0000950170-24-031497 | 10-K | XBRL Viewer | Terns Pharmaceuticals INC

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Common Stock and Stock-Based Compensation - Schedule of Common Stock Shares Reserved for Issuance (Details) - shares	Dec. 31, 2023	Dec. 31, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total shares reserved	23,465,572	22,323,490
Options Outstanding Under Incentive Award Plans
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total shares reserved	8,349,922	4,823,928
Restricted Stock Units (RSUs) [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total shares reserved	365,892	128,280
Shares Available for Future Grant under Incentive Award Plans
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total shares reserved	1,005,587	1,107,362
Shares Available for Future Grant under Employee Stock Purchase Plans
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total shares reserved	701,671	323,920
Shares Available For Future Grant Under Employment Inducement Award Plans [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total shares reserved	3,291,000	1,310,000
Pre-Funded Warrants [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total shares reserved	9,751,500	14,630,000

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

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+ Details

Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Additional paid-in capital	Accumulated Other Comprehensive Loss	Accumulated deficit
Balances at Dec. 31, 2021	$ 160,303	$ 3	$ 342,711	$ (338)	$ (182,073)
Balance at Beginning of period (in shares) at Dec. 31, 2021		25,269,271
Exercise of stock options (in shares)		10,000
Stock-based compensation expense	10,768		10,768
Unrealized loss on available-for-sale securities	(320)			(320)
Issuance of common stock in connection with exercise of pre-funded warrants (In Shares)		12,250,000
Issuance of common stock and pre-funded warrants, net of issuance costs value	60,719	$ 1	60,718
Issuance of common stock in at-the-market offering, net of issuance costs (In Shares)		11,902,500
Issuance of common stock in at-the-market offering, net of issuance costs value	80,847	$ 1	80,846
Issuance of common stock in at-the-market offering, net of issuance costs (In Shares)		4,122,628
Issuance of common stock in at-the-market offering, net of issuance costs value	24,892		24,892
Issuance of common stock under employee stock purchase plan (In Shares)		168,772
Issuance of common stock under employee stock purchase plan value	243		243
Foreign exchange translation adjustment	(164)			(164)
Net Income (Loss)	(60,345)				(60,345)
Balances at Dec. 31, 2022	276,943	$ 5	520,178	(822)	(242,418)
Balance at end of period (in shares) at Dec. 31, 2022		53,723,171
Exercise of stock options	274		274
Exercise of stock options (in shares)		106,176
Vesting of restricted stock (in shares)		50,401
Stock-based compensation expense	25,536		25,536
Unrealized loss on available-for-sale securities	671			671
Issuance of common stock in connection with exercise of pre-funded warrants (In Shares)		4,878,446
Issuance of common stock in at-the-market offering, net of issuance costs (In Shares)		5,659,045
Issuance of common stock in at-the-market offering, net of issuance costs value		$ 1
Issuance of common stock in at-the-market offering, net of issuance costs value	41,611		41,610
Issuance of common stock under employee stock purchase plan (In Shares)		159,480
Issuance of common stock under employee stock purchase plan value	410		410
Foreign exchange translation adjustment	132			132
Net Income (Loss)	(90,210)				(90,210)
Balances at Dec. 31, 2023	$ 255,367	$ 6	$ 588,008	$ (19)	$ (332,628)
Balance at end of period (in shares) at Dec. 31, 2023		64,576,719

Common Stock and Stock-Based Compensation

12 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

Common Stock and Stock-Based Compensation

The Company is authorized to issue 150,000,000 shares of common stock and 10,000,000 shares of preferred stock. All classes of stock have a par value of $0.0001. There were no shares of preferred stock outstanding as of December 31, 2023 and 2022.

As of each balance sheet date, the Company had reserved shares of common stock for issuance in connection with the following:


	December 31,
	2023		2022
Options outstanding under incentive award plans		8,349,922		4,823,928
Unvested restricted stock units		365,892		128,280
Shares available for future grant under incentive award plans		1,005,587		1,107,362
Shares available for future grant under employee stock purchase plans		701,671		323,920
Shares available for future grant under employment inducement award plans		3,291,000		1,310,000
Pre-funded warrants		9,751,500		14,630,000
Total shares reserved		23,465,572		22,323,490

Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are entitled to receive dividends, if any, as may be declared by the Company’s board of directors, subject to the preferential dividend rights of the convertible preferred stock. Through December 31, 2023, no cash dividends have been declared or paid by the Company.

Stock-Based Compensation Plans

The Company has three stock-based compensation plans, the 2017 Incentive Award Plan (the “2017 Plan”), the 2021 Incentive Award Plan (the “2021 Plan”) and the 2022 Employment Inducement Award Plan (the “2022 Inducement Plan”). Although awards made under the 2017 Plan continue to be governed by its terms, the 2017 Plan was terminated at the time of our IPO and no further awards are made under this plan. The 2021 Plan, while effective, authorizes the granting of equity awards to employees and directors of the Company, as well as non-employee consultants. The 2022 Inducement Plan authorizes the granting of equity awards to newly hired employees of the Company.

2021 Incentive Award Plan

In January 2021, the Company's board of directors approved the 2021 Plan which permits the granting of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance bonus awards, performance stock unit awards and other stock awards to employees, directors, officers and consultants. In February 2021, 2,400,007 shares were authorized for issuance under the 2021 Plan, which shall be cumulatively increased on the first day of each year beginning in 2022 and ending in 2031 equal to the lesser of (i) the amount equal to 5% of the number of shares issued and outstanding on the last day of the immediately preceding fiscal year or (ii) such lower number of shares as may be determined by the Company’s board of directors. The 2021 Plan is the successor to the 2017 Incentive Award Plan and no additional awards may be issued from the 2017 Plan. However, the 2017 Plan will continue to govern the terms and conditions of the outstanding awards granted under this plan. Shares of common stock subject to awards granted under the 2017 Plan that are forfeited or lapse unexercised and which following the effective date of the 2021 Plan are not issued under the 2017 Plan will be available for issuance under the 2021 Plan. As of December 31, 2023, 1,005,587 shares of the Company’s common stock were available for future grants under the 2021 Plan. The number of authorized shares reserved for issuance under the 2021 Plan was increased by 3,228,835 shares effective as of January 1, 2024.

2021 Employee Stock Purchase Plan

The 2021 Employee Stock Purchase Plan (the “2021 ESPP”) was approved by the Company’s board of directors in January 2021. In February 2021, a total of 240,000 shares were initially reserved for issuance under this plan, which shall be cumulatively increased on the first day of each year beginning in 2022 and ending in 2031 equal to the lesser of (i) 1% of the shares outstanding (on an as converted basis) on the last day of the immediately preceding fiscal year and (ii) such number of shares as may be determined by the Company’s board of directors. As of December 31, 2023, 701,671 shares of the Company’s common stock were available for future grants under the 2021 ESPP. The number of authorized shares reserved for issuance under the 2021 ESPP was increased by 645,767 shares effective as of January 1, 2024.

Under the 2021 ESPP, eligible employees may select a rate of payroll deduction up to 15% of their eligible compensation subject to certain maximum purchase limitations. The duration for each offering period is 24 months and is divided into four purchase periods of approximately six months in length. Offerings are concurrent. The purchase price of the shares under the offering is the lesser of 85% of the fair market value of the shares on the offering date or 85% of the fair market value of the shares on the purchase date. A look-back feature in the 2021 ESPP causes the offering period to automatically reset if the fair value of the Company’s common stock on the last day of the purchase period is less than that on the original offering date. 2021 ESPP purchases by employees are settled with newly-issued common stock from the 2021 ESPP’s previously authorized and available pool of shares.

As of December 31, 2023, there was $1.0 million of unrecognized stock-based compensation expense related to unvested employee stock purchases. The unrecognized stock-based compensation expense is estimated to be recognized over a period of 1.60 years as of December 31, 2023. There were 159,480 shares purchased by employees under the ESPP during the year ended December 31, 2023.

2022 Employment Inducement Award Plan

In September 2022, the Company's compensation committee approved the 2022 Employment Inducement Award Plan (the "2022 Inducement Plan"), which authorized 1,400,000 shares of common stock to be issued and permits the granting of nonqualified stock options, stock appreciation rights, restricted stock awards and restricted stock unit awards to newly hired employees and officers. In September 2023, the Company approved an amendment to the 2022 Inducement Plan which increased the number of authorized shares reserved for issuance by 3,113,250 shares. As of December 31, 2023, 3,291,000 shares of the Company's common stock were available for future grants under the 2022 Inducement Plan.

Pre-Funded Warrants

In connection with the August 2022 Financing, the Company sold pre-funded warrants to purchase 14,630,000 shares of common stock at a price of $2.4199 per pre-funded warrant. The purchase price per share of each pre-funded warrant represents the per share offering price for the common stock, minus the $0.0001 per share exercise price of such pre-funded warrant. As of December 31, 2023, 4,878,500 pre-funded warrants have been exercised.

Stock Options

Stock options granted to employees and non-employees under the plans generally vest over four years and allow the holder of the option to purchase common stock at a stated exercise price. Options granted under the plans generally expire ten years after the date of grant. The Company recognizes the stock-based compensation expense over the requisite service period of the individual grantees, which generally equals the vesting period.

The following table summarizes the stock option activity for all stock plans during the years ended December 31, 2023 and 2022:


	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value
						(in years)		(in thousands)
Outstanding as of December 31, 2021		3,577,485		$	9.72		9.09	$	491
Granted		1,405,020			4.44
Exercised		(10,000	)		0.00				21
Forfeited		(148,577	)		9.29
Outstanding as of December 31, 2022		4,823,928		$	8.22		8.46	$	11,721
Granted		4,269,925			9.51
Exercised		(106,176	)		2.58				925
Forfeited		(637,755	)		6.99
Outstanding as of December 31, 2023		8,349,922		$	9.04		6.82	$	2,225
Exercisable, December 31, 2023		4,523,993		$	8.64		4.96	$	1,570
Vested and expected to vest, December 31, 2023		8,349,922		$	9.04		6.82	$	2,225

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock.

As of December 31, 2023 and 2022, there was $21.7 million and $21.2 million, respectively, of unrecognized stock-based compensation expense related to unvested stock options. The unrecognized stock-based compensation expense is estimated to be recognized over a period of 2.55 years as of December 31, 2023.

The total fair value of options vested during the year ended December 31, 2023 and 2022 was $20.2 million and $10.9 million, respectively.

Restricted Stock

Restricted stock units (RSUs) granted to employees under the plans generally vest over four years. The number of shares issued on the date the RSUs vest is net of the minimum statutory tax withholdings, which are paid in cash to the appropriate taxing authorities on behalf of the Company’s employees. The Company recognizes the stock-based compensation expense over the requisite service period of the individual grantees, which generally equals the vesting period.

The following table summarizes the RSU activity for all stock plans during the years ended December 31, 2023 and 2022:


	Number of Shares			Weighted Average Grant-Date Fair Value
Unvested restricted stock units as of December 31, 2021		—		$	—
Granted		147,750			3.99
Forfeited		(19,470	)		3.37
Unvested restricted stock units as of December 31, 2022		128,280		$	4.09
Granted		308,013			9.86
Vested		(50,401	)		4.11
Forfeited		(20,000	)		7.04
Unvested restricted stock units as of December 31, 2023		365,892		$	8.79

As of December 31, 2023 and 2022, there was $2.5 million and $0.4 million, respectively, of unrecognized stock-based compensation expense related to restricted stock. The unrecognized stock-based compensation expense is estimated to be recognized over a period of 2.86 years as of December 31, 2023.

The total fair value of restricted stock vested during the year ended December 31, 2023 was $0.2 million. No restricted stock vested during the year ended December 31, 2022.

Stock-Based Compensation Expense

The Company estimated the fair value of options granted and rights to acquire stock granted under the Company’s employee stock purchase plan using a Black-Scholes option pricing model with the following assumptions presented on a weighted average basis:


	Year Ended December 31,
	2023			2022
Stock Option Plans
Expected term (years)		6.05			5.99
Expected volatility		73.84	%		72.67	%
Risk-free interest rate		3.62	%		2.29	%
Fair value of underlying common stock	$	9.51		$	4.44
Weighted average grant-date fair value per share	$	6.41		$	2.91
Employee Stock Purchase Plans
Expected term (years)		1.33			0.89
Expected volatility		82.05	%		70.08	%
Risk-free interest rate		4.84	%		2.55	%
Fair value of underlying common stock	$	7.48		$	2.95
Weighted average grant-date fair value per share	$	3.84		$	1.25

Stock-based compensation expense was classified in the consolidated statements of operations and comprehensive loss as follows:


	Year Ended December 31,
(in thousands)	2023		2022
Research and development expense	$	5,870	$	3,025
General and administrative expense		19,666		7,743
Total stock-based compensation expense	$	25,536	$	10,768

Cash Equivalents and Marketable Securities (Additional Information) (Details)	Dec. 31, 2023 Position
Investments, Debt and Equity Securities [Abstract]
Securities, available-for-sale, unrealized loss position, number of positions	24

Income Tax - Components of (Loss) Income Before Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Income Tax Disclosure [Abstract]
U.S.	$ (90,017)	$ (60,226)
Foreign	46	239
Loss before income taxes	$ (89,971)	$ (59,987)

- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

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-Section S99
-Paragraph 2
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-URI https://asc.fasb.org//1943274/2147483621/220-10-S99-2

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+ Details

Net Loss Per Share of Common Stock - Schedule of Computation of Basic and Diluted Net Loss per Common Share (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Numerator:
Net loss	$ (90,210)	$ (60,345)

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

+ References

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+ Details

Leases - Schedule of Components of lease cost (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Leases [Abstract]
Operating lease cost	$ 648	$ 610
Short-term cost	17	43
Total lease cost	$ 665	$ 653
Weighted-average remaining lease term		10 months 2 days
Weighted-average discount rate		6.00%

Income Tax

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Tax

The following table presents domestic and foreign components of loss before income taxes:


	Year Ended December 31,
(in thousands)	2023			2022
U.S.	$	(90,017	)	$	(60,226	)
Foreign		46			239
Total loss before income tax	$	(89,971	)	$	(59,987	)

The following table presents the provision for income taxes:


	Year Ended December 31,
(in thousands)	2023			2022
Current
Federal	$	5		$	—
State		14			5
Foreign		239			299
Total current	$	258		$	304
Deferred
Foreign	$	(19	)	$	54
Total deferred	$	(19	)	$	54
Total income tax expense	$	239		$	358

The reconciliation of the U.S. federal statutory income tax benefit to the Company’s effective income tax rate is as follows:


	Year Ended December 31,
	2023			2022
Tax benefit at U.S. statutory rate		21.00	%		21.00	%
State income taxes, net of Federal tax benefit		(0.02	)		(0.01	)
Foreign income taxed at non-U.S. rates		(0.07	)		(0.02	)
Other permanent items		(0.10	)		(0.11	)
Deferred tax asset write-off		(5.05	)		—
Stock-based compensation		(0.39	)		(0.47	)
Research and development credits		3.99			3.00
Unrecognized tax benefit		(1.21	)		(0.57	)
162(m) limitation		(0.04	)		—
Global intangible low-taxed income		(0.05	)		(1.09	)
Increase in valuation allowance		(18.74	)		(21.93	)
Other		0.41			(0.40	)
		(0.27	)%		(0.60	)%

The difference between the provision for income taxes and the income tax determined by applying the statutory federal income tax rate of 21% was primarily due to the change in valuation allowance.

Significant components of the Company’s deferred tax assets and liabilities are as follows:


	As of December 31,
(in thousands)	2023			2022
Deferred tax assets:
Accruals and reserves	$	1,280		$	820
Intangibles		11,288			12,929
Stock-based compensation		3,730			3,549
Net operating loss		19,929			13,841
Research and development credits		6,551			3,650
Lease liability		114			241
Capitalized research and development		16,839			7,410
Other		72			61
Valuation allowance		(59,621	)		(42,207	)
Total deferred tax assets	$	182		$	294
Deferred tax liabilities:
Fixed assets	$	(29	)	$	(50	)
Operating lease assets		(97	)		(207	)
Total deferred tax liabilities	$	(126	)	$	(257	)
Net deferred tax assets	$	56		$	37

As of December 31, 2023, the Company recorded a full valuation allowance against its U.S. net deferred tax assets as it believes these deferred tax assets were not realizable on a more likely than not basis. This is based upon the weight of available evidence, including historical operating performance, and that a net loss will be expected to occur in the foreseeable future.

