Merck nears $6bn biotech deal to boost cancer drug pipeline
Terns Pharma stock has jumped since promising clinical data on its bone and blood cancer treatment last year
Merck is nearing a roughly $6bn deal to buy Terns Pharma, a US biotech developing treatments for a rare form of blood and bone cancer, in its latest move to replenish its pipeline as blockbuster oncology drug Keytruda comes off patent.
The New Jersey-based drugmaker has been on a dealmaking spree as it tries to get ahead of $30bn-a-year Keytruda’s patent expiry as soon as 2028. It snapped up respiratory drugmaker Verona Pharma for $10bn and flu-prevention biotech Cidara Therapeutics for $9.2bn last year.
Merck has stood out as the most aggressive biotech acquirer, as the wider pharmaceutical industry contends with an estimated $320bn of revenue losses from drug patent protection ending between now and 2030. Investors have rewarded Merck, with its share price up 38 per cent since the Verona acquisition last July, giving it a market value of $287bn as of Tuesday’s close.
Talks between Merck and Terns were at an advanced stage and a deal could be reached in the coming days, said people familiar with the matter. The all-cash deal is expected to value Terns at roughly $6bn, a premium to its market capitalisation of $5.3bn at Tuesday’s close.
An acquisition of Terns would be a bet on the California-based biotech’s early-stage treatment for chronic myeloid leukaemia, or CML — a rare form of cancer affecting the bloodstream and bone marrow, caused by a genetic mutation.
Merck and Terns did not immediately respond to requests for comment.
This treatment could go some way to displacing the current preferred CML drug Scemblix, sold by Merck’s rival Novartis. Novartis last year raised its peak annual sales projections for Scemblix to $4bn, which suggests that treating CML patients could present a lucrative opportunity for Merck.
Terns is set to launch late-stage trials towards the end of this year or in early 2027. The US had roughly 9,560 new CML cases last year. Across G7 nations, about 93,000 patients were treated for the disease in 2024, according to Novartis.
Shares in Terns have increased nearly fivefold since the biotech released positive clinical data last October.
Merck is set for a busy year with several phase-three clinical data readouts and medicines coming to market, and it has already been fishing for other significant deals. Merck in January was in talks to buy cancer biotech Revolution Medicines in a deal that could be valued at up to $32bn, the FT reported. But the drugmaker walked away after weeks of talks, people familiar with the matter said.
At the JPMorgan healthcare conference in January, Rob Davis, Merck’s chief executive, said he was eyeing further deals to unlock scientific innovation, saying that “the area up to $15bn is our sweet spot” but he would be open to even larger acquisitions.
The XBI biotech index is up 34 per cent over the past year as the sector has been buoyed by increased dealmaking activity. This year has already seen Gilead strike a $7.8bn deal to buy oncology biotech Arcellx, with which it had an existing partnership.
Germany’s Haub family revives $2bn listing plans for OBI and Kik retail businesses
Investment group Tengelmann working on a proposal that could lead to a spin-off as soon as this year
One of Germany’s richest families has revived plans to list its holdings of two of the best known retailers in central Europe in a deal that could value them at a combined $2bn, betting on resilient consumer spending in the continent.
Tengelmann, an investment group run by the Haub family, has tapped bankers to work on plans that could include a spin-off of retail assets such as DIY retailer OBI and Kik, a discount chain, as soon as this year, according to two people with knowledge of the situation.
The companies are household names in central and eastern Europe, with thousands of stores and employees, and the investment group is betting that consumer spending in discount retailing and home improvements will extend for several years.
Tengelmann has explored a potential listing of OBI for several years, but abandoned its most recent attempt in 2021, according to a person familiar with the matter. In the latest plan, the company hoped to create a single listed entity housing the stakes, worth about $2bn together, said the people familiar with the process.
Tengelmann said: “As a matter of principle, we do not comment on speculation.”
The deliberations come even as retailers are increasingly cautious on their outlook because of the war in the Middle East amid concern a prolonged disruption to oil supplies will stoke inflation and cause interest rates to rise, dampening consumer confidence.
Munich-based Tengelmann traces its roots back to 1867, when it started as an importer of tea and coffee. It has grown into one of the world’s largest private consumer goods holding companies.
It has been run by five generations of the family and the majority of shares are owned by Christian Haub, its chief executive. His brother Georg holds the rest. Christian took over after another brother, Karl-Erivan, went missing while skiing in the Swiss Alps in 2018, and was declared dead three years later.
The move to divest its 74 per cent stake in OBI would mark a significant shift for Tengelmann, which took a controlling stake in the DIY chain in 1985 as part of a strategy to diversify away from food.
