Another bidder, which remains unidentified, dropped out of the bidding process. Analysts at William Blair now think it unlikely that another suitor could offer a counter-proposal to Merck’s outstanding $6.7 billion acquisition offer.
When Merck unveiled its $6.7 billion buyout bid for Terns Pharmaceuticals last month, analysts called the deal a bargain for the pharma. William Blair even suggested that the price undervalued Terns and that a rival suitor could emerge. Now, new disclosures about the drug at the center of the acquisition have dampened that enthusiasm and revealed that Merck had once offered roughly $1 billion more.
“The emergence of a higher bidder is unlikely,” William Blair told investors in a note on Tuesday, walking back its previous assessment of the acquisition. “We now believe that the Merck acquisition will be completed later this quarter.” Merck initiated its tender offer for Terns on the same day.
The pharma had initially proposed to purchase Terns’ shares for $61 a pop, according to an SEC filing posted on Tuesday, resulting in a total offer of around $7.7 billion. This was in early February, at which point Terns was also fielding an acquisition offer from an unnamed “large pharmaceutical company,” which had proposed a per-share price of $58—an offer that it later raised to $61.
Days after Merck’s initial proposal, Terns provided both of its suitors with updated clinical data from the Phase 1 CARDINAL study of TERN-701, an oral tyrosine kinase inhibitor being tested for chronic myeloid leukemia and the biotech’s lead asset.
Tuesday’s SEC document did not detail what these updated findings were, revealing only that “the MMR [major molecular response] achievement rate was lower” than the 64% rate at 24 weeks that had previously been disclosed in a December 2025 presentation. MMR is a common bellwether for how effective a leukemia therapy is.
Merck seemed underwhelmed by these new disclosures and lowered its proposed purchase price to $50 per share. “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 biotech reported in its securities filing.
The unnamed bidder was similarly unimpressed with the updated CARDINAL data and withdrew its offer. The company “did not view TERN-701 as sufficiently differentiated or sufficiently de-risked to proceed,” according to Terns’ filing.
Despite the downward adjustment in the purchase proposal, Merck nevertheless believed that TERN-701’s data were still “compelling,” Terns claimed on Tuesday. The biotech negotiated upward, and ultimately the parties settled on the final per-share price of $53, or $6.7 billion as announced last month.
Leerink Partners agreed with Merck’s assessment. “We continue to think that the deal price underestimates the potential for TERN-701 in chronic myeloid leukemia,” the firm wrote to investors on Tuesday evening, projecting sales to reach “blockbuster levels” by 2032. At its peak, TERN-701 could hit global revenues of around $6.2 billion by 2040.
When the transaction closes—which Leerink expects will happen in early May—Merck will gain a potential challenger to Novartis’ Scemblix, a kinase inhibitor approved in October 2021 for Philadelphia chromosome-positive chronic myeloid leukemia. The drug has already broken blockbuster status, bringing in more than $1.28 billion last year.
The Terns deal also plays into Merck’s strategy of enriching its pipeline in preparation for the loss of exclusivity of mega-blockbuster cancer drug Keytruda. Market protections for the PD-1 inhibitor are set to expire in 2028, after which the pharma expects biosimilars to eat away at its market share.
Aside from the Terns takeover, Merck in November 2025 absorbed Cidara Therapeutics for $9.2 billion, winning over a late-stage antiviral drug, and acquired Verona Pharma for $10 billion in July that year for an FDA-approved chronic obstructive pulmonary disease drug Ohtuvayre.
