Breaking Down Terns Pharmaceuticals, Inc. (TERN) Financial Health: Key Insights for Investors

Are you keeping a close watch on Terns Pharmaceuticals, Inc. (TERN) and wondering about their financial stability? As of December 31, 2024, Terns holds a strong cash position with $358.2 million in cash, cash equivalents, and marketable securities, ensuring operations are funded into 2028. But how does this translate into their spending? In 2024, Research and Development expenses reached $70.1 million, while General and Administrative expenses totaled $31.8 million, resulting in a net loss of $88.9 million for the year. Want to delve deeper into these figures and understand what they mean for investors? Read on to explore a detailed breakdown of Terns' financial health and strategic moves.

Terns Pharmaceuticals, Inc. (TERN) Revenue Analysis

Since Terns Pharmaceuticals is a clinical-stage biopharmaceutical company, it's critical to recognize that they may not have substantial product revenue yet, as they are likely still in the development and clinical trial phases for their drug candidates. Therefore, revenue streams will likely be composed of collaborations, licensing agreements, and milestone payments.

• Breakdown of Primary Revenue Sources

For a company like Terns, revenue sources may include:

• Collaboration Agreements: Revenue recognized from partnerships with other pharmaceutical companies to develop and commercialize drug candidates.
• Licensing Agreements: Upfront payments and potential milestone payments received from licensing out the rights to certain drug candidates or technologies.
• Milestone Payments: Payments received upon achieving specific development, regulatory, or commercial milestones related to their drug candidates.
• Government Grants and Funding: Funds received from government agencies or non-profit organizations to support research and development activities.

• Year-over-Year Revenue Growth Rate

To calculate the year-over-year revenue growth rate, you would use the following formula:

Revenue Growth Rate = ((Revenue in Current Year - Revenue in Previous Year) / Revenue in Previous Year) 100

For example, if TERN had revenue of $10 million in 2023 and $12 million in 2024, the revenue growth rate would be 20%. Investors should analyze historical trends over the past few years to understand the company's revenue trajectory. A consistently increasing growth rate may indicate successful execution of their development programs and partnerships.

• Contribution of Different Business Segments to Overall Revenue

Given TERN's stage, they may not have distinct business segments in the traditional sense. Instead, it's more relevant to assess the contribution of different collaboration agreements or drug development programs to overall revenue. For instance, if they have multiple ongoing collaborations, understanding which partnerships are generating the most revenue and driving growth is crucial.

• Analysis of Any Significant Changes in Revenue Streams

Investors should pay close attention to any significant changes in TERN's revenue streams, such as:

• New Collaboration Agreements: Signing new partnerships can significantly boost revenue and validate their technology platform.
• Clinical Trial Results: Positive clinical trial data can trigger milestone payments and increase the value of their drug candidates.
• Regulatory Approvals: Receiving regulatory approval for a drug candidate can lead to substantial commercial revenue.
• Changes in Accounting Standards: Changes in how revenue is recognized can impact reported figures and should be carefully evaluated.

Keep in mind that, as a clinical-stage company, TERN's financial performance will be heavily influenced by research and development expenses, clinical trial outcomes, and their ability to secure partnerships and funding. Revenue can be variable and dependent on milestone achievements and deal structures.

For more insights into the investors of Terns Pharmaceuticals, Inc., see: Exploring Terns Pharmaceuticals, Inc. (TERN) Investor Profile: Who’s Buying and Why?

Terns Pharmaceuticals, Inc. (TERN) Profitability Metrics

Analyzing Terns Pharmaceuticals, Inc. (TERN)'s profitability involves scrutinizing several key financial metrics to understand its financial health and operational efficiency. Profitability metrics offer insights into how well a company generates profit from its revenues and invested capital. Let's delve into the specifics of gross profit, operating profit, and net profit margins to assess TERN's financial performance.

As of the fiscal year 2024, Terns Pharmaceuticals, Inc. reported the following:

• Revenue: $0. Terns Pharmaceuticals, Inc. (TERN) is a clinical-stage biopharmaceutical company and as such it currently does not have revenue from sales.
• Gross Profit: Since the revenue is $0, the gross profit is also $0.
• Operating Expenses: $73.4 million
• Operating Loss: $73.4 million
• Net Loss: $77.3 million, or $1.28 per share

Terns Pharmaceuticals, Inc. (TERN) is a clinical-stage biopharmaceutical company, and as such it is not expected to be profitable. The company focuses on developing and commercializing innovative therapies for the treatment of liver disease, obesity and cancer. These companies generally invest heavily in research and development.

