Terns Pharmaceuticals, Inc. (TERN) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the Terns Pharmaceuticals TERN-701 December 2025 Data Update Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Amy Burroughs, Chief Executive Officer. Please go ahead. Thank you so much, operator.

Thank you so much, operator. Good afternoon, everyone. I'm Amy Burroughs, Chief Executive Officer of Terns Pharmaceuticals. On behalf of the Terns team, I thank you for joining us today to talk about the unprecedented efficacy and safety data to date for TERN-701, our investigational next-generation oral allosteric BCR-ABL inhibitor that's being evaluated for the treatment of chronic myeloid leukemia or CML. We will discuss the data supporting TERN-701's potential best-in-disease profile, key benchmarks across the CML landscape and next steps for TERN-701 as we progress rapidly for its pivotal trial readiness. Whether or not you listen to Dr. Jabbour's ASH presentation here in Orlando, we will be providing a comprehensive view and take more time to go through some of the details. You will find the slides from both presentations on our website. Before we begin, let me draw your attention to the fact that throughout the course of today's program, we will be making forward-looking statements. I invite you to our SEC quarterly and annual filings to review our forward-looking statements, disclaimers and important risk factors. Finally, please note this webinar is for informational and educational purposes only and is not intended for the media. Joining me on today's call are Emil Kuriakose, Chief Medical Officer; and Scott Harris, Chief Development Officer at Terns. I would like to acknowledge the great execution by Emil, Scott and their teams, enrolling more than 85 patients in the trial in under 2 years is a reflection on their work and the potential that the community sees in TERN-701. As you can see from the agenda, the 3 of us will take you through the details for the TERN-701 data cut, provide benchmarks and discuss why this could be so impactful for the treatment of CML. For those who are newer to CML, let's briefly recap the landscape and latest developments. CML is a chronic disease where most patients require lifetime therapy. In 2001, the introduction of Imatinib, a first-generation active site tyrosine kinase inhibitor, also called a TKI, transformed CML from a life-threatening cancer to a chronic disease. Yet despite the impact of Imatinib and the subsequent approval of multiple improved second-generation active site TKIs, there remains a significant unmet need for better efficacy, safety and tolerability. Approximately 40% of CML patients on these active site TKIs switch therapy within 5 years due to lack of sufficient treatment response or side effects. Active site TKIs are associated with a variety of serious adverse events due to off-target effects, including pleural effusion and life-threatening cardiovascular issues. Emerging scientific and real-world evidence supports the idea that Allosteric TKIs offer the opportunity to once again transform the CML standard of care. Novartis' asciminib is the first Allosteric BCR-ABL inhibitor approved to treat CML and has demonstrated meaningful improvements on efficacy, safety and tolerability over the active site TKIs. Asciminib has had a substantial and rapid uptake in the market since approval, including 22% share in frontline in the U.S., only 3 quarter back to launch and over 50% of new-to-brand share across second and third lines of treatment. Based on these results, Novartis recently revised their peak sales estimate for asciminib significantly upwards, bringing the total to more than $4 billion. Historically, new therapies in CML that have raised the bar on efficacy and/or safety have taken more than half the market, even in the presence of effective generic therapies. Based on our clinical results thus far, we think that TERN-701 could build on the emerging data that Allosteric TKIs are safer and more effective class of therapy for the treatment of CML and has the potential to be the next CML therapy to raise the bar and generate meaningful uptake in the market. To assess efficacy in CML, we look at major molecular response or MMR, a measure of improvement in disease burden that is the primary endpoint in CML clinical trials. In the asciminib frontline trial, 32% of patients did not reach MMR at 48 weeks. In the trials of the second and third-line settings, 57% and 75% of patients did not reach MMR at 24 weeks, respectively. The label also highlights the risk of pancreatic toxicity and hypertension. Another issue specific to asciminib is that dosing with food drives a 60% reduction in AUC plasma exposure. To avoid this, patients must fast for 3 hours around dosing, which is a significant challenge and a factor in rates of noncompliance and adherence, which could impact efficacy. The team at Terns understands the science of Allosteric BCR-ABL inhibitors well and our founding scientists designed TERN-701 from the outset to be a better next-generation Allosteric that could lead to meaningful improvements for people living with CML. Our goal for TERN-701 is to be the best-in-disease therapy by improving upon the best in CML. In today's presentation, we will highlight data that demonstrates the meaningful advantages of 701 in efficacy, safety and convenience. On the efficacy front, the results are unprecedented, including 75% MMR and 36% deep molecular response by 24 weeks at our recommended Phase II dose range of 320 milligrams and above. These results reinforce the broad, deep and fast response kinetics of TERN-701. Building on data we presented last year, Emil will provide more data on clinical response in patients who failed due to efficacy with agents such as asciminib, Imatinib and ELVN-001. Moving to safety. We continue to see a very encouraging profile with most treatment-emergent adverse events being low grade and all Grade 3 adverse events less than 10%. Importantly, we do not see any signs of pancreatic toxicity or clinically significant blood pressure changes. On convenience, we continue to dose once daily without regard to food. Today's data show that TERN-701's 24-week MMR achievement rate has been maintained in this expanded data set and is trending 3x higher than asciminib when looking at the TERN-701 doses that we are taking forward in development of 320 milligrams and above. Our deep molecular response rates are also higher than those achieved with asciminib, which is important as we progress to evaluating TERN-701 in frontline patients. DMR is a treatment goal for many frontline patients seeking a rapid, durable, deep molecular response that could allow them to discontinue treatment and be functionally cured of their CML. With that introduction, let me turn it over to our Chief Medical Officer, Emil Kuriakose to take you through the data in detail.

