8-K: Terns Pharma Q3 2025: CML Drug Shines, Metabolic Exit

Terns Pharmaceuticals reported Q3 2025 financial results, showcasing strong Phase 1 CML data for TERN-701 and a strategic pivot away from metabolic disease programs.

Summary

• Reported financial results for the third quarter ended September 30, 2025.
• TERN-701, an allosteric BCR::ABL1 inhibitor for chronic myeloid leukemia (CML), demonstrated an overall major molecular response (MMR) rate of 75% by 24 weeks in its Phase 1 CARDINAL trial.
• 64% of patients achieved MMR and 100% maintained MMR at the time of data cutoff for TERN-701.
• MMR rates in difficult-to-treat CML patient subgroups included 69% in those with lack of efficacy to last tyrosine kinase inhibitor (TKI), 60% in patients with prior asciminib, and 67% in patients with prior asciminib/ponatinib/investigational TKI.
• TERN-601, a GLP1-RA for obesity, showed a maximum placebo-adjusted weight loss of 4.6% in its Phase 2 study, but internal development was discontinued due to results not supporting further advancement and the occurrence of asymptomatic, reversible grade 3 liver enzyme elevations in some participants.
• Terns is seeking strategic partners for its metabolic programs TERN-501 (THRagonist) and TERN-801 (GIPR antagonist).
• Cash, cash equivalents, and marketable securities were $295.6 million as of September 30, 2025, compared to $358.2 million as of December 31, 2024.
• Funds are expected to be sufficient to support planned operating expenses into 2028.
• Research and Development (R&D) expenses increased to $19.9 million for Q3 2025 from $15.2 million for Q3 2024.
• General and Administrative (G&A) expenses decreased to $7.8 million for Q3 2025 from $9.8 million for Q3 2024.
• Net loss increased to $24.6 million for Q3 2025 from $21.9 million for Q3 2024.

Sentiment

Score: 6

Explanation: The strong positive data for TERN-701 in CML is a significant upside, potentially positioning it as a best-in-disease candidate. However, the complete discontinuation of internal metabolic programs, including the failure of TERN-601, represents a pipeline contraction and a negative. The extended cash runway is positive, but the increased net loss and decreased cash position are minor negatives. The overall sentiment is cautiously positive due to the strong oncology focus and promising lead asset, balanced by the metabolic pipeline setback.

Positives

• TERN-701 Phase 1 CARDINAL trial showed an unprecedented 75% overall major molecular response (MMR) rate by 24 weeks in relapsed/refractory CML patients.
• 100% of patients who achieved MMR with TERN-701 maintained it at the time of data cutoff.
• TERN-701 demonstrated an encouraging safety and tolerability profile at all doses evaluated.
• Cash, cash equivalents, and marketable securities of $295.6 million are expected to provide a financial runway into 2028.
• The company is sharpening its strategic focus on oncology, particularly TERN-701, which is positioned as a potential best-in-disease treatment for CML.

Negatives

• Internal clinical development for TERN-601 in obesity was discontinued due to Phase 2 results not supporting further development and the occurrence of asymptomatic, reversible grade 3 liver enzyme elevations in some participants.
• Net loss increased to $24.6 million for the quarter ended September 30, 2025, compared to $21.9 million for the same period in 2024.
• Research and Development (R&D) expenses increased to $19.9 million for Q3 2025 from $15.2 million for Q3 2024.
• Cash, cash equivalents, and marketable securities decreased to $295.6 million as of September 30, 2025, from $358.2 million as of December 31, 2024.

Risks

• Risks associated with the initiation, cost, timing, progress, results, and utility of current and future research and development activities and preclinical studies and clinical trials.
• Uncertainties inherent in forward-looking statements regarding clinical trial outcomes, therapeutic potential, and commercialization.
• The company's ability to establish strategic partnerships for its metabolic disease programs (TERN-501, TERN-801) is not guaranteed.
• The potential for actual results to vary materially from expectations due to various risk factors, as detailed in the company's SEC reports.

Future Outlook

The company expects its current cash, cash equivalents, and marketable securities of $295.6 million to be sufficient to support planned operating expenses into 2028. It is sharpening its strategic focus on oncology, particularly TERN-701, which is viewed as having the potential to be a best-in-disease treatment for CML. The company is actively seeking strategic partners to advance its metabolic disease programs (TERN-501 and TERN-801) after discontinuing internal development.