As of December 31, 2023, the Company had federal and state net operating loss carryforwards of approximately $94.8 million and $2.2 million, respectively. The federal net operating loss has an indefinite carryforward while the state net operating loss will begin to expire in 2042. As of December 31, 2022, the Company had federal and state net operating loss carryforwards of approximately $65.8 million and $0.7 million, respectively.

As of December 31, 2023 and 2022, the Company had federal Research & Development (R&D) credit carryforwards of approximately $7.5 million and $4.1 million, respectively, which will begin to expire in 2039. As of December 31, 2023 and 2022, the Company had California R&D credit carryforwards of approximately $2.9 million and $2.0 million, respectively, which do not expire.

Utilization of net operating loss carryforwards and credits may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration of net operating losses and credits before utilization. The Company does not expect any previous ownership changes, as defined under Section 382 and 383 of the Internal Revenue Code, to result in a limitation that will materially reduce the total amount of net operating loss carryforwards and credits that can be utilized. Further, foreign loss carryforwards maybe subject to limitations under the applicable laws of the taxing jurisdictions due to ownership change limitations.

Beginning in 2022, as part of the Tax Cuts and Job Act (TCJA) passed in 2017, the TCJA enacted tax legislation requiring U.S. R&D expenditures to be capitalized and amortized ratably over a five-year period. Expenditures attributed to research conducted outside of the U.S. must be capitalized and amortized over a 15-year period.

As of December 31, 2023, the Company has provided U.S. income taxes on all its foreign earnings. The Company continues to permanently reinvest the cash held offshore to support its working capital needs. Accordingly, no additional foreign withholding taxes that may be required from certain jurisdictions in the event of a cash distribution have been provided for.

As of December 31, 2023 and 2022, the total amount of unrecognized tax benefits was $7.5 million and $6.3 million, respectively, $4.1 million and $4.2 million of which would affect income tax expense, if recognized, before consideration of any valuation allowance. The Company does not expect the unrecognized tax benefits to change significantly over the next 12 months.

A reconciliation of the beginning and ending unrecognized tax benefit are as follows:


	Year Ended December 31,
(in thousands)	2023			2022
Unrecognized tax benefit at beginning of year	$	6,316		$	5,849
Increases related to prior year tax positions		14			150
Increases related to current year tax positions		1,339			706
Decreases related to prior year tax positions		(163	)		(389	)
Unrecognized tax benefit at end of year	$	7,506		$	6,316

The Company includes interest and penalties related to unrecognized tax benefits within the provision for income taxes. As of December 31, 2023 and 2022, the total amount of gross interest and penalties accrued was $0.4 million and $0.3 million, respectively.

The Company is subject to income taxes in the U.S. federal, state and various foreign jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. The Company’s tax years remain open for examination by all tax authorities since inception as well as carryover attributes beginning December 31, 2019, remain open to adjustment by the U.S. and foreign authorities.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

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-Section 50
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-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

Common Stock and Stock-Based Compensation - Schedule of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total stock-based compensation expense	$ 25,536	$ 10,768
Research and Development Expense
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total stock-based compensation expense	5,870	3,025
General and Administrative Expense
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total stock-based compensation expense	$ 19,666	$ 7,743

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

+ Details

Common Stock and Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of Common Stock Shares Reserved for Issuance

As of each balance sheet date, the Company had reserved shares of common stock for issuance in connection with the following:


	December 31,
	2023		2022
Options outstanding under incentive award plans		8,349,922		4,823,928
Unvested restricted stock units		365,892		128,280
Shares available for future grant under incentive award plans		1,005,587		1,107,362
Shares available for future grant under employee stock purchase plans		701,671		323,920
Shares available for future grant under employment inducement award plans		3,291,000		1,310,000
Pre-funded warrants		9,751,500		14,630,000
Total shares reserved		23,465,572		22,323,490

Summary of Stock Option Activity

The following table summarizes the stock option activity for all stock plans during the years ended December 31, 2023 and 2022:


	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value
						(in years)		(in thousands)
Outstanding as of December 31, 2021		3,577,485		$	9.72		9.09	$	491
Granted		1,405,020			4.44
Exercised		(10,000	)		0.00				21
Forfeited		(148,577	)		9.29
Outstanding as of December 31, 2022		4,823,928		$	8.22		8.46	$	11,721
Granted		4,269,925			9.51
Exercised		(106,176	)		2.58				925
Forfeited		(637,755	)		6.99
Outstanding as of December 31, 2023		8,349,922		$	9.04		6.82	$	2,225
Exercisable, December 31, 2023		4,523,993		$	8.64		4.96	$	1,570
Vested and expected to vest, December 31, 2023		8,349,922		$	9.04		6.82	$	2,225

Schedule of Stock Options Weighted Average Assumptions


	Year Ended December 31,
	2023			2022
Stock Option Plans
Expected term (years)		6.05			5.99
Expected volatility		73.84	%		72.67	%
Risk-free interest rate		3.62	%		2.29	%
Fair value of underlying common stock	$	9.51		$	4.44
Weighted average grant-date fair value per share	$	6.41		$	2.91
Employee Stock Purchase Plans
Expected term (years)		1.33			0.89
Expected volatility		82.05	%		70.08	%
Risk-free interest rate		4.84	%		2.55	%
Fair value of underlying common stock	$	7.48		$	2.95
Weighted average grant-date fair value per share	$	3.84		$	1.25

Summary of Restricted Stock Award Activity

The following table summarizes the RSU activity for all stock plans during the years ended December 31, 2023 and 2022:


	Number of Shares			Weighted Average Grant-Date Fair Value
Unvested restricted stock units as of December 31, 2021		—		$	—
Granted		147,750			3.99
Forfeited		(19,470	)		3.37
Unvested restricted stock units as of December 31, 2022		128,280		$	4.09
Granted		308,013			9.86
Vested		(50,401	)		4.11
Forfeited		(20,000	)		7.04
Unvested restricted stock units as of December 31, 2023		365,892		$	8.79

Schedule of Stock-based Compensation Expense

Stock-based compensation expense was classified in the consolidated statements of operations and comprehensive loss as follows:


	Year Ended December 31,
(in thousands)	2023		2022
Research and development expense	$	5,870	$	3,025
General and administrative expense		19,666		7,743
Total stock-based compensation expense	$	25,536	$	10,768

Pay vs Performance Disclosure - USD ($) $ in Thousands	12 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Pay vs Performance Disclosure
Net Income (Loss)	$ (90,210)	$ (60,345)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
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-Name Accounting Standards Codification
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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Reference 28: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Commitments and Contingencies - Schedule of Future Minimum Lease Payments Due Under Operating Leases (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Leases [Abstract]
Total lease payments	$ 618

Fair Value Measurements -Schedule of Aggregate Amortized Cost and Fair Value of Marketable Securities (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Fair Value Disclosures [Abstract]
Due in one year or less	$ 152,329
Due after one year through two years	31,185
Total marketable securities	183,514
Due in one year or less	152,284
Due after one year through two years	31,073
Marketable Securities at Amortized Cost, Total	$ 183,357

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Dec. 31, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Cash Equivalents and Marketable Securities

12 Months Ended

Dec. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Cash Equivalents and Marketable Securities

The amortized cost and fair value of cash equivalents and marketable securities by major security type is as follows:


	December 31, 2023
(in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Money market funds	$	33,788	$	—	$	—		$	33,788
U.S. government securities		183,357		219		(62	)		183,514
Total	$	217,145	$	219	$	(62	)	$	217,302

Classified as:
Cash equivalents								$	33,788
Marketable securities									183,514
Total								$	217,302

	December 31, 2022
(in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Money market funds	$	23,029	$	—	$	—		$	23,029
U.S. government securities		44,555		31		(383	)		44,203
Non-U.S. government securities		3,024		—		(16	)		3,008
Corporate debt securities		36,411		—		(146	)		36,265
Commercial paper		56,403		—		—			56,403
Total	$	163,422	$	31	$	(545	)	$	162,908

Classified as:
Cash equivalents								$	23,029
Marketable securities									139,879
Total								$	162,908

The aggregate fair value of the Company’s available-for-sale marketable securities that have been in a continuous unrealized loss position for less than twelve months or twelve months or longer is as follows:


	December 31, 2023
	Less than 12 months					12 months or longer					Total
(in thousands)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. government securities	$	80,461	$	(62	)	$	—	$	—		$	80,461	$	(62	)
Total	$	80,461	$	(62	)	$	—	$	—		$	80,461	$	(62	)

	December 31, 2022
	Less than 12 months					12 months or longer					Total
(in thousands)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. government securities	$	—	$	—		$	29,704	$	(384	)	$	29,704	$	(384	)
Non-U.S. government securities		—		—			3,008		(15	)		3,008		(15	)
Corporate debt securities		22,717		(108	)		10,530		(38	)		33,247		(146	)
Total	$	22,717	$	(108	)	$	43,242	$	(437	)	$	65,959	$	(545	)

At December 31, 2023, the Company had 24 available-for-sale marketable securities in an unrealized loss position without an allowance for credit losses. The Company does not intend to sell these securities and the Company believes it is more likely than not that marketable securities in an unrealized loss position will be held until maturity and that the Company will not be required to sell these securities before recovery of their amortized cost basis. The Company believes that an allowance for credit losses is unnecessary as the securities are of high credit quality and the decline in fair value is due to market conditions and/or changes in interest rates.

Nature of the Business, Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended			3 Months Ended	12 Months Ended
	Aug. 31, 2023	Dec. 31, 2022	Aug. 31, 2022	Mar. 31, 2022	Dec. 31, 2023	Dec. 31, 2022	Nov. 30, 2023
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Other Accrued Liabilities, Current		$ 185			$ 278	$ 185
Common stock, par value		$ 0.0001			$ 0.0001	$ 0.0001
Recognized depreciation expense					$ 300	$ 500
Impairments of long-lived assets					$ 0
Maximum
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Estimated Useful Lives					5 years
Minimum
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Estimated Useful Lives					3 years
Senthil Sundaram
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Severance Costs	$ 600
Discretionary Bonus	100.00%
Discretionary Bonus Amount	$ 300
Other Accrued Liabilities, Current					$ 900
Stock-Based Compensation Expense					10,500
Bryan Yoon
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Retention Awards Payable	500
Mark Vignola
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Retention Awards Payable	$ 700
MrYoon And DrVignola
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Other Accrued Liabilities, Current					500
Erin Quirk
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Other Accrued Liabilities, Current					$ 200
Retention Awards Payable							$ 600
Recognition bonus aggregate amount							$ 100
August 2022 Financing
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Number of shares issued			12,250,000
Net proceeds from issuance of common stock allocated to pre-funded warrants			$ 33,000
Pre-funded warrant price			$ 2.4199
Shares issued, price per share			$ 2.42
Pre-funded warrants to purchase			14,630,000
Aggregate net proceeds after deducting underwriting discounts and commissions and other offering expenses common stock			$ 60,700
Common stock, par value			$ 0.0001
December 2022 Financing
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Number of shares issued		10,350,000
Underwriters option to purchase additional shares		1,552,500
Net proceeds from issuance of common stock allocated to pre-funded warrants		$ 80,800
Shares issued, price per share		$ 7.25				$ 7.25
At-the-Market Offering
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Number of shares issued					5,659,045
Net proceeds from issuance of common stock allocated to pre-funded warrants					$ 41,600
Offer price				$ 75,000
At-the-Market Offering \| Common Stock
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Number of shares issued					9,781,673
Net proceeds from issuance of common stock allocated to pre-funded warrants					$ 66,600
Sales Agreement with Cowen
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Offer price					$ 150,000

Fair Value Measurements - Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Assets:
Marketable securities	$ 183,514
Recurring
Assets:
Total cash and cash equivalents	79,926	$ 143,235
Marketable securities	183,514	139,879
Recurring \| Cash in bank balances
Assets:
Total cash and cash equivalents	46,138	120,206
Recurring \| Money Market Funds
Assets:
Total cash and cash equivalents	33,788	23,029
Recurring \| U.S. government securities
Assets:
Marketable securities	183,514	44,203
Recurring \| Non-U.S. Government Securities
Assets:
Marketable securities		3,008
Recurring \| Corporate Debt Securities
Assets:
Marketable securities		36,265
Recurring \| Commercial Paper
Assets:
Marketable securities		56,403
Recurring \| Level 1
Assets:
Total cash and cash equivalents	79,926	143,235
Recurring \| Level 1 \| Cash in bank balances
Assets:
Total cash and cash equivalents	46,138	120,206
Recurring \| Level 1 \| Money Market Funds
Assets:
Total cash and cash equivalents	33,788	23,029
Recurring \| Level 2
Assets:
Marketable securities	183,514	139,879
Recurring \| Level 2 \| U.S. government securities
Assets:
Marketable securities	$ 183,514	44,203
Recurring \| Level 2 \| Non-U.S. Government Securities
Assets:
Marketable securities		3,008
Recurring \| Level 2 \| Corporate Debt Securities
Assets:
Marketable securities		36,265
Recurring \| Level 2 \| Commercial Paper
Assets:
Marketable securities		$ 56,403

Common Stock and Stock-Based Compensation - Summary of Restricted Stock Award Activity (Details) - Restricted Stock - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Number of Shares
Number of Shares, Unvested restricted common stock, beginning balance	128,280	0
Number of Shares, Vested	(50,401)
Number of Shares, Forfeited	(20,000)	(19,470)
Number of Shares, Granted	308,013	147,750
Number of Shares, Unvested restricted common stock, ending balance	365,892	128,280
Grant-Date Fair Value
Grant-Date Fair Value, Unvested restricted common stock, beginning balance	$ 4.09	$ 0
Grant-Date Fair Value, Vested	4.11
Grant-Date Fair Value, Forfeited	7.04	3.37
Grant-Date Fair Value, Granted	9.86	3.99
Grant-Date Fair Value, Unvested restricted common stock, ending balance	$ 8.79	$ 4.09

Nature of the Business, Basis of Presentation and Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Basis of Presentation

The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and include the accounts of Terns and its wholly owned subsidiaries Terns U.S. Opco and Terns Hong Kong and its wholly owned subsidiaries Terns China and Terns Suzhou. The Company’s consolidated financial statements have been prepared in conformity with U.S. GAAP. All intercompany balances and transactions have been eliminated in consolidation.

At-the-Market Offering

In March 2022, the Company entered into a Sales Agreement with Cowen and Company, LLC (Cowen) as sales agent, pursuant to which the Company has the ability to offer and sell, from time to time, through Cowen, shares of its common stock having an aggregate offering price of up to $75.0 million in an at-the-market offering. The shares are offered pursuant to the Company's shelf registration statement on Form S-3 filed with the Securities and Exchange Commission, or SEC, which became effective on March 14, 2022. As of December 31, 2023, there were 9,781,673 shares of our common stock sold for aggregate net proceeds of $66.6 million after deducting commissions and offering expenses pursuant to this agreement. The Company sold 5,659,045 shares for aggregate net proceeds of $41.6 million pursuant to this agreement during the year ended December 31, 2023.

In May 2023, the Company entered into a Sales Agreement with Cowen as sales agent, pursuant to which the Company has the ability to offer and sell, from time to time, through Cowen, shares of its common stock having an aggregate offering price of up to $150.0 million in an at-the-market offering. The shares are offered pursuant to the Company's shelf registration statement on Form S-3 filed with the SEC, which became effective on February 10, 2023. There were no sales of the Company's common stock pursuant to this agreement through December 31, 2023.

August 2022 Financing

In August 2022, the Company issued 12,250,000 shares of its common stock at a price of $2.42 per share and, to certain investors in lieu of common stock, pre-funded warrants to purchase 14,630,000 shares of common stock at a price of $2.4199 per pre-funded warrant. The purchase price per share of each pre-funded warrant represents the per share offering price for the common stock, minus the $0.0001 per share exercise price of such pre-funded warrant. Aggregate net proceeds were $60.7 million after deducting underwriting discounts and commissions and offering expenses.