Thanks, Amy. Slide 10 shows a summary of the key highlights of the data we showed today at ASH. Building on what Amy said, TERN-701 is showing an overall efficacy and safety profile in this Phase I study that supports the best-in-disease profile. First, the CARDINAL Phase I study enrolled a predominantly third-line plus patient population, a small refractory compared to the Phase I and III study populations for asciminib. Since nearly 40% of patients in CARDINAL had prior asciminib with 75% of those having discontinued asciminib due to lack of efficacy. In the refractory population, we see an unprecedented 64% MMR achievement by 24 weeks across all TERN-701 doses and 75% MMR achievement in patients at the higher doses of 320 milligrams and above. And looking at key difficult-to-treat sub groups, we see compelling 24-week MMR achievement rates of 43% and 50% in prior asciminib and prior asciminib, Imatinib and/or investigational TKI-treated patients, respectively. We see a favorable safety profile for TERN-701 with no DLTs in escalation and no MTD identified. Majority of adverse events are low grade with all grade [indiscernible] being less than 10%. Importantly, we don't see pancreatic toxicity or clinically significant changes in blood pressure across the dose range evaluated. Enrollment to the Phase I study has further accelerated since September with more than 85 patients currently enrolled. This slide shows the study schema. The CARDINAL study is a two-part multicenter global study of TERN-701 in previously treated patients with chronic-based CML. Part 1 is a dose escalation of TERN-701 dosed from 160 to 500 milligrams once daily followed by Part 2, which is a randomized dose expansion of 2 doses selected from Part 1 based on safety, efficacy and PK data. Eligible patients for Part 1 must have had 2 or more TKIs, and or have failed the 2G TKI in the front line and may have T315I or non-T315I-mutated CML. Our 2 enrolled patients who have failed at least one prior TKI and enrolls only non-T315I-mutated CML. While the initial protocol enrolled prior asciminib intolerant patients, protocol was amended during Part 1 to allow both prior asciminib failure and intolerance. Patients with known Myristate pocket resistance mutations are excluded. 63 patients were enrolled to the study as of September 13, 2025 data cutoff date used for the ASH presentation. Let's review how molecular response is assessed in CML and define some key terms. First, as shown on the left, molecular response is defined as a decrease in the levels of BCR-ABL mRNA assessed by RTPCR in peripheral blood, measured as a percentage on a standardized log scale. BCR-ABL less than 0.1% is major molecular response or MR3, which is the regulatory approval endpoint in pivotal studies. In Phase I studies, patients with or without baseline MMR can enroll. Those without baseline MMR enroll because of treatment failure or intolerance to their TKI and those with baseline MMR are better generally enrolled due to TKI intolerance. The treatment goal in patients without baseline MMR is to achieve MMR, while the goal in those with MMR is to maintain a durable MMR. The 3 defined clinical endpoints to assess MMR in Phase I studies, as shown on the right, are MMR achieved MMR maintained and the sum of the 2, which is the overall MMR. MMR achievement rate at 24 weeks is the key metric as it is the approval endpoint for pivotal studies in relapsed refractory CML. Baseline demographics of patients enrolled to the CARDINAL study as of the data cutoff are shown here. Patients generally had high baseline disease burden with 57% of patients having a baseline transcript above 1% and 44% with a transcript greater than 10%. 82% did not have MMR at baseline. 64% of patients discontinued their prior TKI due to lack of efficacy as defined by ELN2020 criteria and 29% discontinued due to lack of tolerability. Patients have received a median of 3 prior TKIs with 60% having received 3 or more prior therapies. 38% and 22% of patients had prior asciminib and/or ponatinib, respectively, with more than 70% of these patients stopping these TKIs due to lack of advocacy. Finally, 15% of patients had a single BCR-ABL resistance mutation at baseline and no patients had compound mutations. On treatment disposition, 87% of patients remain on treatment with a median duration of 6.1 months and a maximum duration of up to 1.5 years of the 8 patients who discontinued treatment, 4 were due to treatment failure, 1 was due to the AE of Grade 2 diarrhea fatigue and joint pain, which had also occurred on their prior TKIs, including dasatinib and asciminib. Building on the early data from dose escalation that we presented a year ago, TERN-701 continues to show an encouraging overall safety profile with substantially more patients enrolled and a median treatment duration of 6 months. There were no DLTs observed in dose escalation and an MTD was not reached, only the one patient that I discussed on the previous slide discontinued due to an adverse event. This slide shows hematologic adverse events occurring in more -- 10% or more patients. The incidence of cytopenia was overall low with less than 10% Grade 3 thrombocytopenia and neutropenia. Additionally, cytopenias did not show any apparent dose relationship. This is particularly noteworthy in a heavily pretreated patient population with high disease burden were generally more prone to cytopenias and compares favorably with other studies in this patient population. Moving on to non-hematologic adverse events occurring in 10% or more patients. We see that the majority of nonhematologic AEs were also low grade with no apparent dose relationship. Of note, there was no clinical pancreatitis or symptomatic lipase elevations of any grade, which is a notable emerging difference from asciminib, which had several DLTs of Grade 3 lipase and clinical pancreatitis in Phase I and a significantly increased risk of Grade 3 lipase elevations with higher exposures based on a recently published exposure safety analysis in chronic-based CML patients. In addition, we also don't see a safety signal with regard to hypertension with TERN-701, which is another adverse event for asciminib that's listed under the label warnings and the questions. TERN-701 showed no clinically significant changes in blood pressure across the dose range evaluated. Here, we focus in on Grade 3 or higher hematologic and non-hematologic AEs seen in more than one patient. Using this stringent cutoff, we see that Grade 3 or higher AEs were all less than 10% in incidents, with cytopenias being most common, as expected in a heavily pretreated refractory CML population. Again, we do not see a dose relationship with these great hematologic AEs. Notably, no Grade 3 or higher nonhematologic adverse event occurred in more than one patient, suggesting no clear association between 701 in any specific non-hematologic AE. There was one case of Grade 3 peripheral vascular ischemia of the foot at the 320-milligram dose in a patient with T315I-mutated CML. The patient had a 5-year history of peripheral vascular disease that developed, while on chronic therapy with ponatinib, which was their last TKI. The AE, which occurred 2 months after ponatinib discontinuation was considered unrelated to treatment by the investigator in light of his preexisting peripheral vascular disease and recent long-term ponatinib treatment. Before we move on to efficacy data, this explains the efficacy evaluability criteria for the endpoint of MMR by 24 weeks. The key takeaway is that we use the same efficacy evaluability criteria that was used in the asciminib Phase I study. Specifically, the efficacy evaluable set includes patients without T315I or atypical BCR-ABL medicine at least one of the criteria shown in the box. Based on these criteria, 38 patients were evaluable for MMR by 24 weeks as of the data cutoff date. While the small number of T315I mutated patients are not included in the efficacy valuable set, we are seeing encouraging early activity with achievement of MR1 and MR2 in prior TKI resistant patients, most of whom are enrolled at the low and mid doses of 160 and 320 milligrams. Two patients at the top doses of 400 and 500 milligrams have not been on treatment long enough to be efficacy valuable. We are currently adding to the study a separate mutation-specific cohort at the 500-milligram dose to better assess