• Biotech Snap
  • Posts
  • Merck bets $6.7B on Terns & Sarepta shows strong RNAi clinical results

Merck bets $6.7B on Terns & Sarepta shows strong RNAi clinical results

AuthorAuthor

Joachim Eeckhout & Eduardo Longoria
March 26, 2026

 

Good Morning! Wall Street’s biotech backdoor is open again and RA Capital wants to use it to shop in China.

What happened: RA Capital has filed to raise $50 million for a new SPAC (Special Purpose Acquisition Company) with plans to merge with a biotech or healthcare company in China. The logic is familiar: with the biotech IPO market still sluggish, SPACs are once again being pitched as an alternative route to the public markets. They are faster than a traditional IPO, lighter on scrutiny, and newly attractive again as seasoned biotech investors return to the format.

Why it matters: This is a bet on two things at once: that SPACs are back, and that China remains one of biotech’s most productive sources of clinical-stage inventory. For investors, it’s also a reminder that when the IPO window stays jammed, financial engineering tends to reappear.

Bottom line: The IPO drought may not be over, but the workarounds are still alive.

— Joachim E.

Don’t keep this newsletter a secret: Forward Biotech Snap to a friend!

Was this email forwarded to you? Sign up here.

SNAPSHOT

Merck bets $6.7B on Terns to challenge a leading leukemia drug

Rolling dice on blue.

Merck & Co. (MSD) plans to acquire Terns Pharmaceuticals for $6.7 billion, gaining access to an experimental leukemia drug (TERN-701) that could compete with Novartis’ blockbuster Scemblix.

Why it matters: The deal gives Merck a potential new cancer growth driver as it prepares for Keytruda, its biggest product, to lose patent exclusivity later this decade. It also signals Merck is willing to pay early for assets it sees as meaningfully better than current treatments.

Backstory: TERN-701 is still in early-stage testing, but data presented last year suggested it could compete with Novartis’ Scemblix, a leading chronic myeloid leukemia drug projected to reach more than $4 billion in peak annual sales. Analysts have said TERN-701 may offer stronger efficacy, better safety, and more convenient dosing.

Big picture: Merck has been aggressively reshaping its pipeline. After spending billions on Cidara Therapeutics and Verona Pharma, the company is trying to build enough new products to offset future revenue pressure from Keytruda’s patent loss and support a goal of $70 billion in annual sales next decade.

Zoom in: The offer carries only a 6% premium to Terns’ Tuesday closing price, unusually low for a public biotech deal. But Terns’ stock had already surged over the past year and was up about 25% since the start of 2026. Merck emphasized the bid was 31% above Terns’ average share price over the last two months and 42% above its three-month average. Analysts called the acquisition strategically sound, though the modest premium could invite rival bids.

What’s next: Investors will watch for competing offers, regulatory review, and more clinical data on TERN-701 to determine whether it can become a best-in-class leukemia medicine.

SNIPPETS

What’s happening in biotech today?

🧬 RNAi boost: Sarepta Therapeutics reported encouraging early clinical results for two RNA interference (RNAi) drugs, SRP-1001 and SRP-1003, licensed from Arrowhead Pharmaceuticals, sending its shares up 25%. The treatments, targeting rare muscle-wasting diseases, showed strong muscle delivery, evidence of hitting genetic targets, and no severe side effects in Phase 1/2 studies. SRP-1001 demonstrated particularly strong suppression of a harmful protein linked to disease progression, while SRP-1003 data were more limited. The results support Sarepta’s strategy to bolster its pipeline amid recent setbacks, though analysts note remaining safety questions and await further data to confirm long-term potential.

📉 Stock shock: Maze Therapeutics reported phase 2 data showing its APOL1 inhibitor MZE829 reduced proteinuria by an average of 35.6% after 12 weeks in patients with APOL1-mediated kidney disease, surpassing a common efficacy benchmark and prompting analysts to highlight its “best-in-class potential” and commercial viability. The drug also showed a favorable safety profile, with no serious treatment-related adverse events. Despite this, Maze’s stock fell about 38%, likely due to investor concerns over mixed results across patient subgroups and comparisons to Vertex’s competing drug, inaxaplin. Analysts largely viewed the selloff as an overreaction, noting strong overall efficacy and competitive positioning, with further data expected to guide a planned phase 3 trial.

😬 Symptom miss: Karyopharm Therapeutics reported mixed Phase 3 results for its cancer drug Xpovio in myelofibrosis, showing significant improvement in spleen volume reduction, a key clinical endpoint, when combined with Incyte’s Jakafi, but failing to demonstrate meaningful benefit in symptom relief compared to Jakafi alone. The study also showed a non-statistically significant trend toward improved survival. Despite the partial success, Karyopharm plans to pursue regulatory discussions for expanded approval, which analysts say could substantially boost revenue. However, investor reaction was negative, with shares falling, reflecting concerns about the drug’s incomplete efficacy profile and the company’s ongoing financial losses.

⚖️ Weight win: Novo Nordisk and partner United Laboratories reported positive phase 2 results for their triple agonist UBT251 in Type 2 diabetes patients in China, showing greater reductions in blood sugar (up to 2.16% HbA1c drop) and body weight (up to 9.8%) compared to semaglutide. The data support the drug’s competitive potential within the emerging “triple-G” class, though it still trails Eli Lilly’s retatrutide, which has demonstrated strong efficacy and is further advanced in development. Novo plans to launch a global phase 2 trial later this year, but analysts note its delayed timeline may limit near-term commercial impact as Lilly moves closer to regulatory filings.

SPEED READ

More news

TOUR OPERATOR

Upcoming events

What did you think of today's newsletter?

Your feedback helps us create the best newsletter possible.

Login or Subscribe to participate in polls.

Share the Snap!

Know someone who’d enjoy this? Hit forward and pass it along.