Terns Pharmaceuticals Achieves Milestone with Obesity Drug TERN-601

Author: Owen Jenkins Updated: 09-10-2024 04:15 PM

Significant Stock Surge Following Positive Phase I Results

Shares of Terns Pharmaceuticals TERN, a clinical-stage company, experienced an impressive rise of 16.8% after releasing encouraging top-line data from their early-stage obesity study involving single and multiple-ascending doses (SAD and MAD). This phase I trial focused on assessing both the safety and effectiveness of TERN-601, a novel oral GLP-1 receptor agonist, administered once daily to healthy adults dealing with obesity or overweight issues.

Impressive Weight Loss Results from TERN-601

The findings from the phase I study showcased that TERN-601 enabled a dose-dependent and statistically significant placebo-adjusted mean weight loss across three evaluated dosages (240 mg, 500 mg, and 740 mg) during the 28-day MAD study. Notably, the highest dose, 740 mg, resulted in a maximum placebo-adjusted mean weight loss of 4.9%. Additionally, 67% of participants treated with this dosage lost over 5% of their baseline weight.

Terns Pharmaceuticals emphasized that TERN-601 was generally well-tolerated, with no treatment-related dose interruptions and only mild to moderate adverse events reported. Importantly, there were no significant changes observed in liver enzymes, vital signs, or electrocardiograms throughout the study.

This year, TERN shares have surged 40.5% compared to the industry average decline of 1.6%, showcasing investor confidence in the company's future.

Future Development Plans for TERN-601

Following the positive phase I results, Terns Pharmaceuticals is optimistic about the potential of TERN-601 being utilized as a monotherapy or alongside other medications for obesity treatment. The company intends to kick off a phase II study of TERN-601 for obesity, with anticipated initiation in 2025.

Management has identified an optimal dosage that is clinically effective and well-tolerated for the next phase, indicating they do not foresee the need for further dosage exploration.

Positioning Within the Competitive Obesity Market

The obesity treatment market features strong competition, majorly dominated by established players such as Eli Lilly LLY and Novo Nordisk NVO, known for their relevant drugs Zepbound and Wegovy, respectively. These companies face challenges in meeting rising demand despite having FDA-approved medications.

Eli Lilly launched their dual GIP and GLP-1 receptor agonist, Zepbound, in late 2023, garnering significant revenue exceeding $1.76 billion in the first half of 2024. Conversely, Wegovy, a GLP-1 agonist by Novo Nordisk, has performed excellently since its 2021 approval, accumulating DKK 21 billion in sales during the same period.

Adding to the competition, Amgen AMGN is progressing with its candidate, MariTide (maridebart cafraglutide), which functions as a GIPR/GLP-1 receptor for obesity. Early data from phase II trials have shown promise, and top-line results are anticipated late in 2024. AMGN plans to initiate a large-scale phase III program targeting obesity and related conditions.

Market Growth and Opportunities

Future projections estimate that the obesity treatment market in the United States could surpass $130 billion by 2030. Major pharmaceutical companies like Eli Lilly and Novo Nordisk are investing heavily in expanding their production capacities and investigating a variety of new treatment candidates to capture this lucrative market.

Current Investment Outlook

Terns Pharmaceuticals is currently rated at a Zacks Rank #2 (Buy), reflecting positive analyst sentiment regarding its potential, particularly with the promising results for TERN-601.

Frequently Asked Questions

What is TERN-601?

TERN-601 is an investigational oral GLP-1 receptor agonist developed by Terns Pharmaceuticals aimed at treating obesity.

What were the results of the phase I study?

The phase I study showed significant and dose-dependent weight loss, with the highest dose resulting in a 4.9% placebo-adjusted weight reduction.

When is the phase II study expected to begin?

Terns Pharmaceuticals plans to start the phase II study for TERN-601 in 2025.

Who are Terns Pharmaceuticals' main competitors?

Main competitors include Eli Lilly with Zepbound and Novo Nordisk with Wegovy, both of which are established players in the obesity market.

What is the market outlook for obesity treatments?

The obesity treatment market is forecasted to reach over $130 billion in the U.S. by 2030, indicating substantial growth opportunities for companies in this sector.

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