Seems silly. Exactly. It's crazy. You get dual, though. All right. Are you ready? Yes All right. Let's start. Welcome back to the Citizens Life Science Conference. My name is Silvan Türkcan. I'm a senior analyst covering precision medicines. It's my pleasure to host Terns Pharmaceuticals. Thanks so much for joining us. We have Scott Harris here, the Chief Development Officer, and Andrew Gengos, Chief Financial Officer. Thanks so much. It's good to be here. Thank you. Thank you. Maybe just in the beginning, let's start with oncology. Can you please set the stage by discussing the unmet need in CML and how TERN-701 fits into that landscape? Yeah. Good question. I think to understand how TERN-701 fits in, maybe I'll just spend a couple of minutes talking about the development of drugs in the history in CML. Obviously, CML as a disease was transformed in 2001 with the introduction of Gleevec and imatinib. It really revolutionized the treatment of CML, and patients could live much longer lifespans. Even though the drug was revolutionary, it still left a lot on the table in terms of opportunity for improving the efficacy and also the safety and tolerability. Since then, there's been a number of second-generation TKIs that have come to the market, each of them with improvements in efficacy, but also various safety tolerability issues. I think that the biggest leap forward we've made recently has been the introduction of an allosteric TKI with Novartis's asciminib. I think that an allosteric drug is really going to be the best way to treat CML. It's much more selective. I think we've seen with the data that it's more efficacious and it's more safe than the active site TKIs that are available. With that, there is still room for improvement over asciminib. We think that TERN-701 has the potential to fill those gaps, really differentiating across kind of three pillars: efficacy, safety tolerability, and patient convenience. On the efficacy side, I think that we have shown preclinically that TERN-701 is more potent than asciminib against BCR-ABL. In the clinic, we've been able to see an improved PK profile and our ability to dose higher, which leads to much greater target coverage than what asciminib has. We have also, in the data that we released last December, even though it was an early data set, been able to show that we could take an asciminib failure and actually drive further benefit in that patient. On the safety tolerability side, we announced after our data release last year that we had completed the dose escalation up through the 500 mg dose cohort, and we did not have a single dose-limiting toxicity at any of the dose levels. In addition, we have shown that we also lack certain drug-drug interactions compared to asciminib. We are not an inhibitor of CYP3A4, which at the higher doses asciminib is. With over 60% of small-molecule drugs being metabolized by CYP3A4, we think that is a significant advantage for patients in terms of the conmeds with an aging population with CML. We have shown that we're not an inhibitor of the OATP1B1 transporter, which is the major transporter for statins. On the patient convenience side, we have shown that we're a once-daily drug, and we do not have a clinically meaningful food effect. Right now with asciminib, fasting is required one hour before, two hours after. You actually see a 60% reduction in AUC on a high-fat meal with asciminib. We do not have that liability. The patients that are taking asciminib twice a day, which is the approved dosage regimen outside of the U.S., patients are potentially fasting for six hours a day. Between all those three sort of pillars, we think that we have the ability to be the best in class of what we see as the best treatment for CML, which is an allosteric BCR-ABL inhibitor. Great. Yeah, that's very helpful. Maybe at least the feedback we got from docs, we should think about this disease in somewhat of a chronic setting, right, with life expectancy almost being normal here in this disease. How are patients, like, should we think really in lines of therapy or just people just switching from different inhibitors to others? What are the main reasons for switching in the beginning other than loss of efficacy? Is it safety? Is it some of these other aspects you've brought up? Are there different subpopulations as they come off first-generation or second-generation for certain reasons? Yeah, no, that's a good question. There is a high degree of switching with patients that are on active site TKIs. Typically, within the first year of treatment on a TKI, you see up to 50% of patients switching. Of that 50%, half of those are switching for reasons that are either suboptimal response or loss of response, and the other half is switching for tolerability reasons. You see people going from imatinib to second generation TKIs. Once you have switched, your chance of switching again becomes much greater. Great. In December, you had results from your first 15 patients. Can you maybe just walk us through these initial results? Sure. It might take me half an hour to go through them, but I'll try and be brief. We did release an early data set on our phase one study in December, and that was based on an October data cut. As you mentioned, 15 patients were enrolled. Of those, 12 were evaluable. Of those 12, we removed the T315i. We had 10 patients that we could really look at evaluable for MMR at three months. What we saw was there was a 50% MMR, cumulative