Terns Pharmaceuticals initiated with an Outperform at Leerink

Leerink initiated coverage of Terns Pharmaceuticals (TERN) with an Outperform rating and $58 price target Terns is a clinical-stage biotechnology company developing TERN-701, a next-generation allosteric BCR::ABL1 inhibitor for chronic myeloid leukemia. Early phase 1 TERN-701 CARDINAL data suggest a best-in-class profile, with materially higher molecular response rates and a clean safety profile that affords a wider therapeutic window enabling deeper and more durable target suppression, the firm notes. The frontline CML setting is the primary driver of value for TERN-701, which Leerink sees as a $4.8B opportunity, $32/share in its model. At Terns’s current $4B market valuation, conviction in TERN-701’s ability to meaningfully penetrate the frontline setting is paramount to the long thesis. The firm forecasts an additional $1.4B of second-line-and-beyond peak revenues or $18/share in its model.