Tempest Therapeutics announced today that it would explore strategic alternatives in order to maximize stockholder 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 its program testing a combination of drugs. Well, in one cohort of such a phase 1b/2 randomized study, it was shown that TPST-1120 [now coined 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 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 a year, it has and continues to struggle to gain interest with a prospective partner.
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 enacted a 1-for-13 reverse stock split. There might be some hope if shareholders can somehow benefit from an eventual transaction or merger.
However, it is important to keep in mind that there is always the risk that no strategic alternative will end up happening. Matter of fact, it laid out in its press release that there is no guarantee that it will end up achieving such a strategic initiative. The good news is that Tempest does have another drug in its pipeline, which is 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 patients with familial adenomatous polyposis (FAP). While a promising program, there is one downside, which is that data from this ongoing mid-stage trial is not expected until 2026.
This means that in order for this company to generate shareholder value, it is going to have to establish some type of 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 are EP2 and EP4. These two receptors in this pathway are responsible for driving tumor growth for starters.
They also are responsible for immune suppression. It remains to be seen, but in targeting solid tumors, this dual antagonist method may or may not work out. However, the company has a more pressing issue, which is that it needs to find a suitor either willing to fund the phase 3 study using Amezalpat plus AVASTIN and TECENTRIQ to treat patients with first-line liver cancer or establish some type of merger to keep its business running.
