Summary of Terns Pharmaceuticals Conference Call Company Overview - **Company**: Terns Pharmaceuticals - **Product**: Tern 701, an investigational next-generation oral allosteric BCR-ABL inhibitor for chronic myeloid leukemia (CML) treatment [2][41] Industry Context - **Disease**: Chronic Myeloid Leukemia (CML) - **Current Treatments**: First-generation and second-generation active-site tyrosine kinase inhibitors (TKIs) like Imatinib and Asciminib - **Market Need**: Significant unmet need for improved efficacy, safety, and tolerability in CML treatments, with approximately 40% of patients switching therapies within five years due to inadequate response or side effects [4][5] Key Points from the Call Efficacy and Safety Data - **Tern 701 Efficacy**: - Achieved a 75% major molecular response (MMR) and 36% deep molecular response (DMR) at 24 weeks in the recommended phase two dose range of 320 mg and above [8][31] - In a refractory patient population, 64% MMR was achieved by 24 weeks across all doses, with 75% MMR in patients at higher doses [10][22] - DMR rates are approximately two times higher than those seen with Asciminib [22][34] - **Safety Profile**: - Most treatment-emergent adverse events (AEs) were low-grade, with all grade three AEs being less than 10% [8][41] - No signs of pancreatic toxicity or significant blood pressure changes were observed, differentiating Tern 701 from Asciminib [18][41] Competitive Landscape - **Asciminib**: - First allosteric BCR-ABL inhibitor approved for CML, achieving a 22% market share in the U.S. within three quarters of launch and peak sales estimates revised to over $4 billion [5][6] - Tern 701 is positioned to potentially outperform Asciminib based on early clinical data [6][34] Clinical Trial Insights - **Cardinal Study**: - A two-part multicenter global study enrolling patients with chronic phase CML who have failed prior TKIs [12] - Enrollment has accelerated, with over 85 patients currently participating [3][41] Future Development Plans - **Next Steps**: - Plans to select a single dose for pivotal studies based on ongoing data collection and regulatory feedback [38][41] - Anticipated catalysts include expanded long-term data from the Cardinal study and potential regulatory meetings in 2026 [42][41] Market Opportunity - **Patient Population**: - Approximately 17,000 new CML patients annually in G7 nations, with a significant portion expected to switch to allosteric therapies due to better efficacy and tolerability [39][40] - **Treatment Goals**: - Focus on achieving rapid and deep molecular responses to improve long-term outcomes and quality of life for CML patients [39][52] Conclusion - Tern 701 shows promising efficacy and safety data, positioning it as a potential best-in-disease therapy for CML, with ongoing trials and future studies aimed at confirming its clinical benefits and market potential [41][42]

Core Insights - Terns Pharmaceuticals reported unprecedented Phase 1 efficacy data for TERN-701, indicating a potential best-in-disease profile for chronic myeloid leukemia (CML) treatment [1][2] - The company has a cash position of $295 million, expected to sustain operations into 2028 [1][5] Pipeline Developments - TERN-701 is an investigational allosteric BCR::ABL1 inhibitor for CML, with a major molecular response (MMR) rate of 75% by 24 weeks in the ongoing CARDINAL trial [3][4] - TERN-601, an oral GLP-1 receptor agonist for obesity, showed a maximum placebo-adjusted weight loss of 4.6% but will not proceed further due to adverse events [3][4] Upcoming Milestones - An updated dataset from the CARDINAL trial will be presented at the 67th ASH Annual Meeting on December 8, 2025, with a conference call scheduled for the same day [4][5] Financial Performance - R&D expenses for Q3 2025 were $19.9 million, up from $15.2 million in Q3 2024, while G&A expenses decreased to $7.8 million from $9.8 million [6] - The net loss for Q3 2025 was $24.6 million, compared to $21.9 million in Q3 2024 [7][8] Balance Sheet Highlights - As of September 30, 2025, total assets were $301.7 million, with total liabilities of $17.6 million and stockholders' equity of $284.1 million [10]

TERN-701 Opportunity - TERN-701 is a novel allosteric BCR-ABL TKI in Phase 1 studies, representing a new generation of therapies for CML with superior target coverage, improved kinase selectivity, and high potency against common mutations[16] - TERN-701 has the potential to transform the standard of care for CML by offering enhanced efficacy, minimal off-target activity, optimized dosing, and more rapid and deeper levels of response, potentially leading to treatment-free remission[16] - TERN-701 is expected to be the 2nd allosteric TKI to market, differentiating itself from asciminib[78] CML Market and Treatment Landscape - Approximately 10,000 new CML cases are diagnosed in the U S annually[10] - The U S CML prevalence is approximately 110,000 and is expected to triple by 2040[10] - Around 40% of CML patients switch therapy within 5 years due to intolerance or resistance[10] - About half of CML patients do not achieve deep molecular response (DMR) by 4 years after switching to a second treatment[10] - Allosteric inhibitors represent the latest evolution in CML treatment, with asciminib being the first approved allosteric BCR-ABL inhibitor[12] Clinical Development and Data Interpretation - Baseline BCR-ABL levels impact the speed and attainment of MMR in relapsed/refractory (R/R) CML patients; patients with baseline BCR-ABL of >10% had the lowest molecular response rates to asciminib in Phase 1[38, 42] - Terns' initial Phase 1 data for TERN-701 will comprise patients with shorter treatment duration compared to precedent initial Phase 1 data disclosures[64] - Interim dose escalation data for TERN-701, expected in December, will include an estimated 10-20 enrolled patients, with 5-10 patients having ≥3 months of treatment across at least 2 dose levels[66] Future Strategy - TERN-701 has broad anticipated opportunity across 1L and 2L, with the potential to split 1L allosteric share and capture 2G TKI intolerant/resistant patients[76, 77] - Subsequent readout in 2025 is anticipated to show 6-month data and inform potential registrational trial[79]