While participants on a lower dose of Wave Life Sciences’ RNA therapy lost 5.3% total fat at the six-month mark, those receiving the higher dose saw a less than 1% drop at three months.

Wave Life Sciences touted body composition improvements in an early-stage study of its investigational RNA interference obesity therapy—but when it came to the higher 400-mg dose, analysts weren’t impressed. At $5.59 apiece when the opening bell rang on Thursday, the biotech was trading 54% lower than its previous closing price.

Oppenheimer analyst Cheng Li stuck by the candidate, however. “We would be buyers on any weakness, as the results further support the clean safety profile and once/twice-yearly dosing of WVE-007,” Li said Thursday, according to Reuters.

Wave is studying its siRNA therapeutic WVE-007 in the INLIGHT study, which includes a Phase 1 single-ascending dose portion in otherwise healthy adults who are overweight or obese, and a Phase 2a section that will look at several doses of WVE-007. Thursday’s readout comes from the Phase 1 portion of the trial.

The results showed that at six months, participants treated with 240-mg WVE-007 shed 14.3% of their visceral fat, a statistically significant improvement from baseline and up from 9.2% at three months. Total fat mass at six months dropped 5.3% while lean mass increased 2.4%. Patients at this dose level also saw a 3.3% reduction in waist circumference and 0.9% decrease in body weight at six months.

However, when it came to three-month data from a 400-mg cohort, analysts appeared to be expecting more, Bloomberg reported Thursday. Participants in this cohort saw 5% visceral fat loss, 0.2% loss of lean mass and total fat loss of less than 1%.

“Investors are likely discouraged by the 400 ‌mg ⁠data at 3 months, which look similar on visceral fat as 240 mg and not as good on total fat and lean mass, though there appear to be some differences in ⁠the baseline BMI and body composition of this cohort that could explain some of these observations,” Leerink Partners said ⁠in a Thursday note, Reuters reported.

Wave noted in its press release that this cohort had a leaner baseline body composition, with lower BMI and more participants with healthy levels of visceral fat. The company also noted that a posthoc analysis showed a 7.8% reduction in visceral fat, a result “similar to that observed in the 240 mg cohort.”

The biotech also presented visceral fat-to-muscle ratio, a metric used to quantify body composition, for the 240-mg dose group at six months. A single dose of 240 mg resulted in a 16.5% drop in this ratio—better than what was achieved by a 2.4-mg dose of Novo Nordisk’s semaglutide at six months, according to Wave—a 12.2% decrease from baseline.

Last December, Wave reported a 9.2% reduction in visceral fat at three months with the 240-mg dose, accompanied by a 0.9% increase in lean mass. Truist analysts at the time called the data “impressive.” Wave’s shares crested 80% following the readout.

Despite the stock crash this week, analysts at Mizuho Securities said in a Thursday note that WVE-007 delivered “good data.” The reduction in visceral fat and waist circumference, “while stabilizing lean mass is particularly encouraging, and continues to showcase WVE-007 as a differentiated mechanism for obesity.”

The firm models around $7 billion in peak worldwide sales for WVE-003.

The biotech now plans to begin the Phase 2a portion of INLIGHT in the second quarter, looking to enroll patients with higher body mass index and weight-related comorbidities, according to the Thursday release. The biotech will also run new trials of WVE-007 as part of incretin-based regimens or as a post-incretin therapy.

Merck’s acquisition of Terns Pharmaceuticals follows other big-ticket purchases, including of Verona Pharma and Cidara Therapeutics, as the pharma prepares for the impending expiration of its blockbuster’s patents.

Continuing its campaign to grow its pipeline amid Keytruda’s looming loss of exclusivity, Merck has moved to absorb Terns Pharmaceuticals and its mid-stage leukemia drug, an asset that analysts say could offer the pharma a multi-billion revenue opportunity.

The Terns buyout is “one of the best deals [Merck] has made since its spree began ahead of the Keytruda LOE,” analysts at BMO Capital Markets wrote in a note to investors on Tuesday evening, responding to swirling reports that the pharma was in late-stage talks with the California biotech. The rumor was first broken by the Financial Times.

BMO called Terns’ lead asset, the oral tyrosine kinase inhibitor TERN-701, a “differentiated agent” in chronic myeloid leukemia (CML), adding that it has elicited robust major molecular responses in a highly refractory patient population. TERN-701, the analysts estimated, “offers an unadjusted peak sales of >$4B, meaningfully contributing to Merck’s plans to patch its Keytruda LOE hole at the end of the decade.”

Under the terms of Wednesday’s acquisition agreement, Merck will purchase all of Terns’ outstanding shares for $53 a pop—a 31% premium to the biotech’s average stock price over the preceding 60 days—resulting in a roughly $6.7 billion equity value. The deal has been approved by the boards of directors of both companies and the parties expect to complete the transaction in the second quarter.

The Terns takeover further diversifies and strengthens our position in oncology as we continue to look for opportunities to broaden our portfolio into other therapeutic areas,” Merck CEO Robert Davis said in a statement on Wednesday. In particular, the agreement “builds on our growing presence in hematology,” he added, calling TERN-701 a “potential best-in-class candidate” for CML.

