Tempest Therapeutics announced that it would explore strategic alternatives in order to maximize shareholder value. The thing is that the company achieved great success when it surged 4,000% in one day on the back of news that it had surpassed the efficacy possible with standard of care (SOC) in treating patients with first-line liver cancer (also known as hepatocellular carcinoma).
In essence, the company was a part of a large study that Roche was running for a program that was evaluating a combination of drugs to treat a wide variety of types of cancer. Well, in one cohort of a phase 1b/2 randomized study, it was shown that TPST-1120 (now known as Amezalpat) in combination with Roche’s AVASTIN (bevacizumab) and TECENTRIQ (atezolizumab) had achieved a superior confirmed objective response rate (cORR), compared to that of SOC alone of AVASTIN and TECENTRIQ. The Amezalpat combination achieved a cORR of 30%, far surpassing that of Roche’s SOC AVASTIN and TECENTRIQ to treat these first-line liver cancer patients.
At that time, things looked very good, but being that this is a small-cap biotech, it lacked the resources to actually initiate a phase 3 study for this program. It had already received a “study may proceed letter” from the FDA informing the company that it may run a huge study of this caliber. The truth is that for more than one year, it has and continues to struggle to gain interest with a prospective partner and get a late-stage study going.
This latest move is to see if it can deploy some type of strategic alternative in an effort to boost shareholder value. Just two days ago, before this announcement was released, it had enacted a 1-for-13 reverse stock split. There might be some hope for shareholders if there is an eventual merger or transaction capable of boosting shareholder value.
However, it is important to keep in mind that there is always the risk the strategic review could end up being terminated with no merger or partnership in place. As a matter of fact, this was a risk that was mentioned in this press release, highlighting that there is no guarantee that enacting this strategic alternative will ultimately yield a specific partnership or buyout scenario outcome. On the other hand, the company doesn’t have to solely rely on Amezalpat, because it also has another drug from its pipeline known as TPST-1495.
Tempest received a “study may proceed” letter for a phase 2 study using this particular dual oral EP2/EP4 antagonist to treat these patients with familial adenomatous polyposis (FAP). While a promising program, there is one downside, which is that the data from this mid-stage study is not expected to be released until 2026.
This means that in order for this company to generate shareholder value, it is going to have to establish some type of a deal with another pharmaceutical company quickly. The premise of TPST-1495 is that it is selective of two receptors in the prostaglandin (PGE2) pathway, which is comprised of EP2 and EP4. These two receptors in this pathway are responsible for driving tumor growths.
They are also responsible for immune suppression as well. It remains to be seen, but the targeting of solid tumors with this dual agonist method may or may not work out. However, the company for the time being has a more pressing issue to deal with, which is that it needs to find a suitor to either fund a large phase 3 study for Amezalpat plus AVASTIN plus TECENTRIQ to treat patients with 1st-line liver cancer. Either this or merge with another pharmaceutical company to boost shareholder value.