10-Q: Terns Pharmaceuticals Reports First Quarter 2025 Financial Results and Provides Business Update

Terns Pharmaceuticals reports a net loss for Q1 2025, alongside updates on its clinical programs and executive transitions.

Summary

• Terns Pharmaceuticals, a clinical-stage biopharmaceutical company, released its financial results for the quarter ended March 31, 2025.
• The company reported a net loss of $23.908 million, or $0.26 per share, compared to a net loss of $22.373 million, or $0.30 per share, for the same period in 2024.
• Research and development expenses totaled $18.720 million, slightly higher than the $18.587 million spent in the first quarter of 2024.
• General and administrative expenses increased to $8.707 million from $6.859 million in the prior year's quarter.
• As of March 31, 2025, Terns Pharmaceuticals had cash, cash equivalents, and marketable securities totaling $334.3 million.
• The company believes its current cash resources will be sufficient to fund operations into 2028.
• TERN-701, an allosteric BCR-ABL inhibitor, is currently in a Phase 1 CARDINAL study, with the first patient enrolled in the dose expansion portion in April 2025 and additional data expected in Q4 2025.
• TERN-601, a GLP-1 receptor agonist, is in a Phase 2 FALCON trial, with top-line 12-week data anticipated in Q4 2025.
• The company is limiting spending on TERN-501 for MASH and evaluating opportunities in metabolic diseases.
• The company is prioritizing discovery efforts for the TERN-800 series of GIPR modulators for obesity.

Sentiment

Score: 6

Explanation: The sentiment is neutral. While the company reported a net loss, it has a strong cash position and is making progress in its clinical programs. The company is also prioritizing discovery efforts for the TERN-800 series of GIPR modulators for obesity.

Positives

• The company believes its current cash resources will be sufficient to fund operations into 2028.
• TERN-701 demonstrated compelling molecular responses starting at the lowest dose level in heavily pre-treated patients with high baseline BCR-ABL transcript levels.
• TERN-701 also showed an encouraging safety profile with no dose limiting toxicities, adverse event (AE) related treatment discontinuations or dose reductions across all dose escalation cohorts.
• TERN-601 was well tolerated and demonstrated dose-dependent, statistically significant placebo-adjusted mean weight loss across all three doses evaluated in the 28-day MAD study, with maximum placebo-adjusted mean weight loss of 4.9% (p<0.0001) at the highest dose of 740 mg QD.
• Additionally, 67% of participants lost 5% or more of their baseline body weight at the top dose.

Negatives

• The company reported a net loss of $23.908 million for the first quarter of 2025.
• The company is limiting spending on TERN-501 for MASH given the current regulatory and clinical development requirements for the indication.

Risks

• The company's success is heavily dependent on intellectual property, particularly patents.
• Changes in and uncertainty surrounding U.S. trade policy could have a material adverse impact on our business, financial condition and results of operations.
• If we are unable to obtain necessary raw materials or product components in sufficient quantity and in a timely manner due to disruptions in the global supply chain caused by macroeconomic events and conditions, the development, testing and clinical trials of our product candidates may be delayed or infeasible, and regulatory approval or commercial launch of any resulting product may be delayed or not obtained, which could significantly harm our business.

Future Outlook

The company believes its existing cash and cash equivalents will be sufficient to fund its planned operating expenses and capital expenditure requirements into 2028, including key clinical data readouts from its lead programs in CML and obesity.

Management Comments

• The company is prioritizing discovery efforts for the TERN-800 series of GIPR modulators for obesity.
• The company continues to evaluate opportunities for TERN-501 in metabolic diseases.

Industry Context

The company is developing small-molecule product candidates to address serious diseases, including oncology and obesity, which are areas of significant unmet medical need and active research and development.

Comparison to Industry Standards

• The company's approach to developing small-molecule product candidates is consistent with industry trends.
• The company's focus on oncology and obesity aligns with areas of high unmet medical need and significant market potential.
• The company's cash runway into 2028 is relatively strong compared to other clinical-stage biopharmaceutical companies.

Management Changes

Stakeholder Impact

• Shareholders: The net loss may negatively impact shareholder value.
• Employees: Management changes and program prioritization may affect employee roles and responsibilities.
• Patients: Progress in clinical trials could lead to new treatment options for CML and obesity.

Next Steps

• Release additional safety and efficacy data from the Phase 1 CARDINAL study for TERN-701 in the fourth quarter of 2025.
• Release top-line 12-week data from the Phase 2 FALCON trial of TERN-601 in the fourth quarter of 2025.
• Continue to evaluate opportunities for TERN-501 in metabolic diseases.
• Nominate a GIPR antagonist development candidate based on in-house discoveries and growing specific scientific rationale supporting the potential of GLP-1 receptor agonist and GIPR antagonist combinations for obesity.

Key Dates

Keywords

TERN-701, TERN-601, TERN-501, TERN-800, Clinical Trials, Financial Results, Biopharmaceutical, Oncology, Obesity, MASH