The pre-funded warrants were classified as a component of permanent stockholders’ equity within additional paid-in capital and were recorded at the issuance date using a relative fair value allocation method. The pre-funded warrants are equity classified because they (i) are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, (ii) are immediately exercisable, (iii) do not embody an obligation for the Company to repurchase its shares, (iv) permit the holders to receive a fixed number of shares of common stock upon exercise, (v) are indexed to the Company’s common stock and (vi) meet the equity classification criteria. In addition, such pre-funded warrants do not provide any guarantee of value or return. The Company valued the pre-funded warrants at issuance, concluding that their sales price approximated their fair value, and allocated net proceeds from the sale proportionately to the common stock and pre-funded warrants, of which $33.0 million was allocated to the pre-funded warrants and recorded as a component of additional paid-in capital.

December 2022 Financing

In December 2022, the Company entered into an Underwriting Agreement with Jefferies LLC and Cowen and Company, LLC, as representatives of the several underwriters, relating to the underwritten public offering of 10,350,000 shares of the Company's common stock at a public offering price per share of $7.25. Under the terms of the Underwriting Agreement, the Company granted the underwriters an option, exercisable within 30 days from the date of the Underwriting Agreement, to purchase up to 1,552,500 additional shares of common stock, which the Underwriters exercised in full. Aggregate net proceeds were $80.8 million after deducting underwriting discounts and commissions and offering expenses.

Revenue Recognition

To determine revenue recognition for arrangements, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that it will collect the consideration it is entitled to in exchange for the goods and services it transfers to the customer. At contract inception, the Company assesses the goods or services promised within each contract, determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

The Company enters into corporate collaborations under which it may obtain upfront license fees, research and development funding, and development, regulatory and commercial milestone payments and royalty payments. The Company’s performance obligations under these arrangements may include licenses of intellectual property, distribution rights, research and development services, delivery of manufactured product and/or participation on joint steering committees.

Licenses of intellectual property

If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue from upfront license fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgement to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring proportional performance for purposes of recognizing revenue from non-refundable, upfront fees. The Company evaluates the measure of proportional performance each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

Milestone payments

At the inception of each arrangement that includes development, regulatory or commercial milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price. The Company considers two alternatives to use when estimating the amount of variable consideration: the expected value method and the most likely amount method. Under the expected value method, an entity considers the sum of probability-weighted amounts in a range of possible consideration amounts. Under the most likely amount method, an entity considers the single most likely amount in a range of possible consideration amounts. Whichever method is used, it should be consistently applied throughout the life of the contract; however, it is not necessary for the Company to use the same approach for all contracts. The Company expects to use the most likely amount method for development and regulatory milestone payments. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company’s or the licensee’s control, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis. The Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability or achievement of each such milestone and any related constraint, and if necessary, adjusts its estimates of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment.

Commercial milestones and royalties

For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and in which the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue when the related sales occur. To date, the Company has not recognized any royalty revenue resulting from its collaboration arrangements.

Upfront payments and fees are recorded as deferred revenue upon receipt or when due and may require deferral of revenue recognition to a future period until the Company performs its obligations under these arrangements. Amounts payable to the Company are recorded as accounts receivable when the Company’s right to consideration is unconditional.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Significant estimates and assumptions made in the accompanying consolidated financial statements include, but are not limited to, the estimates for accruals of research and development expenses, accrual of research contract costs, unrecognized tax benefits, fair value of common stock and stock option valuations. On an ongoing basis, the Company evaluates its estimates and judgments, using historical and anticipated results and trends and on various other assumptions that management believes to be reasonable under the circumstances. Actual results could materially differ from those estimates.

Cash, Cash Equivalents, Restricted Cash and Marketable Securities

Cash, Cash Equivalents and Marketable Securities

Cash and cash equivalents consist of standard checking accounts and money market funds. The Company considers all highly liquid investments with an original maturity of 90 days or less at the date of purchase to be cash equivalents.

The Company classifies as available-for-sale marketable securities with a remaining maturity when purchased of greater than three months. The Company’s marketable securities are maintained by investment managers and consist of U.S. government and non-U.S. government securities, corporate debt securities and commercial paper. Debt securities are carried at fair value with the unrealized gains and losses included in other comprehensive loss as a component of stockholders’ equity until realized. Any premium arising at purchase is amortized to the earliest call date and any discount arising at purchase is accreted to maturity. Amortization and accretion of premiums and discounts are recorded in interest income and/or expense.

The Company assesses its available-for-sale debt securities for impairment as of each reporting date in order to determine if a portion of any decline in fair value below carrying value is the result of a credit loss. The Company records credit losses in the consolidated statements of operations and comprehensive loss as credit loss expense within other expense, net, which is limited to the difference between the fair value and the amortized cost of the security. To date, the Company has not recorded any credit losses on its available-for-sale debt securities.

Interest receivable related to the Company's available-for-sale debt securities is presented as marketable securities on the Company's consolidated balance sheets. The Company writes off interest receivable once it has determined that the asset is not realizable. To date, the Company has not written off any interest receivables associated with its marketable securities.

Operating Leases and Rent Expense

At the inception of a contractual arrangement, the Company determines whether the contract contains a lease by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time. If both criteria are met, upon lease commencement, the Company records a lease liability which represents the Company’s obligation to make lease payments arising from the lease, and a corresponding right-of-use (ROU) asset which represents the Company’s right to use an underlying asset during the lease term.

Operating lease right-of-use assets and liabilities are recognized on the balance sheet at the lease commencement date based on the present value of the future minimum lease payments over the lease term. In determining the net present value of the lease payments, the Company uses its incremental borrowing rate applicable to the underlying asset unless the implicit rate is readily determinable. Any lease incentives received are deferred and recorded as a reduction of the ROU asset and amortized over the term of the lease. The Company does not separate lease and non-lease components and instead treats them as a single component. Rent expense, comprised of amortization of the ROU asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term. The Company determines the lease term as the noncancellable period of the lease and may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options.

The Company elected to not apply the recognition requirements of the new leasing standard to short term leases with terms of 12 months or less. As a result, leases with a term of 12 months or less are not recognized on the balance sheet.

Research and Development Expenses

Research and development costs are expensed as incurred. Research and development expenses consist of costs incurred to discover, research and develop drug candidates, including personnel expenses, stock-based compensation expense, allocated facility-related and depreciation expenses, third-party license fees and external costs, including fees paid to consultants and contract research organizations, or CROs, in connection with nonclinical studies and clinical trials and other related clinical trial fees, such as for investigator grants, patient screening, laboratory work, clinical trial database management, clinical trial material management and statistical compilation and analysis. Non-refundable prepayments for goods or services that will be used or rendered for future research and development activities are recorded as prepaid expenses. Such amounts are recognized as an expense as the goods are delivered or the related services are performed, or until it is no longer expected that the goods will be delivered, or the services rendered. Costs incurred in obtaining technology licenses are charged immediately to research and development expense if the technology licensed has not reached technological feasibility and has no alternative future uses.

The Company has from time to time entered into various research and development and other agreements with commercial firms, researchers, universities and others for provisions of goods and services. These agreements are generally cancelable, and the related costs are recorded as research and development expenses as incurred. The Company records accruals for estimated ongoing research and development costs. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the studies or clinical trials, including the phase or completion of events, invoices received and contracted costs. Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period. Actual results could differ materially from the Company’s estimates. Since inception, the Company’s historical accrual estimates have not been materially different from the actual costs.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities included the following:


	December 31,
(in thousands)	2023		2022
Research and development costs	$	2,010	$	1,209
Compensation and benefit costs		5,683		3,843
Accrued professional fees		855		925
Other		278		185
Total accrued expenses and other current liabilities	$	8,826	$	6,162

Executive Leadership Transition

In August 2023, the Company and Senthil Sundaram, former chief executive officer, entered into a separation agreement. Pursuant to the separation agreement, Mr. Sundaram is entitled to receive severance in the amount of $0.6 million and 100% of his annual target discretionary bonus for 2023 in the amount of $0.3 million. During the year ended December 31, 2023, the Company recorded an accrued liability and recognized expense of $0.9 million related to the departure of the former chief executive officer. These accruals are presented within the Consolidated Balance Sheets under Accrued expenses and other current liabilities. The expenses were recognized as operating expenses within the Consolidated Statements of Operations and Comprehensive Loss under General and administrative. The vesting of each equity award held by Mr. Sundaram was fully accelerated as of December 31, 2023. As a result of the change in service period for all outstanding unvested option grants to the Company’s former chief executive officer in August 2023, the Company recognized $10.5 million in stock-based compensation expense during the year ended December 31, 2023. The expense was recognized as operating expenses within the Consolidated Statements of Operations and Comprehensive Loss under General and administrative.

In August 2023, Bryan Yoon, chief operating officer and general counsel, and Mark Vignola, Ph.D., chief financial officer, received retention awards payable in cash in the aggregate amount of $0.5 million for Mr. Yoon and $0.7 million for Dr. Vignola. Each retention award will be payable in two installments of 33% of the award on February 1, 2024 and 67% of the award on August 1, 2024, subject to the applicable officer’s continued employment with the Company through such date. Expense is recognized on a straight-line basis over the requisite service period. During the year ended December 31, 2023, the Company recorded an accrued liability and recognized expense of $0.5 million related to the retention awards. These accruals are presented within the Consolidated Balance Sheets under Accrued expenses and other current liabilities. The expenses were recognized as operating expenses within the Consolidated Statements of Operations and Comprehensive Loss under General and administrative.

In November 2023, Erin Quirk, M.D., president and head of research & development, received a retention award payable in cash in the aggregate amount of $0.6 million and a recognition bonus in the aggregate amount of $0.1 million. The retention award will be payable in two installments of 33% of the award on February 1, 2024 and 67% of the award on August 1, 2024, and the recognition bonus will be payable on January 1, 2024, subject to the applicable officer’s continued employment with the Company through such date. Expense is recognized on a straight-line basis over the requisite service period. During the year ended December 31, 2023, the Company recorded an accrued liability and recognized expense of $0.2 million related to the retention awards. These accruals are presented within the Consolidated Balance Sheets under Accrued expenses and other current liabilities. The expenses were recognized as operating expenses within the Consolidated Statements of Operations and Comprehensive Loss under Research and development.

Income Taxes

The provision for income taxes primarily relates to projected federal, state and foreign income taxes. Income taxes are computed using the asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements. In estimating future tax consequences, the Company considers all expected future events including the enactment of changes in tax laws or rates. A valuation allowance is recorded, if necessary, to reduce net deferred tax assets to their realizable values if management does not believe it is more likely than not that the net deferred tax assets will be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, and ongoing prudent and feasible tax planning strategies in assessing the amount of the valuation allowance. When the Company establishes or reduces the valuation allowance against its deferred tax assets, its provision for income taxes will increase or decrease, respectively, in the period such determination is made.

The Company assesses accounting for uncertainty in income taxes by modeling for the recognition, measurement and disclosure in financial statements any uncertain income tax positions that the Company has taken or expects to take on a tax return. The Company accrues interest and related penalties, if applicable, on all tax exposures for which reserves have been established consistent with jurisdictional tax laws.

Comprehensive Loss

Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources.

Stock-Based Compensation

Stock-based compensation expense, including grants of stock options and restricted stock awards issued under the Company’s equity incentive plan and rights to acquire stock granted under the Company’s employee stock purchase plan (ESPP), is measured at the grant date based on the fair value of the awards and is recognized as an expense on a straight-line basis over the requisite service period, which is generally the vesting period. The Company’s determination of the fair value of stock options with time-based vesting and rights to acquire stock under the ESPP utilizes the Black-Scholes option-pricing model. The Company lacks sufficient company-specific historical and

implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price. The Company estimates risk-free rates using the implied yield currently available on U.S. Treasury zero-coupon issues with a remaining term equal to the expected term and dividend yield using the Company’s expectations and historical data. The Company uses the simplified method to calculate the expected term of stock option grants as the Company has limited historical information from which to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior for its stock option grants. Under the simplified method, the expected term is estimated to be the mid-point between the vesting date and the contractual term of the option. The fair value of each stock option grant and right to acquire stock under the ESPP is calculated based upon the Company’s common stock valuation on the date of the grant. The Company accounts for forfeitures of stock option grants as they occur.

Net Loss Per Share of Common Stock

The Company follows the two-class method when computing net income (loss) per share of common stock as the Company has issued shares that meet the definition of participating securities. The two-class method determines net income (loss) per share of common stock for each class of common and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed.

Basic net income (loss) per share of common stock is computed by dividing the net income (loss) per share of common stock by the weighted average number of shares of common stock outstanding for the period. The weighted-average shares of common stock outstanding as of December 31, 2023 included pre-funded warrants that were issued in connection with the August 2022 Financing, as the warrants were issued for minimal consideration and were immediately exercisable.

Diluted net income (loss) per share of common stock is computed by adjusting net income (loss) to reallocate undistributed earnings based on the potential impact of dilutive securities. Diluted net loss per share of common stock is computed by dividing the diluted net loss by the weighted average number of shares of common stock outstanding for the period, including potential dilutive shares. For purposes of this calculation, outstanding stock options and convertible preferred stock are considered potential dilutive shares. The Company’s convertible preferred stock outstanding prior to the IPO contractually entitled the holders of such shares to participate in dividends but did not contractually require the holders of such shares to participate in losses of the Company. Accordingly, in periods in which the Company reported a net loss, such losses were not allocated to such securities.

The Company reported a net loss for the years ended December 31, 2023 and 2022. In periods in which the Company reported a net loss, diluted net loss per share of common stock was the same as basic net loss per share of common stock, since dilutive shares were not assumed to have been issued if their effect is anti-dilutive. The Company excluded the following potential shares of common stock, presented based on amounts outstanding at each period end, from the computation of diluted net loss attributable to common stockholders per share of common stock for the periods indicated because including them would have had an anti-dilutive effect:


	December 31,
	2023		2022
Options to purchase common stock		8,349,922		4,823,928
Unvested restricted stock units		365,892		128,280
Shares issuable under employee stock purchase plan		16,258		25,326
Total		8,732,072		4,977,534

Deferred Offering Costs

The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated.

After consummation of the equity financing, these costs are recorded as a reduction to the carrying value of stockholders’ equity as a reduction of additional paid-in capital or equity generated as a result of such offering. Should an in-process equity financing be abandoned, the deferred offering costs will be expensed immediately as a charge to operating expenses in the consolidated statements of operations and comprehensive loss.

Property and Equipment, net

Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives. The general range of useful lives of equipment is 3 to 5 years.

When assets are sold or retired, the cost and related accumulated depreciation are removed from the accounts, with any resulting gain or loss recorded in operating expenses in the consolidated statements of operations and comprehensive loss. Costs of repairs and maintenance are expensed as incurred.

Property and equipment, net consisted of the following:


		December 31,
(in thousands)	Estimated Useful Lives	2023			2022
Leasehold improvements	Shorter of remaining life of lease or useful life of asset	$	734		$	758
Furniture and fixtures	5 years		303			294
Computer equipment	3 years		162			203
Office equipment	5 years		146			146
Lab equipment	3 to 5 years		770			758
Property and equipment, gross			2,115			2,159
Less: Accumulated depreciation			(1,609	)		(1,402	)
Total property and equipment, net		$	506		$	757

The Company recognized depreciation expense related to these assets of $0.3 million and $0.5 million during the years ended December 31, 2023 and 2022, respectively.

Impairment of Long-Lived Assets

The Company’s long-lived assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset or asset group may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an asset or asset group to the future undiscounted cash flows expected to be generated by the asset or asset group. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. There were no impairments of long-lived assets for any of the periods presented.

Functional Currencies and Foreign Currency Translation

The Company’s reporting currency is U.S. dollars. The functional currency of Terns U.S. Opco and Terns H.K. is U.S. dollars, while the functional currency of Terns Suzhou and Terns China is the Chinese Yuan (CNY). Transactions denominated in other than the functional currencies are remeasured into the functional currency of the entity at the exchange rates prevailing on the transaction dates. Financial assets and liabilities denominated in other than the functional currency are remeasured at the balance sheet date exchange rate. The resulting exchange rate differences are recorded in the consolidated statements of operations and comprehensive loss as a foreign exchange related gain or loss.

Assets and liabilities of Terns Suzhou and Terns China are translated into U.S. dollars at the balance sheet date exchange rates, while income and expense items are translated at the average exchange rates prevailing during the fiscal year. Translation adjustments arising from these are reported as foreign currency translation adjustments and are shown as accumulated other comprehensive loss on the consolidated balance sheets.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk consist of cash, cash equivalents and marketable securities. The Company maintains deposits in federally insured depository institutions in excess of federally insured limits. The Company has not experienced any losses on such deposits.

