Good afternoon, everyone. Thanks for joining us, for everyone who's joining us here and on the webcast for the Goldman Sachs Global Healthcare Conference. We're pleased to be joined today by the team from Terns Pharmaceuticals.
Obesity. The 2 catalysts that we have, the 2 data readouts coming out this year are the first, well, one is in CML, not necessarily first from a timeline perspective, is in CML, is interim data from our phase I dose escalation with TERN-701 and allosteric BCR-ABL, and TERN-601, an oral GLP-1 agonist.
Perfect. I'll go in the same order you did. Maybe we'll start with CML. Let's do some background first. Just maybe the lay of the land in CML. I think this is an indication that's now all of a sudden of quite a lot of interest, but not something people have been focused on for the past couple of years. And what are the main drugs used for the disease? How well do they work? Where are they used? Just give us some background context there.
Yeah. So CML was really transformed in 2001 with the approval of Gleevec and imatinib, first generation TKI. Since then, there's three other second generation TKIs that are used in the frontline setting. Imatinib is generic. It's used about half the time, and second gen TKIs are used about half the time. About 50% of patients are switched, either for tolerability or efficacy reasons. About 10% of patients see all TKIs at some point in their treatment regimen. So it's a disease which has been transformed from a fatal disease into a chronic disease. There are great drugs out there that will continue to be used. There are also unmet medical needs there. The latest to be approved is asciminib from Novartis, an allosteric BCR-ABL. We are also developing an allosteric.
The allosteric class is really being established as the best class in CML at ASCO. We saw frontline data from Novartis showing better safety and better efficacy. It will definitely change the treatment landscape.
Yeah. Maybe we'll start there with the ASCO data update. Obviously, we're still very early days post the data. But if you think about what, first, maybe outline the key parameters that they showed and how you think that will change the treatment paradigm here in CML?
Well, they really showed that they did a trial in a frontline setting where it was asciminib versus dealer's choice TKI, and they segmented by imatinib versus a second generation TKI. So they evenly split it. It was about 400 patients with half of the second gen TKIs being imatinib and half being one of the second gens. And they showed better safety and efficacy versus imatinib. And they showed trends in efficacy versus the second gen TKIs and better safety.
Sure. So with that data in hand, I guess, where do we think the frontline treatment setting is going to shake out knowing it's early?
Yeah. So Novartis has said they see Scemblix as a $3 billion drug. Some analysts see it potentially as bigger. We see it's going to really garner quite a significant share of the frontline. And that imatinib and second gen TKIs will still be used. Imatinib is generic, and the second gens will be generic in the coming years. Again, they're still good drugs. And we see that when those patients, if those patients fail their first generation therapy, then the allosteric will be the best choice in the second line. And so a question we often get is, is this data good for Terns? We see it as very good for Terns because we see this. We've always talked about generating data in the second line where asciminib does not have a label. And there's definitely a need for an allosteric, as I just outlined.
But we also see this gives us optionality to move into the frontline. Given that we don't think asciminib will have a 100% share, it is feasible to do a similar trial to what asciminib did and show that TERN-701 is at least as good and also has some points of differentiation that are compelling. So we see it as having a real place in the treatment regimen, both first line and second line.
Yeah. Maybe following on that last point there, obviously the data was so good, it does kind of beg the question, where is the unmet need or the path to differentiation? You could maybe spend some time talking about the specifics of where you see TERN-701 as differentiated versus Scemblix.
Yeah. So there are many paths to potential differentiation that will emerge as our clinical data emerges. We did announce our first clinical data in April showing differentiation. So asciminib has a 3-hour fasting requirement. They have 3 approved doses. They have 80 mg once a day and either 40 mg or 200 mg twice a day. So that requires between 3 and 6 hours of fasting, which can be quite difficult for patients. We showed that we do not have that food effect, which can be a big deal for patients in terms of quality of life. They're taking these drugs for the rest of their life, most likely. And that can also lead to some real benefits in terms of compliance and adherence and ultimately efficacy. We also have a plan to look at dose optimization.
