Merck & Co. Inc. (NYSE:MRK) is nearing an all-cash deal to acquire Terns Pharmaceuticals, Inc. (NASDAQ:TERN) for roughly $6 billion, aiming to strengthen its oncology pipeline ahead of Keytruda losing U.S. patent protection, the Financial Times reported on Wednesday.

The deal could close within days, according to the report.

The companies did not immediately respond to Benzinga‘s requests for comment.

Keytruda Patent Cliff Looms

Merck is preparing for the loss of exclusivity on Keytruda, its top-selling cancer drug. The therapy generates about $30 billion annually and accounts for nearly half of the company's revenue. U.S. patent protection could begin expiring as early as 2028, opening the door to biosimilar competition.

Terns Drug Offers Potential

Terns is developing an early-stage treatment for chronic myeloid leukemia (CML), a rare blood cancer. If successful, the drug could help offset future revenue losses. Late-stage trials are expected by late 2026 or early 2027.

Terns' therapy could eventually compete with Scemblix, a leading CML drug from Novartis AG (NYSE:NVS).

Deal Push Reflects Broader Strategy

The potential acquisition is part of Merck's broader push to secure future growth.

The company has been actively pursuing deals as the pharmaceutical industry faces an estimated $320 billion in revenue losses from patent expirations through 2030.

Recent acquisitions include Verona Pharma and Cidara Therapeutics, while earlier talks with Revolution Medicines did not result in a deal.

Beyond dealmaking, Merck is also expanding into AI-driven drug discovery through a partnership with Mayo Clinic, aimed at improving how new therapies are identified and developed.

Price Action: Shares of Terns Pharma were up 12.76% at $56.38 in pre-market trading on Wednesday, while Merck inched up 0.27% to $116.68.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by a Benzinga editor.

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