UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-39926 Terns Pharmaceuticals, Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 98-1448275 (State or other ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-39926 Terns Pharmaceuticals, Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 98-1448275 (State or other juris ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-39926 Terns Pharmaceuticals, Inc. (Exact Name of Registrant as Specified in its Charter) Indicate by check mark whether the regis ...

Financial Performance - The net loss attributable to common stockholders for the years ended December 31, 2022, and 2021 was approximately $60.3 million and $50.2 million, respectively, with an accumulated deficit of $242.4 million as of December 31, 2022[270]. - The company expects to continue incurring significant losses for the foreseeable future as it develops product candidates and conducts clinical trials[270]. - As of December 31, 2022, the company had capital resources of approximately $283.1 million, which are expected to fund planned operating expenses into 2026[273]. - The company may require substantial additional funding to finance operations and achieve goals, with potential delays or limitations in product development if funding is not secured[271]. - The potential economic impact of COVID-19 may reduce the company's ability to access capital, negatively affecting liquidity and financial position[289]. Product Development Focus - The company plans to focus on developing product candidates for chronic myeloid leukemia (CML), non-alcoholic steatohepatitis (NASH), and obesity, with specific candidates like TERN-701, TERN-501, and TERN-601[277]. - The company has prioritized its resources based on a strategic review, deciding to advance TERN-701 and TERN-501 while limiting resources for TERN-201 in NASH[277]. - The successful development and commercialization of product candidates are heavily dependent on timely completion of clinical trials, which may be delayed due to various factors including COVID-19[296]. - The company does not expect to realize revenue from product sales or royalties in the foreseeable future until product candidates are approved and successfully marketed[276]. Clinical Trials and Regulatory Challenges - The ongoing COVID-19 pandemic has caused disruptions that could impact clinical trials, including delays in patient enrollment and site operations[281]. - The company has made adjustments to clinical trial protocols to enable remote visits in response to the COVID-19 pandemic[285]. - Future capital requirements will depend on various factors, including the success of clinical trials and regulatory approvals[274]. - The company faces significant risks related to the discovery and development of product candidates, with no drugs currently approved for sale[293]. - The regulatory approval process is lengthy and uncertain, with potential delays adversely affecting revenue generation and business operations[342]. - The FDA may require additional studies or trials for product candidates, which could delay or prevent commercialization[344]. - The company must comply with varying regulatory requirements in different countries, which may require significant resources[295]. Competition and Market Dynamics - The company may face significant competition in drug discovery and development, particularly in rapidly advancing therapeutic areas like NASH and obesity[320]. - The company is aware of numerous competitors in the development of NASH treatments, including major pharmaceutical companies like AbbVie and Gilead Sciences[323]. - Competitors possess greater financial resources, marketing capabilities, and clinical trial expertise, which may inhibit market penetration efforts[331]. - The number of companies developing drugs for serious diseases like NASH and obesity is expected to increase, intensifying competition[330]. Intellectual Property Risks - The company may face significant legal risks related to intellectual property disputes, which could impact its ability to commercialize its products[426]. - The competitive position in the pharmaceutical market depends on the ability to maintain and enforce intellectual property rights, which are subject to rapid technological changes[437]. - The company may face challenges in enforcing its intellectual property rights, which could lead to unauthorized use or reverse engineering of its technology[442]. - Legal assertions of patent invalidity could result in the loss of patent protection for product candidates, adversely affecting the company's competitive position[447]. Regulatory Compliance and Healthcare Legislation - Compliance with healthcare regulatory laws is essential, as violations could result in significant penalties and operational restructuring[406]. - Future healthcare legislation may increase the difficulty and cost of obtaining marketing approval and affect pricing strategies[411]. - The company may participate in the Medicaid Drug Rebate Program, which requires accurate reporting of pricing data; non-compliance could lead to penalties[409]. - The Inflation Reduction Act of 2022 mandates that manufacturers negotiate prices for certain drugs starting in 2026, with a cap on negotiated prices[417]. Manufacturing and Supply Chain Dependencies - The company relies completely on third parties for the manufacturing of clinical drug supplies and intends to do so for commercial supplies, which poses risks if these third parties fail to meet FDA approval or quality standards[376]. - The company does not have internal manufacturing capabilities and is dependent on contract manufacturers for compliance with regulatory requirements, which could impact the ability to develop and market product candidates[377]. - The company expects to continue depending on third-party contract manufacturers and has not entered into long-term agreements, which could adversely affect business operations[381].

2 March 2023 This presentation contains forward-looking statements about Terns Pharmaceuticals, Inc. (the "Company," "we," "us," or "our") and its industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this presentation, including statements regarding the Company's strategy, future financial condition, future operations, projected costs, prospects, plans, objectives of management and expected market growth, are forward-looking stateme ...

Obesity • ~$30B market5limited by supply/cost of peptides • Oral drugs expected to expand market access potential NASH • No approved drugs to date • Demand for drugs amenable for co-administration 2 Terns Pipeline: Broad Rights to Multiple Wholly-owned Opportunities Targeting Serious Diseases 1. Out-licensed to Hansoh Pharma (HS 10382) in the Greater China region; Ph 1 trial ongoing in China; Terns eligible for up to $ 67M in clinical, regulatory and sales-based milestones, mid single digit percentage royal ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-39926 Terns Pharmaceuticals, Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 98-1448275 (State or other ...