MMR rate at three months with that small data set. I think what's more important is the fact that you could actually look on an individual patient basis as you can expect patients in a phase one CML study, they're going to be heavily pretreated. We had a median prior TKI of four per patient, and over 60% of the patients had baseline BCR-ABL transcripts that were above 1%. Within all of those patients, we were able to see an effect of the drug causing decreases in the BCR-ABL. I mentioned we did not have any dose-limiting toxicities. We also did not see any indication of LFT elevations or pancreatic enzyme elevations either. It was an early data set, but highly encouraging. We are really pleased to release that last year. Great. I think you already mentioned that data that we had on the drug-drug interactions or lack thereof. You also mentioned the lack of food effect. Yeah. Not only is that helpful ultimately when the drug were to be approved, but from a clinical trial enrollment aspect, it allows us to remove a lot of prohibited conmeds, and it allows us to increase the study better. Great. The next update, your guidance is for the fourth quarter of this year. Can you just tell us about, or if you already know, what we can expect in terms of patient numbers and what are kind of the critical efficacy measures that we should be looking at? Yeah. Not guiding right now to specific patient numbers. We may do so later in the year. What you can expect is increased N, so more patients being dosed as well as an increased length of follow-up. Those patients will come from not only the dose escalation phase, we've been backfilling in dose escalation, but also from the dose expansion phase as well. You'll see a substantial increase in the number of patients dosed. Additionally, the big change will be that whereas the early data set we released in December, we were looking at three months, we will actually be able to look at six-month MMR rate, not just cumulative MMR rate, but also more importantly, getting patients into MMR that came into MMR that were not in MMR at baseline. This six-month endpoint is important because it has a direct read-through to what ultimately is an approvable endpoint for a second line plus indication. Great. We'll have a shift table and the different MMRs at different time points, maybe different, I guess, like plots per patient on how his journey was. Yeah, as we did with the early data release, there were a few patient anecdotes. We may do that. Don't know for sure, but you can definitely expect to see a shift table. Great. You were planning to begin the dose expansion in the second quarter. Is that still on track and you're going ahead with that? It is on track. We have selected the doses. Maybe I'll just say that you should expect to hear more on that very shortly. Okay, great. Maybe, yeah, I do not know if we hear more how much you can say now, but can you just remind us of the inclusion criteria for the expansion? Yes. Yeah. That's also maybe the mutations that the patients have, or is that? Yeah, a couple of big changes, largely the same as the dose escalation, but we will not be having mutated patients in the dose expansion. There are some of the inclusion and exclusion that we're tightening up really to create a more homogeneous population for what is ultimately the phase two portion of the study. Okay, great. Looking forward to that. Let's switch to oral GLP-1, TERN-601. How does, sorry, 601, what is it and how does it fit in the landscape? Obviously, it's evolving right now at a rapid pace, but where are you and what are you doing exactly? Yeah. TERN-601 is our orally available once-daily dosed GLP-1 receptor agonist. We did announce data in September of last year. We conducted our initial 28-day study with positive results, seeing weight loss up to 5.5% at our highest dose level. We have since initiated a 12-week study. That study is enrolling and is ongoing. We expect to release data from that in the fourth quarter of this year as well. How we really view TERN-601 is really differentiating it based on its tolerability profile. There are some distinct pharmaceutical properties of the molecule based on its solubility, permeability profile. What you see is that the drug is continually solubilized as it transits through the GI tract. As that drug is solubilized, it's rapidly absorbed. The first thing that drug sees is the GLP-1 receptor, which is enriched in the gut. The TERN-601 that gets systemically out there is largely protein-bound and has less liability on central GLP-1 receptor. What we see is you're getting the beneficial effects of the drug in the gut, less liability centrally. Because of that, we sort of see a flattened PK profile. We see target coverage over 24 hours. We really view TERN-601 as being an orally dosed once-daily GLP-1 receptor agonist that has the potential to be the most tolerable in the class. Great. One question obviously we get a lot is Pfizer recently discontinued danuglipron. Danug lipron. Yeah, exactly, danuglipron. Obviously, you started off with a similar backbone. That whole discussion, is there really a cross-risk or not? What are your comments here? Yes. TERN-601 is based on the danuglipron scaffold, although it is a very different molecule from danuglipron in terms of its pharmaceutical properties, as I just went through. As far as Pfizer's reason for discontinuing that molecule, I can only speak to what they had in their press release. They