Tempest Therapeutics, Inc. (NASDAQ:TPST) has been able to make significant progress in advancing the use of its lead drug TPST-1120 for the treatment of patients with advanced solid tumors. In particular, it was able to achieve positive results as it relates to the advancement of this drug in combination with standard of care [SOC] atezolizumab and bevacizumab for the treatment of patients with unresectable or metastatic hepatocellular carcinoma [HCC]. Matter of fact, a phase 1/2 study already proved that the addition of TPST-1120 together with SOC for this patient population was able to beat out SOC alone.
The TPST stock price soared greatly on the back of this news, but if that is the case, then what possible catalyst could be left with this program that might cause the stock to trade higher? It is expected that it will announce updated data from this ongoing phase 1b/2 randomized study using TPST-1120 for the treatment of this 1st-line HCC patient population in 2024.
Not only that, but this program is phase 3 ready, and it is gearing up to initiate a late-stage trial for this program during this year as well. Of course, this is pending positive feedback from the FDA.
Besides these two catalysts to look forward to, there is another one to keep an eye on. While Tempest Therapeutics has done well in advancing the use of TPST-1120 for the treatment of patients with HCC, there is another drug in the pipeline known as TPST-1495.
This other candidate is currently being explored in a phase 1/2 combination study for the treatment of patients with advanced endometrial cancer. It is expected that it will report data from the combination arm with the two highest doses of TPST-1495 in 2024. Should the results be positive, the plan is to move this other candidate towards phase 2 testing for the treatment of patients with Familial Adenomatous Polyposis [FAP]. A trial initiation for this program is subject to the ability to gain funding from the National Cancer Institute [NCI].
With the ability for the addition of TPST-1120 added to SOC to achieve a possibly better outcome for 1st-linen HCC patients, plus several catalysts on the way during 2024, I believe that investors can benefit with any potential gains made.
TPST-1120 Holds Massive Potential To Improve HCC Treatment Landscape
As I noted above, Tempest Therapeutics is evaluating the use of TPST-1120 + SOC for the treatment of patients with hepatocellular carcinoma [HCC] in a phase 1b/2 study. It reported positive results back in 2023, which caused the stock price to trade higher by more than 4,000% in one day.
The reason why this happened is that the addition of TPST-1120 added to SOC Tecentriq [atezolizumab] + bevacizumab [Avastin] generated a more robust response in patients compared to SOC alone for these 1st line HCC patients. This would be in terms of confirmed and unconfirmed RECIST responses. The data that was released showed that the TPST-1120 triplet therapy improved the percentage of objective response rate [ORR] by a significant amount as follows:
- Unconfirmed response for patients – 30% for TPST-1120 triplet arm versus 17.2% for control arm – Ended up showing a 74.4% relative improvement in ORR
- Confirmed response for patients – 17.5% for TPST-1120 triplet arm versus 10.3%% for control arm – Ended up showing a 69.9% relative improvement in ORR.
This is great data, but what can investors expect coming up that might cause the stock price to trade higher in the coming months? I would say it would be a data update expected from this very same phase 1b/2 study in 2024 for these patients with 1st-line liver cancer. It appears as though the ORR of that for TPST-1120 + Tecentriq + Avastin is a good thing for patients, but there is something else that it possibly would be able to achieve. That is, in the release of this data, patients who took SOC Tecentriq + Avastin were only able to achieve a median overall survival [mOS] of 15.1 months. While on the other hand, the mOS for the TPST-1120 triplet arm had not yet been reached. It will be important to track mOS in the next data update. I believe that whether this data point ends up being significantly better than or not yet reached compared to that of SOC, that this will be another highly significant finding in TPST-1120 moving the treatment paradigm for treating 1st-line HCC patients.
This phase 1b/2 study, which tested the TPST-1120 triplet arm compared to SOC for these 1st-line HCC patients, was sponsored by Hoffmann-La Roche. Tempest has full rights to the use of TPST-1120 currently, but I believe that it is likely going to either keep its collaboration study agreement with Roche (OTCQX:RHHBY) or find another suitable partner willing to move this program forward towards phase 3 testing.
As I stated in the beginning above, pending positive feedback from the FDA, Tempest will be able to initiate a phase 3 registrational study using the TPST-1120 triplet arm for this 1st-line HCC patient population. I’m inclined to believe that Roche should likely commit to funding such a phase 3 study through a deeper collaboration agreement, but this remains to be seen.
The thing is that TPST-1120 as a PPAR agonist seems to do well with different types of PD-1 inhibitors. For example, data released a few weeks ago showed that this drug added to nivolumab [Opdivo] for the treatment of patients with advanced solid tumors, were able to achieve improved responses with dose escalation.
