This Small-Cap Stock Has a Promising GLP-1 Drug Which Could Rival Novo Nordisk and Eli Lilly's Weight-Loss Treatments

Company Overview - Terns Pharmaceuticals has a market cap of less than $800 million, with significant potential upside in the anti-obesity market [1] - The company is developing a once-daily GLP-1 pill, TERN-601, which has shown promising early trial results [4] Industry Insights - The anti-obesity market is projected to reach $100 billion by the end of the decade, currently dominated by Eli Lilly and Novo Nordisk [2] - There is a shift towards oral weight-loss treatments, which may be more appealing for long-term use compared to current injection-based therapies [2] Clinical Trial Results - TERN-601 demonstrated a placebo-adjusted mean weight loss of 4.9% at the highest dosage (740mg) over a 28-day trial, with over two-thirds of participants losing more than 5% of their body weight [4] - In comparison, rival Viking Therapeutics' oral drug VK2735 achieved a placebo-adjusted weight loss of up to 3.3% with a much lower dosage of 40mg [5] - Other competitors like Eli Lilly and Novo Nordisk have shown over 13% weight loss in early-stage trials, but over longer periods of 36 to 68 weeks [6] Financial Considerations - Terns has burned through nearly $79 million in operating activities over the past 12 months, indicating ongoing cash flow challenges [8] - The company announced a $150 million offering to raise capital, which is common for stocks experiencing a rally [7] Future Outlook - Terns plans to advance to phase 2 trials for TERN-601 next year, but the path forward may be volatile due to the need for additional funding and competition in the market [6][9] - While the early trial results are encouraging, there is uncertainty regarding the drug's market entry and potential competition from more effective treatments that may emerge [10]