Terns Pharma Bets Big with $400M Offering to Fuel CML Market Disruption

FOSTER CITY, CA – December 09, 2025 – In a bold strategic move that underscores the high stakes of modern oncology development, Terns Pharmaceuticals announced today a proposed public offering to raise $400 million. This significant capital infusion, backed by an underwriter option for an additional $60 million, isn't just a routine financing round; it's a clear signal of intent to accelerate its lead drug candidate, TERN-701, and challenge the established order in the lucrative Chronic Myeloid Leukemia (CML) treatment landscape.

The announcement comes on the heels of a spectacular run for the clinical-stage company. Terns' stock (NASDAQ: TERN) has surged over 340% in the past year, with a dramatic 37% jump in the last 24 hours alone. This market euphoria is directly tied to a stream of highly promising clinical data, culminating in a recent update from its CARDINAL trial that has Wall Street and the medical community buzzing. By moving to fortify its balance sheet now, Terns is capitalizing on peak momentum, transforming clinical promise into the financial firepower needed to navigate the final, most expensive stages of drug development and prepare for a full-scale commercial launch.

Building a Financial Fortress for a Market Assault

For a clinical-stage biotech, cash is more than just runway; it's a strategic weapon. Terns' proposed $400 million offering is designed to build a formidable war chest. The company has explicitly stated the proceeds will fund the continued research, pivotal clinical trials, and manufacturing scale-up for TERN-701. Crucially, the funds are also earmarked for initial activities in preparation for a potential commercial launch, a clear indication that Terns is thinking several steps ahead.

This move is particularly striking given the company's already solid financial footing. As of its latest filings in late 2025, Terns reported holding approximately $295 million in cash, cash equivalents, and marketable securities, with a stated operational runway extending into 2028. This existing cash position, coupled with a healthy balance sheet carrying more cash than debt, meant the company was not operating from a position of necessity. Instead, this capital raise is an offensive maneuver.

By securing a potential $460 million, Terns is aiming to de-risk its future development path entirely. It provides the resources to run larger, more complex pivotal trials, build out a commercial infrastructure, and potentially explore TERN-701 in other indications without the looming pressure of future financing rounds in an unpredictable market. This financial insulation allows the management team to focus purely on execution and speed—two critical variables in a competitive therapeutic area. This follows a previously successful, albeit smaller, capital raise of $172.7 million in late 2024, demonstrating a consistent ability to attract investor capital based on its scientific progress.

The Disruptor: TERN-701's 'Best-in-Disease' Profile

The entire strategy hinges on the disruptive potential of TERN-701, an investigational oral allosteric BCR-ABL inhibitor. The target, BCR-ABL, is the well-understood driver of CML, but TERN-701's performance in clinical trials suggests it could represent a significant leap forward.

Data from the Phase 1 CARDINAL trial has been nothing short of exceptional. In a population of heavily pre-treated CML patients who had exhausted multiple prior lines of therapy, TERN-701 demonstrated a major molecular response (MMR) rate of 64% by 24 weeks. For patients receiving the higher, recommended Phase 2 dose, that rate climbed to an impressive 75%. To put this in perspective, Novartis's market-leading drug Scemblix (asciminib), which targets the same pocket, achieved a 25% MMR rate at the same time point in a similar refractory patient population during its pivotal trial.

Even more compelling is TERN-701's performance in the most difficult-to-treat subgroups. It achieved a 60% MMR rate in patients who had already been treated with and failed on Scemblix, suggesting it may be effective where even the latest generation of therapy is not. This data has led analysts to posit that TERN-701 possesses a potential 'best-in-disease' profile.

Beyond sheer efficacy, the drug's safety and convenience profile adds to its competitive edge. The CARDINAL trial reported no dose-limiting toxicities or serious treatment-related adverse events. Most side effects were low-grade and manageable, with no clinically meaningful impact on liver enzymes or blood pressure—a notable advantage over some existing CML therapies known for cardiovascular or pancreatic side effects. Combined with the potential for once-daily oral dosing without food restrictions, TERN-701 presents a powerful value proposition for both physicians and patients.

Challenging a Multi-Billion-Dollar Market

Terns is wading into a fiercely competitive, but massive, market. The global CML treatment space is valued at over $8.5 billion and is projected to exceed $12 billion by 2028. It has been dominated for years by giants like Novartis, with its portfolio of Gleevec, Tasigna, and the more recent Scemblix, alongside Bristol Myers Squibb's Sprycel.

Scemblix represented a major innovation by being the first therapy to target the ABL myristoyl pocket, an allosteric site on the BCR-ABL protein. TERN-701 utilizes a similar mechanism but appears, based on current data, to do so with greater potency and a cleaner safety profile. This positions Terns not as a 'me-too' player, but as a direct challenger aiming to unseat the current market leader.

Market observers believe the combination of superior efficacy in refractory patients and a favorable safety profile could allow TERN-701 to carve out a significant share of the market, first in later-line settings and potentially moving into earlier lines of therapy over time. The company’s financial strategy is clearly aligned with this ambition, ensuring it has the resources to go head-to-head with established pharmaceutical titans.

Investor Confidence and Broader Market Signals

The market's reaction validates Terns' strategy. The stock's meteoric rise reflects strong investor confidence that TERN-701 is not just a promising molecule, but a potential blockbuster asset. This sentiment is echoed by the analyst community, with firms like Barclays, Citizens JMP, and William Blair recently raising their price targets, citing the drug's potential to 'meaningfully disrupt' the CML landscape. The consensus rating remains a strong 'Buy'.

Terns' ability to command such a large offering also serves as a bellwether for the broader biotech capital markets. In an environment that has become increasingly selective since the highs of 2021, investors are channeling capital toward companies with de-risked, late-stage assets that have clear clinical validation and address large markets. Terns Pharmaceuticals fits that mold perfectly. Its story demonstrates that for companies with truly differentiated science and a clear strategic plan, the capital markets remain wide open, ready to fund the next generation of market disruptors.