All right. Welcome back to the Citizens JMP Healthcare Conference. My name is Silvan Tuerkcan, I'm a senior analyst covering precision medicines. It's my pleasure to host Terns. Thank you so much, Amy Burroughs, CEO, and Emil Kuriakose, CMO. Thanks so much for joining us today.
Thanks for the invitation.
Yeah, and Amy, I think you had some prepared remarks, so yeah, please give us an introduction.
Great. I'll just introduce to Terns, but first I'll say thanks so much to you and your colleagues for hosting us here today, and also that we'll be making forward-looking statements and would refer you to our website for full disclosures. So I'm relatively new to Terns, but Terns is a seven-year-old company. All of our assets have been internally discovered. We aim to develop best-in-class molecules with validated mechanisms of action, all small molecules, and we're focused on oncology and obesity. We're going to talk quite a bit today about our two assets that have data readouts coming this year. So TERN-701, our allosteric BCR-ABL inhibitor for CML. Again, data in the second half of this year from interim data from our initial dose escalation cohorts. And then TERN-601, our oral GLP-1 receptor agonist with 28-day weight loss data in the second half of this year also.
We have additional assets in the pipeline we can talk about, and a great team that has a demonstrated history of bringing our internally developed assets into the clinic.
Great. Thank you so much. Thanks for the introduction. I would like to start with oncology, perhaps. If you could please set the stage here to discuss the unmet need that you're trying to address in CML for TERN-701.
Sure, certainly. So you know, TERN-701 is in a unique position as one of the, potentially the second-in-class drug in a novel class of allosteric inhibitors that have really changed the paradigm in CML. And you know, when people think CML within the world of oncology, they largely consider it sort of the least unmet need of all the oncologic indications. But that's really not true in the sense that the drugs that have been used and they've been essentially miraculous drugs in terms of the active site TKIs, despite their great activity, these are chronic lifelong therapies. And we know that the bar as far as the surrogate marker that predicts the best outcomes is major molecular response at 12 months. And so the currently approved drugs, even the best second-gen TKIs, only get to less than 50% MMR at 12 months.
So there's a lot of headroom for improvement. The challenge with the active site drugs is as you develop the second and third-gen drugs, you get better efficacy, but that comes at the sacrifice of worse safety. Now, as asciminib being the first allosteric drug, really changed that entire paradigm by showing not just superiority on efficacy, but also superiority on safety. So it's really coming close to that ideal profile for that long-term TKI in CML that addresses this need for patients where they need to be on these lifelong therapies that are very effective, but also really well tolerated.
Really, that's just what speaks to that is the fact that Novartis very recently announced, again, positive Phase III data in the frontline newly diagnosed setting, and they just announced that they got breakthrough therapy from the FDA, which again highlights the fact that this is not a disease without unmet need, that breakthrough therapy is designated specifically for indications with high unmet need. So we're very lucky and fortunate. I think we're in a very good position to be a second-in-class allosteric within this novel exciting class with potentially positive differentiators even from Scemblix that we'll talk about with your later questions.
Yeah, great. Maybe before we go there, you talked about people progressing and/or switching. What is the reason for switching? Is it both of them? Is it predominantly one over the other? And are these two distinct patient populations, or?
Yeah, no, that's a great question. So we know that overall, over the course of the first five to six years, about 40% of patients switch their TKI. And to your point, that's either due to resistance and/or tolerability issues. Those two aren't mutually exclusive because if you have tolerability issues and your dose intensity goes down as a result, your disease will progress. True resistance, within that 40%, it's thought to be approximately 15%-20% are true resistance. What I mean by that is BCR-ABL resistance mutations that evolve that require another TKI that covers that mutation. And then the remainder are usually due to tolerability issues in patients who would otherwise maintain a response. And the tolerability is a wide range of at least qualitative side effects that happen with the current TKIs. For example, dasatinib has pulmonary effusions. Nilotinib has vascular issues. Bosutinib has GI issues.
