Terns’ lead candidate TERN-701 is an investigational oral allosteric BCR::ABL1 tyrosine kinase inhibitor currently in Phase 1/2 development for certain patients with CML (Form 8-K)

Terns' lead candidate TERN-701 is an investigational oral allosteric BCR::ABL1 tyrosine

kinase inhibitor currently in Phase 1/2 development for certain patients with CML

Merck to hold investor call at 8 a.m. EDT today

RAHWAY, N.J., and FOSTER CITY, Calif., March 25, 2026 - Merck (NYSE: MRK), known as MSD outside of the United States and Canada, and Terns Pharmaceuticals, Inc. ("Terns") (Nasdaq: TERN), a clinical-stage oncology company, today announced that the companies have entered into a definitive agreement under which Merck, through a subsidiary, will acquire Terns for $53.00 per share in cash for an approximate equity value of $6.7 billion. This equates to approximately $5.7 billion net of acquired cash and represents an approximate premium of 31% to the 60-day and 42% to the 90-day volume-weighted average stock price on March 24, 2026.

"The acquisition of Terns builds on our growing presence in hematology with TERN-701, a potential best-in-class candidate for the treatment of certain patients with chronic myeloid leukemia," said Robert M. Davis, chairman and chief executive officer, Merck. "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."

Terns' lead candidate, TERN-701, is a novel investigational oral allosteric BCR::ABL1 tyrosine kinase inhibitor (TKI) currently being evaluated in the Phase 1/2 CARDINAL trial (NCT06163430) for patients with Philadelphia chromosome-positive (Ph+), chronic phase chronic myeloid leukemia (CML) previously treated with at least one prior TKI and who experienced treatment failure, suboptimal response or treatment intolerance. In March 2024, the U.S. Food and Drug Administration (FDA) granted Orphan Drug Designation for TERN-701 for the treatment of CML.

"This acquisition reflects our team's deep commitment to innovation in oncology and developing high impact medicines," said Amy Burroughs, chief executive officer, Terns. "By working together, we will advance TERN-701, leveraging the deep expertise and significant resources at Merck, a global biopharmaceutical leader with a proven track record of delivering cancer breakthroughs for patients who need them most. I am immensely proud of the Terns team and our work towards making a difference for people living with CML. Finally, we extend our heartfelt thanks to the investigators, patients, and community advocates whose dedication and support make the development of TERN-701 possible."

In clinical trials to date, TERN-701 has shown promising activity, with encouraging rates of major molecular response and deep molecular response observed by week 24. Importantly, this includes responses in patients with high disease burden who previously received multiple lines of therapy, including many who were treated with an allosteric TKI. The majority of treatment-emergent adverse events were reported as low grade with a low incidence of severe adverse events and discontinuations. No clinically meaningful changes in blood pressure have been observed, and rates of lipase elevation have been low.

"The first approval of a BCR::ABL1 tyrosine kinase inhibitor 25 years ago transformed the prognosis for many patients with chronic myeloid leukemia. Despite new therapeutic options, there is significant need for innovative, well-tolerated therapies with faster time to onset of molecular response leading to deeper responses and better disease control," said Dr. Dean Y. Li, president, Merck Research Laboratories. "Based on early clinical evidence, TERN-701, a novel allosteric BCR::ABL1 inhibitor, may have the potential to provide a meaningfully differentiated option for certain patients living with CML."

The transaction has been approved by both Merck's and Terns' Boards of Directors. Under the terms of the merger agreement, Merck, through a subsidiary, will acquire all of the outstanding shares of Terns. The acquisition is subject to a majority of Terns' stockholders tendering their shares in a tender offer that will be initiated by a subsidiary of Merck. The closing of the proposed transaction will be subject to certain conditions, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and other customary conditions. The transaction is expected to be accounted for as an asset acquisition and close in the second quarter of 2026, resulting in a charge of approximately $5.8 billion, or approximately $2.35 per share, included in both second quarter and full year 2026 GAAP and non-GAAP results.

A copy of the merger agreement for the transaction will be filed with the Securities and Exchange Commission ("SEC") and will be publicly available free of charge at the SEC's website at www.sec.gov. Copies of the documents filed with the SEC by Merck may be obtained at no charge from Merck's website at www.merck.com or by contacting Merck at 126 East Lincoln Avenue, P.O. Box 2000, Rahway, NJ 07065 USA, or (908) 740-4000. Copies of the documents filed with the SEC by Terns may be obtained at no charge from Terns' website at www.ternspharma.com or by contacting Terns at 1065 East Hillsdale Blvd., Suite 100, Foster City, CA 94404 or (650) 525-5535 Ext.101.

