Recently, Tern Pharmaceuticals announced its second-quarter of 2025 financial results and provided an update on its company. The important item to draw out of the release is that upon this year closing out, it had decided against moving forward in the development of several of its metabolic assets. This move likely was not because of bad data, because the expected time for initial results from the ongoing phase 2 FALCON study using TERN-601 to treat patients with obesity is not expected until Q4 of 2025. Regardless, the company immediately indicated that it would no longer pour resources into advancing this or its other metabolic drugs.
The thing is that TERN-601 is an oral GLP-1 receptor agonist, and there are many biotechs that are in the process of developing such drugs for the treatment of patients with obesity. The flood of companies working in this space likely made the company want to shift its focus to its cancer asset, which is known as TERN-701, which is an oral small molecule next-generation allosteric BCR-ABL inhibitor for the treatment of patients with chronic myeloid leukemia (CML). This type of cancer of the blood and bone marrow causes the overproduction of white blood cells known as myeloid cells. The problem with this is that there are two issues that arise from it. The first is that it crowds out the white blood cells that the body needs to maintain function. The second problem is that the myeloid cells can even slip into the bloodstream, causing problems for the patient.
What’s worse is that CML also causes an issue with a lack of proper red blood cells (RBCs) and platelets being produced. Where TERN-701 fits in is that it might be able to effectively counter drug resistance that occurs with ATP-site mutations after a patient is given a tyrosine kinase inhibitor (TKI). The problem is that the mutation inhibits the binding of such drugs. TERN-701 is developed to bind to the allosteric myristoyl site on the kinase, which in turn achieves two items. The first of which is a new binding site, and the second of which is the ability to avoid active site mutations for binding. The end result is that this selective BCR-ABL inhibitor could effectively treat these patients with CML. Beyond that, the ability to avoid active site mutations also gives it the flexibility to eventually be tested in combination with a TKI drug [not ponatinib, which has known safety problems].
Again, Tern is not effectively removing its metabolic drug pipeline. It could possibly find partners who are willing to fund TERN-601 or one of the other drugs like GIPR modulator TERN-800 and THR-beta agonist TERN-501 (likely to be effective in a combination for further weight loss). Having said that, if the release of 12-week data from the phase 2 FALCON study using TERN-601 to treat patients with obesity doesn’t achieve comparable weight loss to drugs either approved or in clinical development, then that could be an instance where the candidate could outright be terminated.
As far as moving to TERN-701 for the treatment of patients with CML, it is not going to be a long wait to see if the mechanism of action (MOA) is proven. There is the ongoing phase 1 CARDINAL study, which is targeting 2nd-line CML patients, with data to be released in Q4 of 2025. Such data will not only show if this drug is effective as a BCR-ABL inhibitor, but it will also be compared to other phase 1 CML trials across the board to see if it can compete going forward. Hopefully, this shift to this oncology candidate pays off. I believe it was a necessary one, because indeed the obesity treatment space is getting crowded. A major competitor in this space would be Eli Lilly, who has already received FDA approval of GLP-1/GIP ZEPBOUND (tirzepatide).
This big pharma is even working on the oral small molecule GLP-1 orforglipron, which is being developed for the treatment of patients with obesity and type 2 diabetes (T2D). Regulatory applications of this drug for each of these indications are expected by the end of 2025 and 2026, respectively. The competitive landscape of dealing with ZEPBOUND now and then and possibly this other drug from Eli Lilly is a lot, and thus it makes sense why Tern would prefer to shift its focus to TERN-701 for the treatment of patients with CML. Especially if it is able to counter ATP-active site mutations where TKI drugs have a problem with resistance.
While it remains to be seen if the data turns out well for this candidate targeting this group of cancer patients, early interim data was released back in December of 2024. At that time, it was noted that as the dose was being pushed higher (dose escalation), there were molecular responses observed in heavily pretreated patients with CML with lower doses. It is important to note that the patients recruited, though, were those who had to have high baseline BCR-ABL transcript levels. This makes sense, based on the mechanism of action of TERN-701 I described above. It is possible that data can be improved upon, and that’s because there was a very compelling safety profile with no dose-limiting toxicities observed at that interim time point. The risk of not pouring resources into its metabolic drug pipeline means that it is heavily going to need strong clinical data from the phase 1 CARDINAL trial in Q4 of 2025.