Terns Pharmaceuticals (TERN): Valuation Check After Strong CARDINAL Trial Data for CML Candidate TERN-701

Terns Pharmaceuticals (TERN) just paired upbeat CARDINAL trial data for its CML candidate TERN-701 with aggressive financing moves, including a $650 million follow on equity raise, reshaping both its balance sheet and growth runway.

See our latest analysis for Terns Pharmaceuticals.

The CARDINAL data and follow on raises land on top of a huge run, with a roughly 95 percent 1 month share price return and a 547 percent 1 year total shareholder return signaling powerful, still building momentum around Terns growth story and perceived risk profile.

If this kind of clinical driven surge has your attention, it could be a good moment to explore other discovery stage names in healthcare stocks for fresh biotech and healthcare ideas.

With shares already up more than fivefold in a year and fresh cash from equity raises, are investors still underestimating the upside from TERN-701 and the broader pipeline, or is the market now fully pricing in future growth?

Price to Book of 16.5x: Is it justified?

Terns Pharmaceuticals last closed at $44.01, and on a price to book basis the market is assigning it a premium valuation versus peers.

The price to book ratio compares the company’s market value to its net asset value. It is a common yardstick for early stage, loss making biotech names with little or no revenue.

At 16.5 times book value versus 2.5 times for the broader US pharmaceuticals industry and 7.4 times for its immediate peer set, investors appear to be focusing on Terns pipeline potential and recent trial momentum, rather than its current balance sheet.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price to Book of 16.5x (OVERVALUED)

However, setbacks in TERN-701 trials or slower progress across its early stage obesity and MASH programs could quickly cool sentiment and compress valuations.

Find out about the key risks to this Terns Pharmaceuticals narrative.

Build Your Own Terns Pharmaceuticals Narrative

If you see things differently or want to stress test your own assumptions, you can build a personalized Terns narrative in just minutes: Do it your way.

A great starting point for your Terns Pharmaceuticals research is our analysis highlighting 5 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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