Sign in

You're signed outSign in or to get full access.

TP

Terns Pharmaceuticals, Inc. (TERN)·Q1 2025 Earnings Summary

Executive Summary

  • In-line quarter operationally with a modest EPS beat: Q1 2025 GAAP EPS of $(0.26) versus S&P Global consensus of $(0.27); no product revenue reported as the company remains clinical-stage . EPS consensus and revenue consensus from S&P Global shown with asterisks below.*
  • Key pipeline execution maintained: completed TERN-701 Phase 1 dose escalation and initiated dose expansion in April; FALCON Phase 2 (TERN-601, oral GLP‑1 RA) enrolling well; both programs guide to 4Q25 data readouts (6‑month MMR for 701; 12‑week weight loss for 601) .
  • Cash of $334.3M at 3/31/25 supports runway “into 2028,” unchanged from prior guidance, providing funding through near-term catalysts .
  • Potential stock catalysts near-term: clarity on 701 dose‑expansion enrollment cadence and any interim updates; medium-term: two 4Q25 data readouts that could re-rate the pipeline depending on efficacy/tolerability and approvable endpoints (6‑month MMR) .

What Went Well and What Went Wrong

What Went Well

  • Executed quickly on 701: “Dose escalation…completed in less than a year” and dose expansion initiated in April with 320 mg and 500 mg QD cohorts; target is to assess 6‑month MMR in 4Q25, the regulatory endpoint for 2L+ CML .
  • Strong early profile for 701: no dose‑limiting toxicities through 500 mg, linear PK with QD dosing, and “compelling molecular responses” in heavily pretreated patients, supporting selection of high-end doses for expansion .
  • FALCON Phase 2 enrollment “is enrolling well” with 12‑week topline weight-loss data expected in 4Q25; management continues to position 601 on oral convenience and tolerability differentiation .

What Went Wrong

  • Operating loss widened modestly YoY: net loss $(23.9)M vs $(22.4)M in Q1’24, driven by higher G&A ($8.7M vs $6.9M) while R&D was roughly flat ($18.7M vs $18.6M) .
  • Limited new financial levers near-term: with no product revenue, quarterly P&L remains driven by opex and interest income ($3.6M in Q1), keeping EPS tied to spending cadence until data inflections .
  • No formal Q1 earnings call transcript found (typical for some small-cap biotech), limiting real-time guidance nuance; however, management discussed programs and partnering approach at a May 7 conference .

Financial Results

P&L and EPS trend (USD Millions, except per-share)

MetricQ3 2024Q4 2024Q1 2025
Research & Development$15.17 $18.00 $18.72
General & Administrative$9.77 $7.95 $8.71
Total Operating Expenses$24.94 $25.95 $27.43
Interest Income$3.09 $4.14 $3.64
Net Loss$(21.95) $(21.80) $(23.91)
GAAP EPS (basic/diluted)$(0.28) $(0.24) $(0.26)

Note: Company reports no product revenue; financial statements presented begin with operating expenses (consistent with clinical-stage status) .

Cash and Balance Sheet (USD Millions)

MetricQ3 2024 (9/30/24)Q4 2024 (12/31/24)Q1 2025 (3/31/25)
Cash, Cash Equivalents & Marketable Securities$372.78 $358.16 $334.26
Total Assets$378.23 $363.93 $339.32
Total Liabilities$13.76 $18.06 $13.27
Stockholders’ Equity$364.47 $345.87 $326.04

Actual vs. S&P Global Consensus (Q1 2025)

MetricActualConsensusSurprise
GAAP EPS$(0.26) $(0.27)*+$0.01*
Revenue— (no revenue reported) $0.0M*—*

Values with asterisks retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious Guidance (as of 3/20/25)Current Guidance (as of 5/8/25)Change
Cash RunwayMulti-yearRunway into 2028 Runway into 2028 Maintained
TERN‑701 CARDINAL data4Q25Additional safety/efficacy data in 4Q25; read‑through to 6‑mo MMR Additional safety/efficacy data in 4Q25; meaningful 6‑mo MMR assessment Maintained, clarified endpoint focus
TERN‑701 status2Q25Dose expansion expected to initiate 2Q25 Dose expansion initiated in April 2025 (320 mg, 500 mg QD) Upgraded (from expected → initiated)
TERN‑601 FALCON topline4Q2512‑week data expected 4Q25 12‑week data expected 4Q25; enrollment “enrolling well” Maintained, added enrollment color

Earnings Call Themes & Trends

Note: No Q1 2025 earnings call transcript located; commentary informed by company press releases and May 7, 2025 Citizens/JMP conference transcript.

