This Biotech Attracted a $181 Million Investment During a Staggering 1,300% Stock Rally

On February 17, 2026, Vestal Point Capital disclosed a new position in Terns Pharmaceuticals (NASDAQ:TERN), acquiring 4,500,000 shares worth $181.80 million.

What happened

According to a U.S. Securities and Exchange Commission (SEC) filing dated February 17, 2026, Vestal Point Capital established a new position in Terns Pharmaceuticals by purchasing 4,500,000 shares. The quarter-end value of the stake stood at $181.80 million.

What else to know

• Top five holdings after the filing:
  • NASDAQ:ABVX: $256.22 million (9.4% of AUM)
  • NASDAQ:ACLX: $190.71 million (7.0% of AUM)
  • NASDAQ: TERN: $181.80 million (6.7% of AUM)
  • NASDAQ:BMRN: $178.29 million (6.5% of AUM)
  • NYSE:GMED: $111.32 million (4.1% of AUM)
• As of Monday, shares of Terns Pharmaceuticals were priced at $46.07, up a staggering 1,300% over the past year and significantly outperforming the S&P 500’s roughly 19% gain in the same period.

Company overview

Company snapshot

• Terns Pharmaceuticals develops small-molecule therapeutics targeting non-alcoholic steatohepatitis (NASH), obesity, and related metabolic diseases, with a pipeline including TERN-101, TERN-201, TERN-501, and TERN-601 in various clinical stages.
• It operates a clinical-stage biopharmaceutical business model, generating value through research, development, and potential future commercialization or licensing of proprietary drug candidates.
• Its primary customers are expected to be healthcare providers, hospitals, and patients affected by NASH, obesity, and metabolic disorders, pending successful clinical development and regulatory approval.

Terns Pharmaceuticals is a clinical-stage biotechnology company focused on developing novel small-molecule therapies for NASH and metabolic diseases. The company leverages a differentiated pipeline with multiple candidates in Phase I and II trials, aiming to address significant unmet medical needs in liver and metabolic health. Its strategy centers on advancing proprietary assets through clinical development to establish a competitive position in the biopharmaceutical sector.

What this transaction means for investors

Huge gains sometimes scare off institutional investors, but that wasn’t at all the case here.

Terns is building a pipeline of small molecule therapies targeting some of the largest and fastest growing markets in medicine, including obesity, metabolic disease, and certain cancers. The metabolic opportunity alone has become one of the most competitive areas in drug development as demand for weight loss and liver disease therapies continues to surge globally.

According to the firm’s latest investor presentation, Terns’ pipeline spans multiple programs, including TERN-501 for metabolic liver disease and TERN-701, an allosteric BCR-ABL inhibitor being developed for chronic myeloid leukemia. Early clinical data has shown encouraging molecular response rates, and the company expects pivotal trials for TERN-701 to begin in the coming years if development continues successfully.

The company also enters this stage with an unusually strong balance sheet for a clinical-stage biotech. Management has indicated roughly $1 billion in cash and marketable securities, enough to fund operations and potential clinical milestones well into the next decade. With this pretty massive bet, it seems like Vestal Point is betting on that pipeline to convert.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Globus Medical. The Motley Fool recommends BioMarin Pharmaceutical. The Motley Fool has a disclosure policy.