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Tempest Therapeutics, Inc. (TPST)·Q2 2024 Earnings Summary

Executive Summary

  • Q2 2024 featured new randomized first-line HCC survival data for amezalpat (TPST-1120): 21-month median OS vs. 15 months for control and a maintained 0.65 hazard ratio; management is advancing toward a pivotal Phase 3, subject to FDA feedback .
  • Financials: Net loss was $9.6M with $(0.42) EPS; cash and equivalents were $31.1M. R&D rose to $5.8M and G&A to $3.7M; increases were driven by CRO/manufacturing costs and stock-based comp .
  • Versus prior periods: Cash declined vs. Q1 ($32.3M) and year-end 2023 ($39.2M); net loss increased vs. Q1 ($7.9M) and vs. prior year Q2 ($7.6M) .
  • Near-term catalysts: FDA feedback and Phase 3 initiation in first-line HCC; continued readouts on TPST-1495 (FAP Phase 2 initiation and endometrial cancer combo-arm data in 2024) .

What Went Well and What Went Wrong

What Went Well

  • Amezalpat randomized HCC study showed a six-month median OS advantage (21 vs. 15 months) with a maintained 0.65 HR and survival benefit across key subpopulations; safety manageable .
  • CEO commentary emphasized confidence in success given survival improvement and maintained HR: “remarkable six-month improvement… gives us confidence in the potential success of the program” .
  • Program progression: advancing amezalpat toward Phase 3, consistent with prior plans; TPST-1495 preparing for Phase 2 in FAP .

What Went Wrong

  • Operating loss widened: Q2 operating loss of $(9.6)M vs. $(8.0)M in Q1 and $(7.5)M in Q2’23; net loss increased sequentially and YoY .
  • Cash balance decreased to $31.1M from $39.2M at year end and $32.3M in Q1, reflecting higher operating spend and program advancement .
  • Increased leverage and lower equity: current loan payable rose to $8.6M (from $4.3M at year-end) and stockholders’ equity declined to $16.9M from $26.8M .

Financial Results

Key Financials vs. Prior Periods

MetricQ2 2023Q1 2024Q2 2024
Cash And Equivalents ($USD Millions)$17.60 $32.33 $31.12
Operating Loss ($USD Millions)$(7.47) $(7.97) $(9.58)
Net Loss ($USD Millions)$(7.58) $(7.90) $(9.57)
Net Loss per Share ($USD)$(0.54) $(0.36) $(0.42)
Research & Development Expense ($USD Millions)$4.42 $4.34 $5.84
General & Administrative Expense ($USD Millions)$3.05 $3.63 $3.75

Notes:

  • Company reported expenses-only operating statements (no product revenue line), consistent with development-stage status .

KPIs (Clinical Program – Randomized First-Line HCC)

KPIQ4 2023 (Top-line update)Q1 2024Q2 2024
Median OS (Amezalpat arm)Not reached; HR 0.59 favoring amezalpat N/A (preclinical/mechanistic updates) 21 months (vs. 15 months control)
Hazard Ratio (OS)0.59 (favoring amezalpat) N/A 0.65 (maintained vs. prior)
Confirmed ORR (cORR)30% amezalpat vs. 13.3% control N/A Maintained survival benefit across subpops
Survival Follow-up40% patients on treatment; 72.5% on study (Oct-2023 data) N/A 20/40 amezalpat vs. 9/30 control in survival follow-up

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Amezalpat (TPST-1120) – