Terns Announces Proposed Public Offering

Rhea-AI Summary

Terns Pharmaceuticals (Nasdaq: TERN), a clinical-stage biopharmaceutical company, has announced a proposed public offering of $125 million in common stock and pre-funded warrants. The company plans to grant underwriters a 30-day option to purchase up to an additional $18.75 million of shares. Jefferies, TD Cowen, and UBS Investment Bank are acting as bookrunners for the offering.

Terns intends to use the net proceeds to fund research, clinical trials, development, and manufacturing of key product candidates, including TERN-701, TERN-601, and the TERN-800 series. The offering is subject to market conditions, and there is no assurance of its completion or terms.

Positive

• Potential to raise up to $143.75 million in capital
• Funds allocated for advancing key product candidates
• Involvement of reputable underwriters (Jefferies, TD Cowen, UBS Investment Bank)

Negative

• Potential dilution of existing shareholders' equity
• Uncertainty regarding the completion and terms of the offering
• Dependence on market conditions for offering success

Insights

Financial Analyst

Terns Pharmaceuticals' proposed $125 million public offering of common stock and pre-funded warrants is a significant move to bolster its financial position. This capital raise could provide important funding for the company's research and development pipeline, particularly for key candidates like TERN-701 and TERN-601. However, investors should note that this will likely result in dilution of existing shareholders' stake.

The additional $18.75 million option for underwriters suggests confidence in market demand. The involvement of reputable underwriters like Jefferies and TD Cowen lends credibility to the offering. Notably, the use of pre-funded warrants alongside common stock offers flexibility in the offering structure, potentially appealing to a broader range of investors.

While this influx of capital could accelerate Terns' clinical programs, it's important to monitor the company's burn rate and progress in its pipeline to assess the long-term value proposition.

Biotech Industry Analyst

Terns' focus on oncology and obesity represents a strategic positioning in high-value therapeutic areas. The capital raised through this offering could significantly advance their portfolio, particularly TERN-701 and TERN-601. However, investors should consider the competitive landscape and clinical success rates in these fields.

The company's emphasis on small-molecule candidates is noteworthy, as these typically have lower manufacturing costs and easier administration compared to biologics. This approach could potentially lead to more cost-effective treatments if successful. The mention of the TERN-800 series suggests a diversified pipeline, which could mitigate risk.

While the additional funding is positive for advancing clinical trials, it's important to monitor upcoming data readouts and regulatory milestones to gauge the true potential of Terns' pipeline and its ability to compete in these challenging therapeutic areas.

FOSTER CITY, Calif., Sept. 09, 2024 (GLOBE NEWSWIRE) -- Terns Pharmaceuticals, Inc. (“Terns” or the “Company”) (Nasdaq: TERN), a clinical-stage biopharmaceutical company developing a portfolio of small-molecule product candidates to address serious diseases, including oncology and obesity, today announced that it has commenced a proposed underwritten public offering of $125 million of shares of its common stock and, in lieu of common stock to certain investors, pre-funded warrants to purchase shares of its common stock. In addition, Terns expects to grant the underwriters a 30-day option to purchase up to an additional $18.75 million of shares of common stock offered in the public offering at the public offering price, less underwriting discounts and commissions. All of the shares and pre-funded warrants to be sold in the offering will be offered by Terns. The offering is subject to market and other conditions, and there can be no assurance as to whether or when the offering may be completed, or as to the actual size or terms of the offering.

Jefferies and TD Cowen are acting as lead book-running managers for the proposed offering. UBS Investment Bank is also acting as a bookrunner for the proposed offering.

Terns intends to use the net proceeds from the proposed offering to fund research, clinical trials, development and manufacturing of the Company’s key product candidates, including TERN-701, TERN-601 and other programs, including Terns’ TERN-800 series, and for working capital and general corporate purposes.

