Business Context and Reporting Period
Company: Tempest Therapeutics, Inc. (TPST)
Filing Type: Form 10-Q (Unaudited)
Period Ended: September 30, 2025
Business Overview: Tempest is a clinical-stage biotechnology company focused on developing targeted and immune-mediated treatments for cancer. Its lead program, amezalpat (TPST-1120), is a PPARα antagonist poised for a pivotal Phase 3 study in first-line hepatocellular carcinoma (HCC). A second candidate, TPST-1495, is a dual EP2/EP4 antagonist expected to enter a Phase 2 study for Familial Adenomatous Polyposis (FAP).
Corporate Actions: The company effected a 1-for-13 reverse stock split on April 8, 2025. In April 2025, the company announced a strategic review to explore alternatives (mergers, acquisitions, partnerships) to maximize stockholder value and retained MTS Health Partners as a financial advisor.
Key Financial Metrics
| Metric (in thousands) | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 |
|---|---|---|---|---|
| Revenue | $0 | $0 | $0 | $0 |
| Net Loss | $(3,511) | $(10,556) | $(22,241) | $(28,030) |
| Loss Per Share (Basic/Diluted) | $(0.79) | $(5.32) | $(5.71) | $(15.48) |
| Cash and Cash Equivalents (End of Period) | $7,514 | $22,911 | $7,514 | $22,911 |
| Accumulated Deficit | $(229,347) | $(193,293) | $(229,347) | $(193,293) |
| Operating Cash Flow (9M) | $(23,246) | $(22,878) | $(23,246) | $(22,878) |
| Debt | $0 | $6,354 (Current) | $0 | $6,354 (Current) |
Note: All share and per-share data have been retroactively adjusted for the 1-for-13 reverse stock split.
Material Changes vs. Prior Period
- Significant Cost Reductions: Research and Development (R&D) expenses decreased by 92% in Q3 2025 ($0.6M) compared to Q3 2024 ($7.6M). This reduction is attributed to a workforce reduction (21 of 26 full-time employees) effective April 30, 2025, and the re-prioritization of efforts toward strategic alternatives.
- Debt Elimination: The company fully repaid its $3.5M term loan with Oxford Finance LLC in April 2025, eliminating interest expense for the quarter and removing all liens on company assets.
- Liquidity Decline: Cash and cash equivalents dropped from $30.3M at year-end 2024 to $7.5M at September 30, 2025, driven by operating losses and debt repayment.
- Capital Raises: During the nine months ended September 30, 2025, the company raised approximately $4.1M via a Registered Direct Offering (RDO) in June and $2.8M via its At-The-Market (ATM) program.
- Executive Transition: The CEO, CMO, and CFO transitioned to consulting arrangements in June 2025 to reduce fixed costs while retaining leadership oversight.
Outlook, Risks, and Management Commentary
- Going Concern Warning: Management has expressed substantial doubt about the company's ability to continue as a going concern for 12 months from the issuance date. Existing cash resources are projected to fund operations for less than 12 months.
- Strategic Review: The company is actively exploring strategic alternatives, including mergers, acquisitions, or partnerships. If no alternative is secured, the company may be forced to wind down operations.
- Regulatory Milestones:
- Amezalpat: Received FDA "Study May Proceed" and NMPA (China) "Clearance to Proceed" for a pivotal Phase 3 trial in HCC. Granted Orphan Drug Designation (FDA/EMA) and Fast Track Designation (FDA).
- TPST-1495: Received FDA "Study May Proceed" for an NCI-funded Phase 2 trial in FAP. Granted Orphan Drug Designation. Trial start expected late 2025, subject to potential delays from the U.S. government shutdown.
- Risk Factors:
- Capital Constraints: Inability to raise additional capital or consummate a strategic transaction could lead to liquidation.
- Government Shutdown: Ongoing U.S. government shutdowns may delay regulatory reviews and clinical trial funding.
- ATM Limitations: The company's public float is under $75M, limiting primary offerings under Form S-3 to one-third of public float ("baby shelf" rules). The ATM prospectus was suspended in June 2025 in connection with the RDO.
Investor Verification Checklist
- Cash Runway: Verify the specific timeline for cash exhaustion given the "less than 12 months" projection and the current burn rate.
- Strategic Process Status: Monitor for updates on the strategic review process and any definitive agreements regarding mergers or asset sales.
- Capital Raising Capacity: Assess the feasibility of raising capital given the "baby shelf" limitations and the suspension of the ATM prospectus.
- Regulatory Dependencies: Confirm the impact of the U.S. government shutdown on the NCI-funded TPST-1495 trial and FDA review timelines.
- Executive Compensation: Review the terms of the consulting agreements for the CEO, CMO, and CFO to understand ongoing cash obligations.