Merck is acquiring Terns Pharmaceuticals for $6.7 billion to bolster its oncology pipeline, while Shionogi is set to purchase 50% of Apnimed's ownership of SASS.
Merck and Shionogi & Co Ltd. announced acquisitions this week, with Merck’s being a major oncology acquisition, while Shionogi represents a joint venture deal.
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Both acquisitions reflect continued dealmaking activity across the pharmaceutical industry as companies reshape their pipelines heading into mid-2026.
Merck agreed to acquire Terns Pharmaceuticals for $53.00 per share in cash, representing an equity value of approximately $6.7 billion, or $5.7 billion net of acquired cash.1 The price represents a 31% premium to Terns' 60-day volume-weighted average stock price and a 42% premium to its 90-day average.1
Both companies' boards approved the transaction and is expected to close in the second quarter of 2026.
The deal centers on TERN-701, an investigational oral allosteric BCR::ABL1 tyrosine kinase inhibitor being evaluated in the Phase I/II Cardinal trial for patients with Philadelphia chromosome-positive chronic phase chronic myeloid leukemia who have experienced treatment failure, suboptimal response, or intolerance to at least one prior tyrosine kinase inhibitor.
TERN-701 was granted Orphan Drug Designation from FDA back in March 2024.1
Early clinical data shows encouraging rates of major and deep molecular response by week 24, including in patients with high disease burden who had previously received multiple lines of therapy and allosteric TKI treatment. The safety profile to date has been favorable, with mostly low-grade adverse events, no clinically meaningful blood pressure changes, and low rates of lipase elevation.1
Robert M. Davis, chairman and CEO of Merck, says TERN-701 represents a potential best-in-class candidate in CML and further diversifies the company's oncology portfolio.
“This transaction further diversifies and strengthens our position in oncology as we continue to look for opportunities to broaden our portfolio into other therapeutic areas,” says Davis.
Dean Y. Li, president of Merck Research Laboratories, notes that despite significant advances in CML treatment over the past 25 years, there remains a need for well-tolerated therapies capable of achieving faster and deeper molecular responses.
In a strategical transaction, Apnimed agreed to sell its 50% stake in Shionogi-Apnimed Sleep Science, LLC (SASS) to its partner Shionogi & Co. for $100 million upfront, along with a $50 million milestone payment tied to the development of SASS-002 (sulthiame), plus tiered royalties on future commercial sales.2
The deal is expected to close in the second quarter of 2026 and will make SASS wholly owned by Shionogi.2
The joint venture was established in 2023 to combine Shionogi's small molecule drug discovery capabilities with Apnimed's translational research expertise in sleep disorders.2 For Apnimed, the divestiture is a deliberate strategic move to strengthen its balance sheet and sharpen its focus on AD109, its lead drug candidate for obstructive sleep apnea, which has an expected NDA submission to the FDA in the second quarter of 2026.
AD109 is a once-daily oral combination of aroxybutynin and atomoxetine designed to address the neuromuscular root cause of upper airway collapse during sleep, a fundamentally different mechanism from existing Obstructive Sleep Apnea (OSA) treatments, which are largely mechanical.2
OSA affects an estimated 80 million Americans and one billion people worldwide, and currently approved pharmacological options are limited.2
Larry Miller, CEO of Apnimed, says the transaction enables the company to concentrate resources on bringing AD109 to market.
"We are proud of the valuable collaboration we have built with Shionogi over the past three years and are encouraged by the progress of the SASS programs," he said.
