Analyst Outlines Doubts On This NASH-Focused Stock, Builds Neutral Case

HC Wainwright initiated Terns Pharmaceutical Inc TERN with a Neutral rating and a price target of $6.00. The biopharmaceutical company has a portfolio of small molecule programs for NASH and obesity.
The analyst says the Phase 2a DUET study of oral TERN-501 in Noncirrhotic Adults with NASH "lacks sufficient supporting evidence," while the rest of the company's pipeline "is too early."
Terns' recent clinical track record has been disappointing, Arce tells investors.
The analyst notes some recent data as underwhelming, including the Phase 2a LIFT study of TERN-101 reported last year and Part 1 of the Phase 1b AVIATION study of TERN-201 10mg reported in March.
Although top-line results from AVIATION Part 2 (20mg) are expected in 2H22, we do not expect the company to pursue further development with TERN-201, says the analyst.
DUET study dosing started in July, and top-line data is expected in 2H23. While acknowledging the pipeline potential, more data is needed to be more constructive. The DUET readout is unlikely to represent a significant stock catalyst.
Price Action: TERN shares are up 13.50% at $5.98 on the last check Monday.

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