Amid a funding drought for start-ups, the company is looking for a deal that can advance its liver cancer drug.
Tempest Therapeutics is seeking a buyer or partner, saying Wednesday it has hired financial advisers to “advance its promising clinical stage programs and maximize stockholder value,” as the California-based biotechnology company prepares a liver cancer drug for late-stage testing.
Tempest didn’t set a deadline for reaching a deal, and doesn’t plan to disclose the nature of its talks or deal evaluation process until the company has “determined that further disclosure is appropriate or necessary.” That cancer drug, called amezalpat, poses a “rare opportunity for a partner,” according to CEO Stephen Brady, who pointed to supportive data as well as the drug being cleared for Phase 3 trials.
Tempest ended 2024 with just over $30 million in cash and equivalents, which it cautioned was not enough to fully fund a Phase 3 trial. Brady said “the capital markets have been unavailable” for the company to raise more money.
The biotech sector has struggled through a funding drought as initial public offerings and secondary share sales alike have declined. Tempest had set out to find some additional funding, but with its market capitalization hovering around its cash holdings, a secondary offering wasn’t a likely avenue of raising more cash.
The company completed a one-for-13 share consolidation on Tuesday, just as world markets were battered by the imposition of global tariffs, many now watered down, by President Donald Trump.
Tempest dodged some of the volatility of being a young biotech on the stock market, going public through a reverse merger with the University of Michigan spinout Millendo Therapeutics after the company had clinical setbacks. Millendo’s corporate shell had formed through a different reverse merger with a company that worked in female infertility, called OvaScience, which also struggled in clinical studies.
Tempest may have a promising asset in amezalpat. When combined with Roche’s Tecentriq and Avastin in the first-line setting, amezalpat reduced the risk of death by 35% in people with hepatocellular carcinoma compared with the two Roche drugs by themselves. (The pairing of Tecentriq and Avastin are one of two recommended first-line treatments for hepatocellular carcinoma.)
That Phase 2 trial also found people who received the amezalpat combination lived a median of 21 months, compared with 15 months for those getting only Tecentriq and Avastin.
Based on that data, the Food and Drug Administration granted amezalpat fast-track designation as well as orphan drug status, both of which will ease some regulatory requirements. Tempest had also been cleared to begin its Phase 3 trial.
