly in talks to acquire Revolution Medicines ( RVMD ) in a deal potentially valued at between $28 billion and $32 billion.

The transaction is expected to close in the second quarter of 2026, resulting in a charge of approximately $5.8 billion, or approximately $2.35 per share to Merck ( MRK ), included in both the second quarter and full year 2026 GAAP and non-GAAP results.

Price Action: Merck & Co ( MRK ) shares were up 2.23% at $118.97 and Terns Pharma shares were up 5.53% at $52.76 at the time of publication on Wednesday, according to Benzinga Pro data.

Image via Shutterstock