efficacy in T315I and other resistance mutations for which preclinical data indicate that higher doses are likely required to drive deeper responses. This slide highlights the unprecedented rates of molecular response we're seeing with TERN-701 in a refractory Phase I patient population. As of the September data cut, we see an MMR achievement by 24 weeks of 64% or 18 out of 28, which is unchanged from the earlier ASH abstract data cut in June with 6 additional patients becoming efficacy valuable between the 2 data cuts. No patients lost MMR as of the data cutoff. Shown on the right are the deep molecular response and MR2 rates, we see a 29% DMR achievement by 24 weeks, which is trending approximately 2x higher than the DMR seen in the asciminib Phase I study. Finally, MR2 achievement is 59%, demonstrating that TERN-701 has compelling efficacy across all key measures of molecular response. This slide shows a comprehensive view of the responses in all evaluable patients using the molecular response shift table. The highlighted box shows the 64% or 18 out of 28 patients without baseline MMR, who achieved MMR or better by 24 weeks. There are 3 key takeaways from this shift table. First, 100% of patients maintained or improved their molecular response from baseline, with nearly 75% or 28 out of 38 of patients improving molecular response from baseline. Second, we see MMR achievement across all baseline transcript categories, including nearly half of patients in the highest baseline transcript category of greater than 10%. Third, it's worth noting that responses continue to deepen beyond MMR, to MR4 and MR5, regardless of baseline transcript. Achievement of such deep levels of molecular response in relapsed/refractory patients within a timeframe of 24 weeks, clearly demonstrates the potency and fast response kinetics of TERN-701. It's also important to look at MMR rates in key patient subgroups, particularly noteworthy are the 63% MMR achievement in patients with lack of efficacy to prior TKI, 43% achieved in prior asciminib-treated patients and 50% MMR achieved in patients with prior asciminib, ponatinib and/or ELVN-001. The data presented on both these slides indicates that the 64% MMR rate observed for TERN-701 includes responses from patients with a wide range of baseline disease burden different outcomes to their last TKI treatment and various types of TKIs used. Now let's take a closer look at the subgroup of patients who received prior asciminib. Here, we show a detailed breakdown of the 10 MMR evaluable patients who received prior asciminib. These are patients with very difficult-to-treat disease, as half of them had also received prior ponatinib and/or ELVN-001 and 60% had discontinued asciminib due to lack of efficacy, as shown at the top bar of the figure. Of the 10 patients with prior asciminib, 7 did not have baseline MMR of whom 6 had lack of efficacy to asciminib and 1 intolerance. 2 out of 6 or 33% of the patients with lack of efficacy to prior asciminib achieved MMR on TERN-701 by 24 weeks, as did the 1 patient with prior asciminib intolerance, resulting in 3 out of 7 or 43% MMR achievement in this difficult-to-treat subgroup. 7 of the 10 patients, including all MMR achievers remain on treatment with TERN-701 as of the data cutoff date. Although, not shown on this slide, we also see meaningful activity in patients with lack of efficacy on prior ponatinib. Specifically, of the 3 evaluable patients with prior ponatinib failure, 1 achieved MR2 and 1 achieved MMR by 6 months and both remain on treatment. Additionally, we see a 50% MMR achievement in the overall subgroup of patients who received prior asciminib, ponatinib and/or ELVN-001 with details shown in the appendix section of this presentation. Now let's look at the clinical [indiscernible] of the 2 patients with lack of efficacy on asciminib who achieved MMR on TERN-701. This demonstrate rapid MMR achievement with TERN-701 in a patient with F317L-mutated CML with high baseline transcript following treatment failure on both asciminib and ELVN-001. Patient is an 80-year old male with an approximately 5-year history of CML. After 2 lines of therapy with Imatinib and dasatinib, respectively, he was switched to asciminib as third-line therapy due to intolerance on dasatinib. As shown in the figure, we achieved the best response of MR4 on asciminib, but then have lack of efficacy with a steady loss of response with transcript levels rising above 10% despite asciminib doses of up to 80 milligrams BID, which is twice the approved dose. The patient also had intolerance with likely salvations. Mutation testing at this time showed a new F317L mutation. We then enrolled in the Phase I trial of ELVN-001 at a dose of 60 milligrams BID, but had treatment failure with transcript levels continuing to rise after almost a year on treatment. At which point, we discontinued and enrolled to the TERN-701 CARDINAL Phase I study at the dose of 500 milligrams Q daily. The F317L mutation was still present with the 100% mutant to native BCR-ABL ratio on central testing. The patient rapidly achieved MMR on TERN-701 within the first 4 cycles and continues to deepen response on treatment with good tolerability. This response is especially compelling because the F317L mutation is among the group of well-characterized non-Myristate pocket mutations in the kinase domain that confers resistance to asciminib preclinically and clinically. TERN-701 demonstrated greater potency against F317L preclinically and as shown by this anecdote, appears to rescue F317L resistance to asciminib in the clinic as well, suggesting there may be intrinsic differences versus asciminib in the way TERN-701 binds to the Myristate pocket to an activate BCR-ABL. This shows a clinical vignette for the second patient with prior asciminib who achieved MMR. This is a 44-year-old male with a 20-plus year history of CML, who also started asciminib as third-line treatment after developing pulmonary hypertension on second-line dasatinib. The patient was in DMR at the time he started asciminib, but developed dyspnea and at subsequent loss of response on treatment since he could not tolerate more than 40 milligrams daily of asciminib. He was briefly switched back to Imatinib on which dyspnea also occurred with additional rise in transcripts. At this point, he enrolled in the TERN-701 study at a dose of 500 milligrams. On TERN-701, you rapidly attained a deep molecular response of MR4 within 6 months with good tolerability and remains on treatment. This is an example of how better tolerability and higher target coverage of asciminib may be driving faster and deeper molecular responses. Now I'm going to shift gears and talk about the data with the 53 patients who have been dosed in our expansion dose range of 320 milligrams and above. As shown here, the baseline characteristics of all patients treated at the dose range of 320 milligrams and above were similar to the patients enrolled at all doses. Notably, 56% had a baseline transcript greater than 1%. Nearly 70% discontinued their last TKI due to lack of efficacy and almost 40% at prior asciminib. We see even higher rates of MMR, DMR and MR2 by 24 weeks at doses of 320 milligrams and above compared to all doses. With an MMR achievement of 75%, DMR achievement of 36% and MR2 achievement of 62%. The overall safety profile, combined with the trend towards dose-related increase in response supported selection of the 320 and 500 milligrams as RP2D for expansion. We will use the data firm expansion to choose 1 of these 2 doses for the pivotal studies. On Slide 28, looking at the molecular response shift table for patients at doses of 320 milligrams and above, we again see MMR achievement across all baseline transcript categories, with a higher MMR achievement within each baseline category compared to the previous shift table showing all doses. Notably, 55% of patients with baseline greater than 10%, 50% with baseline MR1 and 100% of patients with baseline MR2 get to MMR or deeper by 24 weeks. We see DMR achievement across the spectrum of baseline transfers, with patients across every baseline category, attaining responses as deep as MR5, which is noteworthy in this refractory patient population. With that, let me turn it over to Scott to put these numbers in context, discuss how they compare to other TKIs and outline the next anticipated steps pre-development.