Ponatinib has sometimes all of the above. So those are the reasons why patients switch, which again is why the profile of allosterics is that much more attractive given that both on the efficacy and safety front, these drugs are clearly differentiated from the active sites.
Great. And then obviously, that highlights the need for this third-generation approach here. But what gives you confidence that there is a market for a second third-generation inhibitor? And how would that slot in after you progress on a third-generation inhibitor?
Yeah, so we generally shy away from using the term third generation to specifically refer to allosterics. I think allosterics are in their class of their own. Historically, the first-gen, second-gen, third-gen have been in light of the newer active site inhibitors. So allosterics stand in a class of their own. And in that regard, there's a lot of room for additional entrance into that novel space. And really where that I think that plays out, that it's already played out with the second-gen drugs, with the active site inhibitors, as we know. Nilotinib and dasatinib came first, and then bosutinib came some years later, but still is a very successful drug both clinically and commercially. But I think it's not just that we want to be in just another allosteric. Again, we're highlighting as we go along the positive differentiators from asciminib.
Very recently, we just announced and we put out some data from a parallel healthy volunteer study that we're running in the U.S. showing that 701 has very linear PK and importantly doesn't have a food effect, which means that patients may be able to take this drug in fed state or fasted state without regard to food. We think that is an important differentiator from asciminib where, for example, you have to take the asciminib doses with a three-hour fast around each dose. And especially considering that that drug is BID dosing in multiple regions, that's a pretty heavy burden on patients to have a six-hour fasting requirement around dosing. And a positive food and a lack of a food effect, I think, is a clear positive differentiator there.
We also see an opportunity to dose optimized TERN-701 in a way that asciminib we don't think was able to do. As you know, asciminib has two approved doses of 80 for the non-T315I and 400 for the T315I. Both doses have pretty good safety profiles. So they've never reached an MTD with that drug in escalation. So we think there's an opportunity given the safety profile of this class to be able to get to a dose that covers everybody as a single dose, dose once daily. And those are meaningful differentiators for clinicians as well as patients. And so we're excited as we get to clinical data with our molecule that we have an opportunity to capture those patients.
Great. Maybe let's jump into the trial. So you recently started or maybe recently, October 2023, you started your Phase I Cardinal trial in CML. Can you please just walk us through the design and where you are with the trial?
Certainly, yeah. So it's a pretty traditional dose escalation and dose expansion study. It's a BOIN designed dose escalation where we evaluate four dose levels, a starting dose of 160 milligrams once a day, where again, we were able to leverage data, as we'll talk about in a bit, from an ongoing study in China with our partner Hansoh. So essentially, it's a dose escalation with optional backfills to get robust data at each dose level, followed by a randomized expansion where you select two doses from escalation and then test that to get further data on safety and efficacy to then select a dose to take to a pivotal trial.
Great. And then how did you, in that trial design, leverage any observations that you got from your partner Hansoh?
Yeah, so just as a background, our corporate partner is Hansoh Pharmaceuticals in China. Hansoh had done a licensing agreement with Terns in 2021 where they took the drug to develop solely in China, and Terns retained all ex-China development rights and commercialization rights. So Hansoh actually did the IND enabling work and actually began a Phase I study in China about a year before we filed our IND. And so we actually were able to leverage that early data from their dose escalation, which again, they started at a much lower dose of 40 milligrams and had rapidly escalated through the doses to where we were able to use that data to not have to start our study at the same low dose with a very conservative safety margin. Under the agreement, Hansoh has been a great partner.
They've allowed us to share their data confidentially with the regulators in the U.S. That really allowed us to, with the FDA specifically, to have the FDA agree to start our dose at a four times higher dose where, again, we've seen very good safety and evidence of clinical activity. So that's why we think that they really were able to allow us to accelerate our program in a meaningful way, to be able to do more of an abbreviated escalation followed by the expansion that gets us to a potentially pivotal study much faster.
