M&A brings Merck a potential blockbuster cancer drug

MedCity News's analysis-driven daily newsletter  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­  

Featured Story   The Cancer Drug That Could Spark a New Merck, Novartis Rivalry The deal Merck is acquiring Terns Pharmaceuticals in a deal that values the biotech at $6.7 billion. While the $53 in cash that Merck will pay for each Terns share is just a 6% premium to the stock's Tuesday closing price, it's a 42% premium to its average stock price in the 90 days before the deal was announced. Terns shares have been climbing since the late 2025 report of positive preliminary data for TERN-701, a drug that analysts say has best-in-class potential for treating a particular type of chronic myeloid leukemia (CML). The drug TERN-701 is a small molecule inhibitor of an enzyme that drives the progression of CML. The way it works is similar to Novartis's Scemblix, whose 2021 accelerated FDA approval made it first in its drug class. But Scemblix requires fasting before and after taking the twice daily pill. By contrast, TERNS-701 is a once-daily pill that can be taken with or without food, improving on patient convenience. Why it matters Standard treatment for CML includes tyrosine kinase inhibitors. Some patients find their disease does not respond to these older drugs or the cancer becomes resistant to them. Scemblix and TERN-701 are next-generation tyrosine kinase inhibitors that could avoid drug resistance. To analysts that follow the space, the patient convenience of TERNS-701 and its preliminary results showing stronger measures of efficacy position the Terns pill to challenge Scemblix's dominance in this indication. Leerink Partners projects TERNS-701 could achieve about $6.2 billion in peak sales. That's important to Merck, which has been looking for drugs with blockbuster potential to offset the coming revenue decline when its top product, Keytruda, falls off the patent cliff. Soundbite "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," Merck CEO Robert Davis said. "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." —By Frank Vinluan Sponsored   Improving Patient Outcomes: A Conversation with DrFirst Valerie Mondelli Presented by DrFirst DrFirst Chief Commercialization Officer Valerie Mondelli described its intelligent medication management platform. She also noted how medication management and adherence can be an overlooked part of healthcare. Referencing her experience as a pharmacist, she emphasized how the business sought to make the customer experience less daunting in the pharmacy.  See the full interview Top Stories   Adonis Scores $40M The moolah Adonis, founded in 2022, closed a $40 million Series C round on Wednesday, bringing its fundraising total to more than $95 million. The round was led by Quadrille Capital, with participation from General Catalyst and Bling Capital. The platform The startup's platform analyzes hospitals' billing data to find the problems that are causing payers to deny or underpay claims. Its software can then automatically carry out tasks like researching those denials or preparing appeals to help providers recover the money they're owed. "The end goal is to really help our customers increase the revenue they collect, and also, over time, decrease the pressure that they have on the individual team members," explained Adonis CEO Akash Magoon. The inspiration Magoon started Adonis with his brother Aman. This is the second health tech startup they have created — the first was Nayya, which the duo founded in 2019. Nayya sells to payers, offering a solution that helps walk people through the open enrollment process. During the brothers' time working so closely with payers, they were able to see firsthand how aggressively these companies have been investing in AI models to optimize their back-office operations. "They've been building technology to deny claims at a really fast clip. So one of the reasons that we started Adonis is to flip everything we learned working with the payers on its head and help providers and their teams deploy and leverage the same type of capabilities. Seeing it from the other side in our past lives really motivated us to solve this problem," Magoon declared. A customer's thoughts Some of Adonis' customers include Mount Sinai Health System, Baptist Health South Florida, AdventHealth and ApolloMD. Salonia Brown, Mount Sinai's vice president of revenue cycle management, said Adonis stood out from other vendors because of its dual approach. Its system combines AI agents to handle high-volume, manual tasks with an intelligence platform that continually provides visibility into trends, root causes and accounts receivable, Brown noted. In practice, he said Adonis' solution has allowed staff to focus on higher-value work while automating low-yield tasks, as well consolidated insights that were previously scattered across multiple systems. — By Katie Adams Could There Be a 'Soft Opening' of H.R. 1 Medicaid Changes? Could there be a slow implementation of Medicaid changes? H.R. 1, known as the One Big Beautiful Bill Act, will enact significant changes to Medicaid in January 2027, including work requirements for certain enrollees to maintain eligibility. It's estimated that millions of people could lose coverage due to these work requirements. But is it possible that there will be a slow implementation of these changes, in terms of removing people from coverage? One healthcare expert believes there may need to be. "I really struggle to see the policy being launched in full form, in full effectiveness on January 1 in an enforceable way," said Matt Salo, founder of Salo Health Strategies, on a Wednesday panel discussion. "And I continue to believe that with all of the changes that need to happen from systems and government decisions and plan partnerships and member outreach and engagement and activation that we're going to be seeing kind of like a soft opening of a restaurant on January 1." A dissenting view The other panelists disagreed that there will be a slow implementation of H.R. 1 Medicaid changes. Kate McEvoy, executive director of the National Association of Medicaid Directors, noted that there is a "Herculean effort" going on between CMS and states around system functionality. For example, there has been a major focus on improving ex parte renewals, which verify Medicaid eligibility using existing data like income records without requiring paperwork from patients. — By Marissa Plescia The FDA Is Fast-Tracking Health AI — Women's Health Can't Be Left Behind An AI milestone We just passed a milestone in health AI that honestly, we all saw coming, but has major consequences if the data to support is left unexamined. OpenAI launched ChatGPT Health and Anthropic added medical toolsets for Claude, meaning users can sync their records and wearables, using their personal health data to get hyper-specific answers to their medical questions. At the same time, the FDA issued new guidance that effectively loosened the reins on wellness products like wearables, so AI can interpret markers like blood pressure and glucose with far less oversight. Or just a high-tech way to continue giving women the wrong answers? But for these tools to work for women, they must be built on data that actually includes them. The current diagnostic gap is the result of decades of medical research that centered men as the default patient. Even today, women only represent about 30% of clinical research participants, meaning our diagnostic criteria, medical education, and datasets feeding these new models are severely underrepresenting the health needs of half of the population. A bridge toward diagnostic equity is possible The current pace of innovation demands speed, but it cannot sustain without sure data. This means we have to take a strategic pause to check the foundation. It's not that technology is moving too fast for the data, but that we cannot afford to get the data wrong. As people naturally turn to tools like ChatGPT Health and Claude, the risk of automated misdiagnosis increases if we feed them incomplete, male-centric information. We must prioritize building AI on rich, representative data from companies that capture the nuances of women's health. — By MedCity Influencer Julia Cheek   Video   Video: Vibe @ ViVE From ViVE in LA: Jeffrey Sullivan, CTO of eFax® by Consensus (sponsor), talks about its role in the healthcare ecosystem. It has created a bridge between traditional health communications and modern digital health, in part, by converting unstructured data into structured data. He also discussed some of the technical barriers to interoperability.

In Other News

A New Opportunity to Reduce Resident Burnout: Young Doctors Are AI Natives Residents embrace AI for everything from clinical decisions to emotional support. Health systems need to meet them where they are.

eBook   Selecting the Right EMR: A Practical Guide to Streamlining Your Practice and Enhancing Patient Care Choosing the wrong EMR can slow your practice down. This guide helps healthcare teams compare options, avoid costly pitfalls, and choose a platform that improves care, compliance, and patient experience. Read more

MedCity News • PO Box 901 • New York, NY unsubscribe