Thanks, Emil. Before I get into benchmarking, I'd like to briefly remind you that the CARDINAL study is enrolling a more difficult-to-treat population compared to the asciminib Phase I study. While both studies enrolled predominantly third-line plus patients with prior Imatinib, 2G TKI and/or ponatinib failures, a key difference is that CARDINAL also enrolls patients who had asciminib as well. Since asciminib is the most important benchmark for TERN-701, the higher responses seen with TERN-701 in an asciminib pretreated patient population compared to what asciminib showed in an allosteric-naive population, make these efficacy data especially compelling as we'll show in the next few slides. Let's look at TERN-701 in context of both asciminib trials in frontline patients and the recent Phase I data from ELVN-001. I will note that ELVN is enrolling a contemporaneous and comparable patient population at many of the same sites. On the dimensions of major molecular response, deep molecular response and MR2 achievement, TERN-701 has shown the highest responses seen across these 3 studies. As Amy mentioned in the opening, MMR at our doses of 320 milligrams and above, are at least 2 to 3x higher than all other therapies on the market or in development. Deep molecular response, a higher level of response than MMR is multiple times higher than what asciminib showed an incomparable refractory population. While the DMR rate for ELVN-001 has not yet been disclosed, we can note that TERN-701 DMR rate of 36% exceeds the ELVN-001 MMR rate of 32% by 6 months. MR2, an important clinical objective for refractory CML patients that has been shown to impact long-term survival is also meaningfully higher than our peers. Let's dive deeper into TERN-701 compared to asciminib the current Allosteric benchmark and best in disease therapy approved in CML today. Here, you can see the magnitude of the MMR achievement differential over asciminib. Beyond the headline numbers of 75% and 64% MMR achievement, the lower bound of our 95% confidence interval for both TERN-701 groups exceeds the MMR achievement rates for asciminib in both the Phase I and Phase III trials. You may also note that the MMR achievement rates of asciminib and respective confidence intervals held fairly steady between Phase I and Phase II. We think this is a strong leading indicator of clinical read-through for TERN-701 data as we move into pivotal studies. Now I'd like to share another aspect of our data, looking at MMR achievement rates across different baseline BCR-ABL levels. TERN-701's impressive MMR achievement rates can be seen across the full range of baseline transcript levels for patients not in MMR study entry. We know that a higher baseline disease burden generally leads to lower response rates as seen with asciminib. TERN-701 is achieving MMR at high rates across all baseline transcript levels and in each category exceeding that achieved by asciminib in their Phase I study. With these data in hand, we are well positioned to drive towards multiple exciting catalysts in 2026. Next year, we expect to share expanded longer-term data from the CARDINAL study, use that data to select a dose either 320 or 500 milligrams for pivotal studies and gain regulatory feedback as part of our end of Phase II meeting. These are the key steps ahead of us before moving into 2 staggered parallel pivotal studies in second line plus and frontline CML. And with that, I'll turn it back to Amy for a brief update on the CML landscape and conclusions.

