Merck's $6.7B Bet and the First Drug to Reach the Brain in Hunter Syndrome – This Week in Biotech #93
Plus Sarepta's first human proof for gene-silencing in muscular dystrophy, a CDC leadership vacuum, and what it all means for biotech (March 20–26, 2026).
Welcome back to This Week in Biotech by Biotech Blueprint, edition 93, covering biotech and biopharma news from March 20th to 26th, 2026.
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VIDEO SUMMARY
THIS WEEK’S KEY TAKEAWAYS 🔑
The biggest theme this week was capital flowing toward rare and hard to treat diseases, and the market rewarding science that actually solves delivery problems rather than just finding new targets. Merck’s $6.7 billion grab of Terns Pharmaceuticals is the headline M&A move, and it’s an interesting one because the price looks low by almost every analyst’s math. TERN-701 is an oral chronic myeloid leukemia drug with early data compelling enough that Leerink is penciling in $6.2 billion in peak annual sales, yet Merck paid a 6% premium to last close, one of the thinnest acquisition premiums in years. Whether that reflects shrewd negotiating or a valuation gap that other companies might exploit with a counterbid is the question the market is now actively debating. For Merck, the strategic logic is simple as Keytruda’s patent clock is ticking and they need new pillars.
On the science side, two stories stood out for platform reasons, not just drug reasons. Denali’s FDA accelerated approval of Avlayah for Hunter syndrome is the first time a therapy has been approved specifically to cross the blood-brain barrier using the transferrin receptor as a molecular Trojan horse. The disease itself is devastating and rare, affecting roughly 500 Americans, but the approval is really a proof-of-concept for Denali’s TransportVehicle delivery platform, which has more programs in the clinic. Similarly, Sarepta’s 25% single-day jump came from early siRNA data in two untreatable muscular dystrophies showing the company may have cracked muscle delivery, the longstanding Achilles heel of gene silencing approaches.
The governance subplot running in the background is the CDC leadership vacuum. The Trump administration missed its own deadline to name a permanent director, and the agency has now cycled through multiple acting leaders since the firing of Susan Monarez in August 2025, apparently for resisting RFK Jr.’s vaccine policy agenda. It’s easy to write this off as Washington noise, but prolonged instability at the CDC has real downstream consequences for public health infrastructure, outbreak response capacity, and the regulatory environment that drug and vaccine makers operate in.
BIOTECH/PHARMA NEWS 🧬
🔹 The Trump administration missed its own Wednesday deadline to name a permanent CDC director, meaning NIH chief Jay Bhattacharya will keep steering the agency but loses the acting director title in what is becoming a running governance problem. About six candidates are reportedly under vetting, including Johns Hopkins cardiologist Joseph Marine and former Kentucky governor Ernie Fletcher, but the White House is taking its time. The CDC has been effectively leaderless for most of Trump’s second term: Susan Monarez lasted barely a month as director before being fired in August 2025, apparently for refusing to implement vaccine policy changes ordered by HHS Secretary RFK Jr., and the agency has cycled through acting leadership ever since.
🔹 Sarepta Therapeutics jumped 25% after dropping first-in-human data from two phase 1/2 trials targeting rare, currently untreatable muscular dystrophies. SRP-1001 targets facioscapulohumeral muscular dystrophy type 1 (FSHD1), caused by toxic overexpression of the DUX4 protein that progressively destroys skeletal muscle in about 16,000 Americans, while SRP-1003 goes after myotonic dystrophy type 1 (DM1), the most common adult-onset muscular dystrophy affecting around 40,000 Americans, which wrecks not just muscle but also the heart, lungs, and central nervous system. Both drugs use small interfering RNA, or siRNA, a gene-silencing approach that blocks production of the disease-causing protein or toxic RNA before it can do damage. The historical problem with siRNA in muscle disease has been that the drug degrades before reaching muscle cells, but Sarepta's platform uses an integrin-targeted ligand that actively ferries the siRNA into muscle tissue. The early data showed dose-dependent drug exposure in muscle, proof-of-concept knockdown of the target after a single dose, and no dose-limiting toxicities, which is exactly what you want to see at this stage.
🔹 Merck agreed to acquire Terns Pharmaceuticals for $53 per share in cash, roughly $6.7B in equity value or about $5.7B net of cash, to get its hands on TERN-701, an oral allosteric tyrosine kinase inhibitor targeting the BCR::ABL1 fusion protein that drives chronic myeloid leukemia, a slow-growing blood cancer. The drug works differently from older inhibitors by binding to a distinct pocket on the ABL protein, and early phase 1/2 data from the CARDINAL trial showed major and deep molecular responses by week 24, including in heavily pretreated patients who had already failed other allosteric inhibitors, with a clean tolerability profile and no meaningful blood pressure signals. The deal is strategically obvious for Merck. Keytruda faces patent expiration and the company needs new revenue pillars, and Leerink analysts project TERN-701 could peak at $6.2B in annual sales by 2040 if it captures newly diagnosed patients. That projection makes the $5.7B net price look thin, and Wall Street noticed: the 6% premium to last close is among the lowest paid for a public drugmaker since 2018, sparking chatter that AbbVie or BMS could table a competing bid.
🔹 The FDA granted accelerated approval to Denali Therapeutics’ Avlayah for Hunter syndrome, a rare X-linked lysosomal storage disorder affecting roughly 500 Americans, almost all boys, that progressively strips patients of their ability to speak, walk, and think. The approval is a genuine step forward because existing enzyme replacement therapies cannot cross the blood brain barrier, leaving the neurological devastation of the disease untreated for nearly 20 years. Avlayah gets around this using Denali’s TransportVehicle platform, which fuses the therapeutic enzyme to an engineered fragment that hijacks the transferrin receptor, a natural transport system at the blood-brain barrier, to ferry the drug into the brain. In the phase 1/2 trial it drove a 91% reduction in cerebrospinal fluid heparan sulfate by week 24, with 93% of patients reaching normal levels, and that biomarker served as the surrogate endpoint for accelerated approval. The ongoing phase 2/3 COMPASS trial is required to confirm clinical benefit.
CLINICAL TRIAL UPDATES 📊
🔹 Insmed had an important win in lung infection. In its phase 3b ENCORE trial, adding Arikayce (amikacin liposome inhalation suspension) to standard azithromycin plus ethambutol in newly diagnosed Mycobacterium avium complex lung disease improved symptoms and drove much higher culture conversion than placebo on top of the same backbone. The respiratory symptom score improved more at Month 13 (17.8 points vs 14.7, p=0.0299) and culture conversion was the headline, 87.8% by Month 6 vs 57.0% with placebo, with durability holding through Month 15. Safety looked consistent with what we already know for inhaled amikacin, with more voice and airway issues and a higher discontinuation rate, but no new red flags. This was the post-marketing confirmatory work tied to the 2018 accelerated approval, and Insmed now plans a supplemental filing in the second half of 2026 to both expand the label into earlier disease and convert the refractory indication to traditional approval.
🔹 Apogee popped after one year data on zumilokibart in atopic dermatitis suggested something patients actually care about: staying controlled without living on an injection schedule. In the phase 2 APEX part A maintenance readout, responses held up through 52 weeks with dosing every three months or even every six months, and they’re claiming responses kept improving over time rather than plateauing. It’s still phase 2 and the key induction readout (APEX Part B at 16 weeks) lands in Q2 2026, but it seems the drug can offer strong control with two to four dosing days per year.
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