Shares of Terns Pharmaceuticals (TERN), a clinical-stage company focused on developing innovative therapies, skyrocketed by 16.8% following the release of positive top-line data from its early-stage obesity study. The study, evaluating the safety and efficacy of TERN-601, an investigational oral, small-molecule GLP-1R agonist, yielded encouraging results, boosting investor confidence in the company’s potential to develop a significant player in the burgeoning obesity market.
The Phase I study, encompassing both single and multiple-ascending dose (SAD and MAD) trials, assessed the safety, tolerability, pharmacokinetics, and pharmacodynamics of TERN-601 in healthy adults with obesity or overweight. The data revealed a compelling trend: treatment with TERN-601 resulted in dose-dependent, statistically significant placebo-adjusted mean weight loss across all three doses (240 mg, 500 mg, and 740 mg) evaluated in the 28-day MAD study. The highest dose (740 mg) demonstrated the most substantial weight reduction, achieving a maximum placebo-adjusted mean weight loss of 4.9%. Importantly, a significant 67% of patients treated with the 740 mg dosage strength of TERN-601 experienced a 5% or greater reduction in their baseline body weight.
Beyond its weight reduction efficacy, TERN-601 exhibited a favorable safety profile. Despite rapid titration to high doses, the study observed no treatment-related dose interruptions, reductions, or discontinuations at any dose strength. The majority of treatment-related adverse events were classified as mild to moderate in severity, and no clinically meaningful changes in liver enzymes, vital signs, or electrocardiograms were detected.
Terns Pharmaceuticals is confident that TERN-601 has the potential to be a class-leading GLP-1R agonist for weight management. The drug’s distinct properties, including its low solubility and high gut permeability, could lead to a prolonged duration of efficacy, potentially providing a significant advantage as an oral GLP-1R agonist.
Building on the success of the Phase I study, Terns Pharmaceuticals plans to initiate a Phase II trial of TERN-601 for the obesity indication in 2025. The company has already identified an optimal range of clinically active, well-tolerated doses for Phase II development, eliminating the need for further dose range exploration.
The obesity market is experiencing substantial growth, driven by the increasing prevalence of obesity and the emergence of new, effective treatments. Two pharmaceutical giants, Eli Lilly (LLY) and Novo Nordisk (NVO), are currently leading the market with their respective obesity drugs, Zepbound and Wegovy. However, despite the availability of these approved medications, the demand for effective weight management solutions continues to outpace supply. Eli Lilly’s Zepbound, a dual GIP and GLP-1R agonist, launched in November 2023, has enjoyed strong market uptake, generating $1.76 billion in revenue during the first half of 2024. Novo Nordisk’s Wegovy, a GLP-1 agonist, has also witnessed stellar performance since its FDA approval in 2021, generating DKK 21 billion in revenue in the first half of 2024.
Amgen (AMGN) is also actively pursuing the obesity market with MariTide (maridebart cafraglutide), a GIPR/GLP-1 receptor, currently in its pipeline. Encouraging interim data from the Phase II study on MariTide prompted Amgen to announce its plans for a comprehensive Phase III program across obesity, obesity-related conditions, and type-II diabetes. Top-line 52-week data from the Phase II study is expected in late 2024.
The obesity market’s substantial growth potential is evident, with Goldman Sachs projecting the U.S. market to reach $130 billion by 2030. The market’s growth is driving significant investments from major players like Lilly and Novo Nordisk to optimize their production capacities and explore novel obesity candidates.
With the positive Phase I data and its ongoing development program, Terns Pharmaceuticals is well-positioned to compete in this dynamic market. The company’s commitment to advancing TERN-601 as a potential treatment option for obesity could significantly impact the landscape of weight management therapies.