Investor Call

Merck will hold an investor call Wednesday, March 25, 2026 at 8 a.m. EDT to discuss the proposed transaction. Journalists who wish to ask questions should contact a member of Merck's Global Media Relations team at the conclusion of the call. Investors, journalists and the general public may access a live audio webcast of the call via this weblink.

All participants may join the call by dialing (800) 369-2154 (U.S. and Canada Toll-Free) or (517) 308-9422 and using the access code 8711041.

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Advisors

Centerview Partners LLC and Jefferies LLC acted as financial advisors to Terns and Freshfields LLP acted as Terns' legal advisor.

About TERN-701

TERN-701 is a novel investigational oral allosteric BCR::ABL1 tyrosine kinase inhibitor (TKI) designed to bind to the ABL myristoyl pocket, with a potentially best-in-disease profile that could improve upon the efficacy, safety and convenience of existing treatments for CML.

About the CARDINAL study

TERN-701 is currently being evaluated in the CARDINAL trial (NCT06163430), a global multi-center dose escalation and dose-expansion clinical trial to assess safety, tolerability and efficacy in patients with Philadelphia chromosome-positive (Ph+) chronic phase CML previously treated with at least one prior TKI and experienced treatment failure, suboptimal response, or treatment intolerance. The dose escalation portion of the CARDINAL trial completed in January 2025 with no dose limiting toxicities observed up to the maximum dose of 500mg QD. Terns initiated the dose expansion portion of the trial in April 2025 with patients randomized to one of two dose cohorts (320mg or 500mg QD) with up to 40 patients per arm. In January 2026, an additional cohort was added to the CARDINAL trial to evaluate TERN-701 500 mg QD in approximately 20 patients with BCR::ABL1 resistance mutations including T315I, M244V, F359I/C/V and others.

About chronic myeloid leukemia

Chronic myeloid leukemia (CML) is a slow growing type of blood cancer that leads to an overproduction of white blood cells that accumulate in the blood and bone marrow, disrupting the production of healthy blood cells. CML is commonly associated with the Philadelphia chromosome, a translocation between chromosomes 9 and 22 that results in constitutive activation of the BCR::ABL1 fusion protein, which fuels cancer growth.

About Merck in hematology

Merck is advancing a pipeline of hematology candidates targeting a diverse range of targets across leukemias, lymphomas and myeloproliferative neoplasms. Candidates in Phase 3 development include: bomedemstat (MK-3543), an investigational, orally available lysine-specific demethylase 1 (LSD1) inhibitor; nemtabrutinib (MK-1026), an investigational, non-covalent Bruton's tyrosine kinase (BTK) inhibitor; and zilovertamab vedotin (MK-2140), an investigational antibody-drug conjugate (ADC) that targets receptor tyrosine kinase-like orphan receptor 1 (ROR1). Additionally, MK-1045, an investigational CD19xCD3 T-cell engager, is currently being evaluated in a Phase 1b/2 trial.

About Terns Pharmaceuticals

Terns Pharmaceuticals is a clinical-stage oncology company reimagining known biology to deliver high impact medicines. Terns' lead program, TERN-701, is a highly selective, oral, allosteric BCR::ABL1 inhibitor with a potentially best-in-disease profile that could meaningfully improve upon the efficacy, safety and convenience of existing treatments for chronic myeloid leukemia. For more information, please visit: www.ternspharma.com.

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About Merck

At Merck, known as MSD outside of the United States and Canada, we are unified around our purpose: We use the power of leading-edge science to save and improve lives around the world. For more than 130 years, we have brought hope to humanity through the development of important medicines and vaccines. We aspire to be the premier research-intensive biopharmaceutical company in the world - and today, we are at the forefront of research to deliver innovative health solutions that advance the prevention and treatment of diseases in people and animals. We foster a diverse and inclusive global workforce and operate responsibly every day to enable a safe, sustainable and healthy future for all people and communities. For more information, visit www.merck.com and connect with us on X (formerly Twitter), Facebook, Instagram, YouTube and LinkedIn.