Terns Raises $125M Following Oral GLP-1 Data Release

Phase I data for TERN-601 indicates that Terns Pharmaceuticals' oral GLP-1 candidate for obesity could potentially compete with major players like Lilly, Pfizer, and Roche. Following the release of promising data, Terns Pharmaceuticals announced a $125 million public offering to support a Phase II trial of its oral GLP-1 weight loss drug.

Analysts responded positively to the data, with BMO Capital Markets comparing TERN-601 to other oral competitors, such as Eli Lilly’s orforglipron and Pfizer’s danuglipron. In the Phase I trial, patients on TERN-601 experienced a mean weight loss of 4.9% after just 28 days, compared to a placebo. CEO Amy Burroughs emphasized the company's intention to "swiftly advance" the candidate into Phase II by 2025.

The company has rapidly moved forward with its public offering, which includes $125 million in common stock and an option to purchase an additional $18.75 million. Terns' stock surged by nearly 25% following the announcement and was trading around $10 the next day.

The proceeds from the offering will finance not only the Phase II trial for the oral GLP-1 agonist but also other projects. These include another obesity-focused GIPR antagonist and an allosteric BCR-ABL inhibitor for chronic myeloid leukemia.

Jefferies analysts praised the early Phase I data for Terns' lead obesity drug, describing it as "surprisingly good." The trial had minimal discontinuations, administering three different doses to adults with obesity. The highest dose resulted in the most significant weight loss but also the most adverse events, with seven out of nine patients experiencing vomiting. Jefferies suggested that a slower titration rate might mitigate these side effects.

BMO analysts compared Terns' data with those of Lilly and Pfizer's weight loss pills. Lilly's candidate showed a 3.9% weight loss, while Pfizer's danuglipron achieved a 5.2% weight loss.

In addition to Lilly and Pfizer, Terns' candidate will contend with Roche's CT-966, acquired through its $2.7 billion purchase of Carmot Therapeutics. Roche reported in July that CT-966 reduced body weight by more than 6% compared to placebo over four weeks in its Phase I trial.

With the weight loss market projected to grow to between $100 billion and $160 billion in the next decade, there is ample opportunity for companies to expand. Those that can advance to the next generation of oral GLP-1 drugs stand to benefit significantly.

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