Terns Pharmaceuticals Halts Obesity Program as Phase 2 Data Disappoints

Terns Pharmaceuticals has announced the discontinuation of its oral GLP-1 obesity candidate, TERN-601, following underwhelming phase 2 trial results. The decision marks a significant setback for the company's metabolic disease portfolio and highlights the intensifying competition in the oral GLP-1 market.

Phase 2 Results Fall Short of Expectations

The phase 2 trial of TERN-601 yielded a maximum placebo-adjusted weight loss of 4.6% at Week 12 across four regimens. This outcome fell short of both internal expectations and competitive benchmarks set by rival treatments. Scott Harris, Chief Development Officer at Terns, had previously indicated that the company was targeting a placebo-adjusted weight loss of at least 6%.

Tolerability issues further compounded the disappointing efficacy results. In the cohort with the highest weight loss, 64.7% of participants reported nausea, and 38.2% experienced vomiting. These rates were significantly higher than the company's goal of achieving approximately half the incidence observed in competing programs.

Liver Safety Concerns Emerge

Perhaps most concerning were the unexpected liver safety signals detected during the trial. Three cases of asymptomatic, reversible grade 3 liver enzyme elevations were reported, with two patients showing profiles consistent with drug-induced liver injury. Emil Kuriakose, M.D., Chief Medical Officer at Terns, expressed surprise at these findings, as no such signals had been observed in preclinical or phase 1 studies.

Industry analysts have drawn parallels between TERN-601 and Pfizer's discontinued danuglipron, noting similarities in their molecular scaffolds and the emergence of liver toxicity concerns.

Market Implications and Company Strategy

The setback for TERN-601 comes amid intense competition in the oral GLP-1 space, with Eli Lilly's orforglipron and Novo Nordisk's oral Wegovy setting high bars for efficacy and safety. Terns' failure to differentiate its candidate on either efficacy or tolerability, coupled with the emergence of liver safety concerns, has effectively eliminated the possibility of a partnership deal, according to William Blair analysts.

As a result of these developments, Terns Pharmaceuticals is now pivoting its focus entirely to oncology, with its leukemia candidate TERN-701 moving to the forefront of its pipeline. Phase 1 data for this asset is expected later this year.

The news has had a significant impact on Terns' stock, with shares falling 20% to $6.50 in after-hours trading as investors reassessed the company's prospects in light of the TERN-601 setback.