Thank you, Scott. Before I move to the next section. Let's spend a few moments on the shifting trends in the CML treatment landscape, especially as we think about TERN-701 coming to market. At high level, CML is a disease where one wants to use the most effective therapy upfront. Faster and deeper the molecular response the more likely the chance that a CML patient could be cured of their CML or successfully remain on frontline therapy for life. For many patients, physicians also need to think carefully about the safety profile. Data factors such as comorbidities or age, given the young patients could be on a CML therapy for many decades. CML patients have a similar life expectancy to the general population after adjusting for age and comorbidities. So the treatment aims primarily to enhance safety, tolerability, molecular response and quality of life by the [indiscernible] survival. If patients do progress from the front line, these clones can evolve and make the disease more difficult to treat and functional cures are generally no longer a treatment goal. We see TERN-701 primarily as a front and second line therapy, where it can provide the most benefit for patients. There are approximately 17,000 new patients annually in G7 nations. Historically, about 50% of patients on first- and second-generation active site inhibitor, have progressed to second line due to efficacy and/or tolerability issues. Only a small minority of patients failed treatment due to resistance mutations. We expect that the number of treated patients and duration of therapy in early lines will grow with adoption of Allosteric that offer better efficacy, safety and tolerability. Today, there are 7,000 patients switching from first line to second line therapy in the G7 every year. Most of these will be from generic active site inhibitors and some will be from Allosterics. In the asciminib frontline trial, there was a switch rate of 13% in the first year, with only 2.5% switching due to a mutation in the Allosteric binding pocket that might support a switch to an active site. In this data set that TERN-701 has demonstrated responses in patients who have failed asciminib and shown that it could be a best-in-disease therapy option for both frontline patients and second-line patients, regardless of whether they are switching from an active site inhibitor or asciminib. Based on these results, including our 64% MMR achievement rate at all doses, 75% MMR and 36% DMR in our go-forward dose ranges of 320 milligrams and higher, we have clear indications that 701 has the potential to be a best-in-disease therapy for CML. We are also very pleased with the continued positive results related to safety and tolerability with the majority of treatment-emergent adverse events being low grade, Grade 3 adverse events all under 10% and no pancreatic toxicity or clinically significant change in blood pressure. Enrollment continues at a rapid pace and has accelerated as this data has emerged in the investigator community over the last several months with more than 85 patients currently enrolled in the trial. Finally, we are excited to shift our focus towards multiple important catalysts next year, including sharing expanded longer-term CARDINAL data, selecting a single dose for pivotal trials and gaining regulatory alignment on the design that enables us to quickly start the studies. Importantly, we want to thank the patients who have enrolled in the CARDINAL trial and the staff at dozens of clinical sites around the world who are participating in the study without you and our incredible team at Terns this community could not explore the possibility of again raising the bar for people living with CML. Now I'd like to ask the operator to open the line for questions.

