Terns Secures 125 Million Funding Following Release of Oral GLP-1 Data

Just a day after unveiling promising results, Terns Pharmaceuticals has initiated a public offering worth 125 million aimed at advancing a Phase II trial for its oral GLP-1 weight loss medication. The announcement follows strong data released on Monday.

Many analysts, impressed by the recent findings, likened TERN-601 to oral alternatives developed by Eli Lilly and Pfizer, focusing on its promising weight loss results. In a Phase I trial, individuals taking TERN-601 experienced an average weight reduction of 4.9% after just 28 days, compared to those on placebo. Terns CEO, Amy Burroughs, emphasized their intention to rapidly move the drug into Phase II trials by 2025.

The proposed stock offering includes 5 million in common shares, with an additional option available over the next month. After the recent data revelation, Terns’ stock surged nearly 25% from the previous Friday, currently stabilizing around the mark.

Funds raised will contribute to the Phase II trial intended for the oral GLP-1 agonist and support other initiatives, including a GIPR antagonist for obesity and a BCR-ABL inhibitor targeting chronic myeloid leukemia, according to the company’s statements.

Jefferies analysts praised the initial results from Terns’ leading obesity treatment as “surprisingly good,” highlighting that the trial observed low rates of discontinuation. Among three different doses tested, the highest dose yielded the most significant weight loss but also resulted in increased adverse effects, with gastrointestinal issues noted in several participants. Analysts suggested a slower dosage adjustment could mitigate these issues.

Compared to similar offerings, BMO analysts noted that Lilly’s oral obesity medication achieved a weight reduction of 3.9%, while Pfizer’s competitor resulted in a 5.2% loss.

In addition to Terns, the market competition includes Roche’s CT-966, which Roche acquired through its .7 billion purchase of Carmot Therapeutics. In preliminary Phase I data, CT-966 showcased a weight reduction exceeding 6% over four weeks.