Did the fact that Hansoh data also allow you to jump into a second line, or?
Absolutely, yeah. I think the thing we used there was we pointed out the gap, the regulatory gap currently in the U.S. is that there's no allosteric currently approved in second-line patients. As you know, asciminib is currently approved in third-line plus patients. And then they'll get a frontline approval, but on label, there's no second line. And so in patients who start their therapy with the second-gen TKI, which is the most common, the only option for those patients who have resistance is to switch to a second-gen, another second-gen. So that's a clear unmet need there, which the FDA recognized. They liked the profile of the allosterics. They saw our safety data. And they allowed us to enroll a second-line population in our frontline, in our Phase I study.
Great. And then you guided to data in the second half of this year. Can you please set expectations for that data, maybe patient numbers or dose levels, and also maybe with respect to what you want to see in terms of efficacy?
Yeah, so we haven't guided to any specific numbers around patients or dose levels. We've guided to interim data from the initial cohorts of escalation. So by that, you obviously know it's going to be an early data set. I think knowing that keeping in mind that we've already seen the data that we were able to leverage, as I just mentioned, I think seeing consistency in the data both on the safety front and the early efficacy from what we've already seen in a Western population for us internally would be the right checkbox. And then we've already got PK data in a Western population that nicely bridges the China data as well. So I think the data will be directional in terms of efficacy.
I think it would be very premature to say that you can use this early data set to then benchmark it and compare it to P hase II data set like what you see with the Scemblix but an MMR of six months. I think that's unrealistic. But that doesn't mean you can't interpret anything at all. I think you can see evidence of directional changes in BCR-ABL transcript levels in patients who switched therapy to 701. For intolerant patients who are on their previous who couldn't tolerate their previous drug, not seeing those same issues and seeing good safety there, we do intend to do an investor R&D day event, sort of mid-year, to kind of level set folks on how to best interpret such very early data in CML and still be able to make a meaningful assessment of the drug.
Just thinking about a potential readout, indirect competitors of you with an active site and active site molecule, they presented data in a way, I think, where they looked at MMR responses and how they improve or if you do improve. Is that something that will be maybe the lowest hanging fruit in the beginning to show efficacy with, or how do you envision?
Yeah, so Amy, yeah, I mean, I think you're talking about the Enliven data set recently. And I think we congratulate the Enliven team for presenting early data from their study, keeping in mind that they're in a very different class of drug. They're an active site drug. We're an allosteric. And I think they presented, again, an early data set that we think is mainly directional in terms of it's encouraging. But I don't think you can make definitive comparisons using that data to, for example, asciminib or other TKIs at this stage of the game. And so I think that they used an MMR at three months. We don't necessarily have to use the same benchmark again because we're technically even earlier than Enliven in terms of the stage of development.
But yeah, I mean, I think it's great that other companies are testing new drugs in CML. And we'll set the stage again using our own sort of data to level set this tree. But Amy, feel free to add anything there.
Yeah, I was just going to say that I think it also, that data really shows you what early data in CML looks like, the importance of baseline characteristics, and the time that it can take to really drive MMR. So we look forward to seeing the Enliven data and how it evolves because, as Emil said, there's a lot of unmet need in CML.
Yeah, there's certainly quite some unmet need, right, that there's several molecules. What are your thoughts about it? It's a little bit far off, and you said how you get to one dose that you want to carry forward. But what is the registration of development? How could that look like in broad strokes? Would it be an active comparator? Would that be second-generation active site inhibitors?
So I think we have a lot of options right now for development. As Emil said, we also have our partner Hansoh in China developing both safety and efficacy data. Our base assumption has been that, as Emil said, there's a lot of opportunity for second-line patients. There's a lot of patients with that need. And with active site TKIs going generic, that there will be a lot of patients in need of a better second-line therapy. And you can recall, as you said, that our trial is currently enrolling second-line participants. We're all going to see the asciminib data from Novartis in a couple of weeks at ASCO. And we think that really opens up the opportunity for us to also seriously consider a frontline indication.