So we think that an allosteric could be better developed from a dose perspective to have potentially only one dose that covers the full mutational spectrum. There's also opportunities to look at things like DDIs.
Yeah. Based on what you've shown today, I guess some of these things you've started to bear out in data, some of these are still to come. But what of these do you feel the most confidence in in terms of you've demonstrated Scemblix will, for example, not have a fasting requirement or the like?
Well, we're very confident on that, given that we have human data on that showing that. And the other things we'll really have to see how that pans out in the clinic.
Okay. So we do anticipate some early clinical results from a dose expansion study later this year. Maybe just talk to us about first the basic trial design there, how many patients are going to be available, what's kind of the doses, what kind of follow-up? Just what can we look for in terms of data?
Yeah. So it's a very standard phase I study design. We have a dose escalation portion followed by a dose expansion where 2 doses are selected from the escalation and patients are randomized to that. And that's more common these days in oncology with regard to the Project Optimist requirements from the FDA. I think what's attractive about our phase I, specifically in CML, is that we have a corporate partner in China, Hansoh, who did a licensing deal with us. This was an internally discovered molecule at Terns. Hansoh did a licensing deal where they are developing the drug only in China, and Terns retains all ex-China development rights. And so our partner did a lot of the IND enabling work, and they started a phase I study in China only just about a year before we filed our IND.
So we were really able to leverage the early data from their phase I study to come to a starting dose where they had already progressed through half the dose range of 40 mg once a day to 400 mg once a day in their study. We were able to start our study at 160 mg once a day, basically leveraging the safety data, early efficacy data that we already had from their study to pretty much accelerate our escalation. And we've also seen that that 160 mg once a day dose not only appeared to be safe, but also showed evidence of clinical activity early on. And so that's sort of why, again, part of the rationale around our guidance this year to early data from the initial dose escalation cohorts in the second half of this year.
Really, the data are going to be directional data in terms of an early time point. Again, we've been enrolling the study at that point for just about a year. So from a benchmarking standpoint, there's historically really not a lot of data from CML phase I studies from all the TKIs you look at at such an early time point in a phase I. That being said, there are meaningful interpretations of early data that one can make specifically with regard to safety, but also this is a disease where efficacy is measured in a very standardized way and in a very real-time fashion because you're following the change in the BCR-ABL transcript level over time. That's measured essentially fairly frequently about a monthly basis in a lot of these patients.
So you can get directional assessments of the shift in transcript levels early on in treatment. So our data guidance to this year, that early data are intended to sort of capture what would a clinician be looking for in a patient, just a relapse patient that they switched therapies in at an early time point to determine whether they're going to keep that patient on the therapy. Intend to show the data, and we will be doing sort of a mid-year this year to kind of level data. So I guess stay tuned for that.
Okay. Great. You referenced that you utilize the China data to pick starting doses. I guess what other data have you done to kind of understand the translation from China PK/PD type work to the U.S.?
So the other key piece there was the PK data that Amy was referring to that we disclosed in April, where we not only showed that the drug doesn't have a food effect like asciminib, but we also saw that the PK was very consistent with what we've seen so far in China. So we don't really see sort of an ethnicity-based difference in the exposure profile of the drug, which is a good thing. I think that bridges really a gap that especially regulators are looking for in terms of being able to extrapolate that data set to a Western population.
Recognizing that you do plan to provide a lot more education around this kind of later this summer, as you think about the data later this year providing a go decision, what are some of the key parameters you'll be looking for to make that go forward?
It's largely a lot of what I just described to you in terms of what those early signals are. I mean, for us, really the function of the data at the end of this year is to kind of, for us internally, but as well as externally, saying we have a drug here that looks, behaves, and acts like an allosteric would at an early time point. The more mature data, sort of like the phase II type data sets of what is your MMR rate at X time point, you can't really expect a meaningful assessment of that at such an early readout with small numbers of patients. And so really the checkbox for us, as I said, is, look, we have a drug that behaves very consistently with what you'd expect from an allosteric early on from a safety and efficacy standpoint.
