Business Context and Reporting Period
Company: Tempest Therapeutics, Inc. (TPST)
Filing Type: Form 10-Q (Unaudited)
Period Ended: June 30, 2025
Business Overview: Tempest is a clinical-stage biotechnology company focused on developing targeted and immune-mediated therapies 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 in development for Familial Adenomatous Polyposis (FAP).
Corporate Actions: The Company effected a 1-for-13 reverse stock split on April 8, 2025. All share and per-share data in this filing have been retroactively adjusted.
Key Financial Metrics
| Metric (in thousands, except per share) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Three Months Ended June 30, 2025 |
|---|---|---|---|
| Net Loss | $(18,730) | $(17,474) | $(7,870) |
| Net Loss Per Share (Basic & Diluted) | $(5.17) | $(10.15) | $(2.07) |
| Research & Development Expenses | $11,498 | $10,177 | $3,871 |
| General & Administrative Expenses | $7,404 | $7,379 | $4,095 |
| Cash and Cash Equivalents (Balance Sheet) | $14,280 | $30,268 (Dec 31, 2024) | N/A |
| Cash Used in Operating Activities | $(16,467) | $(12,696) | N/A |
| Accumulated Deficit | $(225,836) | $(182,737) (June 30, 2024) | N/A |
Material Changes vs. Prior Period
- Liquidity Decline: Cash and cash equivalents decreased by approximately $16.0 million (53%) from $30.3 million at year-end 2024 to $14.3 million at June 30, 2025, driven by operating losses and debt repayment.
- Debt Elimination: The Company fully repaid its $3.5 million outstanding loan with Oxford Finance LLC on April 8, 2025, including accrued interest and exit fees. Consequently, interest expense decreased significantly compared to the prior year.
- Capital Raising: In June 2025, the Company completed a Registered Direct Offering (RDO) raising approximately $4.1 million in net proceeds. Additionally, $2.8 million was raised via its At-The-Market (ATM) program during the six-month period.
- Workforce Reduction: As part of a strategic review, the Company reduced its workforce by 21 of 26 full-time employees effective April 30, 2025. Key executives transitioned to consulting arrangements. One-time severance costs of approximately $3.2 million were incurred, primarily in Q2 2025.
- Expense Trends: While R&D expenses increased year-over-year for the six-month period due to Phase 3 trial preparation for amezalpat, Q2 2025 R&D expenses decreased 34% compared to Q2 2024 due to the strategic pause and cost-cutting measures.
Guidance, Outlook, and Risks
- Going Concern: The Company has raised substantial doubt about its ability to continue as a going concern. Management expects existing cash resources to fund operations for less than 12 months from the date of issuance. Without a strategic alternative or additional financing, the Company may be forced to wind down operations.
- Strategic Review: In April 2025, the Company announced a strategic review to explore alternatives including mergers, acquisitions, partnerships, or licensing to maximize stockholder value. MTS Health Partners, L.P. has been retained as a financial advisor.
- Product Pipeline:
- Amezalpat: Received FDA "Study May Proceed" and NMPA "Clearance to Proceed" for a pivotal Phase 3 trial in HCC. Received 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. Received Orphan Drug Designation.
- ATM Program Status: The Company suspended its ATM prospectus supplement in June 2025 in connection with the RDO. While the sales agreement remains in effect, no further sales can occur until a new prospectus is filed.
- Subsequent Events: On August 11, 2025, the Company entered into success bonus agreements with key executives totaling $725,000, payable upon a change in control prior to January 31, 2026.
Investor Verification Checklist
- Cash Runway: Verify the specific timeline for cash exhaustion given the "less than 12 months" disclosure and the impact of the recent RDO proceeds.
- Strategic Alternatives: Monitor for updates on the strategic review process, including any potential merger, acquisition, or partnership announcements.
- Capital Constraints: Assess the impact of the suspended ATM program and the "baby shelf" rules (public float < $75M) on the Company's ability to raise additional equity.
- Executive Compensation: Review the terms of the new consulting agreements and success bonus arrangements for key executives (CEO, CMO, CFO) entered into in August 2025.
- Debt Status: Confirm the full release of liens and security interests following the repayment of the Oxford Finance loan.