Taken orally, TERN-701 is an allosteric inhibitor of BCR-ABL1, a protein that arises from an abnormal genetic fusion that is the hallmark of CML. Phase 1 data revealed last December showed an overall major molecular response rate as high as 75% at 24 weeks, with a tolerability profile that supported daily dosing.

“Unprecedented remains the only suitable adjective to describe the compound’s clinical profile,” William Blair analysts wrote in a Dec. 9 note, adding that TERN-701 “is on track to challenge Scemblix’s dominance and disrupt the treatment paradigm of CML.” Owned by Novartis, Scemblix was first approved in October 2021 for the same indication. The drug made $1.285 billion last year.

William Blair analysts value TERN-701 so highly that they questioned Merck’s offer, saying in a note Wednesday morning after the deal was announced that it “does not fully capture the potential of TERN-701.”

“We believe another bidder could emerge with a more attractive offer,” the firm added.

RBC Capital Markets agreed. “We view the decision to acquire TERN before full dose escalation as a sign of high confidence in the asset,” the analysts wrote in their own note on Wednesday. They added, however, that Merck’s price “opens the door for competing bids from other potential acquirers where the deal makes strategic sense,” such as AbbVie or Bristol Myers Squibb.

Key protections for Keytruda, Merck’s mega-blockbuster PD-1 inhibitor, are set to expire in 2028, after which the pharma can expect to cede some of the market to biosimilars. In addition to a recent spate of deals, the pharma has is also working to maintain its earnings through the reformulation of Keytruda into a subcutaneous injection, which the FDA cleared in September last year. Merck is marketing the product as Keytruda Qlex.

Still, the pharma has been an aggressive dealmaker over the past year, betting billions to enrich not only its late-stage pipeline but also its commercial portfolio. In November 2025, for instance, Merck swallowed Cidara Therapeutics for $9.2 billion, gaining a Phase 3 antiviral drug. A few months earlier, the pharma dropped $10 billion to acquire Verona Pharma and the FDA-approved Ohtuvayre for chronic obstructive pulmonary disease.

For Terns, the deal represents a triumphant exit after refocusing its attention last August on TERN-701. Once a rising star in obesity and the MASH space, Terns announced at that time that it would look to partner off a clutch of metabolic assets amid an oversaturated market in the obesity realm. Terns was one of several companies that BioSpace highlighted as likely M&A targets for Big Pharma this year.

While RA Capital Management has yet to commit to a merger plan, it noted that its new blank-check company, Research Alliance III, could target companies abroad, including those from China.

RA Capital Management has a new shell company and it’s looking for overseas players—particularly those from China—to bring to the U.S. public market.

The new special purpose acquisition company (SPAC), called Research Alliance III, could have up to $57.5 million in firepower, according to an SEC filing on Tuesday. In looking for a target, the blank-check entity is keeping its options open, looking for a life science startup with an asset or a platform that could set it apart in the market—regardless of its location.

“RA Capital Management believes there are significant opportunities relating to promising drug therapies developed abroad, including in the [People’s Republic of China],” according to the securities document.

Research Alliance III hasn’t yet launched on the Nasdaq—the SEC filing on Tuesday is a prospectus to register its intent for an initial public offering (IPO)—nor has RA Capital Management committed to searching exclusively for a Chinese target.

SPACs offer an alternative—and typically easier—path for young companies to go public. The process starts with sponsors raising capital from investors by conducting an IPO for their shell company. Once successfully public, the resulting blank-check company will look for a target that it can merge with, effectively bringing that startup to the public markets and infusing it with a hefty sum of capital.

The SPAC became a popular track to Nasdaq in 2021, when the industry was flush with pandemic-era investment cash. Companies like Roivant, Cerevel Therapeutics—which has since been acquired by AbbVie for $8.7 billion—and the beleaguered 23andMe all went public that year via SPACs.

More recently, stem cell specialist PrimeGen US went public via SPAC, merging with DT Cloud Star Acquisition Corporation last month in a deal that valued the startup at around $1.5 billion. DT Cloud Star went public in July 2024 with a $69 million raise.

RA Capital Management itself has had a successful run with SPACs. Its first shell company, Research Alliance I, merged with POINT Biopharma in March 2021, giving the radiopharma player $300 million in capital. Eli Lilly swallowed POINT a couple years later for $1.4 billion.

The venture capital firm’s investment portfolio also includes biotechs such as 89bio, which was acquired by Roche last September for $3.5 billion, and Aktis Oncology, which became the first IPO of this year with a $318 million raise.

Now, RA Capital Management wants to turn this expertise eastward, looking to China for promising technologies in keeping with a broader trend across the biopharma industry. Top drugmakers have in recent months ramped up partnerships with Chinese biotechs in search of innovative therapies. Such deals include Novartis’ $1.5 billion play with SciNeuro for Alzheimer’s disease and AstraZeneca’s $2 billion bet for Jacobio Pharma’s KRAS blocker for cancer.