The Company has established guidelines regarding approved investments and maturities of investments, which are designed to maintain safety and liquidity.

Patent Costs

All patent-related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred due to the uncertainty of the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses in the consolidated statements of operations and comprehensive loss.

Commitments and Contingencies

From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of business. The Company accrues a liability for such matters when it is probable that future expenditures will be made, and such expenditures can be reasonably estimated. For all periods presented, the Company was not a party to any pending material litigation or other material legal proceedings.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies. The Company is an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012, as amended (JOBS Act). Under the JOBS Act, emerging growth companies have extended transition periods available for complying with new or revised accounting standards. The Company has elected to use this exemption to delay adopting new or revised accounting standards until such time as those standards apply to private companies. Where allowable, the Company has early adopted certain standards as described below.

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13), which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. For non-public entities, ASU 2016-13 is effective for annual reporting periods, and interim periods within those fiscal years, beginning after December 15, 2022. Under the JOBS Act, emerging growth companies have extended transition periods available for complying with new or revised accounting standards. The Company adopted the new standard on January 1, 2023 on a prospective basis and the adoption did not have a material impact on the Company’s consolidated financial statements and related disclosures.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires additional income tax disclosures in the annual consolidated financial statements. The amendments in ASU 2023-09 are intended to enhance the transparency and decision usefulness of income tax disclosures. For public entities, ASU 2023-09 is effective for annual periods beginning after December 15, 2024, with early adoption permitted. For non-public entities, ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2025. Under the JOBS Act, emerging growth companies have extended transition periods available for complying with new or revised accounting standards. The Company is currently evaluating the impact of ASU 2023-09 on its financial statements and related disclosures.

Cash Equivalents and Marketable Securities

The amortized cost and fair value of cash equivalents and marketable securities by major security type is as follows:


	December 31, 2023
(in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Money market funds	$	33,788	$	—	$	—		$	33,788
U.S. government securities		183,357		219		(62	)		183,514
Total	$	217,145	$	219	$	(62	)	$	217,302

Classified as:
Cash equivalents								$	33,788
Marketable securities									183,514
Total								$	217,302

	December 31, 2022
(in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Money market funds	$	23,029	$	—	$	—		$	23,029
U.S. government securities		44,555		31		(383	)		44,203
Non-U.S. government securities		3,024		—		(16	)		3,008
Corporate debt securities		36,411		—		(146	)		36,265
Commercial paper		56,403		—		—			56,403
Total	$	163,422	$	31	$	(545	)	$	162,908

Classified as:
Cash equivalents								$	23,029
Marketable securities									139,879
Total								$	162,908


	December 31, 2023
	Less than 12 months					12 months or longer					Total
(in thousands)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. government securities	$	80,461	$	(62	)	$	—	$	—		$	80,461	$	(62	)
Total	$	80,461	$	(62	)	$	—	$	—		$	80,461	$	(62	)

	December 31, 2022
	Less than 12 months					12 months or longer					Total
(in thousands)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. government securities	$	—	$	—		$	29,704	$	(384	)	$	29,704	$	(384	)
Non-U.S. government securities		—		—			3,008		(15	)		3,008		(15	)
Corporate debt securities		22,717		(108	)		10,530		(38	)		33,247		(146	)
Total	$	22,717	$	(108	)	$	43,242	$	(437	)	$	65,959	$	(545	)

Fair Value

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The three levels of inputs that may be used to measure fair value are defined below:

•

Level 1—Quoted prices in active markets for identical assets or liabilities at the measurement date.

•

Level 2—Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•

Level 3—Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

The carrying values of the Company’s other assets, accounts payable and accrued expenses and other current liabilities approximate their fair values due to the short-term nature of these assets and liabilities.

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis:


	Fair Value at December 31, 2023
(in thousands)	Level 1		Level 2		Level 3		Total
Cash and cash equivalents
Cash in bank balances	$	46,138	$	—	$	—	$	46,138
Money market funds		33,788		—		—		33,788
Total cash and cash equivalents	$	79,926	$	—	$	—	$	79,926
Marketable securities
U.S. government securities	$	—	$	183,514	$	—	$	183,514
Total marketable securities	$	—	$	183,514	$	—	$	183,514

	Fair Value at December 31, 2022
(in thousands)	Level 1		Level 2		Level 3		Total
Cash and cash equivalents
Cash in bank balances	$	120,206	$	—	$	—	$	120,206
Money market funds		23,029		—		—		23,029
Total cash and cash equivalents	$	143,235	$	—	$	—	$	143,235
Marketable securities
U.S. government securities	$	—	$	44,203	$	—	$	44,203
Non-U.S. government securities		—		3,008		—		3,008
Corporate debt securities		—		36,265		—		36,265
Commercial paper		—		56,403		—		56,403
Total marketable securities	$	—	$	139,879	$	—	$	139,879

The aggregate amortized cost and fair value of marketable securities as of December 31, 2023, by contractual maturity, are as follows:


(in thousands)	Amortized Cost		Fair Value
Due in one year or less	$	152,284	$	152,329
Due after one year through two years		31,073		31,185
Total marketable securities	$	183,357	$	183,514

During the years ended December 31, 2023 and 2022, there were no transfers between Level 1, Level 2 and Level 3.

Leases

In March 2019, the Company entered into a lease agreement for office space in Foster City, California which expires October 2024. The Company has the option to extend the lease agreement for a period of five years. Additionally, the Company leases office space in Shanghai and Suzhou China.

Components of lease cost are as follows:


	Year Ended December 31,
(in thousands)	2023		2022
Operating lease cost	$	648	$	610
Short-term cost		17		43
Total lease cost	$	665	$	653

Weighted-average remaining lease term				0.84
Weighted-average discount rate				6.00	%

The Company's future minimum lease payments are as follows:


(in thousands)	Operating Leases
2024	$	618
2025 and thereafter		—
Total lease payments		618
Less: Imputed interest		(15	)
Present value of lease liabilities		603
Less: Current portion of lease liabilities		(603	)
Total lease liabilities, non-current	$	—

Common Stock and Stock-Based Compensation

As of each balance sheet date, the Company had reserved shares of common stock for issuance in connection with the following:


	December 31,
	2023		2022
Options outstanding under incentive award plans		8,349,922		4,823,928
Unvested restricted stock units		365,892		128,280
Shares available for future grant under incentive award plans		1,005,587		1,107,362
Shares available for future grant under employee stock purchase plans		701,671		323,920
Shares available for future grant under employment inducement award plans		3,291,000		1,310,000
Pre-funded warrants		9,751,500		14,630,000
Total shares reserved		23,465,572		22,323,490

Stock-Based Compensation Plans

2021 Incentive Award Plan

2021 Employee Stock Purchase Plan

2022 Employment Inducement Award Plan

Pre-Funded Warrants

Stock Options

The following table summarizes the stock option activity for all stock plans during the years ended December 31, 2023 and 2022:


	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value
						(in years)		(in thousands)
Outstanding as of December 31, 2021		3,577,485		$	9.72		9.09	$	491
Granted		1,405,020			4.44
Exercised		(10,000	)		0.00				21
Forfeited		(148,577	)		9.29
Outstanding as of December 31, 2022		4,823,928		$	8.22		8.46	$	11,721
Granted		4,269,925			9.51
Exercised		(106,176	)		2.58				925
Forfeited		(637,755	)		6.99
Outstanding as of December 31, 2023		8,349,922		$	9.04		6.82	$	2,225
Exercisable, December 31, 2023		4,523,993		$	8.64		4.96	$	1,570
Vested and expected to vest, December 31, 2023		8,349,922		$	9.04		6.82	$	2,225

The total fair value of options vested during the year ended December 31, 2023 and 2022 was $20.2 million and $10.9 million, respectively.

Restricted Stock

The following table summarizes the RSU activity for all stock plans during the years ended December 31, 2023 and 2022:


	Number of Shares			Weighted Average Grant-Date Fair Value
Unvested restricted stock units as of December 31, 2021		—		$	—
Granted		147,750			3.99
Forfeited		(19,470	)		3.37
Unvested restricted stock units as of December 31, 2022		128,280		$	4.09
Granted		308,013			9.86
Vested		(50,401	)		4.11
Forfeited		(20,000	)		7.04
Unvested restricted stock units as of December 31, 2023		365,892		$	8.79

The total fair value of restricted stock vested during the year ended December 31, 2023 was $0.2 million. No restricted stock vested during the year ended December 31, 2022.

Stock-Based Compensation Expense


	Year Ended December 31,
	2023			2022
Stock Option Plans
Expected term (years)		6.05			5.99
Expected volatility		73.84	%		72.67	%
Risk-free interest rate		3.62	%		2.29	%
Fair value of underlying common stock	$	9.51		$	4.44
Weighted average grant-date fair value per share	$	6.41		$	2.91
Employee Stock Purchase Plans
Expected term (years)		1.33			0.89
Expected volatility		82.05	%		70.08	%
Risk-free interest rate		4.84	%		2.55	%
Fair value of underlying common stock	$	7.48		$	2.95
Weighted average grant-date fair value per share	$	3.84		$	1.25

Stock-based compensation expense was classified in the consolidated statements of operations and comprehensive loss as follows:


	Year Ended December 31,
(in thousands)	2023		2022
Research and development expense	$	5,870	$	3,025
General and administrative expense		19,666		7,743
Total stock-based compensation expense	$	25,536	$	10,768

Income Tax

The following table presents domestic and foreign components of loss before income taxes:


	Year Ended December 31,
(in thousands)	2023			2022
U.S.	$	(90,017	)	$	(60,226	)
Foreign		46			239
Total loss before income tax	$	(89,971	)	$	(59,987	)

The following table presents the provision for income taxes:


	Year Ended December 31,
(in thousands)	2023			2022
Current
Federal	$	5		$	—
State		14			5
Foreign		239			299
Total current	$	258		$	304
Deferred
Foreign	$	(19	)	$	54
Total deferred	$	(19	)	$	54
Total income tax expense	$	239		$	358

The reconciliation of the U.S. federal statutory income tax benefit to the Company’s effective income tax rate is as follows:


	Year Ended December 31,
	2023			2022
Tax benefit at U.S. statutory rate		21.00	%		21.00	%
State income taxes, net of Federal tax benefit		(0.02	)		(0.01	)
Foreign income taxed at non-U.S. rates		(0.07	)		(0.02	)
Other permanent items		(0.10	)		(0.11	)
Deferred tax asset write-off		(5.05	)		—
Stock-based compensation		(0.39	)		(0.47	)
Research and development credits		3.99			3.00
Unrecognized tax benefit		(1.21	)		(0.57	)
162(m) limitation		(0.04	)		—
Global intangible low-taxed income		(0.05	)		(1.09	)
Increase in valuation allowance		(18.74	)		(21.93	)
Other		0.41			(0.40	)
		(0.27	)%		(0.60	)%

The difference between the provision for income taxes and the income tax determined by applying the statutory federal income tax rate of 21% was primarily due to the change in valuation allowance.

Significant components of the Company’s deferred tax assets and liabilities are as follows:


	As of December 31,
(in thousands)	2023			2022
Deferred tax assets:
Accruals and reserves	$	1,280		$	820
Intangibles		11,288			12,929
Stock-based compensation		3,730			3,549
Net operating loss		19,929			13,841
Research and development credits		6,551			3,650
Lease liability		114			241
Capitalized research and development		16,839			7,410
Other		72			61
Valuation allowance		(59,621	)		(42,207	)
Total deferred tax assets	$	182		$	294
Deferred tax liabilities:
Fixed assets	$	(29	)	$	(50	)
Operating lease assets		(97	)		(207	)
Total deferred tax liabilities	$	(126	)	$	(257	)
Net deferred tax assets	$	56		$	37

A reconciliation of the beginning and ending unrecognized tax benefit are as follows:


	Year Ended December 31,
(in thousands)	2023			2022
Unrecognized tax benefit at beginning of year	$	6,316		$	5,849
Increases related to prior year tax positions		14			150
Increases related to current year tax positions		1,339			706
Decreases related to prior year tax positions		(163	)		(389	)
Unrecognized tax benefit at end of year	$	7,506		$	6,316

Assignment, License and Collaboration Agreements

License Agreement

TERN-101 License Agreement with Eli Lilly

In February 2018, the Company entered a worldwide exclusive license agreement with Eli Lilly and Company (Lilly) (Lilly FXR 2018 License Agreement). Under the terms of the Lilly FXR 2018 License Agreement, Lilly granted the Company an exclusive, royalty-bearing license to make, have made, use, offer for sale, sell, import and have imported, including all rights to develop, manufacture and commercialize covered products in the field in the territory and a sublicensing right that allows the Company to grant sublicenses to affiliates and third parties to perform any portion of the development, manufacture and commercialization of covered products. The Company is required to use commercially reasonable efforts to meet development event milestones, develop the covered product in the field in mainland China and commercialize the covered product in the field in mainland China.

The Company agreed to pay Lilly up to an aggregate of $6.0 million in pre-specified development milestones for the first covered product in mainland China, and up to an aggregate of $50.0 million in pre-specified development milestones for the first covered product in ex-mainland China. The Company also agreed to pay Lilly tiered royalties calculated on a calendar year basis, in the mid-single digits to low teens on net sales ranging from the low hundreds of millions of dollars to the low billions of dollars. The Lilly FXR 2018 License Agreement expires upon expiry of the last remaining royalty obligation for a licensed product. As of December 31, 2023, the Company has not paid any amounts under the agreement and no milestones have been achieved. The Company has not recorded any research and development expense during the years ended December 31, 2023 and 2022 related to this agreement.

Assignment Agreement

In June 2019, the Company entered into an assignment agreement with Vintagence Biotechnology Ltd. (Vintagence) (Vintagence 2019 Assignment Agreement). Under the terms of the Vintagence 2019 Assignment Agreement, Vintagence assigned and agreed to assign to the Company any and all worldwide rights, title and interest in and to the Vintagence technology and gave Terns a sublicensing right that allows the Company to grant sublicenses to any of its affiliates and/or to licensees or contractors to perform any portion of the development, manufacture, and/or commercialization of covered compounds or covered products. The Company will remain directly responsible for all amounts owed to Vintagence under this agreement, regardless of sublicenses. The Company is required to use commercially reasonable efforts to commercialize the covered product in the field in the major markets.

The Company paid Vintagence a non-refundable, non-creditable upfront payment of $0.7 million, which was recorded as research and development expense in the Company’s statements of operations and comprehensive loss for the year ended December 31, 2019. In addition, pursuant to the terms of the Vintagence 2019 Assignment Agreement, the Company agreed to pay Vintagence up to CNY 205.0 million in development milestones for the first covered product. The term of the Vintagence 2019 Assignment Agreement will continue in effect on a country-by-country basis until all milestone payments are made. The Company has the right to terminate the agreement in its entirety or on a covered product-by-covered product and country-by-country basis, in its sole discretion by giving 60 days advance written notice to Vintagence. As of December 31, 2023, the Company has paid $4.4 million to Vintagence which includes a milestone payment of $1.5 million in connection with the Company's IND filing for TERN-501 in December 2020 and a milestone payment of $2.2 million in connection with the initiation of dosing in the Phase 2a DUET trial in July 2022. The Company has not recognized any research and development expense during the year ended December 31, 2023 related to this agreement. The Company has recognized research and development expense of $2.2 million during the year ended December 31, 2022 related to this agreement.

Hansoh Option and License Agreement

In July 2020, the Company entered into an exclusive option and license agreement with Hansoh (Shanghai) Healthtech Co., Ltd. (Hansoh Healthtech) and Jiangsu Hansoh Pharmaceutical Group Company Ltd. (Jiangsu Hansoh) (collectively, Hansoh) (Hansoh 2020 Option and License Agreement). Under the terms of the Hansoh 2020 Option and License Agreement, the Company granted Hansoh an exclusive, non-transferable, non-sublicensable, fully-paid, royalty-free license to conduct preliminary studies on the licensed compound (TERN-701, formerly known as TRN-000632) with an option to exclusively license the same for development and commercialization of licensed products in all prophylactic, palliative, therapeutic and/or diagnostic uses in connection with all human diseases and disorders (including development and research activities on animal models thereof) in the field of oncology, including all types of cancers (Field) in mainland China, Taiwan, Hong Kong and Macau (collectively, the Territory). In November 2021, Hansoh exercised its option and was granted an exclusive, royalty-bearing license, with the right to sublicense to exploit licensed compound and licensed products in the Field and in the Territory.

