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Terns Pharmaceuticals, Inc. (TERN)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024: Net loss of $21.8M ($0.24 per share), R&D $18.0M, G&A $7.9M; year-end cash and marketable securities of $358.2M with runway into 2028 .
  • Clinical momentum: TERN-701 dose escalation completed; dose expansion in CARDINAL to begin in 2Q25 with additional safety/efficacy data expected in 4Q25; TERN-601 Phase 2 FALCON first patient enrolled with 12-week data expected in 4Q25 .
  • Operating trend stable: Interest income rose to $4.14M in Q4, helping keep net loss broadly flat versus prior quarters despite higher R&D YoY .
  • Near-term stock catalysts: 4Q25 data for both TERN-701 (MMR/read-through) and TERN-601 (12-week weight-loss/tolerability) may drive sentiment and estimate revisions .

What Went Well and What Went Wrong

What Went Well

  • Strong clinical progress: “2024 was a year of significant clinical progress... best-in-class potential of both TERN-701 in CML and TERN-601 in obesity” — CEO Amy Burroughs .
  • Compelling early efficacy and safety for TERN-701: cumulative 3‑month MMR 50% in non‑T315i patients; no DLTs up to 400mg; no dose reductions/discontinuations; favorable PK target coverage .
  • TERN-601 Phase 1 delivered class-leading signals: 28‑day mean weight loss up to 5.5% (4.9% placebo‑adjusted) with 67% achieving ≥5% loss; well‑tolerated despite rapid titration .

What Went Wrong

  • No revenue generation yet; P&L remains driven by operating expenses and interest income (press releases present only operating expenses and net loss) .
  • R&D rose YoY in Q4 ($18.0M vs $17.5M), while G&A also increased YoY ($7.9M vs $6.6M) contributing to a slightly higher quarterly net loss versus Q4 2023 ($21.8M vs $21.0M) .
  • TERN-601 timeline refined to 4Q25 for 12‑week data from prior “2H25” target, pushing the expected data point to the back half of the year .

Financial Results

Quarterly P&L and Interest Income

MetricQ2 2024Q3 2024Q4 2024
R&D Expense ($USD Millions)$18.35 $15.17 $18.00
G&A Expense ($USD Millions)$7.19 $9.77 $7.95
Total Operating Expenses ($USD Millions)$25.54 $24.94 $25.95
Interest Income ($USD Millions)$2.88 $3.09 $4.14
Net Loss ($USD Millions)$22.74 $21.95 $21.80
Net Loss per Share ($USD)$0.31 $0.28 $0.24
Weighted Avg Shares (Millions)74.46 77.82 91.24

Narrative:

  • Qoq: R&D rose sequentially (Q3 → Q4) while G&A fell, leaving total opex flat qoq; interest income increased with higher cash balances post the September equity raise, supporting a slightly lower net loss .
  • Share count increased into Q4 due to the equity raise, contributing to improved per‑share loss versus prior year .

Balance Sheet Snapshot

MetricQ2 2024Q3 2024Q4 2024
Cash, Cash Equivalents & Marketable Securities ($USD Millions)$225.30 $372.78 $358.16
Total Assets ($USD Millions)$230.88 $378.23 $363.93
Total Liabilities ($USD Millions)$12.20 $13.76 $18.06
Stockholders’ Equity ($USD Millions)$218.68 $364.47 $345.87

YoY Q4 Comparison

MetricQ4 2023Q4 2024
R&D Expense ($USD Millions)$17.46 $18.00
G&A Expense ($USD Millions)$6.60 $7.95
Net Loss ($USD Millions)$21.02 $21.80
Net Loss per Share ($USD)$0.29 $0.24
Cash, Cash Equivalents & Marketable Securities ($USD Millions)$263.44 $358.16