Founded in 1994 as a discount retailer, Kik has since expanded into property and venture capital, taking early stakes in companies such as online retailer Zalando, payment group Klarna and furniture maker Westwing Group.
The company, which competes with other low cost fashion chains such as the UK’s Primark and Poland’s Pepco, has more than 4,000 stores in 14 countries and aims to increase it to 5,000.
OBI has more than 600 stores across 10 countries and employs 40,000 people. It earned €8.2bn in revenues in 2024 financial year.
United States Said to Have Sent Iran a Plan to End the Middle East War
The 15-point plan was delivered via Pakistan, whose army chief has emerged as the key interlocutor between the United States and Iran, officials say.
The United States has sent Iran a 15-point plan to end the war in the Middle East, according to two officials briefed on the diplomacy, reflecting the Trump administration’s eagerness to find an offramp from the conflict as it grapples with its economic fallout.
It was unclear how widely the plan, delivered by way of Pakistan, had been shared among Iranian officials and whether Iran was likely to accept it as a basis for negotiations. Nor was it clear whether Israel, which has been bombing Iran together with the United States, was on board with the proposal.
But the delivery of the plan showed that the administration was ramping up efforts to conclude a war, now in its fourth week, that has drawn in several other countries.
The New York Times did not see a copy of the plan, but the officials, who spoke on condition of anonymity to discuss sensitive details, shared some of its broad outlines, saying that it addresses Iran’s ballistic missile and nuclear programs.
Israel and the United States have targeted Iran’s ballistic missiles, launchers and production facilities, and its nuclear program in the bombing campaign that began on Feb. 28. American and Israeli leaders have vowed never to allow Iran to possess a nuclear weapon.
But Iran has continued to fire missiles at Israel and neighboring Arab countries and still holds 440 kilograms of highly enriched uranium in its territory.
The plan also discusses maritime routes, one of the officials said. Since the beginning of the war, Iran has effectively blocked most Western ships from safely passing through the Strait of Hormuz, the strategic waterway in and out of the Persian Gulf, cutting the global supply of oil and natural gas, and sending the prices soaring.
For now, there is no indication that the war will let up imminently; Israeli officials have said they expect it to continue for weeks. In a statement, Karoline Leavitt, the White House press secretary, acknowledged diplomacy was underway, but said, “As President Trump and his negotiators explore this newfound possibility of diplomacy, Operation Epic Fury continues unabated to achieve the military objectives laid out by the commander inchief and the Pentagon.”
Pakistan’s army chief, Field Marshal Syed Asim Munir, has emerged as the key interlocutor between the United States and Iran, with Egypt and Turkey encouraging the Iranians to engage constructively, the officials added. Field Marshal Munir is believed to maintain close ties to Iran’s Islamic Revolutionary Guards Corps, putting him in a position to pass messages between the warring sides, they said.
He recently reached out to Mohammad Bagher Ghalibaf, the speaker of Iran’s Parliament and a former Revolutionary Guards commander, proposing that Pakistan host talks between Iran and the United States, said an Iranian official and a Pakistani official, who spoke on condition of anonymity to discuss the sensitive communications.
Field Marshal Munir met twice in 2025 with President Trump, who has showered praise on him, saying he was his “favorite field marshal.”
On Tuesday, Prime Minister Shehbaz Sharif of Pakistan wrote on social media that his country “fully supports ongoing efforts to pursue dialogue to end” the war in the Middle East.
“Subject to concurrence by the US and Iran, Pakistan stands ready and honoured to be the host to facilitate meaningful and conclusive talks for a comprehensive settlement of the ongoing conflict,” he wrote.
Iran may have trouble delivering a quick response to American outreach. Senior Iranian officials have been struggling to communicate internally and they worry that Israel could bomb them if they meet in person, the officials added.
On the first day of the war, Israel struck an Iranian leadership compound in Tehran, killing Iran’s supreme leader, Ayatollah Ali Khamenei, and many other top officials. Who now holds the power to make decisions on diplomacy, war and peace remains to be seen.
But the eagerness of the White House to negotiate suggests that Mr. Trump would be willing to leave the current regime in place, at least for now, albeit in a weakened and more pliant state. He and Prime Minister Benjamin Netanyahu of Israel have vacillated on whether their demands for the war included regime change.
