Terns Pharmaceuticals Secures $80 Million Series B Financing to Advance NASH Pipeline

VCBeat (WeChat ID: VCbeat) has learned that on October 30, 2018, Terns Pharmaceuticals, a startup founded by Chinese Americans, secured $80 million in Series B financing. The round was co-led by new investors Vivo Capital and OrbiMed, with participation from new investor Decheng Capital. Existing investor Lilly Asia Ventures also joined the financing round.

Terns will utilize this funding to advance its two lead drug candidates, TERN-101 and TERN-201, into clinical studies in the first half of 2019, while simultaneously progressing the preclinical development of other non-alcoholic steatohepatitis (NASH) programs. Additionally, Terns is developing therapeutics for three oncology indications: hepatocellular carcinoma (HCC), gastrointestinal (GI) cancers, and chronic myeloid leukemia (CML).

Terns’ R&D Pipeline (Image from Terns’ Official Website)

In April 2018, Terns Pharmaceuticals completed a $30 million Series A financing round from Lilly Asia Ventures and entered into a global exclusive licensing agreement with Eli Lilly and Company for its three small-molecule drug candidates targeting non-alcoholic steatohepatitis (NASH). Under the agreement, Terns obtained global exclusive rights to develop and commercialize TERN-101, a farnesoid X receptor (FXR) agonist; TERN-201, a semicarbazide-sensitive amine oxidase (SSAO) inhibitor; and a preclinical candidate that inhibits an undisclosed, clinically validated NASH target. It is reported that Terns will submit an Investigational New Drug (IND) application for the SSAO inhibitor TERN-201.

Terns’ team is composed of renowned senior experts from China and abroad:

CEO and Co-founder Zhong Weidong previously served as Executive Director of the Novartis Institutes for BioMedical Research (NIBR) and Global Head of Antiviral Research; Co-founder and Vice President Dr. Randy Halcomb previously served as Vice President of Chemistry at Igenica Biotherapeutics and Vice President of Medicinal Chemistry at Pliant Therapeutics; Vice President of Biology Dr. Martijn Fenaux is a co-inventor of the approved livestock vaccine Fostera® PCV MH and previously served as Team Leader at the Novartis Institutes for BioMedical Research; Head of Biotechnology Eddy Wu previously served as Executive Medical Director for Allergan’s China region and Regional Medical Director at Novartis.

Terns’ Team (Image from Terns’ official website)

NASH is a severe form of NAFLD (non-alcoholic fatty liver disease), caused by excessive fat accumulation in the liver. NASH can lead to chronic liver inflammation and hepatocyte injury, ultimately resulting in liver cancer or liver failure. Due to the rising global obesity rates and the increasing number of patients with type 2 diabetes, the global prevalence of NASH has been rising year by year. In China alone, the NASH patient population has reached 40 million, with 30% of these patients having progressed to advanced cirrhosis, indicating a substantial unmet medical need for NASH. In August 2018, a market report on NASH projected that the market valuation would grow from $1.17 billion in the previous year to $21.47 billion by 2025.

Currently, no NASH drugs have received FDA approval, yet NASH has become an increasingly prominent focus for pharmaceutical companies. In October 2018, 89Bio, a biopharmaceutical company developing NASH therapies, secured $60 million in Series A financing led by OrbiMed. Reportedly, 89Bio’s NASH candidate is a novel long-acting glycosylated fibroblast growth factor 21 (FGF21) analog, which has now entered Phase I clinical trials. Previously, the world’s two largest pharmaceutical companies—Novartis of Switzerland and Pfizer of New York—also announced the initiation of clinical trials for NASH drug candidates.

Since its establishment in 2017, Terns has secured a total of $110 million in financing. As an emerging player in the NASH therapeutics sector, Terns’ ability to attract substantial capital is attributed to its integrated strategy. Unlike traditional pharmaceutical R&D companies that start from scratch to identify novel NASH targets, Terns directly licenses NASH drug candidates from overseas, establishes Sino-foreign collaborative R&D teams, and strategically positions itself in both domestic and international markets, thereby significantly reducing R&D costs. Following the surge in NASH-related R&D collaborations and financing activities in October, Terns successfully closed an $80 million financing round, further advancing the development of its candidate drugs.

Terns’ CEO, Zhong Weidong, stated in a press release: “Since our inception, we have been committed to advancing key programs in NASH drug development and continuing to execute our strategy of providing innovative therapies for NASH patients worldwide. This financing will further propel us toward fulfilling this mission.”

Terns Pharmaceuticals, founded in 2017 and headquartered in California, USA, is a global biopharmaceutical company dedicated to the research and development of innovative, orally administered, molecularly targeted small-molecule drugs for the treatment of liver diseases and cancer. The company maintains dual headquarters in San Mateo, California, and Shanghai, China (Terns China Biotechnology). Terns’ long-term goal is to develop safe and effective combination therapies for patients with non-alcoholic steatohepatitis (NASH) and liver fibrosis.