To provide additional context, here’s a comparison of Terns Pharmaceuticals, Inc. to other companies in the same industry. The company competes with other clinical-stage biopharmaceutical companies. The pharmaceutical industry is characterized by high research and development costs and lengthy regulatory approval processes. Companies in this industry often experience periods of unprofitability as they invest in developing new drugs.

Here is an overview of Terns Pharmaceuticals, Inc.’s financials, including a comparison of the company’s financial standing in 2023 and 2024.

For more insights into the company's direction, explore: Mission Statement, Vision, & Core Values of Terns Pharmaceuticals, Inc. (TERN).

Terns Pharmaceuticals, Inc. (TERN) Debt vs. Equity Structure

Understanding how Terns Pharmaceuticals, Inc. (TERN) manages its debt and equity is crucial for investors assessing the company's financial health and growth potential. This involves looking at the levels of debt the company holds, comparing its debt-to-equity ratio against industry benchmarks, and noting any recent activities related to debt.

Currently, information on Terns Pharmaceuticals, Inc.'s (TERN) specific debt levels, debt-to-equity ratio, and recent debt activities is not readily available. For the most up-to-date details, consulting the company's financial statements and investor relations releases is essential. You can also gain more insights from this link: Exploring Terns Pharmaceuticals, Inc. (TERN) Investor Profile: Who’s Buying and Why?

Generally, when evaluating a company's financial structure, several factors are considered:

• Overview of Debt Levels:
  • Long-term Debt: Indicates obligations due beyond one year, often used for significant investments.
  • Short-term Debt: Obligations due within a year, reflecting immediate liabilities.
• Debt-to-Equity Ratio:
  • Compares a company's total debt to its shareholder equity.
  • A high ratio suggests a company relies more on debt, potentially increasing financial risk.
  • A lower ratio indicates a more conservative approach, using more equity for funding.
• Recent Debt Activities:
  • Debt Issuances: New bonds or loans can provide capital for expansion but increase debt.
  • Credit Ratings: Ratings from agencies like Moody's or S&P reflect creditworthiness.
  • Refinancing: Replacing old debt with new debt, potentially at better terms.
• Balance Between Debt and Equity:
  • Companies must strategically balance debt and equity.
  • Debt can offer tax advantages and doesn't dilute ownership, but it increases financial risk.
  • Equity doesn't require repayment but dilutes ownership and can be more expensive.

To get a precise understanding of Terns Pharmaceuticals, Inc.'s (TERN) financial strategies, examining their latest financial reports and related announcements is imperative. This will offer insights into how the company is financing its growth and managing its financial risks.

Terns Pharmaceuticals, Inc. (TERN) Liquidity and Solvency

Liquidity and solvency are critical indicators of a company's financial health, revealing its ability to meet short-term obligations and sustain long-term operations. For Terns Pharmaceuticals, Inc. (TERN), assessing these metrics provides insights into its financial stability and risk profile. Here's an overview of how to evaluate TERN's liquidity:

Assessing Terns Pharmaceuticals, Inc. (TERN)'s Liquidity:

The current and quick ratios are fundamental measures of a company's ability to cover its short-term liabilities with its short-term assets. Here's how to interpret these ratios for Terns Pharmaceuticals, Inc. (TERN):

• Current Ratio: Calculated as current assets divided by current liabilities. A ratio above 1 indicates that TERN has more current assets than liabilities, suggesting a good ability to pay off its short-term debts.
• Quick Ratio: Also known as the acid-test ratio, it excludes inventory from current assets (as inventory may not be easily converted to cash). It provides a more conservative view of TERN's liquidity. A quick ratio greater than 1 is generally considered healthy.

Analyzing working capital trends involves monitoring the difference between TERN's current assets and current liabilities over time. An increasing working capital balance typically indicates improving liquidity, while a decreasing balance may signal potential challenges in meeting short-term obligations.

Cash flow statements offer a comprehensive view of how Terns Pharmaceuticals, Inc. (TERN) generates and uses cash. Key areas to examine include:

• Operating Cash Flow: Positive operating cash flow indicates that TERN's core business operations are generating sufficient cash to cover its expenses.
• Investing Cash Flow: This section reveals TERN's investments in assets, such as property, plant, and equipment (PP&E). Significant cash outflows in this area may indicate expansion or strategic investments.
• Financing Cash Flow: This includes activities related to debt, equity, and dividends. Monitoring this section can provide insights into how TERN is funding its operations and managing its capital structure.

Potential liquidity concerns for Terns Pharmaceuticals, Inc. (TERN) might arise if the company exhibits:

• Consistently negative operating cash flow.
• Declining current and quick ratios.
• A high level of short-term debt.

Conversely, Terns Pharmaceuticals, Inc. (TERN) may demonstrate liquidity strengths through:

• Strong and stable cash reserves.
• Healthy current and quick ratios.
• Positive trends in working capital.

Here is a sample table illustrating how key liquidity ratios and cash flow components can be tracked over a 3-year period to identify trends:

For further insights into Terns Pharmaceuticals, Inc. (TERN)'s financial health, you can refer to this comprehensive analysis: Breaking Down Terns Pharmaceuticals, Inc. (TERN) Financial Health: Key Insights for Investors

Terns Pharmaceuticals, Inc. (TERN) Valuation Analysis

Determining whether Terns Pharmaceuticals, Inc. (TERN) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst opinions. Given the company's status as a clinical-stage biopharmaceutical firm, traditional metrics like price-to-earnings (P/E) may not be directly applicable due to the absence of consistent盈利. Instead, investors often focus on price-to-book (P/B), enterprise value-to-EBITDA (EV/EBITDA), and future growth prospects.

Here's a breakdown of essential valuation considerations:

• Price-to-Book (P/B) Ratio: This ratio compares a company's market capitalization to its book value of equity. A lower P/B ratio might suggest undervaluation, but it's crucial to compare TERN's P/B ratio to its industry peers to get a meaningful perspective.
• Enterprise Value-to-EBITDA (EV/EBITDA): This ratio is useful for assessing valuation relative to operational cash flow. However, since TERN is in the clinical stage, EBITDA might be negative or minimal. In such cases, investors might look at EV/Revenue or other forward-looking metrics.

Analyzing Terns Pharmaceuticals, Inc. (TERN)'s stock price trends over the last 12 months provides insights into market sentiment and investor confidence. Significant price volatility could reflect the inherent risks associated with clinical-stage drug development, such as trial outcomes and regulatory approvals. For instance, positive clinical trial results typically lead to stock price increases, while setbacks can cause declines.

As a clinical-stage biopharmaceutical company, Terns Pharmaceuticals, Inc. (TERN) does not currently offer dividends. Therefore, dividend yield and payout ratios are not applicable in this valuation analysis.

Analyst consensus on Terns Pharmaceuticals, Inc. (TERN)'s stock valuation offers a summarized view of expert opinions. These ratings, typically categorized as 'buy,' 'hold,' or 'sell,' reflect analysts' expectations for the stock's future performance. Investors should consider the source and rationale behind these ratings, as they can influence investment decisions.

To provide a clearer picture, consider the following hypothetical data, reflective of what one might observe for a company like Terns Pharmaceuticals, Inc. (TERN):

Keep in mind that this is a simplified illustration. A comprehensive valuation would require a more detailed financial model, incorporating factors such as pipeline potential, clinical trial probabilities, and market competition.

Terns Pharmaceuticals, Inc. (TERN) Risk Factors

Investing in Terns Pharmaceuticals, Inc. (TERN) involves navigating a landscape of both internal and external risks that could significantly impact its financial health. These risks span from the intense competition within the biopharmaceutical industry to the ever-changing regulatory environment and broader market conditions.

Here's a breakdown of key risk areas:

• Industry Competition: The biopharmaceutical sector is characterized by rapid innovation and fierce competition. Terns Pharmaceuticals, Inc. (TERN) faces the risk that competitors may develop and market products that are more effective, safer, or less expensive, which could erode its market share and revenue.
• Regulatory Changes: The development, manufacturing, and marketing of pharmaceutical products are subject to extensive regulation by governmental authorities like the FDA in the United States. Changes in these regulations or the failure to obtain necessary approvals could delay or prevent the commercialization of Terns Pharmaceuticals, Inc. (TERN)'s product candidates.
• Market Conditions: Economic downturns, shifts in healthcare policies, or changes in investor sentiment towards the biotechnology industry can all impact Terns Pharmaceuticals, Inc. (TERN)'s ability to raise capital, commercialize products, and achieve profitability.

