Welcome back to the Virtual Citizens JMP Hematology and Oncology Conference. My name is Silvan Tuerkcan, and I cover precision medicines at JMP. My pleasure to host Erin Quirk, President, Head of R&D of Terns; Emil Kuriakose, CMO; and Mark Vignola, CFO. Thanks so much for joining us today. Thanks, Silvan. It's great to be here. Appreciate you having us. Great. Yeah, for our Hematology and Oncology Conference, obviously, I would like to focus on your cancer asset. But we have some time at the end to discuss, you know, some of the other assets. But you have a pipeline spanning metabolic diseases and oncology. Erin, maybe could you walk us through what connects these assets and what your R&D on the company level should focus on? Yes, thanks for the question, Silvan. So Terns is a publicly traded biotech company. We are focused on oncology and metabolic disease. We are advancing three different products, all internally discovered at Terns. We're gonna talk mostly about TERN-701 today, but we also have TERN-601, a GLP-1 receptor agonist, and TERN-501, a THR-β agonist, in development as well for metabolic indications. The thread that ties these all together is that they are oral small molecule candidates targeting clinically validated mechanisms of action where we see room for improvement, and they are all indications with high unmet need overall, where there's a need for new treatments for patients. Great, thanks. Could you please set the stage for how you're trying to develop TERN-701 in CML? I'll start off, Silvan, and then pass it over to Emil. So TERN-701 is an allosteric BCR-ABL inhibitor, which has demonstrated and this class has demonstrated significant efficacy and improvement over existing standard of care for active site tyrosine kinase inhibitors, as well as being better tolerated. Emil, why don't you take it from here in terms of of how we're positioning TERN-701 for CML? Thanks, Erin. So, as Erin was starting off, I think allosteric inhibitors is a class, with asciminib sort of, with the data that we have with that drug, have really shown, to Erin's point, that these drugs do appear as effective or more effective than the, the traditional active site, TKIs, including the second gen active site TKIs, plus the safety profile that is, is better than the second gens and more like the first gen, TKIs, which didn't have as good efficacy as the second gen. So it's the right package so far. And as we know, that drug is currently approved in third line. There's a Phase III study in front line. So the anticipation is that, number one, allosterics can stand on their own as monotherapies in this disease, especially in earlier line settings. With that being said, there are shortcomings of asciminib that another allosteric can overcome. We think the key shortcoming there is dose optimization. Asciminib currently has two doses approved: one very low dose, 80 mg in a non-T315I population, and a much higher dose of 400 mg in a more refractory T315I population. Again, we think that's a result of the way that drug was initially being developed as potentially a combination partner for nilotinib, plus the fact that we think the wider therapeutic index of this class as a whole can be better leveraged. So the argument is that you could potentially get an allosteric inhibitor that gets to a dose that covers, ideally, both populations and potentially even improves on efficacy, and also has that exact, as good or better safety profile. So that's the way we're thinking of 701, to really capitalize on the fact that we really don't yet have a dose-optimized allosteric as a monotherapy. Additionally, there are other shortcomings. Again, asciminib has to be taken fasting, because of a negative food effect, which again, if we don't have that, we think that could be an advantage for patients to be able to dose without regard to food. There are also potential advantages with regard to drug-drug interaction that allow us to co-administer TERN-701 with other concomitant medications that may be not doable with asciminib because of, for example, its CYP3A inhibition profile, as well as potential abilities there to combine with active site inhibitors in a more refractory patient population to even better further improve on efficacy. Those are sort of the three axes that we see that 701 can really not only make an impact amongst the landscape of both active site and allosteric, but also meaningfully differentiate from asciminib. Mm-hmm. Great. And, you know, you've talked about the profile here, and that makes sense, and there's a lot of room left to improve on. But what gives you confidence that another third-generation inhibitor will be widely used? And I'm talking in terms of, have you done... You know, how have you worked with KOLs in the field, and what evidence do you have that, you know, they would like to use another one? Yeah. So first of all, I'd like to kind of separate sort of the third gen, second gen. You know, that's sort of been applied to the active site. We're seeing this as, again, this is a novel class. So even though there are, you know, six, seven drugs approved within the disease globally, I think the vast majority of them, except for one, are traditional active site inhibitors, which we know have either shortcomings from the standpoint of resistance mutations within the active site, with allosterics are not, that is not a liability for allosterics, plus the safety issues. So we're seeing this as, you know, a novel, as a second allosteric, really, and, and really that it's a new class that we think will potentially displace, the second gen. So that's number one. Number two is, to your point, there are clear gaps, number one, in the approval landscape. And so I think one key gap that we noticed and are