Terns Pharma Widens Q3 Loss Amid Rising R&D Spend

TL;DR

**TERN is burning cash faster with increased R&D, signaling higher risk but also potential for future breakthroughs if their oncology pipeline delivers.**

AI Summary

Terns Pharmaceuticals, Inc. reported a net loss of $24.635 million for the three months ended September 30, 2025, an increase from a net loss of $21.945 million in the same period of 2024. For the nine months ended September 30, 2025, the net loss widened to $72.636 million, up from $67.054 million in the prior year. Research and development expenses significantly increased to $19.917 million for the quarter, a 31.3% rise from $15.169 million in Q3 2024, reflecting continued investment in its clinical-stage oncology pipeline. General and administrative expenses decreased slightly to $7.799 million from $9.770 million in Q3 2024. The company's cash and cash equivalents decreased to $150.698 million as of September 30, 2025, from $161.439 million at December 31, 2024, with total current assets falling to $300.295 million from $362.109 million. Despite the increased losses, interest income rose to $3.141 million for the quarter, up from $3.088 million in Q3 2024. The company had 90,079,781 shares of common stock outstanding as of November 7, 2025.

Why It Matters

Terns Pharmaceuticals' increased R&D spending, up 31.3% year-over-year, signals aggressive investment in its oncology pipeline, which is crucial for a clinical-stage biotech. While this drives higher net losses, it's a necessary expenditure for future growth and potential drug approvals, impacting investor sentiment and long-term valuation. The decline in cash and cash equivalents, from $161.439 million to $150.698 million, highlights the company's burn rate and the potential need for future financing, which could dilute existing shareholders. In a competitive oncology market, successful clinical trial outcomes are paramount for Terns to differentiate itself and attract partnerships, directly affecting its ability to compete with larger pharmaceutical players.

Risk Assessment

Risk Level: high — The company reported a net loss of $72.636 million for the nine months ended September 30, 2025, and a decrease in cash and cash equivalents from $161.439 million to $150.698 million. This significant cash burn, coupled with increased research and development expenses of $58.990 million for the nine-month period, indicates a high reliance on future financing and successful clinical outcomes, typical for a clinical-stage oncology company with no revenue.

Analyst Insight

Investors should closely monitor Terns' clinical trial progress and upcoming data readouts for its oncology pipeline, as these will be the primary drivers of future valuation. Given the high cash burn and lack of revenue, new investors should exercise caution and consider the company's ability to secure additional financing without significant dilution.

Financial Highlights

debt To Equity

Not Disclosed

revenue

Not Disclosed

operating Margin

Not Disclosed

total Assets

Not Disclosed

total Debt

Not Disclosed

net Income

-$24.635M

eps

Not Disclosed

gross Margin

Not Disclosed

cash Position

$150.698M

revenue Growth

Not Disclosed

Key Numbers

• $24.635M — Net Loss (Q3 2025) (Increased from $21.945M in Q3 2024)
• $72.636M — Net Loss (YTD Sep 2025) (Increased from $67.054M in YTD Sep 2024)
• $19.917M — Research and Development Expenses (Q3 2025) (Increased 31.3% from $15.169M in Q3 2024)
• $150.698M — Cash and Cash Equivalents (Sep 30, 2025) (Decreased from $161.439M at Dec 31, 2024)
• $300.295M — Total Current Assets (Sep 30, 2025) (Decreased from $362.109M at Dec 31, 2024)
• 90,079,781 — Common Stock Shares Outstanding (As of November 7, 2025)
• $3.141M — Interest Income (Q3 2025) (Increased from $3.088M in Q3 2024)
• $10.046M — Stock-based compensation expense (YTD Sep 2025) (Decreased from $12.606M in YTD Sep 2024)
• $161.9M — Net proceeds from September 2024 financing (After deducting underwriting discounts and commissions and offering expenses)

