Barclays initiates Terns Pharmaceuticals stock with Overweight rating

Barclays initiated coverage on Terns Pharmaceuticals (NASDAQ:TERN) with an Overweight rating and a $15.00 price target, highlighting the potential of its lead oncology asset, TERN-701, a third-generation BCR-ABL inhibitor for CML, which is expected to generate over $1 billion in revenue and for which Q4 data is anticipated as a key inflection point. The firm also noted the progress of TERN-601, an oral GLP-1 agonist for obesity with Phase 2 topline data expected in Q4 2025, suggesting TERN's pipeline is trading at a significant discount despite the stock's recent 124% surge, a view supported by other analysts.

Analysis

Barclays has initiated coverage on Terns Pharmaceuticals (TERN) with an Overweight rating and a $15.00 price target, signaling strong institutional confidence. The firm's positive outlook is primarily driven by the lead asset, TERN-701, a third-generation BCR-ABL inhibitor for chronic myeloid leukemia (CML), which Barclays estimates could generate over $1 billion in revenue. This view is supported by a reiterated Market Outperform rating from Citizens JMP, which cited positive efficacy data. Despite the stock's significant 124% surge over the past six months, Barclays perceives it as trading at a 'sharp discount,' suggesting substantial upside potential. A critical near-term catalyst is the upcoming data for TERN-701 expected in the fourth quarter, which is identified as a key inflection point for the stock. Further strengthening the company's profile is its diversified pipeline, which includes TERN-601, an oral GLP-1 agonist for obesity that has completed Phase 2 enrollment with topline data anticipated in Q4 2025. This dual focus on high-value oncology and metabolic disease markets positions the company at the center of several positive analyst evaluations and upcoming clinical milestones.

Key Decisions for Investors

• Investors should closely monitor the fourth-quarter data release for TERN-701, as it is positioned by analysts as a major near-term inflection point that could significantly impact the stock's valuation.
• Given the stock's 124% run-up in six months, investors must weigh the high-growth potential underscored by analyst price targets against the inherent volatility and binary risk associated with clinical-stage biotechnology firms ahead of key trial results.
• Consider the long-term value proposition of the diversified pipeline, particularly the development of TERN-601, an oral GLP-1 for obesity, which taps into a large and growing market and provides a secondary value driver beyond the immediate oncology focus.
• Note the wide range of analyst price targets ($7.44 to $34), which reflects the high degree of uncertainty but also the significant potential upside if clinical and commercial milestones for its key assets are successfully met.