8-K: Terns Pharmaceuticals Announces Positive Financial Results and Pipeline Progress for 2024

Terns Pharmaceuticals reports positive financial results for 2024, highlighted by clinical progress in TERN-701 and TERN-601 trials, and anticipates key data readouts in 2025.

Summary

• Terns Pharmaceuticals reported its financial results for the year ended December 31, 2024, and provided corporate updates.
• The company completed dose escalation in the Phase 1 CARDINAL study of TERN-701 in January 2025 and expects to initiate the dose expansion portion in the second quarter of 2025, with additional data expected in the fourth quarter of 2025.
• The first patient was enrolled in the Phase 2 FALCON trial of TERN-601 in March 2025, with 12-week data expected in the fourth quarter of 2025.
• As of December 31, 2024, Terns had $358.2 million in cash, cash equivalents, and marketable securities, which is expected to fund operations into 2028.
• R&D expenses were $70.1 million for the year ended December 31, 2024, compared to $63.5 million for the year ended December 31, 2023.
• G&A expenses were $31.8 million for the year ended December 31, 2024, compared to $39.1 million for the year ended December 31, 2023.
• Net loss was $88.9 million for the year ended December 31, 2024, compared to $90.2 million for the year ended December 31, 2023.

Sentiment

Score: 7

Explanation: The announcement is generally positive, highlighting clinical progress, a strong cash position, and experienced leadership appointments; however, the company is still operating at a loss.

Positives

• Terns has a strong cash position of $358.2 million, expected to fund operations into 2028.
• TERN-701 showed compelling molecular responses and an encouraging safety profile in the Phase 1 CARDINAL trial.
• TERN-601 demonstrated weight loss and favorable safety in the Phase 1 trial.
• The company is progressing its pipeline with the initiation of the Phase 2 FALCON trial and plans for dose expansion in the TERN-701 CARDINAL trial.
• Terns appointed experienced executives to its leadership team and board of directors.

Negatives

• Terns reported a net loss of $88.9 million for the year ended December 31, 2024.
• The company's G&A expenses increased to $31.8 million for the year ended December 31, 2024, compared to $39.1 million for the year ended December 31, 2023.

Risks

• The success of clinical trials is subject to risks and uncertainties.
• The company's actual results could vary materially due to risks associated with research and development activities.
• The company's ability to execute its development strategy and achieve commercialization is subject to various factors.

Future Outlook

Terns expects to initiate the dose expansion portion of the TERN-701 CARDINAL trial in the second quarter of 2025, with additional data expected in the fourth quarter of 2025, and anticipates 12-week data from the TERN-601 FALCON trial in the fourth quarter of 2025; the company expects its cash resources to be sufficient to support its planned operating expenses into 2028.

Management Comments

• 2024 was a year of significant clinical progress across our lead pipeline programs that was highlighted by two compelling data readouts, which underscore the best-in-class potential of both TERN-701 in CML and TERN-601 in obesity, said Amy Burroughs, chief executive officer of Terns.
• We look forward to building on this positive momentum in 2025, as we prepare to initiate the dose expansion portion of the TERN-701 CARDINAL trial in the second quarter of 2025, with additional data expected in the fourth quarter of 2025.
• Additionally, we are pleased to announce that the first patient has been enrolled in the FALCON trial of TERN-601, with 12-week data also expected in the fourth quarter.
• We continue to operate from a position of strength and remain well-funded through significant, near-term clinical data readouts.

Industry Context

Terns is developing small-molecule product candidates for oncology and obesity, areas with significant unmet medical needs and growing market opportunities; the company's focus on oral GLP-1 receptor agonists and GIPR modulators aligns with current trends in obesity treatment.

Comparison to Industry Standards

• TERN-601's titration design features the fewest steps and lowest fold change to target dose amongst leading oral, small-molecule GLP-1R agonists in a 12-week study, potentially offering a competitive advantage in tolerability and ease of use.
• The company is prioritizing its discovery efforts on nominating a GIPR antagonist development candidate based on in-house discoveries and growing scientific rationale supporting the potential of GLP-1 agonist/GIPR antagonist combinations for obesity, which is a growing trend in the industry.
• TERN-701's positive data on drug-drug interactions (DDI) demonstrate that TERN-701 is not a clinically relevant inhibitor of CYP3A4 or OATP1B1/3, which represents a key safety differentiation within the allosteric TKI class.

Management Changes

Corporate Governance

Stakeholder Impact

• Shareholders: Positive clinical trial results and strong cash position are favorable.
• Employees: Continued investment in R&D and pipeline development provides job security.
• Patients: Potential for new treatments for CML and obesity.
• Creditors: Strong cash position reduces credit risk.

Next Steps

• Initiate dose expansion in Phase 1 CARDINAL trial of TERN-701 in 2Q25.
• Report additional safety and efficacy data from TERN-701 CARDINAL trial in 4Q25.
• Report 12-week data from TERN-601 FALCON trial in 4Q25.
• Continue discovery efforts for small molecule GIPR modulators.

Key Dates

Keywords

TERN-701, TERN-601, Terns Pharmaceuticals, CML, Obesity, Clinical Trials, Financial Results, Biopharmaceutical, GLP-1, TKI