Management Comments

• "We're thrilled with the positive momentum of the CARDINAL program generated by the unprecedented Phase 1 MMR achievement rate and encouraging safety/tolerability profile published in the recent ASH abstract. These data continue to reinforce our view of the potential of TERN-701 to become a best-in-disease treatment for patients with chronic myeloid leukemia (CML)." Amy Burroughs, Chief Executive Officer of Terns Pharmaceuticals.
• "Our team continues to execute with precision and focus towards an updated and expanded CARDINAL readout at ASH, with an ultimate goal of bringing this important new therapy to CML patients." Amy Burroughs, Chief Executive Officer of Terns Pharmaceuticals.
• "As we continue to sharpen our strategic focus in oncology, earlier this year we decided we would discontinue internal clinical development of our metabolic programs. While these metabolic assets have shown promise, we believe their full potential can best be realized through external partnerships." Andrew Gengos, Chief Financial Officer of Terns Pharmaceuticals.

Industry Context

The biopharmaceutical industry, especially oncology, is highly competitive and capital-intensive. Terns' decision to focus on oncology, particularly CML with TERN-701, aligns with a strategy to concentrate resources on high-potential assets. The CML market has established treatments (TKIs), but there's still a need for therapies for relapsed/refractory patients or those intolerant to existing drugs. The 'best-in-disease' claim for TERN-701, if validated, could position it strongly. The discontinuation of metabolic programs, while a setback for those specific assets, reflects a common industry trend for smaller biotechs to streamline pipelines and seek partnerships for non-core areas to optimize resource allocation and reduce burn rate. The GLP-1 RA space for obesity is highly competitive with several approved and late-stage drugs, making it challenging for new entrants without significant differentiation.

Comparison to Industry Standards

• The 75% overall major molecular response (MMR) rate by 24 weeks for TERN-701 in relapsed/refractory CML patients is described as 'unprecedented' in the filing, suggesting it compares favorably to existing therapies or other investigational drugs at a similar stage. Achieving such rates in relapsed/refractory patients, especially those who failed prior TKIs including asciminib or ponatinib, represents a significant clinical achievement compared to the challenges faced by current treatments in this difficult-to-treat population.
• The 4.6% placebo-adjusted weight loss for TERN-601 in obesity is modest compared to leading GLP-1 receptor agonists like semaglutide (Ozempic/Wegovy) or tirzepatide (Mounjaro/Zepbound), which have demonstrated average weight losses of 15-20% or more in clinical trials. This likely contributed to the decision to discontinue internal development.
• The occurrence of asymptomatic, reversible grade 3 liver enzyme elevations with TERN-601, while reversible, is a safety concern that would need careful management and could differentiate it negatively from other GLP-1 RAs with generally favorable safety profiles.

Stakeholder Impact

• Shareholders: Potential positive impact from strong TERN-701 data and extended cash runway, but negative impact from metabolic pipeline discontinuation. Strategic focus on oncology could lead to more efficient capital allocation.
• Patients (CML): Potential for a new, highly effective treatment option with TERN-701, especially for relapsed/refractory cases.
• Patients (Obesity/Metabolic Disease): Discontinuation of TERN-601 means no new treatment option from Terns in this area. Potential for TERN-501 and TERN-801 if partnerships are secured.
• Employees: Strategic shift might lead to reallocation of resources and personnel, though no specific impact is detailed.
• Partners: Terns is actively seeking partners for its metabolic assets, indicating potential future collaborations.

Next Steps

• Oral presentation of expanded and updated TERN-701 CARDINAL trial data at the 67th ASH Annual Meeting and Exposition on December 8, 2025.
• Conference call to review TERN-701 CARDINAL data on December 8, 2025, at 4:30pm ET.
• Seeking strategic partners to advance metabolic programs TERN-501 and TERN-801.
• Continued execution of the CARDINAL program for TERN-701 with the goal of bringing this important new therapy to CML patients.

Key Dates

Recommendation

The strong Phase 1 data for TERN-701 in CML is a significant positive, suggesting high potential for this lead oncology asset and extending the cash runway into 2028. This provides a solid foundation. However, the complete discontinuation of internal metabolic programs, including the failure of TERN-601, represents a pipeline contraction and a strategic pivot that introduces uncertainty regarding the future of those assets. While the oncology focus is clear, the company is still in clinical stages, and further data and regulatory progress are needed to fully de-risk TERN-701. The stock is likely to see some positive movement on the TERN-701 news, but the metabolic pipeline setback and the early stage of the lead asset warrant a 'hold' until more definitive clinical outcomes and partnership details emerge.

Keywords

Terns Pharmaceuticals, TERN, oncology, chronic myeloid leukemia, CML, TERN-701, BCR-ABL1 inhibitor, CARDINAL trial, major molecular response, MMR, metabolic disease, obesity, TERN-601, GLP1-RA, TERN-501, THRagonist, TERN-801, GIPR antagonist, financial results, Q3 2025, clinical-stage, biopharmaceutical