Pipeline and Clinical Programs - TERN-701, an allosteric BCR-ABL inhibitor for Chronic Myeloid Leukemia (CML), has a Phase 1 clinical trial in CML patients initiated in Q2 2022[18, 34] - TERN-601, an oral GLP-1 agonist for obesity, is undergoing IND-enabling activities with Phase 1 trial initiation expected in 2023[39, 65] - TERN-501, a THR-β agonist for NASH, has Phase 2a NASH mono/combo data expected in 2H 2023[9] The Phase 2a combo trial with TERN-101 initiated dosing in July 2022[11, 107] Financial Position - The company has approximately $140 million in cash and cash equivalents as of June 30, 2022, which provides a runway into 2025[9, 118] This equates to roughly $550 per share[9, 118] - The company has approximately 25 million primary shares outstanding as of August 5, 2022[9, 118] Intellectual Property - TERN-701 has composition of matter patent protection until 2039[121] - TERN-601 has composition of matter patent protection projected to expire between 2041 and 2043[122] - TERN-501 has composition of matter patent protection until 2039[123] Market Opportunity and Differentiation - Up to approximately 30% of CML patients are not adequately treated by the standard of care, presenting an opportunity for TERN-701[9, 127] - The obesity market is estimated at approximately $30 billion, but is limited by the supply and cost of peptides, creating an opportunity for oral drugs like TERN-601[9, 127] - TERN-501 aims for superior selectivity for THR-β over THR-α and enhanced metabolic and PK stability compared to other THR-β agonists[12] TERN-101 (FXR Agonist) - In a Phase 2 trial, TERN-101 demonstrated no discontinuations due to adverse events, including pruritus[140] - The Phase 2 trial showed significant improvements in corrected T1 (cT1), an imaging marker of liver inflammation and fibrosis[140]

(Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q Commission File Number: 001-39926 Terns Pharmaceuticals, Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 98-1448275 (State or other juris ...

Drug Development - The company is developing a portfolio of small-molecule therapies targeting serious diseases such as non-alcoholic steatohepatitis (NASH), obesity, and cancer, with a focus on THR-β and FXR mechanisms [117]. - TERN-501, a THR-β agonist, showed positive Phase 1 trial results, demonstrating safety and tolerability with no serious adverse events reported [118]. - The FDA cleared the IND application for TERN-501 and TERN-101, leading to a Phase 2a trial expected to enroll approximately 140 NASH patients, with top-line data anticipated in the second half of 2023 [119]. - The company aims to develop TERN-601, an oral GLP-1R agonist for obesity, with a first-in-human clinical trial planned for 2023 after identifying suitable small-molecule scaffolds [120]. - TERN-101 demonstrated significant improvements in liver inflammation and fibrosis markers in a Phase 2a study, indicating its potential in combination therapies for NASH [121]. - TERN-201, an inhibitor of VAP-1, met primary safety endpoints in a Phase 1b trial, but did not show meaningful changes in NASH biomarkers, leading to limited further investment in this candidate [123]. - TERN-701, a BCR-ABL TKI for chronic myeloid leukemia, is in development in China, with a Phase 1 trial initiated by Hansoh Pharmaceuticals [124]. - The company has prioritized resources towards TERN-501 and TERN-601, expecting cash reserves to fund operations into 2025, including key data readouts [125]. Financial Performance - The company has not generated any revenue from product sales and will not do so until successful clinical development and regulatory approval of its therapy candidates [126]. - For the three months ended March 31, 2022, total operating expenses were $13,825,000, an increase of 4% from $13,296,000 in the same period of 2021 [130]. - Research and development expenses decreased by $599,000 to $8,136,000, primarily due to a $2.0 million decrease in clinical program expenses [130][133]. - General and administrative expenses increased by $1,128,000 to $5,689,000, driven by a $0.8 million increase in personnel-related expenses [130][136]. - The net loss for the three months ended March 31, 2022, was $13,773,000, compared to a net loss of $13,337,000 for the same period in 2021, reflecting a 3.3% increase in losses [130]. - As of March 31, 2022, the company had an accumulated deficit of $195.8 million and cash, cash equivalents, and marketable securities totaling $151.3 million [144]. - The company expects to incur net operating losses for at least the next several years and anticipates significant research and development expenses [142][149]. - Net cash used in operating activities during the three months ended March 31, 2022, was $13.3 million, compared to $14.3 million in the same period of 2021 [153][154]. - Net cash provided by investing activities for the three months ended March 31, 2022, was $9.5 million, primarily from the sale and maturity of investments [155]. - The company entered into a Sales Agreement in March 2022 to offer shares of common stock with an aggregate offering price of up to $75.0 million [147]. - The company will need substantial additional funding to support ongoing operations and research activities, which may come from equity or debt financings [149][151]. Operational Challenges - The ongoing COVID-19 pandemic continues to pose uncertainties regarding the company's operations and development timelines [129].