M&A analysis: Merck and Gilead splash the cash

The first-quarter of 2026 saw nine acquisitions that were relevant to oncology, in line with recent quarters; but, unlike in recent quarters, three of these deals were sizeable.

The biggest price tag concerned the Car-T player Arcellx, which Gilead bought for $7.8bn, cementing a long-held licensing agreement between the two groups. Merck & Co also shelled out $6.7bn for Terns, gaining the BCR-ABL inhibitor TERN-701, which produced knockout data at ASH. And Servier paid a company record of $2.5bn for Day One, largely for its approved brain cancer drug Ojemda.

Gilead's gamble

The only 2025 cancer acquisitions that outstrip Gilead’s Arcellx buy are Genmab’s $8bn swoop for Merus, and Sanofi’s $9bn buyout of Blueprint.

For its money, Gilead gains full control over the autologous BCMA-targeting Car-T anitocabtagene autoleucel, which is awaiting an FDA approval decision in late-line multiple myeloma by 23 December. A green light looks likely, but the big question is whether anito-cel can take market share from J&J/Legend’s Carvykti, based on claims of improved safety. Anito-cel might also be squeezed by J&J’s BCMA-targeting T-cell engager Tecvayli, recently FDA approved alongside Darzalex in second-line disease.

The deal additionally gives holders a contingent value right of $5 per share, payable if anito-cel hits cumulative sales of at least $6bn from launch until the end of 2029. Curiously, the offer for the acquisition was recently extended by 22 days, after only 7.5% of Arcellx shares were tendered.

Terns flies

Terns had looked like an acquisition target since ASH in December, when TERN-701 eclipsed a rival project from Enliven, ELVN-001, as well as looking safer than Novartis’s third-generation BCR-ABL inhibitor Scemblix.

The big surprise here was that Merck was the buyer, given that the big pharma has no meaningful presence in Terns’ target area of chronic myelogenous leukaemia.

Evercore ISI calculated that the price implied TERN-701 peak sales of around $1.5bn, although the analysts believe that “Merck will do better than that”. These two factors have led to speculation that other groups, such as Bristol Myers Squibb, might table a rival offer, although none has yet emerged.

Day One’s day

Meanwhile, Servier’s $2.5bn buyout of Day One is less impressive, but still a big deal for a company that has previously largely stuck to smaller deals. As well as Ojemda, FDA approved for relapsed/refractory, BRAF-altered low-grade glioma, Servier will gain projects originated by Mersana Therapeutics, which Day One acquired last November for the bargain price of $129m.

One question is what the transaction means for Black Diamond’s BDTX-4933, a rival RAF inhibitor that Servier licensed last year for a much less demanding $70m up front.

Also in the first quarter, Lilly was the latest big group to get into the hot area of in vivo Car-T, but its purchase of Orna was largely focused on autoimmune diseases – although Orna had also been developing a bispecific anti-CD19 x BCMA in oncology.

Smaller transactions included Gyre’s all-stock purchase of the degrader specialist Cullgen, Sensei’s takeout of Faeth Therapeutics and its combo therapy Piktor, and Amgen’s bet on a novel leukaemia mechanism, MLLT degradation, with its buyout of Dark Blue Therapeutics.

But the larger buys, as well as a lack of deals from serial acquirers like Concentra and Xoma Royalty, could have biotech investors feeling optimistic about the rest of 2026.

Notable oncology M&A in Q1 2026

Note: excludes SPACs & reverse mergers. Source: OncologyPipeline.