actually taking action on early on in our phase I study, is the fact that there are currently no allosteric inhibitors approved in second-line patients. What I mean by that is. Right now, asciminib is approved in 2 prior TKI population for non-T315I patients, and only in the T315I mutant patients can that drug be used as second-line. So that pretty much leaves 85%-90% of CML patients without an allosteric option in the second-line. Those patients who get a second-gen active site drug in front line, for example, namely dasatinib, nilotinib, or bosutinib, also don't have many options, at least in the U.S., as a second-line option, other than to switch to another second-gen drug. Because the ponatinib, which is the third gen, TKI, is currently not approved for the non-T315I patients in second-line. So these patients effectively, are limited to switching to another second-gen drug if they have suboptimal, response or treatment failure, which is approximately 15%-20% of those patients who start on a second gen. So that's a substantial number of patients when you consider the increase in prevalence of the disease, whose outcomes remain poor if they switch to a second gen. So we see a clear gap there that 701 can fill, you know, in a rapid way. And the fact that we are able to enroll those specific patients in our study, in our phase 1 study that's in startup, I think will give us an early signal of what the drug can do there. And we also see there's potential for this drug, therefore, to move as its first step into at least second-line patients or earlier. And so that's where we are positioning right now in terms of where we would go, once we get our study done, and get the appropriate, you know, level of safety and efficacy data from the phase 1. Great. And in October, the FDA cleared the IND for the phase 1 CARDINAL trial evaluating TERN-701 in CML. Can you just walk us, you know, you've mentioned how you're positioning a little bit through the design, Yeah. Yeah, so it is a, it is a phase I study with the dose escalation and expansion. I think one of the... A couple of the key, what we consider wins in terms of the design of that study, are the first thing I just mentioned, which is the fact that we were able to point out, I think, in a, in a, in a pretty compelling way, and highlight the regulatory gap that I just mentioned, you know, in terms of, the second-line, patients not having an option. You know, when you take that together with the fact that allosterics as a whole have shown an improved safety profile compared to the active sites and in the third gen sec- active site drugs, combining with the fact that our study is not a first-in-human study. So as you know, there, our partner, Hansoh, initiated a phase I study in China just about a year ago, a little over a year ago. So fortunately, we were able to see some early data from that trial that allowed us to basically leverage that data, both safety, PK, and efficacy. You know, essentially, primarily the safety data was what we had the earliest, that allowed us to start our dose escalation at a higher dose, four times the higher dose than Hansoh study. So our study is starting at the 160 mg once daily dose. And that was again, based on our observation that from the early data from the China study, we saw that 160 was safe and also showed evidence of clinical activity. And based on the PK data, we saw good target coverage. So again, it was early data, but it allowed us to be able to sort of accelerate our phase I escalation to where we think that we would get very meaningful data, both from safety, efficacy, you know, in part one that would inform part two, which is a dose expansion that would be randomized to at least two doses based on what we see in dose escalation. Great. You know, when talking about some of the results, when could we see the first safety data? So again, we have guided to first interim data from part one in second half of 2024. In that safety data, can you just talk about some of these, you know, safety parameters that you're looking at? And what are some of the DLTs you're trying or that you may expect to... Is it very similar to asciminib, is it, would it be anything else? Well, I mean, you know, we'll see the data when they come, but in, you know, the safety evaluation, it's fairly standard and established in CML, you know, with the TKIs, what the profile is. You know, pretty much all TKIs, you do see some level of, heme toxicity, but that's, you know, usually it's more disease-related, especially in these advanced patients, that, heme toxicity is usually, at least in the early stages, a reflection of the mutant clone, the disease clone actually being, eradicated. And so that's sort of we have a lot of benchmarks around how to evaluate the toxicity, and again, we're working with very experienced clinicians who know how to deal with that. And, you know, the other safety profile that we know with asciminib is that you see, evidence of amylase lipase elevations. They saw that early on in phase I. And so there's a you know, there's a spectrum of non-heme tox that you've seen with TKIs in CML, and that differs with each TKI. And so again, from the preclinical tox data, again, we feel pretty comfortable in the safety profile that we would expect from this drug. So again, we'll see what the data show, but the fact that it is an allosteric and we've seen a pretty wide therapeutic window preclinically gives us confidence. Great. So we'll see, fairly early on, the safety profile, maybe some of the other parameters that you earlier described, around, you know, combinability or the other profile. The food effect, I guess there's a separate study that you would need for that. Is that something that can also be available maybe next year