Business Overview and History
Tempest Therapeutics, Inc. (TPST) is a clinical-stage biotechnology company developing first-in-class targeted and immune-mediated therapeutics to fight cancer. The company has built a diverse pipeline of small molecule product candidates with the potential to address a wide range of oncology indications. Tempest's lead programs, amezalpat (TPST-1120) and TPST-1495, have demonstrated promising results in early-stage clinical trials, positioning the company for potential regulatory approvals and commercialization in the coming years.
Tempest Therapeutics was founded in 2019 with the goal of creating innovative cancer therapies that leverage both tumor-targeted and immune-mediated mechanisms. In its early years, the company focused on organizing and staffing, raising capital, acquiring technology, and developing its initial product candidates. A significant milestone was reached in January 2021 when Tempest entered into a loan agreement with Oxford Finance LLC, securing up to $35 million in borrowing capacity across three potential tranches, providing crucial funding for its research and development efforts.
The year 2022 marked important progress for Tempest's clinical programs. The company completed a private investment in public equity (PIPE) financing, raising approximately $14.5 million. Additionally, Tempest entered into a sales agreement with Jefferies LLC to establish an at-the-market (ATM) offering program, further enhancing its financial flexibility.
Despite the challenges posed by the COVID-19 pandemic, Tempest Therapeutics continued to advance its pipeline. In 2023, the company reported financial results and provided business updates, highlighting the ongoing development of its lead product candidates. Tempest successfully navigated regulatory processes and presented data from its clinical trials at major medical conferences.
Throughout its history, Tempest Therapeutics has faced various obstacles, including securing funding, managing the complexities of drug development, and responding to the evolving regulatory landscape. However, the company has remained steadfast in its mission, building a talented team and steadily progressing its portfolio of promising cancer therapies.
Product Pipeline and Clinical Development
Tempest's lead product candidate, amezalpat (TPST-1120), is a selective antagonist of the peroxisome proliferator-activated receptor alpha (PPARα), a transcription factor that plays a critical role in tumor metabolism and immune evasion. In a global randomized Phase 1b/2 trial, amezalpat in combination with the standard-of-care regimen of atezolizumab and bevacizumab demonstrated a median overall survival (OS) of 21 months, a 6-month improvement over the control arm. Additionally, the combination therapy showed a consistent 0.65 hazard ratio for OS, indicating a 35% reduction in the risk of death compared to the control arm. These positive results have positioned amezalpat to advance into a pivotal Phase 3 trial for the first-line treatment of unresectable or metastatic hepatocellular carcinoma (HCC).
In August 2024, Tempest announced the successful completion of its end-of-Phase 2 meeting with the FDA regarding the development of amezalpat for the treatment of first-line unresectable or metastatic HCC. The FDA provided positive feedback on the planned pivotal Phase 3 clinical trial design, which closely mirrors the positive randomized Phase 2 study. As of a February 2024 data cut, the ongoing global randomized Phase 1b/2 trial of amezalpat combined with the standard-of-care first-line regimen of atezolizumab and bevacizumab continued to show positive outcomes in patients with advanced or metastatic HCC. The median overall survival (OS) in the amezalpat arm reached 21 months, representing a 6-month improvement over the 15-month OS in the control arm. The confirmed objective response rate (ORR) for the amezalpat arm remained consistent at 30%, compared to 13.3% in the control arm.
Tempest's second clinical-stage program, TPST-1495, is a dual antagonist of the EP2 and EP4 receptors of prostaglandin E2 (PGE2), a key mediator of the immunosuppressive tumor microenvironment. Data from the Phase 1 trial of TPST-1495 in patients with advanced solid tumors were presented at the American Society of Clinical Oncology (ASCO) annual meeting in June 2023, demonstrating a favorable safety profile and initial signs of anti-tumor activity. Based on these results, Tempest is planning to advance TPST-1495 into a Phase 2 trial for the treatment of familial adenomatous polyposis (FAP), a rare genetic disorder characterized by the formation of numerous adenomatous polyps in the colon and rectum. The company is working with the Cancer Prevention Clinical Trials Network on a National Cancer Institute (NCI)-funded Phase 2 study and, subject to final approval, plans to start the study in the second half of 2024.
