On Friday, H.C. Wainwright reaffirmed its Buy rating and $47.00 stock price target for Tempest Therapeutics (NASDAQ:TPST) following the biotech firm's announcement of a drug supply agreement with Roche. The agreement, announced on October 10, stipulates that Roche will provide atezolizumab globally for Tempest's forthcoming Phase 3 study in first-line Hepatocellular Carcinoma (1L HCC).
Under the terms of the partnership, while Roche supplies the drug, Tempest will sponsor and direct the pivotal study. This collaboration builds on a previous clinical partnership in which Tempest's amezalpat was tested in combination with Roche's standard of care (SoC) atezolizumab/bevacizumab versus the SoC combo alone in a randomized Phase 1b/2 trial as part of Roche's MORPHEUS-Liver program.
Tempest has also recently concluded a successful End of Phase 2 (EOP2) meeting with the FDA, agreeing on the Phase 3 study plan, which includes the dosing schedule and the primary endpoint of overall survival (OS). The FDA has concurred with the statistical plan for the study, which incorporates an early efficacy analysis that could potentially reduce the study's timeline to primary analysis by eight months.
Despite the positive developments, Tempest acknowledged the need for significant funding to support the Phase 3 study, with costs estimated around $100 million. The company reported having $39.2 million in cash at the end of the second quarter of 2024.
While the exact cost savings from the Roche agreement have not been disclosed, it is expected to significantly reduce expenses by an estimated $30-50 million, assuming at least 700 subjects are enrolled in the study. Tempest aims to commence the pivotal study in the first quarter of 2025.
In other recent news, Tempest Therapeutics has been making significant strides in its ongoing development of cancer treatments. The biotechnology firm has partnered with Roche to advance a Phase 3 trial for a potential liver cancer therapy, amezalpat, in combination with Roche's atezolizumab and bevacizumab. This follows the release of positive survival data from an ongoing study, showing a six-month median overall survival improvement for patients treated with the combination therapy.
The company has also received approval from the U.S. Food and Drug Administration (FDA) for the Phase 3 clinical trial of amezalpat, following a successful Phase 2 trial. Moreover, Tempest Therapeutics has appointed Troy M. Wagner as Vice President of Quality Assurance, a strategic move as the company prepares for the upcoming trials.
Scotiabank has reiterated its Sector Outperform rating on shares of Tempest Therapeutics, reflecting confidence in the company's strategic position and the expected swift patient recruitment for its clinical program for hepatocellular carcinoma treatment. These recent developments highlight the company's continued progress in the field of cancer treatment.
InvestingPro Insights
Despite Tempest Therapeutics' recent positive developments, including the drug supply agreement with Roche and the successful FDA meeting, InvestingPro data reveals some financial challenges for the company. As of the last twelve months ending Q2 2024, Tempest reported an adjusted operating income of -$31.66 million, indicating the company is not yet profitable. This aligns with the InvestingPro Tip that analysts do not anticipate the company will be profitable this year.
The stock's performance has been notably weak, with InvestingPro data showing a 1-year price total return of -88.74% as of the latest data. This significant decline is reflected in another InvestingPro Tip, which notes that the stock price has fallen significantly over the last year.
On a more positive note, an InvestingPro Tip highlights that Tempest holds more cash than debt on its balance sheet, which could be crucial as the company seeks to fund its upcoming Phase 3 study. However, investors should be aware that the company is quickly burning through cash, another insight provided by InvestingPro.
For those interested in a deeper analysis, InvestingPro offers 13 additional tips for Tempest Therapeutics, providing a more comprehensive view of the company's financial health and market position.
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