This biotech investment fund offloaded $8 million worth of Terns shares last quarter, yet there are strong reasons it remains highly optimistic about the company.

Superstring Capital Management Sells Shares in Terns Pharmaceuticals

On February 17, 2026, Superstring Capital Management disclosed that it had sold 345,869 shares of Terns Pharmaceuticals (NASDAQ:TERN) during the fourth quarter. Based on the average price for the quarter, this transaction was valued at approximately $7.99 million.

Details of the Sale

According to a SEC filing dated February 17, 2026, Superstring Capital Management reduced its holdings in Terns Pharmaceuticals by 345,869 shares in Q4 2025. The estimated value of the sale, calculated using the average closing price for the quarter, was $7.99 million. By the end of the quarter, the fund's position in Terns Pharmaceuticals had dropped in value by about $12 million, reflecting both the share sale and changes in the stock price.

Key Portfolio Holdings

• Top positions after the filing:
  • NASDAQ:CDTX – $18.80 million (10.1% of assets under management)
  • NASDAQ:TERN – $17.93 million (9.6% of assets under management)
  • NASDAQ:URGN – $16.82 million (9.0% of assets under management)
  • NASDAQ:COGT – $13.01 million (7.0% of assets under management)
  • NASDAQ:DVAX – $8.08 million (4.3% of assets under management)
• As of Wednesday, Terns Pharmaceuticals shares were trading at $45.56, representing a remarkable 1,300% increase over the past year—far outpacing the S&P 500’s roughly 19% gain during the same period.

Terns Pharmaceuticals at a Glance

Business Overview

• Terns Pharmaceuticals is focused on developing small-molecule treatments for chronic myeloid leukemia (CML), non-alcoholic steatohepatitis (NASH), and obesity. Its leading drug candidates—TERN-101, TERN-201, TERN-501, and TERN-601—are in various stages of clinical trials.
• The company operates as a clinical-stage biopharmaceutical firm, advancing its proprietary drugs through early and mid-phase trials with the goal of regulatory approval, commercialization, or forming strategic partnerships.
• Terns targets patients with NASH and metabolic disorders, aiming to address unmet needs in the global healthcare and biotech sectors.

Implications for Investors

Despite reducing its stake, Terns Pharmaceuticals remains a significant holding for Superstring Capital Management. This move appears to be a strategic adjustment following an exceptional surge in the stock price, rather than a sign of diminished confidence.

A 1,300% annual increase is extraordinary and sets high expectations, especially in the biotech industry where success depends on clinical trial results and regulatory progress rather than consistent revenue growth.

The company’s focus has shifted toward oncology, with its lead program for chronic myeloid leukemia demonstrating promising early results. Several key milestones are anticipated this year, including dose selection and advancement of pivotal trials. With about $1 billion in cash—bolstered by a $747.5 million offering in December—Terns is financially positioned to continue operations through 2031, minimizing short-term funding concerns. If upcoming catalysts deliver positive outcomes and the company successfully launches its inhibitor by 2031, the recent rally in shares could be sustained.

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