Under the Hansoh 2020 Option and License Agreement, Hansoh was required to pay the Company a refundable, non-creditable upfront payment. The Company received an upfront payment of $0.8 million during the year ended December 31, 2020, which was recognized as a refund liability and presented within accrued expenses and other current liabilities on the consolidated balance sheets as of December 31, 2020. In connection with Hansoh’s exercise of its option in November 2021, the Company recognized $1.0 million in license fee revenue within the consolidated statements of operations and comprehensive loss during the year ended December 31, 2021.

In addition, pursuant to the Hansoh 2020 Option and License Agreement, Hansoh has agreed to pay the Company up to $67.0 million in pre-specified clinical, regulatory and sales milestones. Hansoh must also pay the Company royalties in the mid-single digits based on net sales of all licensed products. The term of the Hansoh 2020 Option and License Agreement will continue until the end of the last-to-expire royalty term. As of December 31, 2023, no milestones have been met and future payments are all constrained.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Conclusions Regarding the Effectiveness of Disclosure Controls and Procedures

As of December 31, 2023, management, with the supervision and participation of our chief executive officer and the chief financial officer, performed an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including the chief executive officer and the chief financial officer, to allow timely decisions regarding required disclosures.

Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objective and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on this evaluation, our chief executive officer and the chief financial officer concluded that, as of December 31, 2023, the design and operation of our disclosure controls and procedures were effective at a reasonable assurance level.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting for our company. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, the company's principal executive and principal financial officers and effected by the company's board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of our company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our company's assets that could have a material effect on the financial statements.

Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements prepared for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management, with the participation of our chief executive officer and the chief financial officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2023. In making this assessment, our management used the criteria set forth in the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on its assessment, management concluded that our internal control over financial reporting was effective as of December 31, 2023 based on those criteria.

Attestation Report of the Registered Public Accounting Firm

This report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting.

Changes in Internal Control over Financial Reporting

There were no changes during the quarter ended December 31, 2023 to our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

Rule 10b5-1 Trading Plans

During the three months ended December 31, 2023, none of our directors or officers, or the Company, has entered into, modified or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c), in each case as defined in Item 408 of Regulation S-K.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

The information required by this item will be contained in our definitive proxy statement to be filed with the SEC in connection with our 2024 annual meeting of stockholders (the “Proxy Statement”), which is expected to be filed not later than 120 days after the end of our fiscal year ended December 31, 2023, and is incorporated in this report by reference.

Item 11. Executive Compensation.

The information required by this item will be set forth in our Proxy Statement and is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this item will be set forth in our Proxy Statement and is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

The information required by this item will be set forth in our Proxy Statement and is incorporated herein by reference.

Item 14. Principal Accounting Fees and Services.

The information required by this item will be set forth in our Proxy Statement and is incorporated herein by reference.

PART IV

Item 15. Exhibits, Financial Statement Schedules.

(a)(1) Financial Statements.

The response to this portion of Item 15 is set forth under Part II, Item 8 above.

(a)(2) Financial Statement Schedules.

All schedules have been omitted because they are not required or because the required information is given in the Financial Statements or Notes thereto set forth under Item 8 above.

(a)(3) Exhibits

The exhibits listed in the Exhibit Index below are filed or incorporated by reference as part of this Annual Report.

Item 16. Form 10-K Summary.

None.


		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	Date	Number	Filed Herewith

3.1	Amended and Restated Certificate of Incorporation.	8-K	2/9/2021	3.1

3.2	Amended and Restated Bylaws.	8-K	10/10/2023	3.1

4.1	Reference is made to Exhibits 3.1 through 3.2.

4.2	Form of Common Stock Certificate.	S-1/A	2/1/2021	4.2

4.3	Description of Securities.				X

4.4	Form of Pre-Funded Warrant.	8-K	8/16/2022	4.1

10.1	Amended and Restated Investors’ Rights Agreement, dated December 29, 2020, by and among the Registrant and the investors listed therein.	S-1	1/15/2021	10.1

10.2	Lease, dated March 1, 2019, by and between the Registrant and DWF IV Century Plaza, LLC.	S-1	1/15/2021	10.2

10.3(a)#	2017 Equity Incentive Plan, as amended.	S-1	1/15/2021	10.4(a)

10.3(b)#	Form of Stock Option Grant Notice and Stock Option Agreement under 2017 Equity Incentive Plan, as amended.	S-1	1/15/2021	10.4(b)

10.3(c)#	Form of Early Exercise Stock Option Grant Notice and Stock Option Agreement under 2017 Equity Incentive Plan, as amended.	S-1	1/15/2021	10.4(c)

10.3(d)#	Form of International Stock Option Grant Notice and Stock Option Agreement under 2017 Equity Incentive Plan, as amended.	S-1	1/15/2021	10.4(d)

10.4(a)#	2021 Incentive Award Plan.	S-8	2/12/2021	99.2(a)

10.4(b)#	Form of Stock Option Grant Notice and Stock Option Agreement under the 2021 Incentive Award Plan.	S-1/A	2/1/2021	10.5(b)

10.4(c)#	Form of Restricted Stock Award Grant Notice and Restricted Stock Award Agreement under the 2021 Incentive Award Plan.	S-1/A	2/1/2021	10.5(c)

10.4(d)#	Form of Restricted Stock Unit Award Grant Notice and Restricted Stock Unit Award Agreement under the 2021 Incentive Award Plan.	S-1/A	2/1/2021	10.5(d)



10.5#	2021 Employee Stock Purchase Plan.	S-8	2/12/2021	99.3

10.6#	Amended and Restated Employment Agreement by and between the Registrant and Erin Quirk, M.D.				X

10.7#	Employment Agreement by and between the Registrant and Senthil Sundaram, as amended.	10-K	3/27/2023	10.7

10.8#	Amended and Restated Employment Agreement by and between the Registrant and Bryan Yoon, Esq.				X

10.9#	Employment Agreement by and between the Registrant and Jill M. Quigley.				X

10.10#	Amended and Restated Employment Agreement by and between the Registrant and Mark Vignola.				X

10.11#	Amended and Restated Non-employee Director Compensation Program.	10-K	3/7/2022	10.10#

10.12	Form of Indemnification Agreement for directors and officers.	S-1/A	2/1/2021	10.11

10.13†	Exclusive License Agreement, dated as of February 9, 2018, between Terns Pharmaceuticals, Inc. and Eli Lilly and Company.	S-1	1/15/2021	10.13

10.14†	Exclusive License Agreement, dated as of March 9, 2018, between Terns Pharmaceuticals, Inc. and Eli Lilly and Company.	S-1	1/15/2021	10.14

10.15†	Assignment Agreement, dated as of June 24, 2019, by and among Terns Pharmaceuticals, Inc. and Vintagence Biotechnology Ltd.	S-1	1/15/2021	10.15

10.16†	Exclusive Option and License, dated as of July 27, 2020, by and among Terns Pharmaceuticals, Inc., Terns, Inc., CaspianTern LLC, Hansoh (Shanghai) Healthtech Co., Ltd. and Jiangsu Hansoh Pharmaceutical Group Company Ltd.	S-1	1/15/2021	10.16

10.17(a)#	2022 Employment Inducement Award Plan.	10-Q	11/9/2022	10.1(a)#
10.17(b)#	Form of Stock Option Grant Notice and Stock Option Agreement under the 2022 Employment Inducement Award Plan.	10-Q	11/9/2022	10.1(b)#

10.17(c)#	Form of Restricted Stock Unit Award Grant Notice and Restricted Stock Unit Award Agreement under the 2022 Employment Inducement Award Plan.	10-Q	11/9/2022	10.1(c)#

10.17(d)#	Amendment No. 1 to 2022 Employment Inducement Award Plan.	10-Q	11/14/2023	10.2#

10.18	Sales Agreement, dated March 8, 2022, by and between Terns Pharmaceuticals, Inc. and Cowen and Company, LLC.	S-3	3/8/2022	1.2

10.19	Sales Agreement, dated May 15, 2023, by and between Terns Pharmaceuticals, Inc. and Cowen and Company, LLC.	8-K	5/15/2023	1.1

10.20#	Separation Agreement between Terns, Inc. and Senthil Sundaram dated August 2, 2023.	10-Q	11/14/2023	10.1#

10.21#	Reference is made to Exhibit 97.0.

21.1	List of subsidiaries.	S-1	1/15/2021	21.1

23.1	Consent of Ernst & Young LLP, independent registered public accounting firm.				X

24.1	Power of Attorney. Reference is made to the signature page hereto.				X


31.1	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X

31.2	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X

32.1^	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				X

32.2^	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				X

97.0#	Clawback Policy.	10-Q	11/14/2023	10.3#

101.INS	Inline XBRL Instance Document				X

101.SCH	Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents				X

104	Cover Page Interactive Data File (embedded within the Inline XBRL document)				X

# Indicates management contract or compensatory plan.

† Certain portions of this document that constitute confidential information have been redacted in accordance with Regulation S-K, Item 601(b)(10).

^ The certification that accompanies this Annual Report on Form 10-K pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, is not deemed “filed” by the Registrant for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	TERNS PHARMACEUTICALS, INC.

Date: March 14, 2024	By:	/s/Amy Burroughs
		Amy Burroughs
		Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Amy Burroughs and Mark Vignola as his or her true and lawful attorney-in-fact and agent, with the full power of substitution, for him or her in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.


Signature	Title	Date

/s/ Amy Burroughs	Chief Executive Officer and Director (Principal Executive Officer)	March 14, 2024
Amy Burroughs		March 14, 2024


/s/ Mark Vignola	Chief Financial Officer (Principal Financial and Accounting Officer)	March 14, 2024
Mark Vignola, Ph.D.		March 14, 2024

/s/ David Fellows	Chairman of the Board of Directors	March 14, 2024
David Fellows	Chairman of the Board of Directors	March 14, 2024

/s/ Carl Gordon	Director	March 14, 2024
Carl Gordon, Ph.D., C.F.A.	Director	March 14, 2024

/s/ Jeffrey Kindler	Director	March 14, 2024
Jeffrey Kindler, Esq.	Director	March 14, 2024

/s/ Hongbo Lu	Director	March 14, 2024
Hongbo Lu, Ph.D	Director	March 14, 2024

/s/ Jill Quigley	Director	March 14, 2024
Jill Quigley, Esq.	Director	March 14, 2024

/s/ Ann Taylor	Director	March 14, 2024
Ann Taylor, M.D.	Director	March 14, 2024

/s/ Radhika Tripuraneni	Director	March 14, 2024
Radhika Tripuraneni, M.D., M.P.H.	Director	March 14, 2024

Common Stock and Stock-Based Compensation - Schedule of Stock Options Weighted Average Assumptions (Details) - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Employee Stock Purchase Plans
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected term (years)	1 year 3 months 29 days	10 months 20 days
Expected volatility	82.05%	70.08%
Risk-free interest rate	4.84%	2.55%
Fair value of underlying common stock	$ 7.48	$ 2.95
Weighted average grant-date fair value per share	$ 3.84	$ 1.25
Employee Stock Option
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected term (years)	6 years 18 days	5 years 11 months 26 days
Expected volatility	73.84%	72.67%
Risk-free interest rate	3.62%	2.29%
Fair value of underlying common stock	$ 9.51	$ 4.44
Fair value of option	$ 6.41	$ 2.91

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

+ Details

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 79,926	$ 143,235
Marketable securities	183,514	139,879
Prepaid expenses and other current assets	3,992	2,071
Total current assets	267,432	285,185
Property and equipment, net	506	757
Operating lease assets	523	1,047
Other assets	56	37
Total assets	268,517	287,026
Current liabilities:
Accounts payable	2,515	1,645
Accrued expenses and other current liabilities	8,826	6,162
Current portion of operating lease liabilities	603	661
Total current liabilities	11,944	8,468
Taxes payable, non-current	1,206	1,071
Operating lease liabilities, non-current	0	544
Total liabilities	13,150	10,083
Commitments and contingencies
Stockholders' equity:
Common stock, $0.0001 par value, 150,000,000 shares authorized at December 31, 2023 and 2022; 64,576,719 and 53,723,171 shares issued and outstanding at December 31, 2023 and 2022, respectively	6	5
Additional paid-in capital	588,008	520,178
Accumulated other comprehensive loss	(19)	(822)
Accumulated deficit	(332,628)	(242,418)
Total stockholders' equity	255,367	276,943
Total liabilities and stockholders' equity	$ 268,517	$ 287,026

Nature of the Business, Basis of Presentation and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Schedule of Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities included the following:


	December 31,
(in thousands)	2023		2022
Research and development costs	$	2,010	$	1,209
Compensation and benefit costs		5,683		3,843
Accrued professional fees		855		925
Other		278		185
Total accrued expenses and other current liabilities	$	8,826	$	6,162

Schedule of Antidilutive Securities Excluded from Computation of Net Loss per Share

The Company excluded the following potential shares of common stock, presented based on amounts outstanding at each period end, from the computation of diluted net loss attributable to common stockholders per share of common stock for the periods indicated because including them would have had an anti-dilutive effect:


	December 31,
	2023		2022
Options to purchase common stock		8,349,922		4,823,928
Unvested restricted stock units		365,892		128,280
Shares issuable under employee stock purchase plan		16,258		25,326
Total		8,732,072		4,977,534

Schedule of Property and Equipment

Property and equipment, net consisted of the following:


		December 31,
(in thousands)	Estimated Useful Lives	2023			2022
Leasehold improvements	Shorter of remaining life of lease or useful life of asset	$	734		$	758
Furniture and fixtures	5 years		303			294
Computer equipment	3 years		162			203
Office equipment	5 years		146			146
Lab equipment	3 to 5 years		770			758
Property and equipment, gross			2,115			2,159
Less: Accumulated depreciation			(1,609	)		(1,402	)
Total property and equipment, net		$	506		$	757

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Lease Payments Due Under Operating Leases

The Company's future minimum lease payments are as follows:


(in thousands)	Operating Leases
2024	$	618
2025 and thereafter		—
Total lease payments		618
Less: Imputed interest		(15	)
Present value of lease liabilities		603
Less: Current portion of lease liabilities		(603	)
Total lease liabilities, non-current	$	—

Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Parenthetical) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($)
Stock issuance cost	$ 268
Pre-funded warrants
Stock issuance cost	426
At-the-Market Offering
Stock issuance cost	$ 101

Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Operating expenses:
Research and development	$ 63,497	$ 39,617
General and administrative	39,061	22,412
Total operating expenses	102,558	62,029
Loss from operations	(102,558)	(62,029)
Other income
Interest income	12,901	2,110
Other expense, net	(314)	(68)
Total other income, net	12,587	2,042
Loss before income taxes	(89,971)	(59,987)
Income tax expense	(239)	(358)
Net loss	$ (90,210)	$ (60,345)
Net loss per share, basic	$ (1.27)	$ (1.67)
Net loss per share, diluted	$ (1.27)	$ (1.67)
Weighted average common stock outstanding, basic	71,259,239	36,033,045
Weighted average common stock outstanding, diluted	71,259,239	36,033,045
Other comprehensive loss:
Net loss	$ (90,210)	$ (60,345)
Unrealized gain (loss) on available-for-sale securities, net of tax	671	(320)
Foreign exchange translation adjustment, net of tax	132	(164)
Comprehensive loss	$ (89,407)	$ (60,829)

Fair Value Measurements - Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Fair Value Disclosures [Abstract]
Assets, Transfers into Level 3	$ 0	$ 0
Assets, Transfers out of Level 3	0	$ 0
Liabilities, Transfers into Level 3	0
Liabilities, Transfers out of Level 3	$ 0

Leases (Tables)

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

Schedule of components of lease cost

Components of lease cost are as follows:


	Year Ended December 31,
(in thousands)	2023		2022
Operating lease cost	$	648	$	610
Short-term cost		17		43
Total lease cost	$	665	$	653

Weighted-average remaining lease term				0.84
Weighted-average discount rate				6.00	%

Schedule of future minimum lease payments required under operating leases

The Company's future minimum lease payments are as follows:


(in thousands)	Operating Leases
2024	$	618
2025 and thereafter		—
Total lease payments		618
Less: Imputed interest		(15	)
Present value of lease liabilities		603
Less: Current portion of lease liabilities		(603	)
Total lease liabilities, non-current	$	—

Nature of the Business, Basis of Presentation and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Nature of the Business, Basis of Presentation and Summary of Significant Accounting Policies

Nature of the Business

Terns Pharmaceuticals, Inc. (Terns) is a clinical-stage biopharmaceutical company developing a portfolio of small-molecule product candidates to address serious diseases including oncology and obesity.

