Overview
Leerink Partners has initiated coverage of Terns Pharmaceuticals (NASDAQ:TERN) with an Outperform rating and a $58.00 price target. At the time referenced by the research, Terns shares were trading at $37.77, leaving the analyst target representing approximately 61% potential upside from that level. The stock has posted a notable 743% return over the past year, according to InvestingPro data.
Clinical thesis
Leerink highlighted TERN-701, the company’s next-generation allosteric BCR::ABL1 inhibitor in development for chronic myeloid leukemia (CML). The research firm emphasized that the drug builds on the clinical and commercial precedent set by allosteric inhibition in CML, pointing to Novartis’s Scemblix (asciminib) as a relevant comparator. Leerink cited early Phase 1 data from the CARDINAL trial indicating TERN-701 may offer a best-in-class profile, with higher molecular response rates and a clean safety profile that could enable deeper and more durable target suppression.
The analyst view places the greatest value on the frontline CML setting, which Leerink estimates as a $4.8 billion opportunity. The firm also projects an additional $1.4 billion in potential peak revenues from second-line and later uses.
Commercial context and comparators
Leerink noted the commercial success of Scemblix, which InvestingPro data shows was on a $1.6 billion run rate as of the fourth quarter of 2025. The research team used that established adoption of targeted therapy in the CML market as a backdrop for assessing TERN-701’s commercial potential.
Financial position and market metrics
Terns carries a market capitalization of $4.11 billion. The company was not profitable over the last twelve months. InvestingPro data cited by Leerink shows a current ratio of 19.52, indicating liquid assets substantially exceed short-term obligations. The stock’s beta is listed as -0.29, suggesting it has historically exhibited movements that often oppose the broader market direction.
Supporting analyst sentiment and targets
Leerink’s $58 target sits among a range of analyst views. InvestingPro indicates a high analyst target of $70. William Blair has reiterated an Outperform rating, underscoring the clinical activity of TERN-701 in CML. Citizens raised its price target to $57 while maintaining a Market Outperform rating. Jefferies also lifted its target to $70, citing positive Phase 1 data. Leerink’s initiation adds to this cluster of bullish assessments.
Clinical data detail
Phase 1 results cited by multiple analysts show a major molecular response rate of 64% for TERN-701, compared with a 24% rate for Novartis’s Scemblix in similar early-stage results. Those figures were referenced in analyst commentary when assessing the potential clinical differentiation of TERN-701.
Recent corporate actions
Terns recently completed a public offering that raised $747.5 million by selling 18,687,500 shares of common stock at $40.00 per share. The company also amended a license agreement with Hansoh, affecting rights to TERN-701 for oncology indications in territories including mainland China and Taiwan.
Conclusion
Leerink’s initiation underscores Terns’s high-profile position in the CML drug development landscape, driven by the early clinical profile of TERN-701, robust liquidity metrics, and recent capital markets activity. The initiation complements other firms’ bullish assessments while the company remains unprofitable on a trailing-twelve-month basis. The ultimate commercial outcome will depend on continued clinical progress and regulatory and market dynamics.