Terns Pharmaceuticals Jumps on Positive Phase I Data for TERN-601
Shares of Terns Pharmaceuticals (TERN) climbed 16.8% after the company reported encouraging top-line results from an early-stage obesity study using single-ascending and multiple-ascending doses (SAD and MAD). The phase I trial evaluated the safety and early effectiveness of TERN-601, a once-daily, oral GLP-1 receptor agonist, in healthy adults with obesity or who were overweight.
Clear, Dose-Dependent Weight Loss Over 28 Days
In the 28-day MAD portion of the study, TERN-601 produced a statistically significant, dose-dependent, placebo-adjusted mean weight loss at all three doses tested (240 mg, 500 mg, and 740 mg). The highest dose, 740 mg, delivered the greatest effect: a 4.9% placebo-adjusted mean reduction in weight. Two-thirds of participants on 740 mg (67%) lost more than 5% of their baseline weight.
The company reported that TERN-601 was generally well tolerated. There were no treatment-related dose interruptions, and adverse events were limited to mild or moderate in severity. Across the study, no meaningful changes were observed in liver enzymes, vital signs, or electrocardiograms.
Investor interest has been building. This year, TERN shares are up 40.5% versus a 1.6% decline for the industry, a gap that suggests improving confidence in the company’s path forward.
Next Steps: Phase II Planned for 2025
On the heels of the phase I readout, Terns is positioning TERN-601 for use either as a stand-alone therapy or in combination regimens for obesity. The company plans to begin a phase II study of TERN-601 in 2025.
Management says it has selected a dose for the next phase that balances clinical activity and tolerability. As a result, it doesn’t expect to run additional dose-finding work before moving ahead.
Competing in a Crowded Obesity Landscape
The obesity market is intense and dominated by established players like Eli Lilly (LLY) and Novo Nordisk (NVO), whose FDA-approved medicines Zepbound and Wegovy continue to face soaring demand. Eli Lilly launched Zepbound, a dual GIP and GLP-1 receptor agonist, in late 2023 and generated more than $1.76 billion in revenue in the first half of 2024. Wegovy, Novo Nordisk’s GLP-1 agonist approved in 2021, posted DKK 21 billion in sales over the same period.
Competition is broadening. Amgen (AMGN) is advancing its candidate MariTide (maridebart cafraglutide), which functions as a GIPR/GLP-1 receptor for obesity. Early phase II data have been encouraging, with top-line results expected late in 2024. AMGN plans a large phase III program that targets obesity and related conditions.
Market Outlook and Openings
Projections suggest the U.S. obesity treatment market could exceed $130 billion by 2030. To compete for share, large drugmakers such as Eli Lilly and Novo Nordisk are investing in manufacturing scale while also testing new treatment candidates.
Analyst View
Terns Pharmaceuticals currently carries a Zacks Rank #2 (Buy), reflecting favorable sentiment tied to the TERN-601 data and the company’s development plans.
Frequently Asked Questions
What is TERN-601?
TERN-601 is an investigational, once-daily, oral GLP-1 receptor agonist being developed by Terns Pharmaceuticals for obesity. It has been studied in healthy adults with obesity or who were overweight in a phase I program that included SAD and MAD parts.
What did the phase I study show?
Across 28 days in the MAD study, TERN-601 produced statistically significant, dose-dependent, placebo-adjusted mean weight loss at 240 mg, 500 mg, and 740 mg. The 740 mg dose delivered a 4.9% placebo-adjusted mean weight reduction, and 67% of participants on that dose lost more than 5% of their baseline weight.
How well was TERN-601 tolerated?
It was generally well tolerated, with no treatment-related dose interruptions and only mild to moderate adverse events reported. No meaningful changes were seen in liver enzymes, vital signs, or electrocardiograms.
What’s next for TERN-601 development?
Terns plans to start a phase II obesity study in 2025. Management has already identified a dose that appears clinically active and well tolerated for the next phase and doesn’t expect additional dose exploration beforehand.
How did the market react, and who are the key competitors?
The stock rose 16.8% on the news and is up 40.5% year to date versus a 1.6% industry decline. Key competitors in obesity include Eli Lilly with Zepbound and Novo Nordisk with Wegovy, while Amgen is progressing MariTide with additional phase II and planned phase III work. The U.S. market could exceed $130 billion by 2030.