A shelf registration statement on Form S-3 (File No. 333-269508) relating to the securities offered in the underwritten offering was filed with the Securities and Exchange Commission (the “SEC”) on February 1, 2023 and declared effective on February 10, 2023. The offering will be made only by means of a prospectus supplement and accompanying prospectus that form a part of the registration statement. A preliminary prospectus supplement and accompanying prospectus relating to the offering will be filed with the SEC and will be available on the SEC’s website located at www.sec.gov. Copies of the preliminary prospectus supplement and accompanying prospectus relating to this offering, when available, may be obtained from Jefferies LLC, Attention: Equity Syndicate Prospectus Department, 520 Madison Avenue, New York, NY 10022, by telephone at 877-821-7388 or by email at prospectus_department@jefferies.com or TD Securities (USA) LLC, 1 Vanderbilt Avenue, New York, NY 10017, by telephone at 855-495-9846, or by email at TD.ECM_Prospectus@tdsecurities.com.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification of these securities under the securities laws of any such state or other jurisdiction.

About Terns Pharmaceuticals

Terns Pharmaceuticals, Inc. is a clinical-stage biopharmaceutical company developing a portfolio of small-molecule product candidates to address serious diseases, including oncology and obesity. Terns’ pipeline contains three clinical stage development programs including an allosteric BCR-ABL inhibitor, a small-molecule GLP-1 receptor agonist, a THR-β agonist, and a preclinical GIPR modulator discovery effort, prioritizing a GIPR antagonist nomination candidate.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements about Terns Pharmaceuticals, Inc. (the “Company,” “we,” “us,” or “our”) within the meaning of the federal securities laws, including those related to the size, structure and completion of the proposed offering, the grant to the underwriters of an option to purchase additional shares of common stock and the Company’s anticipated use of proceeds of the proposed public offering. All statements other than statements of historical facts contained in this press release are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “design,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “positioned,” “potential,” “predict,” “seek,” “should,” “target,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. The Company has based these forward-looking statements largely on its current expectations, estimates, forecasts and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. In light of the significant uncertainties in these forward-looking statements, you should not rely upon forward-looking statements as predictions of future events. These statements are subject to risks and uncertainties that could cause the actual results and the implementation of the Company’s plans to vary materially, including the risks associated with the initiation, cost, timing, progress, results and utility of the Company’s current and future research and development activities and preclinical studies and clinical trials. These risks are not exhaustive. For a detailed discussion of the risk factors that could affect the Company and the offering, please refer to the risk factors identified in the Company’s SEC reports, including but not limited to its Annual Report on Form 10-K for the year ended December 31, 2023, and its preliminary prospectus supplement. Except as required by law, the Company undertakes no obligation to update publicly any forward-looking statements for any reason.

Contacts for Terns

Investors
Justin Ng
investors@ternspharma.com

Media
Jenna Urban
Berry & Company Public Relations
media@ternspharma.com

FAQ

What is the size of Terns Pharmaceuticals' (TERN) proposed public offering?

Terns Pharmaceuticals (TERN) has announced a proposed public offering of $125 million, with an additional option for underwriters to purchase up to $18.75 million in shares, potentially totaling $143.75 million.

How does Terns Pharmaceuticals (TERN) plan to use the proceeds from its public offering?

Terns Pharmaceuticals (TERN) intends to use the net proceeds to fund research, clinical trials, development, and manufacturing of key product candidates, including TERN-701, TERN-601, and the TERN-800 series, as well as for working capital and general corporate purposes.

Who are the underwriters for Terns Pharmaceuticals' (TERN) proposed public offering?

The lead book-running managers for Terns Pharmaceuticals' (TERN) proposed public offering are Jefferies and TD Cowen, with UBS Investment Bank also acting as a bookrunner.

What types of securities are being offered in Terns Pharmaceuticals' (TERN) public offering?

Terns Pharmaceuticals (TERN) is offering shares of its common stock and, to certain investors, pre-funded warrants to purchase shares of its common stock.