Segment breakdown and margins: Not applicable; Terns did not report product revenue or segment metrics in these periods and did not disclose margin figures in the filings/press releases .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
TERN-701 CARDINAL (allosteric BCR-ABL)1H25–4Q25Interim dose escalation data expected early Dec 2024; dose expansion planned thereafter Dose escalation completed Jan 2025; dose expansion to initiate 2Q25; additional safety/efficacy data expected 4Q25 Clarified and sequenced; maintained rapid progression
TERN-601 FALCON (oral GLP‑1R)2025Initiate Phase 2 early 2Q25; initial 12‑week data in 2H25 First patient enrolled Mar 2025; 12‑week data expected 4Q25 Narrowed window to 4Q25; timing refinement
Cash RunwayMulti‑yearInto 2028 (post Sept equity raise) Into 2028 reiterated with $358.2M at YE24 Maintained; balance updated

Earnings Call Themes & Trends

Note: No Q4 2024 earnings call transcript was available in the document set; themes below reflect company communications across Q2–Q4 press releases.

TopicPrevious Mentions (Q2 2024, Q3 2024)Current Period (Q4 2024)Trend
CML (TERN‑701) efficacy/safetyPlanned interim data Dec 2024; PK study supports QD dosing ; reiterated interim data timing Dose escalation completed; expansion begins 2Q25; additional data 4Q25; supportive DDI and safety profile Advancing on schedule; increasing clinical conviction
Obesity (TERN‑601) efficacy/tolerabilityPhase 1 positive topline: up to 5.5% mean loss, well tolerated; move to Phase 2 in early 2Q25 Phase 2 FALCON first patient enrolled; 12‑week data expected 4Q25 Execution continues; data timing refined
Cash & runway$225.3M (Q2) → $372.8M (Q3); runway into 2028 $358.2M YE24; runway into 2028 reiterated Strong capital position post raise
Management & governanceLegal officer appointment; CFO transition planned CFO appointment (Andrew Gengos) and new directors (Azelby, Turner) Leadership strengthened

Management Commentary

  • “We look forward to building on this positive momentum in 2025… initiate the dose expansion portion of the TERN‑701 CARDINAL trial in the second quarter of 2025… first patient has been enrolled in the FALCON trial of TERN‑601, with 12‑week data also expected in the fourth quarter.” — Amy Burroughs, CEO .
  • “These exciting early data… show TERN‑701 has compelling clinical activity with a highly encouraging cumulative MMR rate of 50% at 3 months… no dose limiting toxicities… no AE‑related dose reductions or discontinuations...” — Emil Kuriakose, MD, CMO .
  • “These data validate the potential of TERN‑601 for the treatment of obesity… once‑daily dosing… well tolerated at high doses.” — Amy Burroughs, CEO .

Q&A Highlights

  • No Q4 2024 earnings call transcript was available in the document set; the company did host a webcast on Dec 3, 2024 for TERN‑701 interim data, but Q&A content is not included in the available filings/press releases .

Estimates Context

  • Wall Street consensus EPS and revenue estimates via S&P Global were unavailable at the time of analysis due to data access limits; therefore, a beat/miss assessment versus consensus cannot be provided from S&P Global sources at this time [SPGI data unavailable]. Values retrieved from S&P Global would be used by default when accessible.

Key Takeaways for Investors

  • Capital runway into 2028 with $358.2M cash/marketable securities positions Terns to fund pivotal catalysts without near‑term financing risk .
  • TERN‑701 trajectory is favorable: dose expansion in 2Q25 and additional safety/efficacy/MMR data in 4Q25; early 50% cumulative 3‑month MMR and clean safety profile support best‑in‑class potential in allosteric TKIs .
  • TERN‑601 is advancing: Phase 2 FALCON initiated with 12‑week readout in 4Q25; Phase 1 efficacy/tolerance signals suggest competitive oral GLP‑1 profile which, if confirmed, could be a key differentiator .
  • Operating discipline: Q4 opex remained controlled and interest income increased post equity raise, keeping net loss stable despite higher YoY R&D; watch expense cadence into 2025 as trials scale .
  • Leadership additions (CFO and directors) shore up finance and strategic oversight ahead of multiple data events; reduces execution risk into 2025 .
  • Trading setup: Expect heightened sensitivity around 4Q25 data for both programs; interim updates (e.g., dose expansion enrollment, conference disclosures) may serve as catalysts in the interim .
  • Risk checks: No product revenue; timelines refined for TERN‑601 data to 4Q25; monitor safety/tolerability in longer‑duration datasets and any regulatory feedback .