Merck & Co (MRK) investor relations material

Deal rationale and strategic fit

• Acquisition expands and strengthens the hematology pipeline, focusing on chronic myeloid leukemia (CML) and leveraging expertise and commercial scale.

• TERN-701, a next-generation allosteric BCR-ABL TKI, offers high selectivity, improved therapeutic index, and addresses significant unmet needs in CML, with potential best-in-class efficacy and safety.

• The deal aligns with a strategy to pursue innovative science, diversify the oncology portfolio, and create long-term shareholder value.

• The acquisition leverages resources to advance TERN-701 and supports ambitions to lead in oncology.

Financial terms and conditions

• Acquisition price is $53 per share in cash, valuing the transaction at approximately $6.7 billion, or $5.7 billion net of cash and securities.

• Represents a 31% premium to the 60-day and 42% premium to the 90-day volume-weighted average stock price as of March 24, 2026.

• Transaction will be financed primarily through new debt, with no expected impact on credit rating.

• The transaction will be accounted for as an asset acquisition, resulting in a $5.8 billion R&D charge in 2026 and a ~$0.17 EPS impact in the first 12 months.

Synergies and expected cost savings

• TERN-701 is expected to be a significant growth driver with multi-billion dollar commercial potential starting in the early 2030s.

• The acquisition leverages existing commercial and clinical infrastructure in oncology and hematology.

• Patent exclusivity for TERN-701 in the U.S. is anticipated to extend into the 2040s, supporting durable revenue streams.

• TERN-701 is expected to improve efficacy, safety, and convenience over existing CML treatments.