Terns & the Speculative Bubble

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First Turn Management, a fund presumably not averse to a gamble, has disclosed a position in Terns Pharmaceuticals. Eight hundred and seventy-two thousand and forty-nine shares, to be precise, acquired at a cost of some $35.23 million. One observes a certain enthusiasm, or perhaps desperation, in the timing. The market, it appears, has already decided Terns is the answer to all our metabolic woes.

A Momentary Effervescence

The filing, dated February 13th, 2026, confirms the acquisition. At quarter’s end, the investment was valued at the aforementioned sum, a figure inflated, no doubt, by the sheer velocity of the stock’s ascent. One is reminded of those Parisian bubbles of the 1920s – briefly dazzling, ultimately unsustainable.

Portfolio Considerations

This foray into Terns represents a modest 4.03% of First Turn’s $875.20 million in U.S. equity holdings as of December 31st, 2025. A considered allocation, or a fleeting fancy? Their top holdings, as of the same date, reveal a preference for the speculative – ABVX, RVMD, INSM, BBIO, and MIRM, all names redolent of hope and high risk. A portfolio, one suspects, constructed more for bragging rights than prudent returns.

  • NASDAQ:ABVX: $51.41 million (5.9% of AUM)
  • NASDAQ:RVMD: $50.85 million (5.8% of AUM)
  • NASDAQ:INSM: $46.00 million (5.3% of AUM)
  • NASDAQ:BBIO: $45.55 million (5.2% of AUM)
  • NASDAQ:MIRM: $38.04 million (4.3% of AUM)

The truly remarkable statistic, however, is Terns’ performance. An 826.2% increase over the past year. A figure that, while statistically impressive, raises more questions than it answers. The S&P 500, by comparison, merely plodded along, trailing Terns by a rather humiliating 814.43 percentage points. A clear indication that rationality has abandoned the trading floor.

The Company Itself

Terns Pharmaceuticals, for the uninitiated, is a clinical-stage biopharmaceutical firm. They dabble in small-molecule therapeutics, targeting the increasingly fashionable afflictions of NASH and obesity. Their pipeline, a veritable cornucopia of acronyms – TERN-101, TERN-201, TERN-501, TERN-601 – promises much, but delivers, as yet, precisely nothing. They operate, as these firms invariably do, on a diet of venture capital and optimistic projections.

Metric Value
Price (as of market close February 13, 2026) $37.79
Market Capitalization $4 billion
Net Income (TTM) ($94.44 million)
One-Year Price Change 826.2%

The Inevitable Reckoning

The current momentum, naturally, compels investors to distinguish between narrative and substance. Terns has, indeed, rocketed skyward, propelled by some encouraging Phase 1 results for TERN-701 in relapsed and refractory CML. A 75% cumulative major molecular response rate is not to be sneezed at, though one wonders whether the patient population was statistically significant, or merely a fortunate handful.

Whether First Turn acquired their stake before, or after, this surge remains unclear. Either way, the allocation aligns with a portfolio already saturated with clinical-stage biotech names. A deliberate bet on volatility, or a reckless pursuit of quick gains?

For the long-term investor – a dwindling breed, these days – the lesson is simple: discipline. Clinical-stage biotech can, occasionally, deliver extraordinary returns. But it can also inflict catastrophic losses. Position sizing and pipeline durability matter far more than headline percentage gains. And a healthy dose of skepticism is always advisable, particularly when confronted with a stock that has increased eightfold in a single year. One suspects, ultimately, that Terns will prove to be less a miracle cure, and more a cautionary tale.

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2026-02-17 20:45