8-K: Terns Pharma Advances CML & Obesity Programs

Terns Pharmaceuticals reported Q2 2025 financial results, highlighting progress in its CML and obesity clinical programs with key data readouts expected in Q4 2025 and a cash runway into 2028.

Summary

• Terns Pharmaceuticals reported financial results for the second quarter ended June 30, 2025.
• The Phase 1 CARDINAL trial of TERN-701 for chronic myeloid leukemia (CML) is enrolling well, with efficacy and safety data, including 6-month major molecular response (MMR) rates, expected in the fourth quarter of 2025.
• The Phase 2 FALCON trial of TERN-601 for obesity completed enrollment in Q2 2025, and top-line 12-week efficacy, safety, and tolerability data are expected in early Q4 2025.
• The company's cash, cash equivalents, and marketable securities were $315.4 million as of June 30, 2025, down from $358.2 million on December 31, 2024.
• Terns expects its current funds to be sufficient to support planned operating expenses into 2028.
• Research and Development (R&D) expenses increased to $20.4 million for Q2 2025, compared to $18.4 million for Q2 2024.
• General and Administrative (G&A) expenses decreased slightly to $7.0 million for Q2 2025, from $7.2 million for Q2 2024.
• Net loss for Q2 2025 was $24.1 million, an increase from $22.7 million for Q2 2024.
• Net loss per share improved to $(0.26) for Q2 2025, compared to $(0.31) for Q2 2024, due to an increase in weighted average common stock outstanding to 91,575,039 shares from 74,459,774 shares.
• Terns is focusing its internal resources on advancing the TERN-701 CML program towards a pivotal trial.
• The company is seeking strategic partners to advance its portfolio of metabolic assets, including TERN-601, TERN-800 Series (GIPR modulators), and TERN-501 (THR-beta agonist), and does not plan to invest in clinical development in metabolic disease beyond year-end 2025.

Sentiment

Score: 7

Explanation: The sentiment is positive due to strong clinical trial progress with key data readouts expected soon, a clear strategic focus on oncology, and a robust cash runway extending into 2028. While net loss increased, this is expected for a clinical-stage biotech, and the improved net loss per share is a minor positive. The strategic decision to partner metabolic assets is a pragmatic approach to resource allocation.

Positives

• Cash runway extends into 2028, providing significant financial stability for ongoing operations and clinical programs.
• Phase 1 CARDINAL trial for TERN-701 (CML) is enrolling well, indicating strong progress in a key oncology asset.
• Preclinical data for TERN-701 demonstrated greater potency compared to asciminib against multiple clinically relevant BCR-ABL variants, including resistance mutations, supporting its potential best-in-class profile.
• Phase 2 FALCON trial for TERN-601 (obesity) completed enrollment, setting the stage for a key data readout in early Q4 2025.
• The company has a clear strategic focus on advancing its CML program internally while seeking partnerships for its metabolic assets, streamlining resource allocation.
• Net loss per share improved to $(0.26) in Q2 2025 from $(0.31) in Q2 2024, despite an increased net loss, due to a larger share base.

Negatives

• Net loss increased to $24.1 million for Q2 2025, up from $22.7 million in Q2 2024, reflecting increased operational expenses.
• Research and Development (R&D) expenses increased to $20.4 million in Q2 2025 from $18.4 million in Q2 2024, indicating higher spending on clinical programs.
• Cash, cash equivalents, and marketable securities decreased to $315.4 million as of June 30, 2025, from $358.2 million at the end of 2024, reflecting ongoing cash burn.

Risks

• The success of TERN-701 and TERN-601 clinical trials is uncertain, and results may not be favorable or sufficient for regulatory approval.
• The company's strategy to partner its metabolic assets (TERN-601, TERN-800 Series, TERN-501) carries the risk that suitable strategic partners may not be found, or terms may not be favorable, impacting future development of these programs.
• Clinical development activities are subject to risks associated with initiation, cost, timing, progress, results, and utility of preclinical studies and clinical trials.
• The company does not plan to invest in clinical development in metabolic disease beyond year-end 2025, which could limit the potential of these assets if partnerships are not secured.

Future Outlook

Terns Pharmaceuticals is strategically focusing its internal resources on advancing TERN-701 towards a pivotal trial in CML, aiming for a potential best-in-class therapy. The company anticipates key clinical data readouts for TERN-701 (CML) and TERN-601 (obesity) in the fourth quarter of 2025. Beyond year-end 2025, Terns plans to seek strategic partners for its metabolic disease assets, including TERN-601, TERN-800 Series, and TERN-501, rather than investing further in their clinical development internally. The company projects its current cash resources will fund operations into 2028.