The increase in response can be shown below as follows:
- Patients with heavily pre-treated cholangiocarcinoma [CCA], HCC and renal cell carcinoma [RCC] who took TPST-1120 + Opdivo an ORR of 23%
- Patients given the two highest doses of combination TPST-1120 + Opdivo achieved an ORR of 30%.
The point here is that this establishes further proof-of-concept that adding TPST-1120 to PD-1/PD-L1 inhibitors can improve response rates for patients with solid tumors, who otherwise don’t respond to initial therapy. Hopefully, Tempest can move this program forward as a 1st-line treatment option. It is expected that the global liver cancer drug market size is expected to reach $7.6 billion by 2033. The preferred 1st-line treatment option is Tecentriq + Avastin as systemic therapy. However, based on what this company has been able to show with TPST-1120 + SOC, it holds the potential to become the preferential 1st-line treatment of choice for 1st-line HCC patients.
Financials
According to the 10-K SEC Filing, Tempest Therapeutics had cash and cash equivalents of $39.2 million as of December 31, 2023. It was able to increase the amount of cash on hand due to the proceeds it generated from the issuance of common stock. In essence, it was capable of obtaining $35.6 million from an at-the-market offering program.
Based on the cash it could obtain through this ATM, plus the funds on hand, Tempest Therapeutics, Inc.’s cash runway is expected into Q2 of 2025. This estimate makes sense because its cash burn per year is roughly $29.3 million. It needs to get its phase 3 study going, and it will likely need funding to do so.
However, being that it ran the phase 1b/2 study with Roche as a collaboration partner, I still believe that some type of deal will occur to move this program forward. Either that, or Tempest might find another big pharma willing to fund a phase 3 registrational study using the TPST-1120 triplet arm for the treatment of patients with 1st-line HCC.
On the flip side, if Tempest Therapeutics can’t get a big pharma partner on board, then it is likely going to have to find another way to raise cash. This could be either through the issuance of stock, debt or by any other means necessary. It even states in its 10-K SEC Filing that it still has $57.6 million remaining available from its ATM program as of December 31st, 2023. This would be regarding the ATM program noted above where it raised $35.6 million to fund its pipeline.
Risks To Business
There are several risks that investors should be aware of before investing in Tempest Therapeutics. The first risk to consider would be regarding the release of updated data from the phase 1b/2 study, using TPST-1120 + Tecentriq + Avastin for the treatment of patients with 1st-line HCC. Even though preliminary data was good, showing an improvement in ORR and several other biomarker endpoints, there is no assurance that the same will be shown in the updated data. Nor that the final median OS number of the TPST-1120 triplet arm will be superior to that of the SOC arm when the results are ultimately released.
A second risk to consider would be the funding necessary to move the use of the TPST-1120 arm forward towards phase 3 registrational testing for 1st-line HCC patients. That’s because it has to be able to obtain significant funding, as I noted directly above. There is no guarantee that this biotech will be able to establish a partnership with a big pharmaceutical company, nor that it will be able to find the non-dilute capital to initiate such a late-stage study. Plus, the ability for it to initiate a registrational study for this program is contingent upon it obtaining positive feedback from the FDA.
A third risk to consider would be regarding the advancement of another clinical product in its pipeline, which is being advanced in a phase 1/2 study for the treatment of patients with advanced endometrial cancer using TPST-1495. Data from the two highest dose combination arms for this trial are expected to be released in 2024. There is no assurance that final data to be released from this phase 1/2 trial will turn out to be positive.
Another risk to consider in relation to this program is that Tempest will only initiate a phase 2 study, using TPST-1495 for the treatment of patients with Familial Adenomatous Polyposis [FAP], if it obtains final approval funding from the National Cancer Institute [NCI]. If it cannot obtain funding from this agency, then this program might be placed on the back burner until such funding for it can be obtained.
Conclusion
Tempest Therapeutics, Inc. has been able to develop a PPAR agonist, TPST-1120, that when added to SOC Tecentriq + Avastin can improve response rates and other biomarker outcome measures. Why I believe further value can be unlocked here is because the mOS number was reached for the SOC treatment arm, but not yet for the TPST-1120 triplet arm. Again, if this endpoint ends up being significantly superior for this specific arm from Tempest, then I believe it could cause the stock price to trade significantly higher. Another catalyst would be if the company not only obtains positive feedback from the FDA to begin a phase 3 registrational study targeting 1st-line HCC patients, but that it also can find a partner that is willing to fund it.
While its pipeline is highly focused on advancing TPST-1120 as a PPAR agonist for the treatment of 1st-line HCC and other types of solid tumors, it does have another product in its pipeline. This would be the use of TPST-1495 for the treatment of patients with FAP. However, the first goal would be to release data from the two high dose combination arms of this drug for the treatment of patients with advanced endometrial cancer. Such data is expected this year as well, and I believe this is another important milestone for investors to keep an eye on.
Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.
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