Terns was incorporated as an exempted company in the Cayman Islands in December 2016. In December 2020, the Company effected a de-registration of the Company in the Cayman Islands and a domestication in the State of Delaware, pursuant to which it became a Delaware corporation. Terns owns all of the share capital of Terns Pharmaceutical HongKong Limited (Terns Hong Kong) and Terns, Inc., a Delaware corporation (Terns U.S. Opco). Terns Hong Kong holds all of the share capital of Terns China Biotechnology Co., Ltd. (organized in Shanghai, People’s Republic of China (PRC)) (Terns China) and Terns (Suzhou) Biotechnology Co., Ltd. (organized in Suzhou, PRC) (Terns Suzhou).

The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions.

Basis of Presentation

At-the-Market Offering

August 2022 Financing

December 2022 Financing

Summary of Significant Accounting Policies

Revenue Recognition

Licenses of intellectual property

Milestone payments

Commercial milestones and royalties

Use of Estimates

Cash, Cash Equivalents and Marketable Securities

Operating Leases and Rent Expense

Research and Development Expenses

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities included the following:


	December 31,
(in thousands)	2023		2022
Research and development costs	$	2,010	$	1,209
Compensation and benefit costs		5,683		3,843
Accrued professional fees		855		925
Other		278		185
Total accrued expenses and other current liabilities	$	8,826	$	6,162

Executive Leadership Transition

Income Taxes

Comprehensive Loss

Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources.

Stock-Based Compensation

Net Loss Per Share of Common Stock


	December 31,
	2023		2022
Options to purchase common stock		8,349,922		4,823,928
Unvested restricted stock units		365,892		128,280
Shares issuable under employee stock purchase plan		16,258		25,326
Total		8,732,072		4,977,534

Deferred Offering Costs

Property and Equipment, net

Property and equipment, net consisted of the following:


		December 31,
(in thousands)	Estimated Useful Lives	2023			2022
Leasehold improvements	Shorter of remaining life of lease or useful life of asset	$	734		$	758
Furniture and fixtures	5 years		303			294
Computer equipment	3 years		162			203
Office equipment	5 years		146			146
Lab equipment	3 to 5 years		770			758
Property and equipment, gross			2,115			2,159
Less: Accumulated depreciation			(1,609	)		(1,402	)
Total property and equipment, net		$	506		$	757

The Company recognized depreciation expense related to these assets of $0.3 million and $0.5 million during the years ended December 31, 2023 and 2022, respectively.

Impairment of Long-Lived Assets

Functional Currencies and Foreign Currency Translation

Concentration of Credit Risk

The Company has established guidelines regarding approved investments and maturities of investments, which are designed to maintain safety and liquidity.

Patent Costs

Commitments and Contingencies

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Recently Issued Accounting Pronouncements Not Yet Adopted

Cash Equivalents and Marketable Securities

The amortized cost and fair value of cash equivalents and marketable securities by major security type is as follows:


	December 31, 2023
(in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Money market funds	$	33,788	$	—	$	—		$	33,788
U.S. government securities		183,357		219		(62	)		183,514
Total	$	217,145	$	219	$	(62	)	$	217,302

Classified as:
Cash equivalents								$	33,788
Marketable securities									183,514
Total								$	217,302

	December 31, 2022
(in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Money market funds	$	23,029	$	—	$	—		$	23,029
U.S. government securities		44,555		31		(383	)		44,203
Non-U.S. government securities		3,024		—		(16	)		3,008
Corporate debt securities		36,411		—		(146	)		36,265
Commercial paper		56,403		—		—			56,403
Total	$	163,422	$	31	$	(545	)	$	162,908

Classified as:
Cash equivalents								$	23,029
Marketable securities									139,879
Total								$	162,908


	December 31, 2023
	Less than 12 months					12 months or longer					Total
(in thousands)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. government securities	$	80,461	$	(62	)	$	—	$	—		$	80,461	$	(62	)
Total	$	80,461	$	(62	)	$	—	$	—		$	80,461	$	(62	)

	December 31, 2022
	Less than 12 months					12 months or longer					Total
(in thousands)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. government securities	$	—	$	—		$	29,704	$	(384	)	$	29,704	$	(384	)
Non-U.S. government securities		—		—			3,008		(15	)		3,008		(15	)
Corporate debt securities		22,717		(108	)		10,530		(38	)		33,247		(146	)
Total	$	22,717	$	(108	)	$	43,242	$	(437	)	$	65,959	$	(545	)

Fair Value

•

Level 1—Quoted prices in active markets for identical assets or liabilities at the measurement date.

•

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis:


	Fair Value at December 31, 2023
(in thousands)	Level 1		Level 2		Level 3		Total
Cash and cash equivalents
Cash in bank balances	$	46,138	$	—	$	—	$	46,138
Money market funds		33,788		—		—		33,788
Total cash and cash equivalents	$	79,926	$	—	$	—	$	79,926
Marketable securities
U.S. government securities	$	—	$	183,514	$	—	$	183,514
Total marketable securities	$	—	$	183,514	$	—	$	183,514

	Fair Value at December 31, 2022
(in thousands)	Level 1		Level 2		Level 3		Total
Cash and cash equivalents
Cash in bank balances	$	120,206	$	—	$	—	$	120,206
Money market funds		23,029		—		—		23,029
Total cash and cash equivalents	$	143,235	$	—	$	—	$	143,235
Marketable securities
U.S. government securities	$	—	$	44,203	$	—	$	44,203
Non-U.S. government securities		—		3,008		—		3,008
Corporate debt securities		—		36,265		—		36,265
Commercial paper		—		56,403		—		56,403
Total marketable securities	$	—	$	139,879	$	—	$	139,879

The aggregate amortized cost and fair value of marketable securities as of December 31, 2023, by contractual maturity, are as follows:


(in thousands)	Amortized Cost		Fair Value
Due in one year or less	$	152,284	$	152,329
Due after one year through two years		31,073		31,185
Total marketable securities	$	183,357	$	183,514

During the years ended December 31, 2023 and 2022, there were no transfers between Level 1, Level 2 and Level 3.

Leases

Components of lease cost are as follows:


	Year Ended December 31,
(in thousands)	2023		2022
Operating lease cost	$	648	$	610
Short-term cost		17		43
Total lease cost	$	665	$	653

Weighted-average remaining lease term				0.84
Weighted-average discount rate				6.00	%

The Company's future minimum lease payments are as follows:


(in thousands)	Operating Leases
2024	$	618
2025 and thereafter		—
Total lease payments		618
Less: Imputed interest		(15	)
Present value of lease liabilities		603
Less: Current portion of lease liabilities		(603	)
Total lease liabilities, non-current	$	—

Common Stock and Stock-Based Compensation

As of each balance sheet date, the Company had reserved shares of common stock for issuance in connection with the following:


	December 31,
	2023		2022
Options outstanding under incentive award plans		8,349,922		4,823,928
Unvested restricted stock units		365,892		128,280
Shares available for future grant under incentive award plans		1,005,587		1,107,362
Shares available for future grant under employee stock purchase plans		701,671		323,920
Shares available for future grant under employment inducement award plans		3,291,000		1,310,000
Pre-funded warrants		9,751,500		14,630,000
Total shares reserved		23,465,572		22,323,490

Stock-Based Compensation Plans

2021 Incentive Award Plan

2021 Employee Stock Purchase Plan

2022 Employment Inducement Award Plan

Pre-Funded Warrants

Stock Options

The following table summarizes the stock option activity for all stock plans during the years ended December 31, 2023 and 2022:


	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value
						(in years)		(in thousands)
Outstanding as of December 31, 2021		3,577,485		$	9.72		9.09	$	491
Granted		1,405,020			4.44
Exercised		(10,000	)		0.00				21
Forfeited		(148,577	)		9.29
Outstanding as of December 31, 2022		4,823,928		$	8.22		8.46	$	11,721
Granted		4,269,925			9.51
Exercised		(106,176	)		2.58				925
Forfeited		(637,755	)		6.99
Outstanding as of December 31, 2023		8,349,922		$	9.04		6.82	$	2,225
Exercisable, December 31, 2023		4,523,993		$	8.64		4.96	$	1,570
Vested and expected to vest, December 31, 2023		8,349,922		$	9.04		6.82	$	2,225

The total fair value of options vested during the year ended December 31, 2023 and 2022 was $20.2 million and $10.9 million, respectively.

Restricted Stock

The following table summarizes the RSU activity for all stock plans during the years ended December 31, 2023 and 2022:


	Number of Shares			Weighted Average Grant-Date Fair Value
Unvested restricted stock units as of December 31, 2021		—		$	—
Granted		147,750			3.99
Forfeited		(19,470	)		3.37
Unvested restricted stock units as of December 31, 2022		128,280		$	4.09
Granted		308,013			9.86
Vested		(50,401	)		4.11
Forfeited		(20,000	)		7.04
Unvested restricted stock units as of December 31, 2023		365,892		$	8.79

The total fair value of restricted stock vested during the year ended December 31, 2023 was $0.2 million. No restricted stock vested during the year ended December 31, 2022.

Stock-Based Compensation Expense


	Year Ended December 31,
	2023			2022
Stock Option Plans
Expected term (years)		6.05			5.99
Expected volatility		73.84	%		72.67	%
Risk-free interest rate		3.62	%		2.29	%
Fair value of underlying common stock	$	9.51		$	4.44
Weighted average grant-date fair value per share	$	6.41		$	2.91
Employee Stock Purchase Plans
Expected term (years)		1.33			0.89
Expected volatility		82.05	%		70.08	%
Risk-free interest rate		4.84	%		2.55	%
Fair value of underlying common stock	$	7.48		$	2.95
Weighted average grant-date fair value per share	$	3.84		$	1.25

Stock-based compensation expense was classified in the consolidated statements of operations and comprehensive loss as follows:


	Year Ended December 31,
(in thousands)	2023		2022
Research and development expense	$	5,870	$	3,025
General and administrative expense		19,666		7,743
Total stock-based compensation expense	$	25,536	$	10,768

Income Tax

The following table presents domestic and foreign components of loss before income taxes:


	Year Ended December 31,
(in thousands)	2023			2022
U.S.	$	(90,017	)	$	(60,226	)
Foreign		46			239
Total loss before income tax	$	(89,971	)	$	(59,987	)

The following table presents the provision for income taxes:


	Year Ended December 31,
(in thousands)	2023			2022
Current
Federal	$	5		$	—
State		14			5
Foreign		239			299
Total current	$	258		$	304
Deferred
Foreign	$	(19	)	$	54
Total deferred	$	(19	)	$	54
Total income tax expense	$	239		$	358

The reconciliation of the U.S. federal statutory income tax benefit to the Company’s effective income tax rate is as follows:


	Year Ended December 31,
	2023			2022
Tax benefit at U.S. statutory rate		21.00	%		21.00	%
State income taxes, net of Federal tax benefit		(0.02	)		(0.01	)
Foreign income taxed at non-U.S. rates		(0.07	)		(0.02	)
Other permanent items		(0.10	)		(0.11	)
Deferred tax asset write-off		(5.05	)		—
Stock-based compensation		(0.39	)		(0.47	)
Research and development credits		3.99			3.00
Unrecognized tax benefit		(1.21	)		(0.57	)
162(m) limitation		(0.04	)		—
Global intangible low-taxed income		(0.05	)		(1.09	)
Increase in valuation allowance		(18.74	)		(21.93	)
Other		0.41			(0.40	)
		(0.27	)%		(0.60	)%

The difference between the provision for income taxes and the income tax determined by applying the statutory federal income tax rate of 21% was primarily due to the change in valuation allowance.

Significant components of the Company’s deferred tax assets and liabilities are as follows:


	As of December 31,
(in thousands)	2023			2022
Deferred tax assets:
Accruals and reserves	$	1,280		$	820
Intangibles		11,288			12,929
Stock-based compensation		3,730			3,549
Net operating loss		19,929			13,841
Research and development credits		6,551			3,650
Lease liability		114			241
Capitalized research and development		16,839			7,410
Other		72			61
Valuation allowance		(59,621	)		(42,207	)
Total deferred tax assets	$	182		$	294
Deferred tax liabilities:
Fixed assets	$	(29	)	$	(50	)
Operating lease assets		(97	)		(207	)
Total deferred tax liabilities	$	(126	)	$	(257	)
Net deferred tax assets	$	56		$	37

A reconciliation of the beginning and ending unrecognized tax benefit are as follows:


	Year Ended December 31,
(in thousands)	2023			2022
Unrecognized tax benefit at beginning of year	$	6,316		$	5,849
Increases related to prior year tax positions		14			150
Increases related to current year tax positions		1,339			706
Decreases related to prior year tax positions		(163	)		(389	)
Unrecognized tax benefit at end of year	$	7,506		$	6,316

Assignment, License and Collaboration Agreements

License Agreement

TERN-101 License Agreement with Eli Lilly

Assignment Agreement

Hansoh Option and License Agreement

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Conclusions Regarding the Effectiveness of Disclosure Controls and Procedures

Management’s Report on Internal Control over Financial Reporting

Attestation Report of the Registered Public Accounting Firm

This report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting.

Changes in Internal Control over Financial Reporting

Item 9B. Other Information.

Rule 10b5-1 Trading Plans

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

Item 11. Executive Compensation.

The information required by this item will be set forth in our Proxy Statement and is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this item will be set forth in our Proxy Statement and is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

The information required by this item will be set forth in our Proxy Statement and is incorporated herein by reference.

Item 14. Principal Accounting Fees and Services.

The information required by this item will be set forth in our Proxy Statement and is incorporated herein by reference.

PART IV

Item 15. Exhibits, Financial Statement Schedules.

(a)(1) Financial Statements.

The response to this portion of Item 15 is set forth under Part II, Item 8 above.

(a)(2) Financial Statement Schedules.

All schedules have been omitted because they are not required or because the required information is given in the Financial Statements or Notes thereto set forth under Item 8 above.

(a)(3) Exhibits

The exhibits listed in the Exhibit Index below are filed or incorporated by reference as part of this Annual Report.

Item 16. Form 10-K Summary.

None.