Management Comments

• "The Terns team continues to advance our clinical programs with strong momentum, a clear focus on execution and a strong balance sheet."
• "We are on track for two key clinical readouts in CML and obesity by year-end."
• "The fourth quarter data readout from the Phase 1 CARDINAL trial in 2L+ CML will enable comparison of the efficacy and safety results of TERN-701 with data from other Phase 1 CML trials, including asciminibs."
• "We are focusing the company in oncology and on rapidly advancing TERN-701 towards a pivotal trial, with the goal of ultimately bringing a potential best-in-class therapy to people living with CML."
• "The company seeks to partner our portfolio of potentially best-in-class metabolic assets and does not plan to invest in clinical development in metabolic disease beyond year end 2025."
• "We are encouraged by the rapid enrollment in the CARDINAL trial of TERN-701 in CML and initiation of dose expansion at the high end of the dose range based on the safety and efficacy data to date."
• "We look forward to sharing a CARDINAL data set in the fourth quarter that will provide a read through to the primary endpoint in a registrational trial – the achievement of a major molecular response at six months."

Industry Context

Terns Pharmaceuticals' strategic shift to prioritize its oncology program (TERN-701 for CML) while seeking partnerships for its metabolic assets (TERN-601 for obesity, GIPR modulators, THR-beta agonist) reflects a common trend in the biopharmaceutical industry. Companies often narrow their focus to areas with high unmet need or where they perceive a stronger competitive advantage, especially given the high costs and competitive landscape in areas like obesity drug development, which has seen significant investment and large players. By focusing on CML, Terns aims to carve out a niche with a potentially best-in-class therapy, while leveraging its metabolic assets through collaborations.

Comparison to Industry Standards

• TERN-701 is being positioned as a potential best-in-class allosteric BCR-ABL inhibitor for CML, with preclinical data highlighting greater potency compared to asciminib (Novartis' Scemblix) against several resistance mutations.
• The upcoming 4Q25 data for TERN-701 will enable direct comparison of its efficacy and safety results with data from other Phase 1 CML trials, including asciminib's, specifically looking at 6-month major molecular response (MMR) rates as a registrational trial endpoint.
• TERN-601, an oral GLP1-RA for obesity, aims to demonstrate competitive weight loss at 12 weeks, a class-leading safety/tolerability profile, and the simplest dose titration among GLP1-RA therapies, differentiating itself in a highly competitive market with established injectable and emerging oral GLP-1 agonists.

Stakeholder Impact

• Shareholders: Potential for increased value from successful clinical trial readouts and strategic partnerships, but also risk from increased net loss and reliance on future data.
• Employees: Continued employment and focus on key oncology programs, with potential for shifts in metabolic disease teams depending on partnership outcomes.
• Customers (future patients): Potential for new treatment options in CML and obesity if product candidates are successful.
• Potential Partners: Opportunity to collaborate on promising metabolic assets without Terns' internal clinical development investment beyond year-end 2025.

Next Steps

• Report efficacy and safety data from the Phase 1 CARDINAL trial of TERN-701 in 4Q25, including 6-month MMR achievement rate.
• Report top-line 12-week data from the Phase 2 FALCON trial of TERN-601 in early 4Q25.
• Host a TERN-701-focused educational webinar in September 2025.
• Participate in the Morgan Stanley 23rd Annual Global Healthcare Conference from September 8-10, 2025.
• Continue to advance TERN-701 towards a pivotal trial.
• Seek strategic partners for the TERN-601, TERN-800 Series, and TERN-501 metabolic programs.

Key Dates

Recommendation

The company has a strong cash position and clear strategic direction, focusing on its promising CML program while seeking partnerships for metabolic assets. Key clinical data readouts for both TERN-701 and TERN-601 are expected in Q4 2025, which represent significant catalysts. While the net loss increased, this is typical for a clinical-stage biotech. Investors should hold to await these upcoming data releases, which will provide crucial insights into the potential of its lead assets and inform future valuation.

Keywords

Biopharmaceutical, Oncology, Obesity, CML, Chronic Myeloid Leukemia, GLP-1, THR-beta, GIPR, Clinical Trials, Drug Development, TERN-701, TERN-601, Terns Pharmaceuticals, BCR-ABL inhibitor