We'd expect to share more mature data as time goes on.
I would say too, we're really sharing it for you. It's not really a go/no-go decision for us. You've already seen enough.
Well, I would say it's just not a time point in the trial where we're moving to a next stage or something like that.
Okay. As you think about then the points of differentiation that we already discussed, which of those could we see kind of further borne out in this data versus what will be kind of too early to make a conclusive statement about?
The things like dose optimization, I think that is going to be a later time point, obviously, right? I mean, I think the goal there is an aspirational goal to get to a single dose, ideally, that covers the full mutational spectrum, which we think is an area that can be potentially improved on over asciminib, the 80-milligram dose. And so that technically more of an abbreviated escalation because we're starting from the data. And I think so we'll be able to interrogate essentially the full dose range of this drug, combining both data sets from China and our data to come to that faster than we would otherwise have.
Okay. Obviously, you guys have some visibility on the program. We'll get more over the year. But as you think about the risk kind of hitting some of these benchmarks that you have talked about, what do you work in terms of linear?
I mean, look, to Amy's point earlier on the way the field is progressing with regard to the entry of this novel class, I think right now the full development path looks more dearest for us because, again, our base case going in for a full development approach here was filling the gap, at least the current regulatory gap that there's no approved allosteric inhibitors as second line options for patients who don't do well on or have to switch from an active site drug. That population still exists. To Amy's point around no matter what the distribution is in the front line between asciminib and the generic drugs, we think a reasonable and a meaningful proportion of patients will start with those drugs to still maintain that healthy second line market for us. But what we have now is an additional optionality to move quickly to front line.
We've already seen the excitement, at least on the regulatory side, just based on the fact that the FDA gave a Scemblix breakthrough designation in that front line population just sort of hints at the fact that the regulators like the profile of allosteric, which also is indicated by the fact that the FDA allowed us to enroll a second line plus population in our phase I study, which is also fairly novel in the disease from a patient population standpoint. We think, again, we have more optionality than less.
Okay. As you think then about the registrational development strategy, I guess what would kind of a front line registrational trial have to look like?
I think the front line registrational trial could look very similar to the ASC4FIRST first study. Again, from the standpoint of the control arm, we think that, like we said, a good proportion of patients will still get those generic drugs in front line. So it's very feasible to do a phase III study where you have a very similar control arm of a blend of imatinib and a second gen TKI because that is reflective of real-world practice. And if 701, at least based on all the profiles we've seen of the molecule preclinically and early clinical data, looks at least as good or better than asciminib, the PTS for that study is pretty high. And so we think that with the differentiator like food effect or others that we just talked about, we have a pretty competitive spot in the front line with a feasible study.
What kind of data do you need to have in hand before you kind of go to discuss this registrational path with regulators?
Yeah. I mean, traditionally, I think it's largely safety, longer-term safety data in a reasonably good number of patients to give both us as well as the regulators sort of the confidence that you can take this drug, that the risk-benefit profile is favorable enough to go to a front line population. And I think there's a few things working in our favor there. One is the fact that we have two parallel phase I studies ongoing globally that generates a fairly large, robust data set. And the fact that they're kind of staggered in time gives us some long-term follow-up on the safety as well.
And then add to the fact that all the sort of regulatory advantages that asciminib has had in terms of things like breakthrough designation and the data that we've seen in the class, I think as a class as a whole, compared to the active site drugs, we've already seen that allosterics have shown a long-term safety profile that kind of potentially can lower the bar. So I think we're in a good position to be able to get there, but I think it is that you have to check off.
Okay. As you think about that registrational trial execution, I guess, and knowing the CML landscape seems to be changing quite rapidly, I guess what's your level of confidence that you'll be able to enroll efficiently and find patients in the front line setting?
