Tempest Therapeutics, Inc. — Q2 2023 Form 10-Q
Reporting period: Three and six months ended June 30, 2023. Tempest is a clinical-stage oncology company developing TPST-1120 and TPST-1495, with additional preclinical programs. It has no approved products and has generated no product revenue.
Financial performance and liquidity
| Metric | Q2 2023 / June 30, 2023 | Comparable period / prior year-end |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $4.4 million; six months: $9.1 million | Q2 2022: $5.7 million; six months: $10.8 million |
| General and administrative expense | $3.1 million; six months: $6.0 million | Q2 2022: $3.1 million; six months: $6.2 million |
| Net loss | $7.6 million; six months: $15.2 million | Q2 2022: $9.2 million; six months: $17.7 million |
| Net loss per share | Q2: $0.54; six months: $1.09 | Q2 2022: $0.79; six months: $1.88 |
| Cash and cash equivalents | $17.6 million | $31.2 million at December 31, 2022 |
| Total assets / stockholders’ equity | $30.7 million / $5.0 million | $46.1 million / $18.1 million at December 31, 2022 |
| Debt, net of discounts and costs | $10.5 million | $10.4 million at December 31, 2022 |
| Operating cash used | $14.7 million for six months | $15.5 million for six months ended June 30, 2022 |
Operating loss was $7.5 million in Q2 and $15.1 million for the first half. No meaningful sales margins are reported because the company has no product sales. Cash used in investing was $0.2 million for the first half; financing provided $1.2 million, versus $15.8 million in the 2022 period, which included PIPE proceeds. Current assets were $18.5 million and current liabilities $8.6 million at June 30, 2023.
Changes and operating developments
- First-half R&D expense fell $1.7 million year over year, primarily due to lower CRO and other third-party costs, partly offset by higher personnel and facilities costs. G&A expense declined $0.2 million.
- Tempest sold common stock through its ATM program for $1.2 million net proceeds during the first half of 2023. Shares issued and outstanding increased to 12.58 million from 10.52 million at year-end 2022; 13.32 million were outstanding as of August 7, 2023.
- The company reported final court approval in June 2023 of the Cima settlement and dismissal with prejudice of the related Chiu action in July 2023. The balance sheet no longer showed the related $0.45 million accrued settlement or insurance recovery.
Outlook, risks and notable items
- Going concern and funding: Management stated that June 30 cash would not fund projected expenses and obligations beyond Q2 2024 and disclosed substantial doubt about the company’s ability to continue as a going concern. It is pursuing equity or debt financing, collaborations, licensing, or other arrangements, with no assurance of success. Cost-preservation measures may delay or reduce program milestones. The filing also says cash is expected to fund current plans through at least 12 months from issuance; this statement should be considered alongside the explicit going-concern warning and stated Q2 2024 cash horizon.
- Clinical outlook: TPST-1120’s randomized Phase 1b/2 HCC study was fully enrolled. Reported early data from a February 2023 cutoff showed unconfirmed ORR of 30% versus 17.2% for control, and confirmed ORR of 17.5% versus 10.3%. These are interim results; more mature ORR data and potentially PFS and OS data were expected in H2 2023 or H1 2024. TPST-1495 Phase 1 data were presented at ASCO in June 2023; the filing provides no detailed efficacy figures in the supplied text.
- Debt: Oxford Finance debt bears a floating annual rate reported as 7.15%, matures August 1, 2025, and is secured by company assets, including intellectual property. Interest-only payments run through December 31, 2023, with a possible extension under certain conditions; monthly principal payments of $0.513 million were scheduled to begin January 2024. A further $10 million tranche is available only at the lender’s option.
- Risks: Continued losses, uncertain clinical and regulatory outcomes, need for additional capital, potential dilution, ATM “baby shelf” limits, Oxford covenants and collateral, reliance on third-party manufacturers/CROs, and competitive, intellectual-property and market risks are highlighted. The company reported effective disclosure controls as of June 30, 2023 and no material quarterly change in internal control over financial reporting.
Important facts for investors to verify
- Cash runway assumptions, near-term obligations, and whether additional financing or partnering has been secured.
- Updated TPST-1120 trial data, including confirmation, patient counts, follow-up, control-arm comparability, PFS and OS; and detailed TPST-1495 results.
- Oxford loan repayment schedule, covenant compliance, any interest-only extension, and availability of the optional tranche.
- Potential dilution from future equity issuance, ATM capacity under applicable shelf limits, outstanding pre-funded warrants, and equity awards.