Terns Pharmaceuticals Halts Obesity Drug Development After Disappointing Phase II Results

Terns Pharmaceuticals has announced the discontinuation of its oral GLP-1 drug TERN-601 following underwhelming results and safety concerns in a mid-stage clinical trial. The California-based biotech company will now shift its focus to oncology, specifically its BCR-ABL inhibitor for chronic myeloid leukemia (CML).

TERN-601 Phase II Trial Results

The Phase II trial of TERN-601 for obesity treatment showed modest efficacy coupled with concerning safety signals. Patients receiving at least 500 mg of the drug experienced placebo-adjusted weight loss, with the most effective regimen resulting in a 4.6% reduction in body weight at 12 weeks. However, this level of efficacy was deemed uncompetitive compared to other oral agents in development for obesity.

Safety data revealed that nearly 12% of participants withdrew from the study due to side effects, while 8.9% required dose modifications. Although most adverse events were gastrointestinal and classified as non-severe, three patients experienced grade 3 elevations in liver enzymes. Two of these cases were consistent with drug-induced liver injury related to TERN-601.

Strategic Shift and Market Reaction

The disappointing results have prompted Terns Pharmaceuticals to abandon its obesity pipeline, which includes TERN-601, the GIPR modulator TERN-800, and the THR-beta agonist TERN-501. The company had previously announced plans to divest its metabolic disease portfolio in August, but the recent trial outcomes have likely eliminated partnership potential for these assets.

Following the news, Terns' stock price dropped 10% in pre-market trading on Wednesday, reaching $7.25 per share. Analysts from BMO Capital Markets described TERN-601's performance as "uncompetitive" in the obesity space, citing both efficacy and safety concerns.

Focus on Oncology: TERN-701 for CML

With the obesity program terminated, Terns Pharmaceuticals is pivoting to focus entirely on TERN-701, its investigational BCR-ABL inhibitor for chronic myeloid leukemia. The company expects to release clinical data for this compound in the current quarter.

Analysts from BMO Capital Markets expressed optimism about this strategic shift, noting that the upcoming data could present "an opportunity for Terns to meaningfully differentiate" in the CML market. The potential advantages of TERN-701 include a more convenient dosing schedule with no food effect, as well as possible improvements in safety and efficacy compared to existing treatments.