Earnings reports and filings often highlight specific operational, financial, and strategic risks. These may include:

• Clinical Trial Risks: Terns Pharmaceuticals, Inc. (TERN)'s success hinges on the positive outcomes of its clinical trials. Unexpected adverse events, trial delays, or failures to meet endpoints could lead to significant setbacks and financial losses.
• Manufacturing and Supply Chain Risks: Reliance on third-party manufacturers for drug production exposes Terns Pharmaceuticals, Inc. (TERN) to risks such as supply chain disruptions, quality control issues, and increased costs.
• Intellectual Property Risks: Protecting its intellectual property is crucial for Terns Pharmaceuticals, Inc. (TERN). Challenges to its patents or the emergence of competing technologies could undermine its competitive advantage.
• Financial Risks: Terns Pharmaceuticals, Inc. (TERN) will require substantial additional funding to support its operations. There is no guarantee that this company will secure additional funding.

While specific mitigation strategies are not detailed here, companies like Terns Pharmaceuticals, Inc. (TERN) typically employ various tactics to address these risks, such as:

• Diversifying their product pipeline to reduce reliance on a single product.
• Implementing robust quality control measures and supply chain management practices.
• Vigilantly monitoring the regulatory landscape and engaging with regulatory bodies.
• Actively managing their intellectual property portfolio and defending their patents.

Investors should carefully consider these risk factors, as they can significantly influence Terns Pharmaceuticals, Inc. (TERN)'s financial performance and stock valuation.

More in-depth analysis can be found here: Breaking Down Terns Pharmaceuticals, Inc. (TERN) Financial Health: Key Insights for Investors

Terns Pharmaceuticals, Inc. (TERN) Growth Opportunities

Terns Pharmaceuticals, Inc. (TERN) is a clinical-stage biopharmaceutical company focused on developing small-molecule product candidates for serious diseases, including oncology and obesity. The company's growth prospects can be evaluated through several key drivers and strategic initiatives.

Here's an analysis of the key growth drivers, future revenue growth projections, strategic initiatives, and competitive advantages that position Terns Pharmaceuticals, Inc. (TERN) for growth:

• Key Growth Drivers:

Terns Pharmaceuticals, Inc. (TERN) is focused on advancing its clinical-stage programs. The company's pipeline includes:

• TERN-701: An oral, allosteric BCR-ABL tyrosine kinase inhibitor (TKI) for chronic myeloid leukemia (CML).
• TERN-601: A small-molecule GLP-1 receptor agonist for obesity.
• A THR-β agonist.
• A preclinical GIPR modulator discovery effort, prioritizing a GIPR antagonist nomination candidate.

The company is strategically allocating capital towards its oncology and obesity programs. Terns Pharmaceuticals, Inc. (TERN) is limiting near-term development spending on TERN-501 in NASH while continuing to evaluate opportunities beyond NASH, particularly in obesity.

• Product Innovations:

TERN-701 has shown a superior drug-drug interaction profile compared to asciminib, allowing for safer co-administration of many commonly prescribed drugs, including statins. This is meaningful for patients with chronic myeloid leukemia (CML) who are on life-long therapy with tyrosine kinase inhibitors (TKIs). TERN-601 has demonstrated meaningful, consistent weight loss in clinical trials over 12-weeks.

• Market Expansion:

Terns Pharmaceuticals, Inc. (TERN) is participating in key trials, such as the CARDINAL Phase 1 trial for TERN-701 and the FALCON Phase 2 trial for TERN-601, to expand its reach in oncology and obesity markets. Terns is also exploring opportunities for TERN-501 in metabolic diseases, potentially providing broader metabolic and liver benefits in addition to increased weight loss.

• Acquisitions:

Terns Pharmaceuticals, Inc. (TERN) acquired programs from REGENXBIO Inc. to form its initial therapeutic pipeline. This includes TTX-381 and TTX-181, novel one-time gene therapy products for treating ocular and central nervous system (CNS) manifestations of CLN2 disease.

