Mizuho maintains Outperform rating on Terns Pharmaceuticals stock ahead of ASH data

Investing.com - Mizuho has reiterated an Outperform rating and $33.00 price target on Terns Pharmaceuticals (NASDAQ:TERN) stock ahead of upcoming Phase 1 data for its TERN-701 treatment in chronic myeloid leukemia (CML). According to InvestingPro data, analyst targets for TERN range from $17 to $36, with a strong consensus recommendation of 1.18 (where 1 is Strong Buy), though the stock appears overvalued relative to its Fair Value.

The firm highlighted that data from TERN-701, an allosteric tyrosine kinase inhibitor, is expected to be presented at the American Society of Hematology (ASH) meeting on December 8. Previously released abstract data showed the drug achieved a 64% six-month median molecular response rate, significantly exceeding market expectations.

Terns Pharmaceuticals stock has surged approximately 240% since the initial data release, compared to a 7% gain in the XBI biotech index during the same period, reflecting strong investor confidence in the treatment’s potential. InvestingPro data shows even more impressive returns, with TERN up 839.54% over the past six months and 353.47% over the past year, pushing its market cap to $2.59 billion. InvestingPro Tips indicate the stock is currently trading near its 52-week high of $29.51 with RSI suggesting overbought territory.

Mizuho noted that Novartis’ competing drug asciminib (Scemblix) continues to gain market share across all treatment lines, with Novartis recently increasing its peak sales guidance for Scemblix from $3 billion to over $4 billion.

The research firm believes that even if TERN-701’s updated six-month molecular response rate comes in at 30-40% (lower than the previously reported 64%), it would still exceed Scemblix’s benchmark of approximately 25%, potentially positioning TERN-701 as a best-in-class treatment that could challenge Scemblix’s market position.

In other recent news, Terns Pharmaceuticals has been in the spotlight due to significant developments surrounding its TERN-701 treatment for chronic myeloid leukemia (CML). The company presented promising Phase 1 CARDINAL trial data at the American Society of Hematology (ASH) meeting, revealing a 64% major molecular response (MMR) achievement rate at 24 weeks in efficacy-evaluable patients, which is an improvement over historical benchmarks. Following these results, multiple analysts have adjusted their outlook on the company. Citizens raised their price target for Terns Pharmaceuticals to $35, maintaining a Market Outperform rating, while Truist Securities also increased their price target to $35, citing positive reactions from key opinion leaders. BMO Capital raised its price target to $22, highlighting strong data from the ASH meeting. Additionally, H.C. Wainwright upgraded Terns Pharmaceuticals from Neutral to Buy and increased their price target to $20, acknowledging the promising trial data. These developments indicate a growing confidence among analysts in the company’s future prospects.

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