After Hours Summary: Oil lower, gold & silver higher on NYT report about US presenting Iran with proposal to bring war to an end; KBH -4.8%, WOR -2.6% lower on earnings; ARM +6.5% as it sees CPU business reaching $15 bln in revs in FY31
After Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: BZAI +41.5%, BRZE +19% (also authorizes new $100 mln share repurchase program), MPTI +3.3%, MDT +0.2%
Companies trading higher in after hours in reaction to news: GRFS +11.1% (to evaluate a potential IPO of US Biopharma business), KDK +9% (unveils Leonidas Autonomous Ground Vehicle), STRS +8.7% (approves plan of complete liquidation and dissolution), ARM +6.5% (reaffirms Q4 guidance; sees ARM CPU business reaching $15 bln in revenue in FY31), PAAS +3% (revised PEA for the La Colorada Skarn Project), HOOD +1.7% (authorizes new $1.5 bln share repurchase program), XWIN +1.5% (board approves expansion into AI), SRPT +1.1% (to share data from siRNA Pipeline targeting FSHD1 and DM1), DNUT +0.9% (continues progress on turnaround plan to deleverage; JV partner WKS Restaurant Group increases stake in JV), BX +0.8% (announces intra-quarter realization update), META +0.8% (faces $375 mln civil penalty from New Mexico jury, according to Bloomberg), RIO +0.7% (partnership with Queensland govt and Commonwealth Govt), MSFT +0.6% (OpenAI realigns priorities ahead of its ‘Spud' AI model launch, according to The Information; DIS ends OpenAI arrangement, according to Hollywood Reporter), MELI +0.3% (to invest $11 bln in Brazil this year, according to Reuters), DIS +0.2% (ends OpenAI arrangement following Sora closure, according to The Hollywood Reporter), CLS +0.1% (Chair to retire; current CEO to also become Chair)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: ABSI -14.6%, DPRO -11.7%, VELO -11.1%, KBH -4.8%, WOR -2.6%, NOAH -1.4%, GME -0.1%
Companies trading lower in after hours in reaction to news: FPS -9.1% (stock offering by selling shareholders), DOCN -8.5% (commences $700 mln stock offering), DRS -1.4% (introduces THOR, delivers edge computing power to modern battlefield), JHG -1.4% (VCTR withdraws proposal to acquire JHG), CMP -1.2% (continues balance sheet deleveraging), BIOA -0.8% (files mixed securities shelf offering), LMT -0.2% (awarded a $478 mln Navy contract)
Hedge funds are dumping cyclical stocks at an aggressive pace:
The long/short ratio of hedge funds in US non-consumer cyclical stocks, which include Energy, Materials, Industrials, Financials, and Real Estate, is down to 1.68, the lowest since May 2025.
Hedge funds have sold stocks in these sectors for 9 consecutive weeks.
Sales accelerated after the Iran War began on February 28th, completely wiping out all cumulative net purchases since the start of 2025.
As a result, net trading flow has turned negative for the first time since May 2025, indicating that hedge funds are now net short this group of stocks.
Hedge funds are betting that the worst of the economic impact is still ahead.
The long/short ratio of hedge funds in US non-consumer cyclical stocks, which include Energy, Materials, Industrials, Financials, and Real Estate, is down to 1.68, the lowest since May 2025.
Hedge funds have sold stocks in these sectors for 9 consecutive weeks.
Sales accelerated after the Iran War began on February 28th, completely wiping out all cumulative net purchases since the start of 2025.
As a result, net trading flow has turned negative for the first time since May 2025, indicating that hedge funds are now net short this group of stocks.
Hedge funds are betting that the worst of the economic impact is still ahead.
VW to shift from cars to missile defence in deal with Israel’s Iron Dome maker
Venture between carmaker’s Osnabrück plant and Rafael Advanced Defence Systems part of plan to save 2,300 jobs
Volkswagen is in talks with Israel’s Rafael Advanced Defence Systems over a deal that would switch production at one of the German group’s factories from cars to missile defence.
The two companies plan to convert the embattled Osnabrück plant to make components for the Israeli state-owned group’s Iron Dome air defence system, according to people familiar with the plan.
The tie-up would be the highest-profile example yet of the German car industry, where profits have plunged amid rising Chinese competition and a stuttering transition to electric vehicles, seeking partnerships with the booming defence sector.
The two companies hope to save all 2,300 jobs at the plant in the west German state of Lower Saxony, which has been under threat of closure, and hope to sell the systems to European governments.
“The aim is to save everybody, maybe even to grow,” said one of the people familiar with the plans. “The potential is so high. But it’s also an individual decision for the workers if they want to be part of the idea.”
The German government is actively supporting the proposal, according to a second person.
VW already makes military trucks in a joint venture between subsidiary MAN and German arms group Rheinmetall. But the partnership with Rafael would mark a major return to weaponry for VW, which produced military vehicles and the V1 flying bomb for Hitler’s Wehrmacht during the second world war.
Under the plans, the Osnabrück factory would make various Iron Dome parts, including the heavy-duty trucks that carry the system’s missiles as well as launchers and electricity generators. But it would not produce the projectiles themselves.