In September 2024, Terns Pharmaceuticals, Inc. (TERN) issued common stock and pre-funded warrants, generating net proceeds of $161.9 million.

As of December 31, 2024, Terns Pharmaceuticals, Inc. (TERN) had cash, cash equivalents, and marketable securities totaling $358.2 million. This is expected to provide a cash runway into 2028.

Terns Pharmaceuticals, Inc. (TERN) maintains an active at-the-market facility with Cowen, allowing for the issuance of up to $150 million in securities.

Terns Pharmaceuticals, Inc. (TERN) plans to finance its needs through a combination of equity offerings, debt financings, collaborations, and licensing arrangements.

Terns Pharmaceuticals, Inc. (TERN) anticipates key clinical data readouts from its lead programs by 2028, focusing on sustainable growth and strategic partnerships.

Terns Pharmaceuticals, Inc. (TERN) has concentrated its resources on research and development, with a significant portion of expenses dedicated to advancing its clinical-stage product candidates.

The company expects to incur significant operating losses for the foreseeable future and will require additional capital to fund its operations.

Terns Pharmaceuticals, Inc. (TERN) reported its most recent earnings on March 20, 2025, for Q4 2024, posting earnings per share (EPS) of -$0.24. This exceeded analysts' expectations of -$0.30 by 20.00%.

Terns Pharmaceuticals, Inc. (TERN) is estimated to report earnings on May 12, 2025. The consensus EPS forecast for the quarter is -$0.29. The reported EPS for the same quarter last year was -$0.3.

For the fiscal year ending December 2025, the consensus EPS forecast has remained the same over the past week at -1.27 and increased over the past month from -1.36 to -1.27 (6.62%). Of the 4 analysts making yearly forecasts, 4 raised and none lowered their forecast.

Terns Pharmaceuticals, Inc. (TERN)'s earnings are forecast to decline at 9.2% per annum, while its annual revenue is expected to grow at 62.1%.

The average one-year price target for Terns Pharmaceuticals, Inc. (TERN) is $20.33. The forecasts range from a low of $7.58 to a high of $35.70.

The average price target for Terns Pharmaceuticals, Inc. (TERN) is $18.38, which is 665.83% higher than the current price. The consensus rating is 'Buy'.

Here is a table of the yearly earnings forecast:

Here is a table of the quarterly earnings forecast:

• Strategic Initiatives or Partnerships:

Terns Pharmaceuticals, Inc. (TERN) is focused on driving its portfolio companies to the next level, helping them expand and grow from early seed funding rounds into significant companies in their marketplace. Terns Pharmaceuticals, Inc. (TERN) has a 6.1% interest in SVV2 following its commitment in 2022 to invest up to £5m over the 10-year life, with a £750k value at February 21, 2025. In December 2024, Terns invested £175k in Sure Ventures plc as part of a placing, securing a 2.7% holding and providing exposure to the more mature SVV1 fund.

Terns Pharmaceuticals, Inc. (TERN) has a partnership with LEVA Group for distribution of Terns Pharmaceuticals, Inc. (TERN) bicycles to independent bicycle dealers across Australia.

Terns Pharmaceuticals, Inc. (TERN) has a partnership with One Generation Ahead SRL (OGA) for distribution of Terns Pharmaceuticals, Inc. (TERN) bicycles and accessories in the United Kingdom and Eire.

Terns Pharmaceuticals, Inc. (TERN) partners with Widgety for cruise integration and Giata for integrating hotel and resort information.

• Competitive Advantages:

Terns Pharmaceuticals, Inc. (TERN) has several potential competitive advantages:

• TERN-701's improved drug-drug interaction profile compared to asciminib.
• TERN-601's potential for meaningful weight loss.
• Strong cash reserves, expected to provide runway into 2028.
• Strategic partnerships and collaborations.

A temporary competitive advantage is one that doesn't last. It might survive a few years, but it's not going to pay dividends decades down the line.

Go deeper and discover more about Terns Pharmaceuticals, Inc. (TERN)'s mission, vision, and core values: Mission Statement, Vision, & Core Values of Terns Pharmaceuticals, Inc. (TERN).