Companies To Watch: Terns Pharmaceuticals
By Ben Comer, Chief Editor, Life Science Leader
Developing small molecules for cancer and obesity
Snapshot
What is better than first to market? Best to market, says Terns Pharmaceuticals CEO Amy Burroughs, an executive with a diverse, 25-year career in life sciences who joined Terns Pharmaceuticals as CEO in February 2024. Burroughs believes that TERN-701, an FDA orphan designated small molecule, allosteric BCR-ABL inhibitor indicated for CML, and TERN-601, an oral GLP-1R agonist indicated for obesity, could substantially improve upon currently marketed therapies and other late-stage pipeline candidates. The company also has a potential combination therapy for obesity in TERN-501 and is conducting preclinical research on GIPR modulators (TERN-800 series) for obesity.
What’s At Stake
Terns Pharmaceuticals began as a company focused on oncology and NASH, with the goal of improving upon existing drugs in both categories in clinically meaningful ways. Terns’ former CEO, Senthil “Sen” Sundaram, was responsible for building the company’s oncology and metabolic pipeline and taking the company public in 2021 through a $128 million IPO. In November 2023, Sundaram passed away at age 45 from peritoneal cancer.
Burroughs, who in 2023 was serving as president and CEO at Cleave Therapeutics (following an executive in residence role at 5AM Ventures), received a call from a recruiter about Terns. She decided to take the call with Terns board members David Fellows and Jill Quigley, mostly out of curiosity, she says. “I’ve been around this industry for a long time, and I know a lot of people” — Burroughs served as commercial team leader at Genentech and chief commercial officer at APT Pharmaceuticals, in addition to consulting roles, board positions, and a stint in executive search — “So I thought, if I don’t know these people, and I don’t know this company, how can it possibly be interesting?”
What Burroughs found was a “company with some amazing medicines in the pipeline,” and a very interesting program in CML that was entering Phase 1. “It’s a disease a couple of my friends have, and they will be on drugs for life, drugs that can cause issues like pleural effusion or QT prolongation,” necessitating a need to switch therapies. “I think Terms has a drug that can have meaningful benefit for people like my friends, and from a business perspective, it’s a lot less crazy than developing a therapy for Alzheimer’s disease, for example. It’s very likely to succeed.”
On the metabolic side, Terns started out with a focus on NASH, developing candidates in-licensed from Lilly; however, those drugs didn’t work out in the clinic. But they served as a learning experience and led to an expertise in obesity and GLP-1s, including through a focus on creating a combination therapy with TERN-501, a THR-β agonist.
The need to end development programs for candidates that didn’t work out and pivot to other development assets is not a strike against the company, says Burroughs. It’s quite the opposite. “I’ve studied companies, and I’m not intimidated by the fact that a company is in a different place from where it started,” she says. “Vertex, Regeneron, Argenx … so many great companies have started in one place, but the ability to pivot, pursue new opportunities, and let things go to continually evolve is really important.” Burroughs also liked the challenge of rebuilding some of the team and taking the company into its next era.
Burroughs describes TERN-701, the CML candidate discovered internally, as Terns’ lead clinical program. “CML is something that a small company can commercialize itself, and I view [TERN-701] as an anchor asset capable of taking the company to future success.” To Burroughs’ point about best in class, she notes that Terns founders “know a lot about asciminib” — Novartis’s Scemblix, first approved by FDA in 2021 — “and saw an opportunity to make a better molecule.” Novartis “left opportunities on the table for us to be best in class … as the second allosteric [for CML] to market, we will have real advantages.”
Similarly, Terns designed its Phase 1 study for internally discovered TERN-601 “based on what we learned looking at other [GLP-1] agents,” explains Burroughs. For example, “we titrated [the dose] outrageously quickly, every three days,” because “in 28 days you can’t differentiate on tolerability … we’re just going to get people to that target and push it, because as we’ve seen in other programs, if you slow it down in the next stage, you will get better tolerability.” Burroughs says the company accepted that clinical result as a given, an insight not likely to be known by a first-in-class developer.
There are of course advantages to being first in class, but the ability to learn and improve a product based on what has come before will continue to be a key strategy for drug developers. Lipitor was the fifth statin approved by the FDA, and Humira was the third anti-TNF inhibitor; both products dramatically outsold their market forebears. As a marketer by training, Burroughs anticipates the potential for segmenting patients in the obesity category. She is also optimistic about the potential for Terns GIPR modulators for obesity, which are currently in the preclinical stages. If Medicare and Medicaid begin covering obesity drugs, a policy change the Biden administration floated in the waning days of its administration, the category could be poised for even more explosive growth.
Vital Statistics
Full-time Employees: 66
Headquarters: Foster City, California
Funding: $378 million and runway through 2028
Significant Investors: OrbiMed, Vivo Capital, Soleus Capital Management, Deep Track Capital, Blackrock, Inc.
Latest Updates:
November 2024: Appointed Heather Turner, J.D., to board of directors.
September 2024: Announced positive Phase 1 trial results for TERN-601, a once-daily oral GLP-1R agonist for the treatment of obesity. Terns plans to initiate a Phase 2 trial in 2025.
August 2024: Announced plans to release early clinical trial data on TERN-701 in CML in December 2024.