The concept would require minimal new investment, according to the first person. “There is some money needed to transition to new production but this is pretty easy.”
The idea, he added, was that “proven [defence] tech comes together with German manufacturing” to produce the system.
Production could be up-and-running within 12-18 months, the person said, as long as workers agreed to switch to weapons production.
Rafael plans to set up a separate production facility in Germany for the system’s missiles, which must be handled on a specialist site.
The company hopes to sell the Iron Dome system to governments across Europe including Germany, as countries strengthen their air defences as part of a large-scale rearmament in response to Russia’s full-scale invasion of Ukraine. Germany last year took delivery of the first of three batteries of the Israeli Arrow 3 air defence system, made by another Israeli company, Israel Aerospace Industries.
Rafael chose Germany for European production because of its status as one of the strongest supporters of Israel in Europe, according to a third person familiar with the plan.
Another of the people said the company had heeded pleas from senior German officials to harness excess capacity in the country’s struggling industrial sector.
The move comes as the EU’s largest nation plans to spend more than €500bn on defence by the end of the decade, with officials saying that air defence is one of their top spending priorities.
Israel credits its complex web of air defences, which involves several different systems, with intercepting more than 90 per cent of missiles fired at the country by its adversaries.
But some experts have questioned the suitability of the Iron Dome, which has a range of 70km and has primarily been used to stop rockets from Gaza hitting Israel, for defending European nations from longer-range threats.
Rafael already produces Spike missiles for European countries in Germany through a joint venture with Rheinmetall and Diehl Defence. It also produces a system called Trophy that protects tanks and armoured vehicles.
VW has been seeking a solution for the Osnabrück plant, where production of vehicles is set to end next year under a cost-cutting plan agreed in 2024.
About 35,000 workers at VW plants are set to leave the company by 2030, although the redundancies are all on a voluntary basis.
VW did not immediately respond to a request for comment.
Iran says ‘non-hostile’ ships can transit Strait of Hormuz
Tehran tells IMO member nations that vessels must co-ordinate with it to pass through vital waterway
Iran has circulated a letter to member countries of the International Maritime Organization saying “non-hostile vessels” can transit the Strait of Hormuz “in co-ordination with Iranian authorities”.
In the letter circulated among IMO members on Tuesday and shared with the Financial Times, Iran’s foreign ministry said Tehran had “taken necessary and proportionate measures to prevent the aggressors and their supporters from exploiting the Strait of Hormuz to advance hostile operations against Iran”.
The critical waterway has been in effect closed to all but a handful of ships since the start of the US-Israel war against Iran on February 28. Previously about a fifth of the world’s oil passed through the strait, as well as the majority of cargo and container ships serving Gulf countries.
About 3,200 ships are stuck in the Gulf, unwilling to risk the transit of the narrow strait, which is just 21 nautical miles wide at its narrowest point. At least 22 vessels have been hit by Iran since the outbreak of the conflict.
The IMO, a UN body that sets international standards for shipping, convened an emergency meeting of its members last week to address the crisis. It is in talks to try and establish a humanitarian corridor to allow ships that are running critically low on supplies to exit the Gulf.
In recent days, ship tracking data has suggested Iran is permitting a small number of ships to pass via a route in its territorial waters. Analysts believe the route allows Iranian authorities to verify vessels’ identities before letting them transit.
Some ships have paid as much as $2mn to Iran to ensure safe passage through the Gulf, according to Lloyd’s List Intelligence and one person with knowledge of the situation.
“All the governments should come forward and try to help solve this situation,” said SV Anchan, chief executive of US-based Safesea Group, whose vessel Safesea Vishnu was attacked on March 11 and was now “beyond repairable”.
Tehran said in the letter that vessels linked to the US and Israel, as well as “other participants in the aggression, do not qualify for innocent or non-hostile passage”.
There is no sign Tehran intends to relinquish its leverage over the waterway, despite threats from US President Donald Trump.
Iranian officials and politicians have suggested that there will be no return to the prewar situation in the Strait of Hormuz even if the current conflict ends.
Iran’s parliament is preparing to introduce new regulations governing traffic through the Strait of Hormuz, according to MP Mansour Alimardani. The proposal remains at an early stage and must first be reviewed by the parliament’s legal department before being presented to MPs. It would then require approval by a majority to become law.
“Iran has always pursued a policy of international co-operation in the Strait of Hormuz, but mounting pressure from illegal sanctions has led the Islamic republic to temporarily restrict cargo passage in order to demonstrate its capability in managing global energy transit,” Alimardani told Mehr News Agency in Tehran.
He explained that the plan had two components: “First, to reciprocate the actions of countries that supported the US sanctions against Iran, and second, to shift transactions from the US dollar to alternative currencies.”