Key Players & Entities

• Terns Pharmaceuticals, Inc. (company) — clinical-stage oncology company
• Cowen and Company, LLC (company) — sales agent for at-the-market offering
• TD Securities (USA) LLC (company) — successor sales agent for at-the-market offering
• Nasdaq Global Select Market (regulator) — exchange where TERN common stock is registered
• Securities and Exchange Commission (regulator) — filing oversight body
• Delaware (regulator) — state of incorporation
• Terns Pharmaceutical HongKong Limited (company) — wholly owned subsidiary
• Terns, Inc. (company) — wholly owned subsidiary
• Terns China Biotechnology Co., Ltd. (company) — wholly owned subsidiary in Shanghai, PRC
• Terns (Suzhou) Biotechnology Co., Ltd. (company) — wholly owned subsidiary in Suzhou, PRC

FAQ

Risk Factors

• Continued Net Losses and Need for Future Financing [high — financial]: The company reported a net loss of $24.635 million for Q3 2025, an increase from $21.945 million in Q3 2024. For the nine months ended September 30, 2025, the net loss widened to $72.636 million. This sustained unprofitability indicates a significant ongoing need for capital to fund operations and clinical development.
• Declining Cash and Current Assets [medium — financial]: Cash and cash equivalents decreased to $150.698 million as of September 30, 2025, from $161.439 million at December 31, 2024. Total current assets also fell to $300.295 million from $362.109 million. This trend suggests a burn rate that is outpacing cash generation and may necessitate future financing rounds.
• Increased Research and Development Expenses [medium — operational]: R&D expenses surged by 31.3% to $19.917 million in Q3 2025, up from $15.169 million in Q3 2024. While this reflects investment in the oncology pipeline, it also contributes to the widening net loss and increases the company's cash burn.
• Clinical Trial and Regulatory Approval Risks [high — regulatory]: As a clinical-stage biopharmaceutical company, Terns is subject to extensive regulatory review by bodies like the FDA. Delays in clinical trials, failure to demonstrate safety and efficacy, or adverse regulatory decisions could significantly impact the company's ability to bring its products to market.
• Competition in Oncology Market [medium — market]: The oncology therapeutic area is highly competitive, with numerous established and emerging companies developing novel treatments. Terns faces the risk that competitors may develop superior or more effective therapies, or gain market exclusivity.

Industry Context

Terns Pharmaceuticals operates in the highly competitive biopharmaceutical sector, specifically focusing on oncology. This industry is characterized by long development cycles, significant R&D investment, and stringent regulatory oversight. Success hinges on innovation, clinical trial outcomes, and the ability to navigate complex regulatory pathways to bring novel therapies to market.

Regulatory Implications

As a clinical-stage biopharmaceutical company, Terns is subject to rigorous scrutiny from regulatory bodies like the FDA. Any setbacks in clinical trials, manufacturing issues, or failure to meet efficacy and safety standards can lead to significant delays or outright rejection of drug candidates, impacting future revenue potential.

What Investors Should Do

1. Monitor R&D progress and clinical trial updates closely.
2. Assess the company's cash burn rate and runway.
3. Evaluate competitive landscape and market potential for Terns' drug candidates.
4. Watch for any announcements regarding future financing activities.

Key Dates

• 2025-09-30: End of third quarter 2025 — Reporting period for the latest financial results, showing increased net loss and R&D investment.
• 2024-09-30: End of third quarter 2024 — Prior year comparable period for financial results, showing a smaller net loss and lower R&D expenses.
• 2024-12-31: End of fiscal year 2024 — Reference point for cash and current asset balances at the beginning of the current fiscal year.
• 2025-11-07: Common stock shares outstanding reported — Provides the latest share count for potential per-share metric calculations and market capitalization.

Glossary

Net Loss

The amount by which total expenses exceed total revenues over a specific period. (Indicates the company's profitability, with Terns reporting increasing net losses.)