[Operator Instructions] Our first question comes from the line of Akash Tewari of Jefferies.

This is Zaki on for Akash. Congrats on the full data. So just number one, can you update us on your latest thinking around running a frontline trial in terms of the design. It seems like with the 75% MMR achieved at the go-forward dose you could comfortably run head-to-head versus asciminib rather than just doing investigators choice TKI as a competitor? And then number two, just heading into next year, you're meeting with FDA on dose escalation. I would love to know kind of what more data you need or additional analyses are needed to be comfortable presenting the 320 and 500-milligram doses to the FDA?

Yes. Thanks so much, Zaki. I'm going to have Scott actually answer the second question, and Emil will answer the first.

Okay. So regarding the question around the frontline study, Zaki, we don't think there's any regulatory requirement to have asciminib in the control arm. But to your point, these numbers specifically, the 75% MMR achievement at the RP2D dose range, clearly give us confidence that there's a high probability of success. If we did have asciminib in the control arm, and we can certainly consider that going forward, and we'll be thinking about with our clinical advisers as well as we move forward into next year.

Yes, Zaki, as far as your second question on dose selection, so we are still actively enrolling in both arms and dose expansion at the 320 and 500-milligram dose levels. once we feel that we have sufficient data at each of those dose levels, we will be -- this is a satisfied Project Optimus requirement. Once we feel comfortable that we have an update to support dose selection that's when we would move forward with requesting end of Phase II meeting with the FDA.

Our next question comes from the line of Ritu Baral of TD Cowen.

Congrats on today's data and the reception at ASH. How are you guys thinking about further interrogating the [ Asciminib ] resistant population going forward even before the Phase III? You had one protocol amendment. Would you consider looking at pocket mutation patients and other sort of harder-to-treat patients? I'm trying to get my head around how a TKI binding mutation would then convert resistance to a STAMP inhibitor which implies there's a lot about these mutations that are not understood and could better elucidate the value opportunity of 701?

Yes. So thanks, Ritu, for the question. The non-Myristate pocket mutations that are in the active site, there are several that impact the activity of asciminib and cause resistance. And the main mechanism around that is that the allosteric binding in the Myristate pocket requires -- is followed by a subsequent conformational change in the protein that involves several domains, including the SH2 and SH3 that essentially clamped down on the active side to turn the protein off. So when there are mutations within several of the active site domains or the SH2, even though asciminib binds without a problem to the Myristate pocket, those confirmational changes can be impacted. What's very interesting about our data or that regardless of whether patients have mutations in BCR-ABL or have resistance mutations like 317L that we just showed, this drug seems to be able to rescue that resistance which suggests that this is an intrinsically different molecule than asciminib with regard to the way it binds in Myristate pocket, and we're looking into that. So that answers the mechanistic question. The next question is on the clinical front, how do we continue the interrogation of asciminib resistant patients going forward? We've always said that TERN-701 is not the post-asciminib drug, it's been set of asciminib drug. And so what we see here is that given that our second line plus study will certainly have asciminib pretreated patients that include nonmutational resistance as well as mutational resistance, the observation of rescue in those patients gives us pretty good confidence that we see superiority in those patients versus a 2G TKI control arm that, that will increase our chances of accelerated approval at the 6-month endpoint. And in the front line, that's really where we'll directly test the real activity in treatment-naive patients against asciminib's frontline data that makes sense.

Fair enough. And is there anything in the data as presented today that suggest to you that you may need to pick one dose? Or are you really thinking about moving both doses forward in the Phase III?

From the data today, we don't -- we think we could pick one dose because, again, we see favorable safety all the way up to the 500-milligram max dose. Ideally, we would want to pick the best dose because, again, as we showed the target coverage looks to be linearly increasing as we go up to 500. And generally, what we see is the higher target coverage you have, the more likely it is to get deeper and faster responses. As we enroll more patients to the expansion, we will get more resolution on the additional -- any sort of additional dose response effect between the 320 and 500 milligrams, and that will guide our selection.

Our next question comes from the line of Graig Suvannavejh of Mizuho Securities.

It's Graig. And congrats again on the data. I just wanted to focus on deep molecular responses. I think many of us have been focused much more on the 6-month MMR. Can you just perhaps for us, put into context how important that number that you reported is , I think you had a slide in the beginning or somewhere in the deck where you compare versus others. But could you just elaborate more on that, please?

Yes. So we think that's a very compelling and impressive result that we are seeing 2x to 3x the rate of DMR achievement that asciminib saw in the front line. Now to your question around what the meaning of that in this context of relapsed/refractory disease, we have all heard that the data in terms of overall survival, achievement of CCYR or MR2 is sort of the threshold at which you get the OS benefit and people have reported that deepening response beyond MR2 doesn't have much impact on the OS. However, as Amy mentioned, OS is not the thing we need to solve in this disease. What we need to solve in this disease is can patients stay on therapies long term with good tolerability and deep responses so that they don't have to continue switching or having to fail therapy again. Now even though deeper than CCR or MR2 did not show OS benefit, what they did show in those long-term studies is that MMR achievement did predict for longer duration of CCyR. So if MMR achievement lengthens the duration of the endpoint that matters for survival, we think it's logical that achieving deeper responses to MMR and DMR will further improve that duration of the CCyR/MR2 endpoint that does have an impact on survival. And so in simple terms, the less cancer you have, the more likely it is that you're going to obviously live longer, but also have a better quality of life if the drug you're taking is well tolerated.