In addition to its clinical-stage programs, Tempest maintains an active discovery research group focused on identifying and validating new therapeutic targets in oncology. The company's proprietary discovery platform, combined with its academic and industry collaborations, has generated a robust pipeline of preclinical assets that may feed into future clinical development.
Financial Performance and Outlook
Tempest Therapeutics has reported consistent annual net losses since its inception, reflecting the company's focus on clinical development and research activities. For the fiscal year 2023, the company reported a net loss of $29.5 million, with no revenue generated. This is in line with the net losses of $35.7 million and $28.3 million reported in 2022 and 2021, respectively.
The company's operating expenses have been primarily driven by research and development (R&D) costs, which accounted for approximately 60% of total expenses in 2023. General and administrative (G&A) expenses have also been a significant component, reflecting the costs associated with operating as a public company.
For the most recent quarter (Q3 2024), Tempest reported no revenue and a net loss of $10.6 million. The company's year-to-date net loss as of September 30, 2024, was $28.0 million, compared to $22.0 million for the same period in 2023. This increase in net loss reflects the ongoing investment in clinical development programs and the advancement of the company's pipeline.
Liquidity and Capital Resources
As of September 30, 2024, Tempest reported cash and cash equivalents of $22.1 million. The company has supplemented its cash position through an at-the-market (ATM) equity offering program, which has provided additional funding of $19.9 million between October 1, 2024 and November 8, 2024. This cash runway is expected to fund the company's operations into the fourth quarter of 2025, based on its current business plan and expected expenditures.
Tempest's financial position is further supported by its debt structure. As of September 30, 2024, the company reported a debt-to-equity ratio of 0.77, indicating a balanced approach to financing its operations. Additionally, Tempest has access to a $10 million remaining capacity on its Oxford loan, providing further financial flexibility.
The company's liquidity ratios demonstrate its ability to meet short-term obligations. As of September 30, 2024, Tempest reported a current ratio and quick ratio of 1.69, indicating that the company has sufficient liquid assets to cover its current liabilities.
Competitive Landscape and Risks
The oncology therapeutics market is highly competitive, with numerous pharmaceutical and biotechnology companies developing innovative treatments. Tempest's product candidates face competition from both established therapies and emerging therapies targeting similar pathways or indications.
In the HCC market, amezalpat will compete with approved targeted therapies, such as sorafenib and lenvatinib, as well as immunotherapies like atezolizumab and nivolumab. The company's ability to differentiate amezalpat and demonstrate a meaningful clinical benefit will be crucial for its commercial success.
For TPST-1495 in FAP, there are currently no approved systemic therapies, providing Tempest with a potential opportunity to address an unmet need. However, the company will need to ensure that TPST-1495 can effectively manage the progression of polyps and delay the need for surgical intervention.
Regulatory and clinical development risks are also significant for Tempest, as delays or failures in obtaining regulatory approvals or demonstrating the desired efficacy and safety profiles could adversely impact the company's prospects. Additionally, Tempest's reliance on third-party manufacturers and contract research organizations introduces supply chain and operational risks that must be carefully managed.
Conclusion
Tempest Therapeutics is a clinical-stage biotechnology company with a promising pipeline of first-in-class targeted and immune-mediated oncology therapies. The company's lead programs, amezalpat and TPST-1495, have demonstrated encouraging results in early-stage trials, positioning Tempest for potential regulatory approvals and commercialization in the coming years.
As Tempest advances its pipeline and navigates the competitive oncology landscape, the company's ability to successfully execute on its clinical development and regulatory strategies will be crucial for unlocking shareholder value. Investors should closely monitor the company's progress in the pivotal Phase 3 trial of amezalpat and the planned Phase 2 trial of TPST-1495, as these milestones could serve as significant catalysts for the company's future growth.
The company's financial position, bolstered by recent capital raises and available credit, provides a runway to support ongoing clinical development efforts. However, as with many clinical-stage biotechnology companies, Tempest will need to carefully manage its resources and potentially seek additional funding to support long-term growth and the potential commercialization of its product candidates.