did dose 1,400 patients with their initial formulation. Their once-daily dosing formulation did not see any signal. They did make a switch to a modified release formulation. As they mentioned in the press release, they saw one potential case of DILI. Small changes in molecules can have large effects just looking at our pharmaceutical properties of our molecule. I do not think there is any overhang from a safety aspect just because our molecule does act very differently than danuglipron itself. Obviously, there is one less player in the field. Our eyes will now be focused on orforglipron as what they released for their obesity data this year. Great. Maybe on the data side on 601, what have you shown in your 28-day data? How does that compare? Yeah. Yeah. The 28-day data, a couple of interesting aspects about that. We looked at three dose levels, 240, 500, and 750. With the mid and the high dose, we actually titrated every three days. That is the fastest we have seen as far as titration goes for an oral GLP-1. As I mentioned, we saw weight loss of up to 5.5% at the highest dose level at 28 days. The tolerability profile was in line with others in the field, no severe adverse events. For the most part, all of the nausea and vomiting was mild. Interestingly, at our low dose, 240 milligrams, we saw 2.5% weight loss in 28 days, and we did not have a single report of any nausea or vomiting at that dose level. As we look forward to the 12-week study, we're actually evaluating the exact same dose range, the exact same patient population, and taking that out to 12 weeks. The only difference between the 12-week study really and the 28-day study is that we have slowed down the titration. As you know, slowing down the titration leads to even better tolerability. We were thrilled with the tolerability we saw considering the rapid titration in the 28-day study. Our expectation is that in the context of a 12-week study, we'll see even better tolerability. Yeah. Talking about the titration at 28-day, I think we did some work on that. It was one of the more aggressive titration regimens out there, right? Every three days. Yep. Exactly. Yep. All right. That's interesting. So you touched on the Falcon trial. Is that trial just directly comparable to all the other 12-week trials we've seen out there, or is there anything that we shouldn't mind when we see the data in the third quarter? Yeah. Again, we're looking at the exact same dose range. What we've seen with a lot of other programs is that they didn't quite learn enough in their 28-day study, and they've had to modify doses, expand the dose range in their longer-term studies. We're evaluating the exact same dose range, patient population that's 30-50 BMI or 27-30 with an obesity-related comorbidity. The one aspect is we've slowed the titration down a bit. If you look at the dose levels, we're really honing in on that mid dose level of 500 milligrams. We're actually looking at two different titration schedules with that where we're dosing one monthly. That fits in nicely with what we hear from practicing physicians in that they like to just give a patient a 30-day supply. It's potential that a patient could come in, get a 30-day supply, come back in, get their next dose level. Depending on which dose we're at, we're really only looking at two to four titration steps, which is significantly less than what the other products are out there as well. Great. Can you comment about how many trial sites are open at the moment and kind of like the speed of enrollment or where we're at? Yeah. So we have 17 active trial sites here in the U.S. Enrollment, as I'm sure you can imagine, is not an issue. In fact, with obesity studies, I think the biggest issue with enrollment is enrolling too fast. It's one of the only indications I've worked in where enrolling too fast is an issue. It's usually quite the opposite. Yes, the study is active. All sites are enrolling. We do expect to have data in the fourth quarter. Great. Fourth quarter. Okay. And did you specify if that's at a conference or is that as a corporate update or? Most likely not at a conference. This will be a corporate update for 601. Okay, great. Yeah. Maybe I'd like to move a little bit about the next steps. I think we talked about this before, Andrew. You then have data in hand. What do we do next? The next steps will be larger trials. How will we think about that? I've done in prior roles, I've done quite a bit of business development. You think about why would you ever partner or whatever flavor of partnership, why would you ever do that with a pharma company? Usually it's because you don't have access to a certain resource or capability to take this drug all the way to commercial yourselves. In the case of obesity, it's two things. One, the resources. The capital to get to registration in obesity is outside of the scope of a company like ours now. I mean, it's probably order of magnitude $500,000,000-$1,000,000,000 depending on what kind of indications you want to get in addition to obesity. We don't have access to that. Two, ultimately, we think the orals, at least today, will be a general practitioner sale. Never say never, but it's highly unlikely that our first sales force would be a GP sales force. We need to partner this program. Our strategy there is if we get the differentiated profile that Scott's been talking about, which is essentially competitive weight loss with distinguished safety and tolerability and ease