Research and Development Expenses

Costs incurred in the process of discovering, designing, and developing new products or improving existing ones. (A significant expense for Terns, reflecting investment in its drug pipeline, and a key driver of its net loss.)

Cash and Cash Equivalents

Highly liquid investments with maturities of three months or less from the date of purchase. (Represents the company's most liquid assets available for immediate use, crucial for funding operations.)

Current Assets

Assets that are expected to be converted to cash or consumed within one year or the operating cycle, whichever is longer. (Indicates the company's short-term financial health and liquidity.)

Stock-based compensation expense

The cost of equity instruments (like stock options or restricted stock units) issued to employees and others, recognized over the vesting period. (A non-cash expense that impacts net income, which decreased year-over-year for Terns.)

Year-Over-Year Comparison

Compared to the prior year's comparable period, Terns Pharmaceuticals has seen a widening net loss, with Q3 2025 losses at $24.635 million versus $21.945 million in Q3 2024. This is largely driven by a significant 31.3% increase in Research and Development expenses to $19.917 million, reflecting continued pipeline investment. While General and Administrative expenses saw a decrease, the overall financial picture indicates increased operational costs associated with advancing its drug candidates. The company's cash position has also declined, necessitating careful monitoring of its financial runway.

Key Financial Figures

• $0.0001 — nge on which registered Common Stock, $0.0001 par value per share TERN The Nasdaq

Filing Documents

• tern-20250930.htm (10-Q) — 2351KB
• tern-ex31_1.htm (EX-31.1) — 18KB
• tern-ex31_2.htm (EX-31.2) — 18KB
• tern-ex32_1.htm (EX-32.1) — 10KB
• tern-ex32_2.htm (EX-32.2) — 10KB
• 0001193125-25-274367.txt ( ) — 9841KB
• tern-20250930.xsd (EX-101.SCH) — 1341KB
• tern-20250930_htm.xml (XML) — 1991KB

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 20 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 27 Item 4.

Controls and Procedures

Controls and Procedures 27 PART II. OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 28 Item 1A.

Risk Factors

Risk Factors 28 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 32 Item 3. Defaults Upon Senior Securities 32 Item 4. Mine Safety Disclosures 32 Item 5. Other Information 32 Item 6. Exhibits 33

Signatures

Signatures 34 ii

—FINANCI AL INFORMATION

PART I—FINANCI AL INFORMATION

Condensed Consolidated Financi al Statements (Unaudited)

Item 1. Condensed Consolidated Financi al Statements (Unaudited). Terns Pharmaceuticals, Inc. Condensed Consolida ted Balance Sheets (Unaudited; in thousands, except share and per share data) September 30, 2025 December 31, 2024 Assets Current assets: Cash and cash equivalents $ 150,698 $ 161,439 Marketable securities 144,937 196,725 Prepaid expenses and other current assets 4,660 3,945 Total current assets 300,295 362,109 Property and equipment, net 59 222 Operating lease assets 938 1,248 Other assets 359 350 Total assets $ 301,651 $ 363,929 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 2,946 $ 2,148 Accrued expenses and other current liabilities 11,982 13,074 Current portion of operating lease liabilities 459 428 Total current liabilities 15,387 15,650 Taxes payable, non-current 1,628 1,490 Operating lease liabilities, non-current 570 919 Total liabilities 17,585 18,059 Commitments and contingencies Stockholders' equity: Common stock, $ 0.0001 par value, 150,000,000 shares authorized at September 30, 2025 and December 31, 2024; 87,511,470 and 87,126,583 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively 9 9 Additional paid-in capital 778,065 767,621 Accumulated other comprehensive income (loss) 109 ( 279 ) Accumulated deficit ( 494,117 ) ( 421,481 ) Total stockholders' equity 284,066 345,870 Total liabilities and stockholders' equity $ 301,651 $ 363,929 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 1 Terns Pharmaceuticals, Inc. Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited; in thousands, except share and per share data) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Operati

View Full Filing

View this 10-Q filing on SEC EDGAR