		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	Date	Number	Filed Herewith

3.1	Amended and Restated Certificate of Incorporation.	8-K	2/9/2021	3.1

3.2	Amended and Restated Bylaws.	8-K	10/10/2023	3.1

4.1	Reference is made to Exhibits 3.1 through 3.2.

4.2	Form of Common Stock Certificate.	S-1/A	2/1/2021	4.2

4.3	Description of Securities.				X

4.4	Form of Pre-Funded Warrant.	8-K	8/16/2022	4.1

10.1	Amended and Restated Investors’ Rights Agreement, dated December 29, 2020, by and among the Registrant and the investors listed therein.	S-1	1/15/2021	10.1

10.2	Lease, dated March 1, 2019, by and between the Registrant and DWF IV Century Plaza, LLC.	S-1	1/15/2021	10.2

10.3(a)#	2017 Equity Incentive Plan, as amended.	S-1	1/15/2021	10.4(a)

10.3(b)#	Form of Stock Option Grant Notice and Stock Option Agreement under 2017 Equity Incentive Plan, as amended.	S-1	1/15/2021	10.4(b)

10.3(c)#	Form of Early Exercise Stock Option Grant Notice and Stock Option Agreement under 2017 Equity Incentive Plan, as amended.	S-1	1/15/2021	10.4(c)

10.3(d)#	Form of International Stock Option Grant Notice and Stock Option Agreement under 2017 Equity Incentive Plan, as amended.	S-1	1/15/2021	10.4(d)

10.4(a)#	2021 Incentive Award Plan.	S-8	2/12/2021	99.2(a)

10.4(b)#	Form of Stock Option Grant Notice and Stock Option Agreement under the 2021 Incentive Award Plan.	S-1/A	2/1/2021	10.5(b)

10.4(c)#	Form of Restricted Stock Award Grant Notice and Restricted Stock Award Agreement under the 2021 Incentive Award Plan.	S-1/A	2/1/2021	10.5(c)

10.4(d)#	Form of Restricted Stock Unit Award Grant Notice and Restricted Stock Unit Award Agreement under the 2021 Incentive Award Plan.	S-1/A	2/1/2021	10.5(d)



10.5#	2021 Employee Stock Purchase Plan.	S-8	2/12/2021	99.3

10.6#	Amended and Restated Employment Agreement by and between the Registrant and Erin Quirk, M.D.				X

10.7#	Employment Agreement by and between the Registrant and Senthil Sundaram, as amended.	10-K	3/27/2023	10.7

10.8#	Amended and Restated Employment Agreement by and between the Registrant and Bryan Yoon, Esq.				X

10.9#	Employment Agreement by and between the Registrant and Jill M. Quigley.				X

10.10#	Amended and Restated Employment Agreement by and between the Registrant and Mark Vignola.				X

10.11#	Amended and Restated Non-employee Director Compensation Program.	10-K	3/7/2022	10.10#

10.12	Form of Indemnification Agreement for directors and officers.	S-1/A	2/1/2021	10.11

10.13†	Exclusive License Agreement, dated as of February 9, 2018, between Terns Pharmaceuticals, Inc. and Eli Lilly and Company.	S-1	1/15/2021	10.13

10.14†	Exclusive License Agreement, dated as of March 9, 2018, between Terns Pharmaceuticals, Inc. and Eli Lilly and Company.	S-1	1/15/2021	10.14

10.15†	Assignment Agreement, dated as of June 24, 2019, by and among Terns Pharmaceuticals, Inc. and Vintagence Biotechnology Ltd.	S-1	1/15/2021	10.15

10.16†	Exclusive Option and License, dated as of July 27, 2020, by and among Terns Pharmaceuticals, Inc., Terns, Inc., CaspianTern LLC, Hansoh (Shanghai) Healthtech Co., Ltd. and Jiangsu Hansoh Pharmaceutical Group Company Ltd.	S-1	1/15/2021	10.16

10.17(a)#	2022 Employment Inducement Award Plan.	10-Q	11/9/2022	10.1(a)#
10.17(b)#	Form of Stock Option Grant Notice and Stock Option Agreement under the 2022 Employment Inducement Award Plan.	10-Q	11/9/2022	10.1(b)#

10.17(c)#	Form of Restricted Stock Unit Award Grant Notice and Restricted Stock Unit Award Agreement under the 2022 Employment Inducement Award Plan.	10-Q	11/9/2022	10.1(c)#

10.17(d)#	Amendment No. 1 to 2022 Employment Inducement Award Plan.	10-Q	11/14/2023	10.2#

10.18	Sales Agreement, dated March 8, 2022, by and between Terns Pharmaceuticals, Inc. and Cowen and Company, LLC.	S-3	3/8/2022	1.2

10.19	Sales Agreement, dated May 15, 2023, by and between Terns Pharmaceuticals, Inc. and Cowen and Company, LLC.	8-K	5/15/2023	1.1

10.20#	Separation Agreement between Terns, Inc. and Senthil Sundaram dated August 2, 2023.	10-Q	11/14/2023	10.1#

10.21#	Reference is made to Exhibit 97.0.

21.1	List of subsidiaries.	S-1	1/15/2021	21.1

23.1	Consent of Ernst & Young LLP, independent registered public accounting firm.				X

24.1	Power of Attorney. Reference is made to the signature page hereto.				X


31.1	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X

31.2	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X

32.1^	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				X

32.2^	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				X

97.0#	Clawback Policy.	10-Q	11/14/2023	10.3#

101.INS	Inline XBRL Instance Document				X

101.SCH	Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents				X

104	Cover Page Interactive Data File (embedded within the Inline XBRL document)				X

# Indicates management contract or compensatory plan.

† Certain portions of this document that constitute confidential information have been redacted in accordance with Regulation S-K, Item 601(b)(10).

SIGNATURES


	TERNS PHARMACEUTICALS, INC.

Date: March 14, 2024	By:	/s/Amy Burroughs
		Amy Burroughs
		Chief Executive Officer

POWER OF ATTORNEY


Signature	Title	Date

/s/ Amy Burroughs	Chief Executive Officer and Director (Principal Executive Officer)	March 14, 2024
Amy Burroughs		March 14, 2024


/s/ Mark Vignola	Chief Financial Officer (Principal Financial and Accounting Officer)	March 14, 2024
Mark Vignola, Ph.D.		March 14, 2024

/s/ David Fellows	Chairman of the Board of Directors	March 14, 2024
David Fellows	Chairman of the Board of Directors	March 14, 2024

/s/ Carl Gordon	Director	March 14, 2024
Carl Gordon, Ph.D., C.F.A.	Director	March 14, 2024

/s/ Jeffrey Kindler	Director	March 14, 2024
Jeffrey Kindler, Esq.	Director	March 14, 2024

/s/ Hongbo Lu	Director	March 14, 2024
Hongbo Lu, Ph.D	Director	March 14, 2024

/s/ Jill Quigley	Director	March 14, 2024
Jill Quigley, Esq.	Director	March 14, 2024

/s/ Ann Taylor	Director	March 14, 2024
Ann Taylor, M.D.	Director	March 14, 2024

/s/ Radhika Tripuraneni	Director	March 14, 2024
Radhika Tripuraneni, M.D., M.P.H.	Director	March 14, 2024

Cash Equivalents and Marketable Securities (Tables)

12 Months Ended

Dec. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Schedule of Fair Value And Amortized Cost of Marketable Securities

The amortized cost and fair value of cash equivalents and marketable securities by major security type is as follows:


	December 31, 2023
(in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Money market funds	$	33,788	$	—	$	—		$	33,788
U.S. government securities		183,357		219		(62	)		183,514
Total	$	217,145	$	219	$	(62	)	$	217,302

Classified as:
Cash equivalents								$	33,788
Marketable securities									183,514
Total								$	217,302

	December 31, 2022
(in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Money market funds	$	23,029	$	—	$	—		$	23,029
U.S. government securities		44,555		31		(383	)		44,203
Non-U.S. government securities		3,024		—		(16	)		3,008
Corporate debt securities		36,411		—		(146	)		36,265
Commercial paper		56,403		—		—			56,403
Total	$	163,422	$	31	$	(545	)	$	162,908

Classified as:
Cash equivalents								$	23,029
Marketable securities									139,879
Total								$	162,908

Schedule of Available-for-sale Marketable Securities for Unrealized Loss Position


	December 31, 2023
	Less than 12 months					12 months or longer					Total
(in thousands)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. government securities	$	80,461	$	(62	)	$	—	$	—		$	80,461	$	(62	)
Total	$	80,461	$	(62	)	$	—	$	—		$	80,461	$	(62	)

	December 31, 2022
	Less than 12 months					12 months or longer					Total
(in thousands)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. government securities	$	—	$	—		$	29,704	$	(384	)	$	29,704	$	(384	)
Non-U.S. government securities		—		—			3,008		(15	)		3,008		(15	)
Corporate debt securities		22,717		(108	)		10,530		(38	)		33,247		(146	)
Total	$	22,717	$	(108	)	$	43,242	$	(437	)	$	65,959	$	(545	)

Net Loss Per Share of Common Stock (Tables)

12 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

Schedule of Antidilutive Securities Excluded from Computation of Net Loss per Share


	December 31,
	2023		2022
Options to purchase common stock		8,349,922		4,823,928
Unvested restricted stock units		365,892		128,280
Shares issuable under employee stock purchase plan		16,258		25,326
Total		8,732,072		4,977,534

Income Tax - Schedule of Provision for Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Current
Federal	$ 5	$ 0
State	14	5
Foreign	239	299
Total current	258	304
Deferred
Foreign	(19)	54
Total deferred	(19)	54
Total income tax expense	$ 239	$ 358

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Assignment, License and Collaboration Agreements

12 Months Ended

Dec. 31, 2023

Assignment License And Collaboration Agreements [Abstract]

Assignment, License and Collaboration Agreements

License Agreement

TERN-101 License Agreement with Eli Lilly

Assignment Agreement

Hansoh Option and License Agreement

Leases (Additional Information) (Details)	Mar. 31, 2019
Lease Agreements [Member] \| Geographic Distribution, Domestic [Member]
Lessor, Lease, Description [Line Items]
Option to extend	The Company has the option to extend the lease agreement for a period of five years

Income Tax (Tables)

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Components of (Loss) Income Before Income Taxes

The following table presents domestic and foreign components of loss before income taxes:


	Year Ended December 31,
(in thousands)	2023			2022
U.S.	$	(90,017	)	$	(60,226	)
Foreign		46			239
Total loss before income tax	$	(89,971	)	$	(59,987	)

Schedule of Provision for Income Taxes

The following table presents the provision for income taxes:


	Year Ended December 31,
(in thousands)	2023			2022
Current
Federal	$	5		$	—
State		14			5
Foreign		239			299
Total current	$	258		$	304
Deferred
Foreign	$	(19	)	$	54
Total deferred	$	(19	)	$	54
Total income tax expense	$	239		$	358

Reconciliation between Effect of Applying Federal Statutory Rate and Effective Income Tax Rate

The reconciliation of the U.S. federal statutory income tax benefit to the Company’s effective income tax rate is as follows:


	Year Ended December 31,
	2023			2022
Tax benefit at U.S. statutory rate		21.00	%		21.00	%
State income taxes, net of Federal tax benefit		(0.02	)		(0.01	)
Foreign income taxed at non-U.S. rates		(0.07	)		(0.02	)
Other permanent items		(0.10	)		(0.11	)
Deferred tax asset write-off		(5.05	)		—
Stock-based compensation		(0.39	)		(0.47	)
Research and development credits		3.99			3.00
Unrecognized tax benefit		(1.21	)		(0.57	)
162(m) limitation		(0.04	)		—
Global intangible low-taxed income		(0.05	)		(1.09	)
Increase in valuation allowance		(18.74	)		(21.93	)
Other		0.41			(0.40	)
		(0.27	)%		(0.60	)%

Components of Deferred Tax Assets and Liabilities

Significant components of the Company’s deferred tax assets and liabilities are as follows:


	As of December 31,
(in thousands)	2023			2022
Deferred tax assets:
Accruals and reserves	$	1,280		$	820
Intangibles		11,288			12,929
Stock-based compensation		3,730			3,549
Net operating loss		19,929			13,841
Research and development credits		6,551			3,650
Lease liability		114			241
Capitalized research and development		16,839			7,410
Other		72			61
Valuation allowance		(59,621	)		(42,207	)
Total deferred tax assets	$	182		$	294
Deferred tax liabilities:
Fixed assets	$	(29	)	$	(50	)
Operating lease assets		(97	)		(207	)
Total deferred tax liabilities	$	(126	)	$	(257	)
Net deferred tax assets	$	56		$	37

Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ending unrecognized tax benefit are as follows:


	Year Ended December 31,
(in thousands)	2023			2022
Unrecognized tax benefit at beginning of year	$	6,316		$	5,849
Increases related to prior year tax positions		14			150
Increases related to current year tax positions		1,339			706
Decreases related to prior year tax positions		(163	)		(389	)
Unrecognized tax benefit at end of year	$	7,506		$	6,316

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, authorized	150,000,000	150,000,000
Common stock, shares issued	64,576,719	53,723,171
Common stock, shares outstanding	64,576,719	53,723,171

Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2023	Mar. 08, 2024	Jun. 30, 2023
Cover [Abstract]
Document Type	10-K
Document Annual Report	true
Amendment Flag	false
Document Period End Date	Dec. 31, 2023
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	FY
Entity Registrant Name	Terns Pharmaceuticals, Inc.
Entity Central Index Key	0001831363
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Well-known Seasoned Issuer	No
ICFR Auditor Attestation Flag	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Small Business	true
Entity Common Stock, Shares Outstanding		64,651,693
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Shell Company	false
Entity File Number	001-39926
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	98-1448275
Entity Address Address Line1	1065 East Hillsdale Blvd.
Entity Address, Address Line Two	Suite 100
Entity Address, City or Town	Foster City
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94404
City Area Code	650
Local Phone Number	525-5535
Entity Public Float			$ 408,999,623
Document Transition Report	false
Entity Interactive Data Current	Yes
Title of 12(b) Security	Common Stock, $0.0001 par value per share
Trading Symbol	TERN
Security Exchange Name	NASDAQ
Documents Incorporated By Reference	Portions of the information called for by Part III of this Annual Report on Form 10-K is hereby incorporated by reference from the definitive proxy statement for the registrant’s 2024 annual meeting of stockholders, which will be filed with the Securities and Exchange Commission not later than 120 days after the registrant’s fiscal year ended December 31, 2023.
Document Financial Statement Error Correction [Flag]	false
Auditor Firm ID	42
Auditor Location	San Jose, California
Auditor Name	Ernst & Young LLP

Leases - Schedule of maturities of operating leases (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Lessee, Operating Lease, Liability, to be Paid, Fiscal Year Maturity [Abstract]
2024	$ 618
2025 and thereafter	0
Total lease payments	618
Less: Imputed interest	(15)
Present value of lease liabilities	603
Less: Current portion of lease liabilities	(603)	$ (661)
Total lease liabilities, non-current	$ 0

- Definition

Amount, after deduction of unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

Leases

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

Leases

Components of lease cost are as follows:


	Year Ended December 31,
(in thousands)	2023		2022
Operating lease cost	$	648	$	610
Short-term cost		17		43
Total lease cost	$	665	$	653

Weighted-average remaining lease term				0.84
Weighted-average discount rate				6.00	%

The Company's future minimum lease payments are as follows:


(in thousands)	Operating Leases
2024	$	618
2025 and thereafter		—
Total lease payments		618
Less: Imputed interest		(15	)
Present value of lease liabilities		603
Less: Current portion of lease liabilities		(603	)
Total lease liabilities, non-current	$	—

Assignment, License and Collaboration Agreements - Additional Information (Details) $ in Thousands, ¥ in Millions	1 Months Ended					12 Months Ended
	Jul. 31, 2022 USD ($)	Nov. 30, 2021 USD ($)	Jul. 31, 2020 USD ($)	Jun. 30, 2019 CNY (¥)	Feb. 28, 2018 USD ($)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
TERN-101 License Agreement with Eli Lilly
Assignment License And Collaboration Agreements [Line Items]
Agreement milestones payment						$ 0
Research and development expense						0	$ 0
TERN-101 License Agreement with Eli Lilly \| China
Assignment License And Collaboration Agreements [Line Items]
Aggregate pre-specified development milestones for the first covered product					$ 6,000
Aggregate pre-specified development milestones for the first covered product in ex-mainland					$ 50,000
Assignment Agreement
Assignment License And Collaboration Agreements [Line Items]
Aggregate pre-specified development milestones for the first covered product \| ¥				¥ 205.0
Research and development expense						0	$ 2,200
Amount paid under the agreement						$ 4,400
Number of days advance written notice						60 days
Milestone payment								$ 1,500
Assignment Agreement \| Research and Development Expense
Assignment License And Collaboration Agreements [Line Items]
Upfront payment									$ 700
Hansoh Option and License Agreement
Assignment License And Collaboration Agreements [Line Items]
Upfront payment received								$ 800
License revenue		$ 1,000
Hansoh Option and License Agreement \| Maximum
Assignment License And Collaboration Agreements [Line Items]
Amount agree to pay in pre-specified clinical, regulatory and sales milestones			$ 67,000
Phase 2a DUET [Member]
Assignment License And Collaboration Agreements [Line Items]
Milestone payment	$ 2,200

Nature of the Business, Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Net Loss per Share (Details) - shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	8,732,072	4,977,534
Options to Purchase Common Stock
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	8,349,922	4,823,928
Unvested Restricted Stock Units
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	365,892	128,280
Shares issuable under employee stock purchase plan
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	16,258	25,326

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Cash flows from operating activities:
Net loss	$ (90,210)	$ (60,345)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense	25,536	10,768
Depreciation expense	292	484
(Accretion) amortization on marketable securities	(5,029)	81
Change in deferred taxes and uncertain tax positions	141	392
Amortization of operating lease assets	589	548
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	(1,921)	(1,121)
Accounts payable	1,149	(722)
Accrued expenses and other current liabilities	2,729	1,416
Operating lease liabilities	(666)	(610)
Net cash used in operating activities	(67,390)	(49,109)
Cash flows from investing activities:
Purchase of property and equipment	(52)	(275)
Purchase of investments	(275,781)	(139,731)
Proceeds from sales and maturities of investments	237,846	117,734
Net cash used in investing activities	(37,987)	(22,272)
Cash flows from financing activities:
Net proceeds from the issuance of common stock and pre-funded warrants	0	61,145
Net proceeds from the issuance of common stock	0	81,115
Net proceeds from issuance of common stock in at-the-market offering	41,611	24,993
Payment of deferred offering costs	(344)	(401)
Proceeds from the issuance of common stock under employee stock purchase plan	410	243
Proceeds from stock option exercises	274	0
Net cash provided by financing activities	41,951	167,095
Effect of exchange rate changes on cash and cash equivalents	117	(178)
Net (decrease) increase in cash and cash equivalents	(63,309)	95,536
Cash and cash equivalents at beginning of period	143,235	47,699
Cash and cash equivalents at end of period	79,926	143,235
Supplemental disclosure of cash flow information:
Cash paid for amounts included in the measurement of lease liabilities	721	688
Cash paid for taxes	28	3
Supplemental disclosure of noncash investing and financing activities:
Right-of-use assets obtained in exchange for lease liabilities	65	1,595
Deferred offering costs included in accounts payable and accrued expense	$ 0	$ 394

Fair Value Measurements

12 Months Ended

Dec. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value

•

Level 1—Quoted prices in active markets for identical assets or liabilities at the measurement date.

