Terns Pharmaceuticals, Inc. (NASDAQ: TERN) disclosed a proposed underwritten public offering of $400 million in common stock and pre‑funded warrants, with a 30‑day option for underwriters to purchase an additional $60 million at the offering price. The offering is led by Jefferies, TD Cowen and Leerink Partners and is intended to raise capital for the continued development of its lead oncology candidate, TERN‑701, as well as for working capital and general corporate purposes.
The company’s pipeline centerpiece, TERN‑701, is a next‑generation tyrosine‑kinase inhibitor that demonstrated a 74 % major molecular response (MMR) rate at 24 weeks in a Phase 1 study of chronic myeloid leukemia (CML) patients. The data, presented at the 67th ASH Annual Meeting, positioned TERN‑701 as a potential best‑in‑disease therapy and provided a strong rationale for the capital raise to fund late‑stage trials and regulatory submissions.
Terns is a clinical‑stage biopharma with no revenue and a net loss of $1.03 per share. The company’s balance sheet, however, shows a robust cash position and no debt, giving it a healthy runway to pursue its oncology strategy. The equity offering is therefore a strategic move to extend that runway and support the company’s shift from metabolic indications to oncology, where the competitive landscape is more favorable.
CEO Amy Burroughs emphasized the significance of the data, describing the Phase 1 results as “unprecedented” and affirming confidence that TERN‑701 could become a best‑in‑disease treatment for CML. She also highlighted the company’s commitment to accelerating development and bringing the drug to market as quickly as possible.
The announcement was met with a positive market reaction, largely driven by the strong clinical data for TERN‑701 and the clear path the equity offering provides to fund the next milestones. Investors and analysts noted the company’s strategic pivot to oncology and the potential upside of a successful late‑stage program.
The $400 million offering, with an additional $60 million option, will provide Terns with the necessary capital to advance TERN‑701 through Phase 2 and Phase 3 studies, support regulatory filings, and maintain liquidity for future development activities. While the transaction will dilute existing shareholders, the long‑term benefits of securing funding for a potentially transformative therapy outweigh the short‑term dilution concerns.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.