Phase I data for TERN-601 suggests Terns’ oral GLP-1 candidate for obesity could be a contender in the market next to big names like Lilly, Pfizer and Roche.
Just one day after its release of positive data on Monday, Terns Pharmaceuticals announced a $125 million public offering to fund a Phase II trial of its oral GLP-1 weight loss drug.
Analysts were impressed with yesterday’s data drop, with BMO Capital Markets comparing TERN-601 to oral competitors such as Eli Lilly’s orforglipron and Pfizer’s danuglipron. After just 28 days, patients taking TERN-601 in the Phase I trial had a mean weight loss of 4.9% compared to placebo. CEO Amy Burroughs said at the time that Terns was looking to “swiftly advance” the candidate into Phase II for 2025.
The company is wasting no time with its proposed stock offering, which includes $125 million of shares of Terns’ common stock, with a 30-day option to purchase an additional $18.75 million at the public offering price. On Monday, Terns’ stock shot up close to 25% compared to Friday’s close and is hovering around $10 Tuesday morning.
Proceeds will fund not only the Phase II clinical trial for the oral GLP-1 agonist, but also the company’s other programs including another obesity-focused GIPR antagonist and an allosteric BCR-ABL inhibitor for chronic myeloid leukemia, the company said Tuesday.
Analysts from Jefferies called the early-stage data from Terns’ lead obesity drug “surprisingly good.” The trial had low discontinuations with its design, placing adults with obesity on three different doses. The highest dose led to the greatest loss but also the greatest adverse events with seven out of nine patients vomiting. Jefferies analysts’ note to investors pointed out that this could potentially be solved with a slower titration.
BMO analysts compared the data to Lilly and Pfizer’s weight loss pills. Lilly’s oral obesity candidate achieved a 3.9% weight loss while Pfizer’s danuglipron led to 5.2% weight loss.
In addition to Lilly and Pfizer, Terns’ candidate will be up against Roche’s CT-966, acquired in its $2.7 billion buy of Carmot Therapeutics. CT-996 reduced body weight by more than 6% at four weeks out compared to placebo in its Phase I trial reported in July.
With the weight loss market forecasted to reach between $100 billion and $160 billion in the next decade, there’s plenty of room for obesity drugmakers to expand, especially for those that can break through to the next generation of oral GLP-1 drugs.
