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Investing.com - H.C. Wainwright has reiterated its Neutral rating on Terns Pharmaceuticals (NASDAQ:TERN) following disappointing results from the company’s GLP-1 obesity treatment. According to InvestingPro data, the company maintains a strong financial health score of 2.7, with a notably high current ratio of 24.7 and zero debt on its balance sheet.
The company reported topline 12-week results from its Phase 2 trial of TERN-601, showing a maximum placebo-adjusted weight loss of 4.6% with 12% treatment discontinuation due to adverse events.
Safety concerns emerged with two patients experiencing drug-related liver toxicity, similar to issues that led Pfizer to discontinue development of its oral GLP-1 candidate, danuglipron, earlier this year.
Terns Pharmaceuticals has confirmed it does not plan to invest further in the metabolic disease space and will not advance TERN-601, instead focusing on its TERN-701 treatment for chronic myeloid leukemia.
Data from the Phase 1 CARDINAL trial for TERN-701 is expected in the fourth quarter of 2025, which remains the company’s primary development focus. With analyst price targets ranging from $7.44 to $34 per share and the next earnings report due on November 18, investors will be closely watching the company’s progress in its new strategic direction.
In other recent news, Terns Pharmaceuticals announced the discontinuation of its TERN-601 obesity treatment following underwhelming Phase 2 trial results. The trial revealed a maximum placebo-adjusted weight loss of 4.6% at the 500mg dose, but safety concerns arose due to adverse events, including gastrointestinal issues, leading to a 12% discontinuation rate. Additionally, some participants experienced asymptomatic, reversible grade 3 liver enzyme elevations, with two cases deemed drug-related. As a result of these developments, Citizens and Oppenheimer both lowered their price targets for Terns Pharmaceuticals, to $15 and $17 respectively, while maintaining an Outperform rating. Despite the setback with TERN-601, Truist Securities initiated coverage with a Buy rating and a $20 price target, citing the company’s promising lead asset in rare blood cancer treatment. Truist Securities sees this asset as potentially best-in-class, based on promising Phase 1 and preclinical data, targeting an estimated $1 billion market opportunity. These recent developments highlight the mixed outlook for Terns Pharmaceuticals as it navigates the challenges and opportunities in its drug development pipeline.
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