JMP maintains $20 target on Terns stock amid GLP-1RA developments

Published 21/04/2025, 10:10
JMP maintains $20 target on Terns stock amid GLP-1RA developments

On Monday, JMP Securities reiterated their Market Outperform rating and a $20.00 price target for Terns Pharmaceuticals (NASDAQ:TERN) shares, which currently trade at $2.40. According to InvestingPro data, analysts maintain a strong buy consensus with price targets ranging from $7.50 to $34.00. The company holds more cash than debt on its balance sheet, providing financial flexibility for its development programs. The reaffirmation follows recent developments in the GLP-1 receptor agonist (GLP-1RA) space, which have had varying implications for companies within the sector.

Terns Pharmaceuticals, which is working on its own oral GLP-1RA, TERN-601, has been under scrutiny after Pfizer (NYSE:PFE) discontinued danuglipron due to competitive challenges and a single case of drug-induced liver injury (DILI) in its safety database. With an overall Financial Health score of "FAIR" from InvestingPro, and a current ratio of 23.14, the company maintains strong liquidity despite its development-stage status. Despite these concerns, JMP analysts believe that Terns’ chemically distinct iteration of its molecule sets it apart from Pfizer’s discontinued product.

The analysts pointed out that TERN-601 has shown liver enzyme reduction across 28 patients, suggesting a limited read-across in toxicity from the discontinuation of danuglipron. This positive safety profile differentiates TERN-601 and could position it favorably in the market.

Further bolstering the case for oral GLP-1RAs, the successful Phase 3 results of Orforglipron in treating diabetes were highlighted. This success indicates a growing potential for oral GLP-1RAs to capture market share from injectable treatments in both diabetes and obesity management.

JMP’s analysis suggests that Terns Pharmaceuticals could benefit from these industry-wide developments, as the company continues to progress with its GLP-1RA candidate. The reiterated price target reflects a confidence in Terns’ strategic position within the competitive landscape of diabetes and obesity treatments.

In other recent news, Terns Pharmaceuticals has reported significant progress in its clinical trials and financial strategies. The company announced updates on its development programs, including the CARDINAL study for TERN-701 and the upcoming FALCON trial for TERN-601, with cash reserves expected to fund operations into 2028. The CARDINAL study for TERN-701, an oral treatment for chronic myeloid leukemia, completed its dose escalation phase, with promising interim data showing strong molecular responses and a favorable safety profile. In addition, Terns is preparing to launch the Phase 2 FALCON trial for TERN-601, targeting obesity treatment, with data expected in the second half of 2025.

In corporate developments, Terns Pharmaceuticals appointed Andrew Gengos as its new Chief Financial Officer, bringing extensive experience to support the company’s growth. This follows the departure of former CFO Mark Vignola, who will continue as a consultant through mid-2025. Analyst firms Mizuho (NYSE:MFG) and Oppenheimer have both reiterated an Outperform rating for Terns Pharmaceuticals, with price targets of $14 and $20, respectively. Mizuho highlighted Pfizer’s recent withdrawal of a competing drug as beneficial for Terns, while Oppenheimer pointed to upcoming data releases as potential catalysts for the company’s profile. These developments underscore the strategic and operational advancements Terns is making in its therapeutic pipeline.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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