Terns Pharmaceuticals (TERN) Pivots After TERN-601 Setback Can a Focus on Oncology Redefine Its Future?

• In late October 2025, Terns Pharmaceuticals announced topline 12-week Phase 2 results for its oral GLP-1 receptor agonist, TERN-601, showing the trial did not meet the high threshold required for further development in obesity treatment.
• This marks a major pivot for the company as it discontinues investment in metabolic disease and shifts its focus toward advancing the TERN-701 program in chronic myeloid leukemia.
• We'll examine how this pipeline shift and termination of TERN-601 development shapes Terns Pharmaceuticals' investment narrative going forward.

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What Is Terns Pharmaceuticals' Investment Narrative?

For anyone considering Terns Pharmaceuticals, the big-picture narrative has shifted quickly. The recent discontinuation of the TERN-601 obesity program means the investment case now hangs entirely on the success of TERN-701 for chronic myeloid leukemia, a therapeutic area where the company is aiming for best-in-class innovation. This development streamlines the pipeline but narrows short-term catalysts, as upcoming data from TERN-701 now carries even more weight than before. The loss of a late-stage metabolic disease candidate does alter risk: rather than a diversified pipeline, execution in a single area becomes critical. With no revenue expected, continued financial losses and relatively high cash burn heighten pressure to deliver meaningful clinical progress soon. While price returns have been very large recently, this has happened alongside these changing risks, and investors should watch how the market reacts as the business model refocuses so abruptly.
On the flip side, concentration on one asset brings new risks if milestones are delayed or missed, something long-term holders need on their radar.

Our valuation report here indicates Terns Pharmaceuticals may be overvalued.

Exploring Other Perspectives

Simply Wall St Community members each set a fair value estimate at US$18.83 per share, showing no internal variation among retail views. While these opinions point to a tightly held outlook, your market peers are now weighing how the loss of TERN-601 and a singular focus on TERN-701 could affect future growth. Explore a range of perspectives to inform your own view.

Explore another fair value estimate on Terns Pharmaceuticals - why the stock might be worth just $18.83!

Build Your Own Terns Pharmaceuticals Narrative

Disagree with this assessment? Create your own narrative in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Terns Pharmaceuticals research is our analysis highlighting 3 important warning signs that could impact your investment decision.
• Our free Terns Pharmaceuticals research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Terns Pharmaceuticals' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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