TERN: The Weight Loss Stock Hedge Funds Can't Resist?

Terns Pharmaceuticals, Inc. (TERN) has been making waves in the biopharmaceutical industry, particularly in the realm of weight loss treatments. With a portfolio of small-molecule product candidates targeting oncology, metabolic dysfunction-associated steatohepatitis (MASH), and obesity, TERN has caught the attention of hedge funds and investors alike. But is TERN the best weight loss stock to buy now? Let's delve into the data and expert opinions to find out.

TERN's oral GLP-1 receptor agonist, TERN-601, has shown promising results in a Phase 1 trial, with statistically significant, dose-dependent placebo-adjusted mean weight loss over 28 days. Its efficacy (5.5% weight loss) compares favorably to Roche's oral GLP-1 (6.1%) and Viking's VK2735 (3.3%). TERN-601's tolerability was clean, with no treatment-related dose interruptions or discontinuations, and its ease of manufacture is highlighted as a potential advantage.



TERN's thyroid hormone receptor beta (THR-β) agonist, TERN-501, has also demonstrated a differentiated safety profile in preclinical and clinical studies. With 23-fold greater selectivity for THR-β than THR-α, it minimizes the risk of cardiotoxicity and other off-target effects. In the Phase 2a DUET trial, TERN-501 achieved all primary and secondary efficacy endpoints with a clean safety profile. Compared to other THR-β agonists, TERN-501's high metabolic stability, enhanced liver distribution, and greater selectivity make it an attractive candidate for fixed-dose combinations.



TERN's potential in the weight loss market is further bolstered by its strategic partnerships and collaborations. In September 2024, TERN raised $125 million in a public offering to fund additional trials of TERN-601, indicating strong investor confidence in the company's prospects. Additionally, TERN has out-licensed TERN-701, an allosteric BCR-ABL tyrosine kinase inhibitor for chronic myeloid leukemia, to Hansoh Pharmaceutical Group Company Limited for development in the greater China region.



However, TERN is not without competition in the weight loss market. Established pharmaceutical giants such as Novo Nordisk, Eli Lilly, and Pfizer are also developing oral alternatives to injectable obesity drugs. TERN will need to demonstrate the superiority of its candidates in larger, more robust clinical trials to maintain its competitive edge.

In conclusion, TERN's promising weight loss candidates, strategic partnerships, and strong investor support make it an attractive stock for hedge funds and investors. However, the competitive landscape and the need for further clinical validation warrant a cautious approach. As always, it is essential to conduct thorough due diligence and consider your risk tolerance before making any investment decisions.