•

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis:


	Fair Value at December 31, 2023
(in thousands)	Level 1		Level 2		Level 3		Total
Cash and cash equivalents
Cash in bank balances	$	46,138	$	—	$	—	$	46,138
Money market funds		33,788		—		—		33,788
Total cash and cash equivalents	$	79,926	$	—	$	—	$	79,926
Marketable securities
U.S. government securities	$	—	$	183,514	$	—	$	183,514
Total marketable securities	$	—	$	183,514	$	—	$	183,514

	Fair Value at December 31, 2022
(in thousands)	Level 1		Level 2		Level 3		Total
Cash and cash equivalents
Cash in bank balances	$	120,206	$	—	$	—	$	120,206
Money market funds		23,029		—		—		23,029
Total cash and cash equivalents	$	143,235	$	—	$	—	$	143,235
Marketable securities
U.S. government securities	$	—	$	44,203	$	—	$	44,203
Non-U.S. government securities		—		3,008		—		3,008
Corporate debt securities		—		36,265		—		36,265
Commercial paper		—		56,403		—		56,403
Total marketable securities	$	—	$	139,879	$	—	$	139,879

The aggregate amortized cost and fair value of marketable securities as of December 31, 2023, by contractual maturity, are as follows:


(in thousands)	Amortized Cost		Fair Value
Due in one year or less	$	152,284	$	152,329
Due after one year through two years		31,073		31,185
Total marketable securities	$	183,357	$	183,514

During the years ended December 31, 2023 and 2022, there were no transfers between Level 1, Level 2 and Level 3.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Nature of the Business, Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Accounting Policies [Abstract]
Research and development costs	$ 2,010	$ 1,209
Compensation and benefit costs	5,683	3,843
Accrued professional fees	855	925
Other	278	185
Total accrued expenses and other current liabilities	$ 8,826	$ 6,162

Income Tax - Reconciliation between Effect of Applying Federal Statutory Rate and Effective Income Tax Rate (Details)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Effective Income Tax Rate Reconciliation, Percent [Abstract]
Tax benefit at U.S. statutory rate	21.00%	21.00%
State income taxes, net of Federal tax benefit	(0.02%)	(0.01%)
Foreign income taxed at non-U.S. rates	(0.07%)	(0.02%)
Other permanent items	(0.10%)	(0.11%)
Deferred tax asset write-off	(5.05%)	0.00%
Stock-based compensation	(0.39%)	(0.47%)
Research and development credits	3.99%	3.00%
Unrecognized tax benefit	(1.21%)	(0.57%)
162(m) limitation	(0.04%)	0.00%
Global intangible low-taxed income	(0.05%)	(1.09%)
Increase in valuation allowance	(18.74%)	(21.93%)
Other	0.41%	(0.40%)
Effective tax rate	(0.27%)	(0.60%)

Nature of the Business, Basis of Presentation and Summary of Significant Accounting Policies - Property and Equipment, Net (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 2,115	$ 2,159
Less : Accumulated depreciation	(1,609)	(1,402)
Property, Plant and Equipment, Net, Total	$ 506	757
Minimum
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	3 years
Maximum
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	5 years
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 734	758
Estimated Useful Lives	Shorter of remaining life of lease or useful life of asset
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 303	294
Estimated Useful Lives	5 years
Computer equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 162	203
Estimated Useful Lives	3 years
Office equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 146	146
Estimated Useful Lives	5 years
Lab equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 770	$ 758
Lab equipment \| Minimum
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	3 years
Lab equipment \| Maximum
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	5 years

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2023

Fair Value Disclosures [Abstract]

Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis:


	Fair Value at December 31, 2023
(in thousands)	Level 1		Level 2		Level 3		Total
Cash and cash equivalents
Cash in bank balances	$	46,138	$	—	$	—	$	46,138
Money market funds		33,788		—		—		33,788
Total cash and cash equivalents	$	79,926	$	—	$	—	$	79,926
Marketable securities
U.S. government securities	$	—	$	183,514	$	—	$	183,514
Total marketable securities	$	—	$	183,514	$	—	$	183,514

	Fair Value at December 31, 2022
(in thousands)	Level 1		Level 2		Level 3		Total
Cash and cash equivalents
Cash in bank balances	$	120,206	$	—	$	—	$	120,206
Money market funds		23,029		—		—		23,029
Total cash and cash equivalents	$	143,235	$	—	$	—	$	143,235
Marketable securities
U.S. government securities	$	—	$	44,203	$	—	$	44,203
Non-U.S. government securities		—		3,008		—		3,008
Corporate debt securities		—		36,265		—		36,265
Commercial paper		—		56,403		—		56,403
Total marketable securities	$	—	$	139,879	$	—	$	139,879

Schedule of Aggregate Amortized Cost and Fair Value of Marketable Securities

The aggregate amortized cost and fair value of marketable securities as of December 31, 2023, by contractual maturity, are as follows:


(in thousands)	Amortized Cost		Fair Value
Due in one year or less	$	152,284	$	152,329
Due after one year through two years		31,073		31,185
Total marketable securities	$	183,357	$	183,514

Income Tax - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Deferred tax assets:
Accruals and reserves	$ 1,280	$ 820
Intangibles	11,288	12,929
Stock-based compensation	3,730	3,549
Net operating loss	19,929	13,841
Research and development credits	6,551	3,650
Lease liability	114	241
Capitalized research and development	16,839	7,410
Other	72	61
Valuation allowance	(59,621)	(42,207)
Total deferred tax assets	182	294
Deferred tax liabilities:
Fixed assets	(29)	(50)
Operating lease assets	(97)	(207)
Total deferred tax liabilities	(126)	(257)
Net deferred tax assets	$ 56	$ 37

Income Tax - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Unrecognized tax benefit at beginning of year	$ 6,316	$ 5,849
Increases related to prior year tax positions	14	150
Increases related to current year tax position	1,339	706
Decreases related to prior year tax positions	(163)	(389)
Unrecognized tax benefit at end of year	$ 7,506	$ 6,316

Cash Equivalents and Marketable Securities - Schedule of Fair Value And Amortized Cost of Marketable Securities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Marketable Securities [Line Items]
Amortized Cost	$ 217,145	$ 163,422
Unrealized Gains	219	31
Unrealized Losses	(62)	(545)
Fair Value	217,302	162,908
Cash equivalents	33,788	23,029
Marketable securities	183,514	139,879
Total	217,302	162,908
Money Market Funds
Marketable Securities [Line Items]
Amortized Cost	33,788	23,029
Unrealized Gains	0	0
Unrealized Losses	0	0
Fair Value	33,788	23,029
U.S. government securities
Marketable Securities [Line Items]
Amortized Cost	183,357	44,555
Unrealized Gains	219	31
Unrealized Losses	(62)	(383)
Fair Value	$ 183,514	44,203
Non-U.S. Government Securities
Marketable Securities [Line Items]
Amortized Cost		3,024
Unrealized Gains		0
Unrealized Losses		(16)
Fair Value		3,008
Corporate Debt Securities
Marketable Securities [Line Items]
Amortized Cost		36,411
Unrealized Gains		0
Unrealized Losses		(146)
Fair Value		36,265
Commercial Paper
Marketable Securities [Line Items]
Amortized Cost		56,403
Unrealized Gains		0
Unrealized Losses		0
Fair Value		$ 56,403

Common Stock and Stock-Based Compensation - Summary of Stock Option Activity (Details) - Employee Stock Option - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Number of Shares
Number of Shares, Outstanding beginning balance	4,823,928	3,577,485
Number of Shares, Granted	4,269,925	1,405,020
Number of Shares, Exercised	(106,176)	(10,000)
Number of Shares, Forfeited	(637,755)	(148,577)
Number of Shares, Outstanding ending balance	8,349,922	4,823,928	3,577,485
Number of Shares, Exercisable	4,523,993
Number of Shares, Vested and expected to vest	8,349,922
Weighted-Average Exercise Price
Weighted-Average Exercise Price, Outstanding beginning balance	$ 8.22	$ 9.72
Weighted-Average Exercise Price, Granted	9.51	4.44
Weighted-Average Exercise Price, Exercised	2.58	0
Weighted-Average Exercise Price, Forfeited	6.99	9.29
Weighted-Average Exercise Price, Outstanding ending balance	9.04	$ 8.22	$ 9.72
Weighted-Average Exercise Price, Exercisable	8.64
Weighted-Average Exercise Price, Vested and expected to vest	$ 9.04
Weighted-Average Remaining Contractual Term and Aggregate Intrinsic Value
Weighted-Average Remaining Contractual Term, Outstanding	6 years 9 months 25 days	8 years 5 months 15 days	9 years 1 month 2 days
Weighted-Average Remaining Contractual Term, Exercisable	4 years 11 months 15 days
Weighted-Average Remaining Contractual Term, Vested and expected to vest	6 years 9 months 25 days
Aggregate Intrinsic Value, Outstanding, beginning balance	$ 11,721	$ 491
Aggregate Intrinsic Value, Outstanding, Exercised	925	21
Aggregate Intrinsic Value, Outstanding, ending balance	2,225	$ 11,721	$ 491
Aggregate Intrinsic Value, Exercisable	1,570
Aggregate Intrinsic Value, Vested and expected to vest	$ 2,225

Cash Equivalents and Marketable Securities - Schedule of Available-for-sale Marketable Securities for Unrealized Loss Position (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Marketable Securities [Line Items]
Less than 12 months, fair value	$ 80,461	$ 22,717
Less than 12 months, unrealized losses	(62)	(108)
12 months or longer, fair value	0	43,242
12 months or longer, unrealized losses	0	(437)
Total fair value	80,461	65,959
Total unrealized losses	(62)	(545)
U.S. government securities
Marketable Securities [Line Items]
Less than 12 months, fair value	80,461	0
Less than 12 months, unrealized losses	(62)	0
12 months or longer, fair value	0	29,704
12 months or longer, unrealized losses	0	(384)
Total fair value	80,461	29,704
Total unrealized losses	$ (62)	(384)
Non-U.S. Government Securities
Marketable Securities [Line Items]
Less than 12 months, fair value		0
Less than 12 months, unrealized losses		0
12 months or longer, fair value		3,008
12 months or longer, unrealized losses		(15)
Total fair value		3,008
Total unrealized losses		(15)
Corporate Debt Securities
Marketable Securities [Line Items]
Less than 12 months, fair value		22,717
Less than 12 months, unrealized losses		(108)
12 months or longer, fair value		10,530
12 months or longer, unrealized losses		(38)
Total fair value		33,247
Total unrealized losses		$ (146)

Income Tax - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Income Taxes [Line Items]
Net deferred tax assets	$ 56	$ 37
U.S. federal statutory tax rate	21.00%	21.00%
California R&E credit carryforward	$ 6,551	$ 3,650
Unrecognized tax benefits	7,506	6,316	$ 5,849
Total amount of gross interest and penalties accrued	400	300
Foreign Tax Positions
Income Taxes [Line Items]
Federal research and development credit carryforwards	7,500	4,100
California R&E credit carryforward	2,900	2,000
Unrecognized tax benefits	7,500	6,300
Unrecognized tax benefits, that would affect income tax expense	$ 4,100	4,200	$ 4,200
Foreign Tax Positions \| Research and Experimentation (R&E)
Income Taxes [Line Items]
Operating loss carryforwards, expiration date	Dec. 31, 2039
Federal
Income Taxes [Line Items]
Operating loss carryforwards	$ 94,800	65,800
State
Income Taxes [Line Items]
Operating loss carryforwards	$ 2,200	$ 700
Operating loss carryforwards, expiration date	Dec. 31, 2041

Common Stock and Stock-Based Compensation - Additional Information (Details)			1 Months Ended	12 Months Ended
	Jan. 01, 2024 shares	Sep. 30, 2023 shares	Feb. 28, 2021 shares	Dec. 31, 2023 USD ($) Plan Vote $ / shares shares	Dec. 31, 2022 USD ($) $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock, voting rights				Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are entitled to receive dividends
Number of voting rights per share \| Vote				1
Cash dividends declared or paid \| $				$ 0
Share Based Compensation Arrangement By Share Based Payment Award Number Of Share Based Compensation Plans \| Plan				3
Number of stock-based compensation plans \| Plan				3
Total shares initially reserved				23,465,572	22,323,490
Common stock, authorized				150,000,000	150,000,000
Preferred stock, shares authorized				10,000,000
Preferred stock, par or stated value per share \| $ / shares				$ 0.0001
Preferred Stock, Shares Outstanding				0	0
Common stock, par value \| $ / shares				$ 0.0001	$ 0.0001
Pre Funded warrants exercised				4,878,500
Employee Stock Option
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized stock-based compensation expense related to unvested stock options \| $				$ 21,700,000	$ 21,200,000
Unrecognized stock-based compensation expense recognized period				2 years 6 months 18 days
Fair Value Of Options Vested \| $				$ 20,200,000	$ 10,900,000
Number of Shares, Granted				4,269,925	1,405,020
Restricted Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized stock-based compensation expense related to unvested stock options \| $				$ 2,500,000	$ 400,000
Unrecognized stock-based compensation expense recognized period				2 years 10 months 9 days
Fair Value Of Options Vested \| $				$ 200,000	$ 0
2021 Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based payment award, number of shares authorized			2,400,007
Increase of number of authorized shares reserved for issuance under the 2021 Plan	3,228,835
Share-based payment award, shares available for future grants				1,005,587
Increase of authorized shares, percent of common stock outstanding			5.00%
2017 Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Increase of number of authorized shares reserved for issuance under the 2021 Plan			0
2021 Employee Stock Purchase Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Percentage of fair market value of the shares on the offering date				85.00%
Percentage of fair market value of the shares on the purchase date				85.00%
Increase of number of authorized shares reserved for issuance under the 2021 Plan	645,767
Share-based payment award, shares available for future grants				701,671
Total shares initially reserved			240,000
Increase of authorized shares, percent of common stock outstanding			1.00%
Unrecognized stock-based compensation expense recognized period				1 year 7 months 6 days
Unrecognized stock-based compensation expense related to unvested employee stock purchases \| $				$ 1,000,000
Issuance of common stock under employee stock purchase plan				159,480
2021 Employee Stock Purchase Plan \| Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share based compensation rate of payroll deduction				15.00%
2022 Inducement Plan Member
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Increase of number of authorized shares reserved for issuance under the 2021 Plan		3,113,250
Common stock, authorized				1,400,000
Number of Shares, Granted				3,291,000
Pre-Funded Warrants [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Pre-funded warrants to purchase				14,630,000
Pre-funded warrant price \| $ / shares				$ 2.4199
Common stock, par value \| $ / shares				$ 0.0001