Terns Pharmaceuticals has shelved its oral GLP-1 obesity candidate after a phase 2 trial delivered a mix of weight loss and tolerability data that fell short of expectations as well as evidence the asset causes liver injuries.
The biotech had already decided against investing in the GLP-1 candidate TERN-601 and other metabolic disease assets beyond 2025. Terns was planning to finish its phase 2 study of TERN-601 and use the data to land a partner with the cash to take the asset through a pivotal program. Yet, after seeing the results, William Blair analysts said in a note to investors that the data “likely eliminate” the chances of a deal.
Multiple aspects of Terns’ data disappointed. Across four regimens, the company saw placebo-adjusted weight loss of up to 4.6% at Week 12. Eli Lilly saw deeper weight loss in a phase 2 study of orforglipron, the front-runner in the oral GLP-1 small molecule space. Terns’ result fell short of internal expectations.
Scott Harris, chief development officer at Terns, said at a Morgan Stanley event last month that his team was expecting to see weight loss of at least 6%. After meeting with Terns executives in August, TD Cowen analysts wrote in a note to investors that the company was targeting placebo-adjusted weight loss of 5% to 7%.
Related
After viewing the data, TD Cowen analysts told investors that weight loss was lower than expected. BMO Capital Markets analysts also called out the weight loss data, writing in a note that efficacy “appears less competitive versus other oral agents in development.”
Terns’ plan was to post competitive efficacy and rely on tolerability and titration to differentiate its asset. The data dented Terns’ hopes of achieving a better tolerability profile than orforglipron and other rival oral treatments.
In the TERN-601 cohort with the highest weight loss, 64.7% of people reported nausea, and 38.2% had vomiting. The figures for nausea and vomiting across all dose cohorts were 56% and 26.9%, respectively. Overall, 11.9% of patients discontinued treatment because of an adverse event.
Last month, Harris said Terns was hoping to see nausea and vomiting rates of “about 50% of what the other programs have produced.” The Terns executive specifically called out the rate of vomiting on rival therapies as a problem, telling analysts that a 23% rate in a primary care market is really difficult for patients and physicians to manage. Lilly saw vomiting rates of 14% to 32% on orforglipron in phase 2.
Related
The lack of differentiation on efficacy and tolerability was compounded by three cases of asymptomatic, reversible grade 3 liver enzyme elevations. Two patients had profiles consistent with drug-induced liver injury, an impression that was supported in one person by the findings of a biopsy. Emil Kuriakose, M.D., chief medical officer at Terns, said in a statement that the elevated liver enzymes were “unexpected.”
Kuriakose’s comment reflected the lack of liver toxicity signals in preclinical and phase 1 studies of the drug candidate. TD Cowen analysts also called the liver injuries unexpected, but their peers expressed less surprise. BMO and William Blair analysts separately noted that TERN-601 has a similar scaffold to danuglipron, an oral GLP-1 candidate that Pfizer axed over signs of liver toxicity.
The efficacy, safety and tolerability achieved by Lilly’s orforglipron and Novo Nordisk’s oral Wegovy, plus a stacked pipeline of challengers trying to clear that bar, mean assets with shortcomings may struggle to recoup the investment needed to bring them to market. Pfizer made that assessment when it stopped work on danuglipron and struck a deal to buy Metsera for an initial $4.9 billion.
Terns’ shares fell 20% to $6.50 in after-hours trading as investors assessed the impact of the data on the chances of the biotech attracting a partner. With Terns following through on its plan to stop investing in metabolic disease, the company is now focused squarely on the leukemia candidate TERN-701. Phase 1 data on the cancer treatment are due this year.