Yeah. I mean, like I said, I think if the distribution of the front line is going to be similar to what it is today with half the patients still getting generic drugs, I think the feasibility of that study is still very high. Even if it's less than that, I think the feasibility is high because allosterics have generated a lot of excitement in the fact that we're a differentiated allosteric inhibitor than asciminib, both still, I think, bode well for feasibility.
Yeah. We talked a week ago or so at ASCO about the timeline for development, the full scope of timeline for development in CML. I guess remind us what that looks like based on precedent.
Precedent is generally from start to finish, starting being the phase I, it's about a five to six year time frame historically average for these TKIs. Generally, the phase I study followed by the expansion within the phase I sets the precedent for the next, which is usually a pivot. We've seen that story play out with the synonym as well, where the second study that Novartis did was the ASCEMBL phase III and third line plus. So that time frame has been fairly consistent.
So I think being that we're building on already a data set from an allosteric drug that has shown already established sort of blazed the path in terms of long-term safety as well as efficacy data, I think if we start to see consistency of that profile with 701 in the early data set, I think we could be well within that time frame, if not faster, given the fact that we have two phase I studies ongoing.
Yeah. There's also some early stage assets of active site inhibitors. I guess as you look at the competitive landscape, how are you thinking about the other programs and development?
I mean, our benchmark is going to be asciminib . I think it's in a good position to be potentially the second in class allosteric. I think the other novel drugs being evaluated are more in the active site category, which is a very different ball game in terms of sort of the competitive landscape and positioning of those drugs relative to an allosteric. And I think the active site profile is well known with both the first, second, and third gen TKIs, and the differentiation is primarily going to be on the safety side, specifically around things like cardiovascular AEs, which take a long time to read out. And so I do think that's one thing. And the second piece is that the current active site drugs are all going to be generic within the next two years. So the competitive landscape becomes pretty different.
And then third, you add into the mix now new allosteric inhibitors that are preferred, we think, going to be the preferred agents in front line and even second line. And so that also creates a potential positioning issue in terms of where the entry line is for another active site. So bottom line is we feel good to have an allosteric.
Yeah. One of the things that's kind of interesting about CML is there's obviously precedent in terms of having multiple branded products with share. I guess what does that tell you about the potential for having the second allosteric inhibitor and the market size opportunity that could be there?
I mean.
I think it bodes well for us. This is a therapeutic area where there's been traditionally a lot of switching. Again, as I said previously, chronic disease. And so I think it bodes well for us being a second, especially with the food effect and potential other differentiators.
Right. And there's historical playbooks for this as well with the two TKIs, right? I mean, we've seen dasatinib and nilotinib came to the market in fairly similar time frame, but then bosutinib came fairly late to the game. But they still captured a pretty respectable share in front line despite the fact that from an efficacy standpoint, they really weren't that differentiated. Safety standpoint, neither. They had qualitatively a different type of safety profile than the other two, but quantitatively it was similar, but bosutinib is still considered to be a successful drug. So I think we've seen this movie before in terms of. And so it's certainly good to be a second entrant in an exciting new class.
Perfect. Maybe we'll switch gears to obesity. I guess setting the stage again, we expect first in human data for the oral GLP-1 program in the second half. Maybe review first the design features of that product in particular and how you expect that to translate into clinical benefit.
Yeah. So this is a 28-day first in human study with TERN-601, our oral GLP-1 agonist. It's similar to this other studies out there. It's a SAD-MAD. We started with the SAD. We've disclosed that the SAD is complete and the MAD is underway. In the MAD, we have initial non-titrated cohorts for 14 days to really help accelerate the program and get to the higher doses for our MAD cohorts. The final data will have at least three MAD cohorts, and we gave ourselves flexibility to go up to six.
Okay. And just remind me the product itself, what are some of the, as you think about design features across the different oral drugs and development, what are some of the key features of TERN-601?
Yeah. So we really looked to optimize it for potency, for PK, and really flattening the PK curve. And we also looked for QD dosing. So in the 28-day study, we don't necessarily expect to see differentiation. If you look across the board at 28-day studies, whether you're talking about injectables or orals, you see that data is fairly similar. It's about 3%-5% body weight loss across really all the different ones. And so that's really what we're looking for from TERN-601 in this initial 28-day study. And it's really in the follow-on studies where we could potentially see differentiation, whether it be tolerability, ability to combine with other products, indications.