TopicPrevious Mentions (Q3’24 and Q4’24)Current Period (Q1’25)Trend
TERN‑701 efficacy/safety and PKPositive interim 701 signals; no DLTs; strong selectivity; dose escalation near completion Dose expansion initiated at 320/500 mg; plan to show 6‑mo MMR in 4Q25; continued emphasis on safety and once‑daily PK Execution advancing; de‑risking dose selection
6‑month MMR as approvable endpointPreparing for read‑through to 6‑mo MMR in 4Q25 Reiterated; expansion powered for meaningful 6‑mo MMR assessment Reinforced
TERN‑601 strategy (tolerability, oral convenience)Strong 28‑day weight loss (up to 5.5%), favorable tolerability; Phase 2 planned FALCON enrolling; 12‑week topline in 4Q25; narrative focuses on differentiated tolerability and simple titration Consistent; clearer path to differentiation
Partnering outlook (obesity)Not central in Q3 PR; new CFO added in Q1’25 Management underscores need to partner obesity given scale and GP sales force; openness to risk‑sharing Partnering narrative more explicit
Cash runwayInto 2028 reiterated Into 2028 reiterated Stable
Drug‑drug interactions (701)701 not clinically relevant inhibitor of CYP3A4/OATP1B1/3 Reinforced as safety differentiator in forums Reinforced

Management Commentary

  • “Terns had a strong start to 2025…we have initiated enrollment in the dose expansion portion of [TERN‑701]…[and] the Phase 2 FALCON trial of TERN‑601 in obesity is enrolling well…we remain on track to deliver meaningful data from both these studies in the second half of this year” — CEO Amy Burroughs .
  • “TERN‑701 showed highly encouraging safety with no dose limiting toxicities…linear pharmacokinetics with once daily dosing, and compelling molecular responses…[which] allowed us to select doses at the top end…for dose expansion.” — CMO Emil Kuriakose, MD .
  • Obesity partnering rationale: registration scale ($0.5–$1.0B) and GP commercial footprint argue for pharma partnership; company open to risk‑sharing given multiple programs — CFO Andrew Gengos .

Q&A Highlights

  • 701 early efficacy/safety: management reiterated a 3‑month cumulative MMR of ~50% in an early 15‑patient dataset (Oct cut) with no DLTs and absence of LFT/pancreatic enzyme elevations; 6‑month MMR readout prioritized for 4Q25 .
  • 701 dose expansion: initiated; excludes certain mutations to create a more homogeneous population; doses at 320/500 mg QD; aim is increased N and longer follow‑up for 6‑mo MMR .
  • 601 differentiation: focus on tolerability via PK/pharmaceutical properties; slower titration in 12‑week Phase 2 vs aggressive 28‑day Phase 1, with expectation of improved tolerability .
  • Competitive landscape: views Lilly’s orforglipron as establishing the oral GLP‑1 market; Terns positions 601 for patient‑friendly titration and tolerability; sees multiple viable players .
  • BD stance: obesity program intended to be partnered; continued execution across pipeline provides optionality in deal structures .

Estimates Context

  • Q1 2025 GAAP EPS: $(0.26) vs consensus $(0.27); beat by $0.01. Four EPS estimates contributed to the consensus.*
  • Q1 2025 Revenue: company reported no product revenue; consensus was $0.0M* on six revenue estimates.*

Values with asterisks retrieved from S&P Global.

Key Takeaways for Investors

  • Pipeline execution is on track for two 4Q25 catalysts (701 6‑mo MMR and 601 12‑week weight loss), which are likely to be the primary stock drivers near-term .
  • 701’s safety/PK profile (no DLTs through 500 mg, QD dosing, favorable DDI profile) and selection of higher doses for expansion support a potential best‑in‑class allosteric profile if 6‑mo MMR translates at scale .
  • 601 will be judged on competitive weight loss plus tolerability/simplicity; Phase 2 design targets simple titration and patient convenience themes discussed with prescribers .
  • Balance sheet provides runway into 2028, enabling data‑driven decision making without near‑term financing pressure under current plans .
  • Expect partnering discussions for 601 ahead of or around 12‑week data if differentiation is confirmed; company open to risk‑sharing structures given multi‑asset pipeline .
  • Near-term trading setup: limited financial surprises (no revenue model), sensitivity to any interim program updates, competitor data (oral GLP‑1 class), and conference commentary .
  • Risk factors: dependence on clinical outcomes; competition in CML (asciminib) and obesity (Lilly/Novo); any tolerability/efficacy shortfall vs evolving benchmarks could pressure shares .