Terns Pharmaceuticals (TERN) is emerging as a noteworthy player in the weight loss biotech arena, drawing comparisons to Viking Therapeutics (VKTX) following encouraging Phase 1 clinical trial results for its oral anti-obesity program, TERN-601. The company's stock is attracting attention from investors seeking opportunities in the rapidly growing weight loss market.
Promising Phase 1 Results for TERN-601
TERN-601 recently reported positive Phase 1 data on September 9, showcasing its potential as a safe and effective weight loss treatment. The trial data indicated that TERN-601 is reasonably tolerable for patients, with manageable side effects. At the highest dose level tested, participants experienced an average weight loss of 5.5% after 28 days of treatment, or 4.9% on a placebo-adjusted basis. These results suggest that TERN-601 could be competitive with existing weight loss drugs from companies like Eli Lilly and Novo Nordisk.
Competitive Edge and Tolerability
While direct comparisons with other weight loss programs are challenging due to various factors, Terns' preliminary data hints that TERN-601 could be on par with Viking Therapeutics' candidate in terms of weight loss proportion per unit of time. Furthermore, Terns may have an advantage in tolerability, potentially opening doors for combination therapies and expanding its addressable market. A highly tolerable weight loss pill could be combined with other Terns' medications to treat multiple conditions simultaneously or accelerate weight loss.
Financial Stability and Future Prospects
Terns Pharmaceuticals appears to be well-funded, reporting $225 million in cash, equivalents, and short-term investments as of the second quarter. With research and development expenses at $69.2 million over the trailing 12 months, the company has a solid financial foundation to support its clinical programs. The company plans to advance TERN-601 into Phase 2 trials sometime in 2025.
Investment Considerations
While investing in Terns Pharmaceuticals carries risks associated with biotech stocks and clinical trial outcomes, the potential upside is significant. TERN-601 has the potential to be a safer, more tolerable, and more effective weight loss pill candidate. If the clinical data continues to impress, Terns could attract further investment and experience substantial growth. Investors willing to accept the risks of a pre-revenue biotech company may find Terns Pharmaceuticals a worthwhile addition to their portfolio.
