While Terns' CEO cited "following the data" for their promising CML drug, the decision to de-prioritize metabolic disease was equally influenced by the competitive landscape. She noted the extreme difficulty of competing against larger, well-capitalized players in the obesity market, making the pivot a strategic choice based on relative opportunity and defensibility.
Terns' CML drug is an allosteric inhibitor, targeting a different site on the target protein than older drugs. This mechanism provides greater selectivity, avoiding off-target effects like arterial blockages common with active-site inhibitors. This technical advantage creates a compelling safety and tolerability profile, a key differentiator in a market with established therapies.
While Chronic Myeloid Leukemia (CML) is no longer a fatal disease for most, Terns' CEO highlights a significant unmet need rooted in quality of life. Patients face lifelong therapies with severe side effects like strokes or pancreatitis. This focus on tolerability reveals massive opportunity in markets that appear "solved" from a pure survival standpoint.
When Terns Pharmaceuticals released poor data for its obesity drug, its core investors and analysts framed it as a positive "clearing event." Instead of punishing the failure, they rewarded the company for its decisive focus on its highly promising CML asset. This shows sophisticated investors value resource allocation and strategic clarity over clinging to underperforming programs.
Upon joining Terns Pharmaceuticals after the former CEO's passing, Amy Burrows intentionally adopted a pre-existing cultural practice called "Share Good News" in leadership meetings. This demonstrates how a new leader can build rapport and show respect for a company's history by identifying and continuing positive rituals, rather than imposing a completely new culture.