Yeah, that makes sense. Yeah, let's switch to oral GLP-1s, TERN-601. Obviously, very exciting field. Everyone's talking about it. Where does your small molecule fit into the treatment landscape in obesity?
Yeah, we get asked this question a lot. It's quite a crazy market, as everyone knows. But we really see there being significant demand in the future for orals in this space and really ones that are easy to manufacture, distribute, administer, and importantly, to combine. And so we see TERN-601 is really one of a select group that meets those criteria. We also have in-house agents such as our THR-beta and our GIPR modulators that could be combined with 601 in the future. So we do not have a crystal ball about where everything will go. But we definitely see a need for an oral like 601.
Great. Maybe a big picture of orals versus injectables. Maybe some people go the way of spacing out the injections versus orals every day. What do we know about where efficacy could be trending, orals versus injectables, and where patient preference could be trending?
Yeah, I mean, I don't think there's a one-size-fits-all efficacy target in this disease. We know that the injectables get to that 20%-25% in the large Phase III-Phase III studies. And we'll see, I think, the most mature data set and the most advanced oral is orforglipron. And we've seen where that molecule sort of lands in terms of the efficacy target. But there's going to be patients who don't necessarily need to lose 20%-25% of their weight over the course of whatever, four to six weeks or months or whatever. There are patients who may want it to a paradigm of, say, get to your target weight loss and then switch to an oral maintenance to maintain the plateau instead of having to continue the injections forever.
So we see there's a lot of treatment modalities emerging in terms of just what you can do with a monotherapy oral GLP-1 in terms of how you can interplay with the injectables, whether it be a maintenance strategy or using an oral up front in patients that don't want the inconvenience of taking an injectable. So this is a large enough market where there's going to be room for not only multiple entrance but multiple ways of treating the disease and multiple segments of phenotypes of the disease. That's just talking about single agent. Now, when you bring combinations into that play, you add the layer of comorbidities. So there might be obese patients with NAFLD. So about three quarters of obese patients have NAFLD.
A THR-beta combination could be very attractive in that subset as opposed to an obese patient with diabetes where a glucagon GLP GIPR may be optimal. I think there's just so many sort of different paths that one can take with an oral drug. In terms of the titration, the last piece I'll say is that you can fine-tune the titration much more tightly with an oral than you can with an injectable so that patients who, for example, can tolerate the initial titration for an injectable don't have an intermediate dose, for example, to go to where you can easily do that with an oral. These are all the opportunities that we see where an oral can play.
Obviously, Terns, you're specialized in designing small molecules, right? You've done that across several indications. When you set out to design TERN-601, is it safety? Is it you want to be the most safe oral GLP-1? Or with an oral GLP-1, what exactly?
Yeah, so I mean, really, when we started the TERN-601 discovery effort well before the bandwagon with the obesity Ozempic started, we were initially using this molecule potentially as a route to combination approaches in NASH. So that gave us sort of a time advantage in terms of now that we're actually one of the very first few companies that are in the clinic in Phase I with an oral drug. What we were really looking to do is improve on the pharmacology of danuglipron. So we've publicly stated that we've based this off on the danuglipron scaffold. And we saw opportunities to improve the pharmacology to really allow for once-daily dosing, which we think is critical for any oral GLP from the standpoint of both clinical and commercial.
And so optimizing the pharmacology to be able to allow once dosing but also be able to not have to go through the problem of what danuglipron faced with the BID dosing, which is what we think really drove the GI tolerability issues and discontinuations with that drug, is really what we were trying to optimize. This safety piece, it's really difficult to, number one, optimize that on the discovery side of things. Even at the Phase I stage with 28-day studies, you really cannot thread the needle on the GI tolerability. We just have seen such a wide range of GI AEs ranging as low as 15%, as high as 90%. And all of them regress to a mean of approximately 40%-50% when these molecules all move into Phase IIA.