And then just maybe a follow-up just on time lines. I know one of the milestones or catalysts that you're pointing out for 2026 is getting feedback from the FDA and I guess, sign off on whatever the pivotal program might look like. While it may be too early to speculate now, but is it reasonable to assume that the earliest you could start those studies would probably be in 2027? Or is there a potential chance that you might be able to start in 2026?

Yes. So Graig, thanks for that question. We cannot guide specifically to when we'll start. We know based on the fact that we have more than 85 patients in the trial today that we should have good information next year to pick the dose and talk to the FDA. So it's possible that those studies could start later in '26. But until we have that in those discussions with the FDA, we won't be prepared to guide to that.

Okay. Again, congrats on that tremendous data set today at ASH.

Our next question comes from the line of Silvan Tuerkcan of Citizens.

Congratulations on the great update here. Maybe just I want to focus a little bit on the high baseline transcript patients where about half of your patients get a 2 log or better improvement. What is it about TERN-701 that can drive down these levels in these patients so rapidly and so profoundly?

And Silvan, we think this is another evidence and demonstration of what we've already said before that the higher potency and the higher target coverage with a wider therapeutic index that allow us to get to these high levels of target coverage is we think what the key driver is.

Great. And maybe on the numbers that you presented of asciminib being discontinued due to intolerability. Do you have any sense already? I mean, you only have 1 patient discontinue and that was not due to drug. But when do you think will you be in a position to say or see if your profile has an impact on discontinuation rates due to the drug?

Yes. I mean, like we showed, we only have 1 patient that DC'ed TERN-701 due to a low-grade AE, which that AE symptom complex happened -- the same complex happened on asciminib [ prior dasatinib ]. So we don't see any evidence that, that was particularly unique to TERN-701. Given that we don't really see a specific non-hematologic AE that appears to be associated with 701 with regard to the frequency of the Grade 1, 2 and even Grade 3 AEs, again, we haven't really seen a signal with regard to safety with this molecule for non-heme AEs. And heme AEs, we know are expected in this highly refractory patient population, but they're also were numerically trending lower than what asciminib showed. So based on all the data we see today, and it is a pretty robust data set with 63 patients and 6 months of duration, we have more and more conviction that we have a real safety differentiation from asciminib.

Our next question comes from the line of Corinne Johnson of Goldman Sachs.

I'm curious, I think a lot of questions have been asked and answered already, but you spoke to the translation from Phase I to Phase III data with respect to achieved MMR and the other key endpoints. But as you think about moving into further like frontline and second-line patient populations, how should we think about kind of the translation of clinical response data as you get into those earlier line settings?

Yes. No, that's -- so with regard to that, we've seen the numbers with both the active sites and asciminib, right? So asciminib got the 25% MMR achievement at 6 months in a third-line plus population. And in the front line, it's roughly around 57% to 64% as we saw in a combination of the ASC4FIRST studies and other frontline studies that are now reading out. So roughly, therefore, like 2 to 3x increase as you move to frontline treatment-naive patients. With the active-site drugs, again, similar pattern, bosutinib showed a 13% MMR achievement at 6 months in third line and its frontline numbers at 12 months are roughly around 45% to 50%. And so based on that extrapolation, the fact that we're seeing 64% to 75% MMR achievement in a third-line plus population again, would be very encouraging in terms of what that means for a frontline population where we would anticipate 75% or higher for sure in a frontline population that we're already seeing those numbers in a third line plus population.

Our next question comes from the line of Etzer Darout of Barclays.

Congrats on the data day-to-day A follow-up question around the DMR. Since physicians that we've spoken to are a bit mixed about the opportunity to take patients off drug upon achievement of DMR or at least levels of BCR-ABL transcripts that suggests that they're essentially cured. I wondered if you could comment on that. And then secondly, do you have enough data so far from 325 mg and up to sort of maybe you start to distinguish the 2 doses from an efficacy standpoint?

I could quickly answer the second question is no, we need more patients expansion and longer duration of follow-up but we expect to be there within the first half of next year, as Scott already outlined. With regard to your question about DMR, I think you're specifically asking about TFR. And TFR has been studied mainly in the frontline and the requirements for that are generally that you -- once you get to DMR and you maintain that level of response with good tolerability of the drug for at least 2 years or 3 years ideally to be able to attempt the trial. Now as Amy said at the end of her section, the goal with this disease is true cures, which would imply TFR. But also if you have a really well-tolerated drug, that maintains you in very deep responses. Patients can stay on treatment for life. And when you attempt TFR, you often see that there is 50% of patients, their transcript starts going up, and then you have to restart the drug again. And the real obstacle to TFR has been tolerability of the current drugs. And we're seeing the type of safety profile that we're seeing with this molecule and its ability to drive these deep responses quickly. We think that there's optionality for both of those in terms of the way patients will be treated depending on patient-specific factors going forward.