or not yet? ... we haven't got put any formal guidance around that, but, you know, we will be evaluating that as well. Great. And then thinking about shifting gears to efficacy, what are the first hints of you know, your efficacy? When could they become apparent in this trial? Would this be, would we have to wait for dose expansion here? And what would be the first measures that we could look at? Right. You know, I mean, it—like, the data, the initial data won't obviously be a phase two data set, right? So what's beneficial about CML is that you can see directional evidence of efficacy from early on. And so there's been benchmarks established in the disease. For example, early molecular response is at three months the proportion of patients with, you know, one log or less than 10% by IS BCR-ABL transcript levels. And you're also looking at the overall slope of BCR-ABL transcript level change on a very fairly continuous basis at every cycle. So you can think about ways to see the initial decline in transcript, you know, could be. But essentially, what we would look for early on are trends in that direction, that you're seeing hematologic response, that you're seeing molecular BCR-ABL transcript levels heading in the right direction. That's gonna... You know, there's no one formula to put a number on that. It's gonna really depend on your baseline characteristics, namely, what are the prior lines of therapies that the patients have had, and what are their starting transcript level? Those things have a major influence on those early trends in terms of what we'd see. But that's basically what we'll be looking for. And, you know, it's rare that companies have presented data, you know, very early into dose escalation in CML, again, because it's a chronic disease, and, you know, what you're looking for to get to the metrics of things like MMR at six months, an example, you obviously need some longer-term follow-up. But again, you can see early trends of activity based on the fact that you're fairly continuously measuring the efficacy parameter. Great. And at ASH, I believe we'll see some data from asciminib on once-daily dosing from the ASC4FIRST study. Is that important for the development of TERN-701 or not, or not so much? Do- Yeah, I mean, at this point, asciminib is largely considered to be a once-daily drug. You know, I think the label has the 80 mg, and they used pop PK modeling to get QD approved. And And again, that drug is used once daily pretty widely. And you know, the BID is at the 200 mg dose with BID for those two to five patients. So again, I don't, and the first-line phase 3 study that they're doing is also QD once a day. So, you know, I don't think that has any impact on our development plan. We're considering 701 to be a once-daily drug, and again, we expect to continue evaluating it as such. Great. And just to come back to the safety data, the very first data set that we may get in the second half of next year, what's kind of the broad comparator, or the best comparator that we should look for, yeah, for that to interpret that data set? You know, I mean, apples to apples, it would be obviously asciminib. I mean, you know, it's the only other allosteric inhibitor where you have such a large body of safety data. And so I think that would be the first, you know, point of comparison. And then obviously, compared to the active site drugs, again, this class as a whole has seen a overall better therapeutic index than the active site drugs. And so those are the two axes of comparison that you'd probably... Great. And then, are there any other updates at ASH in the CML space that are important or that you'll be looking to? Yeah, I mean, there's some, you know, data, phase one data also from China. So again, we're again focused on developing this drug, you know, ex-China and, you know, there's a, it's a very different demographic in terms of not just obviously the population, but also the way the disease is treated. And so I think there's some, you know, caution you have to apply when, when you, when you try to extrapolate from a data set exclusively from China to other parts of the world. So the bottom line is, we think that we need to just get our study up and running, get our own data in a population that probably reflects more what the asciminib studies did, to be able to make an apples to apples comparison. So again, we look forward to looking at new data at ASH, but that doesn't really change any of our plans going forward into 2024. Great. Well, thank you so much for those details on the oncology program. Maybe in the last five minutes, I'd like to switch to obesity. You know, given Pfizer's danuglipron, we had a you know, readout last Friday and some decisions regarding that compound. And what are the read-throughs to TERN-601? You know, maybe if you could comment a little bit also on the structure and what other compound within the oral GLP-1s that TERN-601 is most related to, perhaps? Sure. Thanks for the question, Silvan. I can take this. So, just to orient the audience, danuglipron is a, is an oral, small molecule GLP-1 receptor in development, by Pfizer for the treatment of type 2 diabetes and obesity, and recently had this phase 2b readout, from a six-month plus trial, or 2 weeks, I believe, just last Friday. So we were excited to see those results because TERN-601 is an oral small molecule, GLP-1 inhibitor that Terns has now in development in phase 1 for the treatment of obesity. And, like danuglipron, it is a partially biased agonist to the GLP-1 G protein-coupled receptor.... the data we saw from Pfizer, showed a few, a few strong positives, we think, for danuglipron. First of all, there was no liver toxicity signal with the drug, whereas most every other glipron that's in