I think safety, we're in the range of what the other GLP-1s, both injectables and orals, have shown in 28 days. We're in that placebo-adjusted 3%-5% weight loss at 28 days. We think we have a competitive molecule.
Great. Yeah, maybe talking about the trial, you initiated clinical development. Where are you with the trial? And maybe you can walk us through the design.
We announced this week that the SAD has been completed. The MAD is underway. It's once-daily dosing. We will be releasing data from at least three cohorts. Preliminary safety looked good, really nothing remarkable. There's been a lot of questions in this class about liver toxicity, which we have not seen any, nor have we had any treatment-related AEs that have led to discontinuation. We expect to report on data in the second half of this year.
Great. An obvious question, what should we look for in the 28-day data? And what should we compare it to?
Yeah, I think it's like Emil said. It's really in the 28-day data, you don't see a lot of differentiation across injectables, orals. You're really looking for 3%-5% body weight. Do we have a drug type of thing? You see quite a difference in some of the tolerability. And really, the differentiation comes in future studies.
What about the titration piece? Will you fine-tune that later? There's no titration in the.
Well, there is titration in the 28-day as there is in every 28-day study. But that won't be the final titration scheme. All these drugs, when you get to a Phase IIA, Phase IIB, the titration is very different. It's usually slower. But in a 28-day, really, the goal is to get to the max dose within the titration cohort and spend the longest time at that dose to maximize the weight loss. But you also don't want to minimize discontinuations due to AE. So AEs by themselves are fine as long as they don't lead patients to come off the drug.
So we've designed our titration schema to be able to be flexible enough to allow for that rapid titration, get to a starting titration dose that doesn't lock you into the lowest dose that you had to go to in SAD, and gives you enough wiggle room to be able to not have patients completely discontinue therapy in the event of intolerability but rather maybe go down to an intermediate dose where they can continue dose and maintain dose intensity as maximal as possible.
Great. Maybe are there any demographic details, as we've looked through previous results with oral GLP-1s and maybe also injectables, and then specifically your trial, that we should be aware of when we look at this data comparing cross-trials?
We've really said that it's a US-based study in obese and otherwise healthy participants.
Great. What can we learn from, I guess, Pfizer's Phase II BOBC data and then Amgen's decision to discontinue the small molecule AMG 786? Different mechanisms but different designs of the molecule. But is there anything pertinent to your program?
I think on AMG 786, we'd really have to ask Amgen since they never really disclosed the target is an oral obesity agent. But I don't think a lot more is known. And we at Terns do not know. So not a lot to be learned from that. On danuglipron, I think they've dosed over 1,500 people. They've seen a good safety profile on that without liver tox. And I think they've also seen there's some issues, like Emil was saying, with the conduct of the study, the titration, the dropouts, the BID dosing. They did see some good weight loss, QD120. So we'll just have to see and sort of ask Pfizer where they're going to go with this. But we think there are some promising components to that drug.
Great. And maybe finally, as we come up on time here, once we get that data in the second half of the year, what are the next steps? What should we be looking for in the obesity program?
Yeah, I mean, the traditional next step after a 28-day would be a Phase IIA to do a 12-week study where, again, you look at a longer time course on the weight loss but also approximately different titration schedules. At the end of the day, that Phase IIA will inform sort of what your anchor GLP-1 dosing strategy would be for combinations. Now, we're aware that taking these drugs to full development programs at 2B3 is not typically something we would intend to do as a small company. I think that's a point we'd require a partner. But I think we want to generate enough proof of concept data and enough early-phase data to be able to generate conviction amongst ourselves and potential partners that we have a reliable, competitive GLP-1 anchor that can be taken forward.
Great. Well, thank you, Amy. Thank you, Emil. Thanks so much for joining us today.
Thanks, Simon.