Obviously, a huge focus for these programs is tolerability, particularly early on. Without dose titration in the study that you're going to show, how should we think about benchmarks for tolerability here?
Yeah. I mean, so just to clarify, we are doing a titration. There's two parts to the titration in the study. One is a 14-day non-titrated cohort, which is really that the function of that is to, of the range of doses we look at in SAD, to inform what the optimal starting dose for the 28-day titrated cohort is.
Oh, sorry.
From the standpoint of not having to lock ourselves into having to start at the lowest SAD dose for the 28-day titration. Because given that you only have 28 days to titrate, we wanted to make sure that we quickly get to sort of pharmacodynamically active doses early on in that 28-day period rather than have very low doses to start off with. So that's really the function of the 14-day titration. We dose those SAD cohorts multiple days, 14 days, to see where are we starting to see on target GI, where are we starting to see sort of the traditional PD markers like glucose control and things like that, to be able to say, okay, where's an intermediate dose level at the 28-day dose titration cohort that now we can start at sort of a mid level and then target getting to the max dose quickly.
So to your point, there's a lot of flexibility in the 28-day titration in our study design to be able to achieve that fast titration informed by the tolerability that we see in the non-titrated cohort, to be able to make sure that we play within that sweet spot of getting quickly to a very active dose that gets weight loss without forcing a lot of, without getting a lot of tolerability that makes people stop taking drug, right? And so that's sort of why we think that flexibility in titration in a 28-day study is important. And to the point Amy was making around the PK curve, really we've learned quite a bit from the 28-day data sets we've seen so far with regard to the fact that all the drugs so far have shown a 3%-5% placebo-adjusted weight loss.
We've seen a really wide range of tolerability. And I agree with Amy fully, obviously, that you can't thread the needle on tolerability in a 28-day study because every single one of these drugs changes when they go to 12-week and then they go to phase III with slower and slower titrations. It just gets better and better. But that being said, if you can get to the lower end of that range in a 28-day study, I think that bodes probably well for subsequent longer titrations. So we're trying to just basically get to that by targeting a PK profile where we minimize Cmax to trough ratios, which we think led to a lot of the AE issues that we had with danuglipron, specifically with the BID dosing. We think QD dosing is vital for a target product profile in this space.
Getting to a smoother PK curve that achieves at least 24-hour coverage, if not 24-hour, at least waking hour coverage over your target efficacious concentration is the goal we're trying to get to.
Okay. Have you done, or what preclinical or clinical work have you done to characterize kind of the tolerability profile to date and that PK curve that you were just discussing?
So it's really hard to do tolerability studies preclinically because you can't have a mouse tell you how nauseous it is. But what we did preclinically was to make sure that we had the right positive controls to look at the PD assessment that you would expect from a GLP-1. So that's glucose control, gastric emptying. And so we've seen that the drug behaves as well as the positive controls we use, which is those fronts. And so the next step was for, does this look and act like a GLP-1, take it to the clinic because really it's the clinical weight loss data that's going to be the real proof of concept.
Okay. In terms of next steps pending the 28-day data, how should we think about the program from there?
Yeah. I think similar to other programs, really the next step is to move to phase II-A, a 12-week study. We've done the tox work. We're prepared to move to phase II-A right away.
Okay. As you think about the, this is kind of like a $100 billion question at this point, but how do you think about the market opportunity for an oral obesity program in particular? And are there population carve-outs that you see or maintenance versus, what are all the parameters you're considering in terms of market?
Yeah. So I think at this stage of development, as Emil said, we're really looking for proof of concept. I think this market is very nascent. Everybody knows it's large. Everybody knows there are different segments of need for weight loss. And a BMI of 30 is different from a BMI of 40 type of thing. And so we'll just have to see how that market evolves. We're also very interested in combinations, and we have two combination agents in-house at Terns, our THR beta and also our GIP receptor.