development has shown some liver enzyme elevations, more so in the active arms than in the placebo arms to date. If you read the press release from Pfizer, there was a clear mention that there was no evidence of liver toxicity. We think that's important. Pfizer, in the past year, had discontinued lotiglipron, a structurally related molecule to danuglipron, in part because of hepatotoxicity observed in clinical development. We know the structures of lotiglipron and danuglipron. We think there's a moiety that's very specific to lotiglipron that could have been responsible for the liver toxicity, that is not in danuglipron, it is not in TERN-601. Indeed, now with the readout from the phase 2b from danuglipron, with no evidence of liver toxicity, we feel that much more confident that that is probably a lotiglipron specific signal, and that the overall structure shared by danuglipron and TERN-601 appears to have great liver safety, right? Which is where we would be. That really sort of sets danuglipron aside in the pack. Now, the drawbacks for danuglipron were twice daily dosing in this study, and Pfizer has now said that they're not gonna advance danuglipron because of its BID dosing schedule. There was a high degree of discontinuations due to GI tolerability. Even in the placebo group, 40% of placebo recipients discontinued due to nausea, vomiting, and we saw about 50% in the danuglipron. So that's a bit of a head scratcher. Despite that early discontinuation rate, there was a 13% body weight loss, which is impressive, actually, that with that degree of discontinuation, there could still be that much body weight loss. So we think these are strong positive read-throughs to TERN-601, which we plan on dosing once daily, right? You know, that's now a validated mechanism. And we feel good about the potential for an improved hepatotoxicity safety profile, as well as a very competitive weight loss. We'll be looking to see the 28-day weight loss data with TERN-601 in the second half of next year. Great. Well, thank you so much for the overview. Obviously, you kicked off your own trial. You announced that you dosed already the first patient. I'm just thinking about what we can learn from these, as these first results for these oral GLP-1s come in, right, from you and some other companies? What exactly is the bar? Should we expecting, you know, if there was an oral to develop alongside injectables, would you have to beat injectables in terms of efficacy, or is it just the fact that there's an oral option, you know, if you can get close to injectables, would that be useful? I'm hearing different things from different people, and, you know, we won't know till many years from now. But, yeah, what are your initial thoughts at, at this point? Yeah. So just to contextualize the data we'll be showing next year, it's weight loss through 28 days of dosing in a healthy, obese, and overweight population. And if you look back at all of the GLP-1-based treatments, including, you know, the peptidic drugs that are now registered, tirzepatide and semaglutide, the weight loss was pretty much the same through 28 days, including with the orals. So, given the short duration of treatment in a 28-day study, what we've seen consistently is somewhere between 4%-5% body weight loss, depending on the baseline BMIs that were in the study. And so I think really it doesn't have to be better in 28 days, it really just needs to be competitive, and we've seen other oral small molecules do quite well, even in this past year, you know, showing their 28-day weight loss data. So that's, that's what I think we would need to see in the short term. In the longer term, just to put it into context, tirzepatide and semaglutide are blockbuster drugs, yet only 2% of the patients in the U.S. that, that qualify for pharmacotherapy for obesity are actually being able to access those drugs. So if the manufacturing were tripled, we'd still be at only 6%. So I think the penetration into the market that having an oral small molecule, cost of good drugs, that's easy to take, easy to prescribe, easy to be on pharmacy shelves, doesn't require refrigeration, doesn't require injection, I think... Does it have to be better than injectables? No, I think it has to be, you know, competitive, and I think it has to be available for patients who need treatment. Great. Well, thank you so much for that insight. And, Mark, maybe can you tell us about, you know, the cash position of the company right now, what the runway is, and, you know, is the NASH asset that you have, is that an asset that you could monetize in the not-too-distant future? Well, thanks for giving me at least something to answer, so that I was feeling a little... I was feeling a little left out. No, I'm just kidding. Great answers from Emil and Erin. Cash position is very strong. We're very excited to have a strong balance sheet, around $270 million in cash, which lasts us into 2026, and with a great deal of buffer covers the readouts that Emil and Erin have discussed today. With regards to the NASH asset, you know, we're always opportunistic with regards to collaborations and potential business development opportunities. I think that we certainly look for partners that can help accelerate development, and I think that 501 and NASH is an indication that it certainly be accelerated with a partner with greater expanse than TERN has. So we haven't actually announced next steps for TERN- 501 yet. We continue to engage with regulators and thought leaders on that data set. But yeah, we remain opportunistic with regards to collaborations and in NASH. Great! Well, with that, I'll close our discussion here. Thank you so much, Erin and Emil, and Mark. Thanks for joining us today, and I look forward to seeing talks-