of use, then we think there'll be a partnership opportunity at that stage. That's what we would hope to see. Okay. That makes sense. Obviously, there's a couple of readouts that I would like to get your take on and how that may impact the field and the view of your program. For example, maybe starting with Lilly's orforglipron update, what do you think about that? What does that mean for the oral GLP-1s? We love what Lilly's doing because they're basically establishing markets. It looks like from what we know, it looks like that drug will get to approval. Never say never. FDA obviously makes those decisions. I think having them establish things like pricing and the marketplace and the use case for what segment of patients use it, I think that's only good things for us. If our molecule turns out to be better than that, same class, best in class maybe, then we think we would benefit from having them do the work of establishing that market and then coming behind them. Great. Obviously, we have, we're waiting structures update, I think, sometime in the near future. Is that kind of like getting to your data, or then we'll have both data sets in hand? How do you view, how will your BD discussions maybe focus on that, or is there anything? You want to talk about their data? I mean, I'll just say that we're really focused on execution of our program right now. Based on what we've seen in the 28-day study, we're bullish on what we hope to see with the 12-week data. I think that really orforglipron is going to set the bar as being the first to get to market. We'll assess structures data when it comes in. I think more players in the field are good for patients. This is a massive pharmaceutical market. There are room for multiple players. There's another what I call kind of inside baseball point in business development. This is not our only program. And we just talked about our CML program, which frankly could be the basis for a company alone. So if we get the differential data in the obesity program, we're actually in a position where we could do a risk-sharing deal with pharma if that's what it took to get a really interesting partnership. I think some of the other companies that have the obesity program as their lead or only program, it's harder for them to do a deal like that because then what do they do? It's more I would think they would be more thinking about acquisition as a form of partnership than a risk-sharing deal like what we can do. Maybe we have more degrees of freedom in how we would partner because of our other programs, our pipeline versus some of the other folks in the business. Yeah. That makes sense. Obviously, Pfizer, after the discontinuation of danuglipron, they're out hunting. I assume they're probably hunting for an oral, right? Or did you? I mean, it's all speculation, but I would think I used to be on the buy side of business development. If I'm sitting in a big pharma company and I'm not Lilly or Novo, I'm looking at the biggest therapeutic market that I will ever see in my entire career, obesity. Are you really going to sit that one out if you're a big pharma company with loss of exclusivity coming and lots of revenue needing to be replaced? I think that's a hard choice to sit that one out. I would expect that Pfizer, and they've made some statements recently that they're still interested in obesity. I would expect that Pfizer and others are interested in looking at what's available in biotech. Great. Maybe from what we know today, oral GLP-1s, within obesity, what type of patients would you think would they be more appealing or most appealing for? Maybe subsegmenting some of the. I'll try that one. Yeah. So yeah, we've actually spent a lot of time thinking about this. It's funny, I think there's been a bit of a paradigm shift over the past year. Investors were hyper-focused on absolute weight loss and arguing over 0.3, 0.4% in some data releases. I think we've thankfully gotten past that. In the conversations that we have with practitioners, there's a large segment of the population that doesn't need to lose 20% of their body weight or 25% of their body weight over the course of a year in particular. Having an oral available that has a more gradual weight loss but is extremely tolerable is something that is of great interest to practitioners and we think also to patients. Those at the higher end of the BMI, I think there's still a place for injectables for the peptides. I think that once orals come to market, and as Andrew said, there's family practitioners that are prescribing them, tolerability really becomes the focus for them because the last thing they want is a patient coming back all the time complaining of nausea, vomiting. Between that and ease of titration, I think it becomes a very patient-friendly drug and you still get the weight loss that you're looking for. Great. I mean, I don't know the answer, but are oral or injectables the better backbone for combinations in obesity? I don't think we know the answer to that question yet. Theoretically, I think that there's probably no difference between the two. I still don't think that fixed dose combinations are the way to go, particularly with a drug that requires titration. If you can take two pills a day and a GLP-1 and a GIPR, and that does the trick on weight loss, I think that that's an acceptable approach too. Great. Thanks so much for joining us today. Yeah, thanks for all your insights. Thanks very much. Appreciate it.