Terns Pharmaceuticals (TERN 5.74%), a clinical-stage biopharmaceutical company developing therapies for chronic myeloid leukemia (CML) and metabolic diseases, released its second quarter results on August 5, 2025. The most notable news was continued progress in its two lead clinical programs—TERN-701, a kinase inhibitor drug for CML, and TERN-601, an oral GLP-1 receptor agonist drug for obesity—while maintaining a robust cash balance. The GAAP net loss per share was $(0.26), slightly better than the expected $(0.29). Compared to Q2 2024, R&D spending increased. Overall, the period was marked by clinical advancement, prudent cash management, and a significant narrowing of its research and development focus.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $(0.26) | $(0.29) | $(0.31) | 16.1% |
| Revenue (GAAP) | $0.0 | $0.0 | $0.0 | – |
| Research & Development Expenses | $20.4 million | $18.4 million | 10.9% | |
| General & Administrative Expenses | $7.0 million | $7.2 million | (2.8%) | |
| Net Loss | $24.1 million | $22.7 million | 6.2% |
Source: Analyst estimates for the quarter provided by FactSet.
About Terns Pharmaceuticals and Its Focus
Terns Pharmaceuticals develops oral drug candidates targeting cancer (specifically CML) and cardiometabolic diseases, advancing multiple therapies through clinical trials but has no products on the market. Its most advanced medicines are TERN-701 for CML—a cancer of the blood—and TERN-601 for obesity. The company operates fully in clinical development, meaning its worth is closely tied to the progress and outcome of these pipeline programs.
Recently, the company has shifted its strategy to focus resources on oncology—mainly CML—while planning to partner out its metabolic and other non-oncology assets. Key success factors include positive clinical trial results, securing regulatory approvals, maintaining patent protection, and establishing strategic collaborations for both development and commercialization.
Quarterly Highlights and Financial Developments
Terns made significant advances in its clinical pipeline this period. For its lead TERN-701 program—a kinase inhibitor drug designed to treat patients with chronic myeloid leukemia—Enrollment in the Phase 1 CARDINAL trial progressed rapidly. This study is now in the dose expansion phase, randomizing up to 80 patients across two dosing arms. Interim results released late last year showed meaningful molecular responses in heavily pre-treated patients and a favorable safety profile, with no dose-limiting toxicities. Preclinical data also suggested TERN-701 could be more potent than asciminib, a Novartis product, particularly against resistant forms of the disease.
Looking at the obesity program, TERN-601—which is an oral drug that mimics the glucagon-like peptide 1 (GLP-1) receptor and is being tested as a once-daily therapy for weight loss—completed enrollment for its Phase 2 FALCON trial. This study includes several dosing strategies and a placebo group, with the main outcome being percentage weight loss over twelve weeks. The company plans to release top-line safety and efficacy results from this study in early fourth quarter of 2025, aiming to demonstrate competitive weight loss and the simplest dose titration among GLP1-RA therapies.
From a financial perspective, Total research and development (R&D) expenses rose 10.9% to $20.4 million compared to Q2 2024 as the company advanced both major clinical programs. General and administrative expenses were steady at $7.0 million compared to $7.2 million in Q2 2024. A net loss of $24.1 million (GAAP) was reported, widening moderately from the prior-year period, while net loss per share improved, reflecting an increase in the number of shares outstanding.
There were no new strategic partnerships announced during the period; however, Terns’ exclusive licensing agreement with Hansoh for TERN-701 development in China remains active. This partnership provides for future milestone payments and royalties, supporting development in the Greater China region. Intellectual property protections remain strong, including Orphan Drug status for TERN-701, granting seven-year market exclusivity in the United States if approved.
Product Development, Partnerships, and Strategic Changes
Terns prioritized its CML therapy TERN-701, advancing to later-stage trials with the goal of obtaining robust safety and efficacy data. The company plans to host an educational session in September 2025 to discuss unmet needs in CML and TERN-701’s comparative positioning. Additionally, outcomes from the ongoing trial—specifically major molecular response rates at six months—will be a key milestone as management considers moving into more advanced pivotal studies required for regulatory approval.
In the metabolic disease franchise, the Phase 2 program for TERN-601 remains on track, but Terns announced its intention to seek external partners for next-stage development of both its GIPR antagonist (TERN-800 series) and THR-β agonist (TERN-501) programs. This represents a strategic narrowing of internal research efforts, aiming to leverage partnerships rather than investing its own capital in these highly competitive therapeutic areas, notably in obesity where larger players like Novo Nordisk and Eli Lilly dominate.
No one-time financial gains or losses, impairment charges, or restructuring costs were disclosed this period.
Outlook and Upcoming Milestones
Management did not issue specific financial or revenue guidance for the coming quarter or year. However, The company’s cash, equivalents, and marketable securities totaled $315.4 million as of June 30, 2025. Terns projects this will fund its current operating plan into 2028, giving confidence about its ability to reach and possibly move beyond upcoming clinical milestones without needing new capital in the near term.
The focus in the second half of the year will be on key clinical readouts, with efficacy and safety results from the ongoing TERN-701 and TERN-601 trials expected by the end of 2025. Investors will be watching these closely, as future company value and potential for partnerships or commercialization rest on their outcomes. Any new collaborations, regulatory milestones, or shifts in strategy could also influence its trajectory. TERN does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