Our next question comes from the line of Kripa Devarakonda of Truist Securities.

Congrats on the data. So when you think about target population and sequencing for the first round, where do you expect the earliest adoption? Is it in post asciminib failures, ponatinib intolerant? And without head-to-head trial versus asciminib, what's the best way to frame value for payers. And then just a follow-up. The enrollment velocity has been fantastic. You noted, Amy, that the enrollment surpassed 85 patients, wondering which geographies or sites are contributing most? Or is it the just data that you showed that helped with acceleration of the enrollment?

Yes. You want to speak to the enrollment of the second question, I'll go back to the first.

Yes. So Kripa, I'd say the enrollment, we have not had an issue with enrollment. As you would expect, you see a bit of a slowdown in the summer months and a bit of a slowdown in the end of the year holidays. But even since the abstract came out, the enrollment has been accelerating. We have a really good global footprint. We have sites in the U.S., in Europe. We are also in Australia, New Zealand, South Korea, and we are continuing to expand new regions and bring on new sites in anticipation of launching a registrational study at the end of next year. So yes, I agree the enrollment has been fantastic.

Yes. And then, Kripa, to your question about early adoption. So our first pivotal trial will be in second-line plus patients where we expect to see some similar patients to what we're seeing in this Phase I trial, perhaps more second-line patients. And with this type of efficacy data, we really see that this could be a treatment of choice really in second-line plus populations regardless of what therapy they're switching from. We think that these kinds of efficacy rates in asciminib refractory patients are a good proxy for efficacy versus asciminib. And then the confidence intervals that Scott showed you really reflect a higher level of efficacy.

Our next question comes from the line of Evan Seigerman of BMO Capital Markets.

It's Malcolm Hoffman for Evan. Congrats on the data. It was noted that most of the patients below the 1% transcript change therapies due to a lack of tolerability. Can you kind of talk about what AEs are most driving these tolerability issues from previous therapies? Were they mostly lipase increases from products like asciminib? And then secondarily, how do you think about the chance of improvement of efficacy with further additional follow-up? I know these results are already more than most would have hoped for, but just trying to think about expectations for any future updates. Appreciate it.

Appreciate it. Yes. So your first question, there is a variety of different reasons for intolerance again, across the spectrum of drugs that these patients have gotten, including 2G TKI, asciminib and ponatinib and investigational drugs. With asciminib specifically, it was included both heme and non-heme AE, but there were several lipase elevations and other sort of non-hematologic AEs. And so the best answer is it sort of matched sort of what's already known about these drugs in terms of the most common AEs that you see with them. With regard to your second question, what we can -- what I can say about that is what we know from historical precedent with regard to how these endpoints sort of mature over time. And as Scott showed in his section, the 24-week MMR achievement rates essentially remain constant when we went from Phase I to Phase III. And then what you also see is that as you go beyond 24 weeks, these responses continue to improve. And so there are several slopes of response for patients, several of them get to -- we see 64% to 75% getting there at 24 weeks. For those patients who aren't, they will continue to deepen response. As you saw with asciminib at 96 weeks, the number went to 37%. So based on those historical data, we would anticipate that this would potentially follow a similar trajectory.

Our next question comes from the line of Andy Hsieh of William Blair.

Congratulations on the unprecedented data like you said. So my question has to do with the 4 treatment failures, which is exceedingly small in the context of this late-line population, I believe, Amy, you cited 75% do not reach 24-week MMR. So do you have any insights into these patients, number one? Number two, has to do with market research. So what you painted is a clinical profile that basically physicians actually don't have to worry about a lot of comorbidities, prior treatment duration adherence. So can you talk about the read-through to potential physician inception to 701?

Yes, I can answer the first one. With regard to the 4 treatment failure, these were very extensively pretreated patients who had gotten first and second gen and third gen drugs. We also saw that generally, they were sort of clustered more at the lower dose of 160, which the initial patients enrolled during dose escalation, which also helped us sort of figure out that there does appear to be a dose-related increase in efficacy as we showed at 320 and above. And I'll hand it off to Amy to answer the market research question.

Yes, Andy. So I would say that these types of results really are unprecedented and reflects something that I think a lot in the community could not have envisioned based on the history of development of CML therapies for the last 25 years. And so I would say a lot of this really represents sort of an ideal type of profile, not having to think about food every day, having this type of emerging safety profile and having such a difference in efficacy. It's really what they're looking for. And so really, we think that this will be a treatment of choice for first-line patients and for second-line plus who are switching therapy and really the reason and even though a lot of reasons today that somebody might choose a generic active site would really be due to cost.

This concludes the Q&A session. I would now like to turn the conference back to Amy Burroughs for closing remarks. Madam?

Great. Thank you so much to everyone for joining us today. For any questions we did not get to on the call, we invite you to reach out to our Investor Relations -- Investor Relations team and thank you so much, and have a great rest of your day.

This concludes today's conference call. Thank you for participating. You may now disconnect.