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Investing.com - Citizens lowered its price target on Terns Pharmaceuticals (NASDAQ:TERN) to $15.00 from $20.00 on Thursday, while maintaining its Market Outperform rating following disappointing results from the company’s obesity treatment. The biotech company, currently valued at $712 million, has seen its stock surge nearly 192% over the past six months despite recent setbacks.
The firm’s decision came after Terns’ TERN-601 program failed to meet criteria necessary to become a competitive oral treatment for obesity, with lower-than-anticipated weight loss results and an unfavorable side effect profile.
Citizens viewed management’s prompt decision to halt further development of TERN-601 as a positive move, demonstrating the company’s willingness to make difficult but necessary decisions regarding its pipeline.
The research firm has removed TERN-601 from its financial model, resulting in the reduced price target based on discounted cash flow analysis.
Citizens expressed optimism about Terns’ upcoming FALCON clinical trial data, likely to be presented at the American Society of Hematology meeting with abstracts expected on November 3, noting favorable positioning and clinical program development in chronic myeloid leukemia (CML).
In other recent news, Terns Pharmaceuticals announced the discontinuation of its obesity drug, TERN-601, after mixed results from a Phase 2 trial. The trial revealed a maximum placebo-adjusted weight loss of 4.6% but raised safety concerns, including a 12% discontinuation rate due to adverse events. Following this update, Oppenheimer lowered its price target for Terns Pharmaceuticals from $20.00 to $17.00, though it maintained an Outperform rating. Truist Securities has initiated coverage of Terns Pharmaceuticals with a Buy rating and a $20.00 price target, highlighting the company’s promising lead asset in rare blood cancer treatment. Barclays also began coverage with an Overweight rating and a $15.00 price target, focusing on TERN-701, a third-generation inhibitor for chronic myeloid leukemia. These developments reflect a mixed outlook for the company, with promising assets in other areas despite the setback in obesity treatment.
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