Great. Maybe another question around this is obviously you have to think about partnerships and obesity. They're very large studies. At what stage do you think clinical collaborations would be appropriate to pursue?
You know, we just hired a great chief business officer, and we have lots of relationships, and we're always talking about partnerships. So I don't know that there's necessarily the perfect time. I think unlike CML, which is something that we could take through a registrational trial, that partnership for registrational trials in obesity is important, particularly for a small company like Terns.
Yeah, of course. Maybe because you referenced that you do have some other programs, the THR beta, just remind us where you are in terms of those programs?
Yeah. So our THR beta, we phase II-A data last year that shows that has the potential to be a best-in-class THR beta in terms of the PK profile, the GI tolerability. And those two things actually make it a very good agent in combination with GLP-1s to really improve metabolic health. It's a liver-directed agent. We know that GLP-1s do not target the liver and that there are many metabolic benefits from a THR beta. I won't go into too much detail right now. And then there's the GIP receptor modulator program, and we have guided that we are prioritizing nominating a candidate for a GIP receptor antagonist program, but we're working on both. And that would also be a great combination agent with 601.
Great. In terms of the work you've done around characterizing, particularly the THR beta combo, I guess maybe you could speak a little bit more to the work you've done on the combination with GLP there, what you've seen.
Yeah. So preclinically, we have some very interesting data in mice in sort of the standard models like DIO, where we see sort of the combination of THR beta plus GLP increases or gives you more of a weight loss. Mice get to a lower plateau of weight. We think that's driven by a couple of mechanisms. One is the THR beta thyroid hormone agonism really influences your basal metabolic rate. And so the limitation of GLP-1 alone is that when GLP-1 is primarily an appetite suppressor, you lose the weight, your body has a compensatory mechanism to lower your metabolic rate, which limits the total weight that you can lose. In contrast, when you had the THR beta, you maintain your BMR at a higher rate that allows you to get to a lower plateau of weight loss.
So, combination putting together can get you to a deeper weight loss. The other benefit is that we've seen the other benefits like lipid profile improvements that are independent of GLP-1's effect alone. And we're also starting to see data that it can impact the nature of the weight loss. So as you know, there's a lot of emphasis now on not just how much weight you lose, but what kind of weight you lose. So preservation of lean muscle mass is super important. And so there's some early evidence that THR beta agonism can influence the balance of fat versus muscle loss to preserve more lean muscle mass. So overall, we're very excited by that mechanism because it's a very orthogonal mechanism to just appetite suppression that can work together in a lot of interesting ways.
Yeah. Obviously a lot to do. So how do you think about prioritizing moving forward with the monotherapy versus exploring some of these combinations?
I mean, I think we're one of the few companies working in this space that's in a unique spot to be able to quickly prosecute a novel clinically prosecute a novel combination in the space of just THR beta. Because as Amy was saying, we already have a phase II asset in TERN-501. And so we think sort of the activation energy to quickly get to a combo phase II. Our next step would obviously be phase II-A of TERN-601 if we see the profile we want to see in the 28-day study. But you can think of creative sort of modular approaches where you kind of add in the combination in an efficient manner to prosecute that in the clinic quickly with an all-oral combination. And then the discovery engine working on GIPR just adds more optionality there going forward.
Yeah. On a related question, maybe just remind us in terms of cash runway and what events or trials are kind of embedded in the runway guidance.
Yes. At the end of Q1, we reported about $240 million on our balance sheet, which funds us through into 2026 and funds us through these upcoming data readouts that we talked about.
Okay. In terms of the programs that follow, I guess, are those embedded in that guidance or?
Not all of them. Like the combination with 501 and 601 is not because that would, the 12-week study comes first.
Okay. Wonderful. I think that brings us to the end of my questions. It was so great to have you guys both here. Thank you again for coming.
Thank you so much, Bryn.
Perfect. Thanks.
Thank you.
Thank you.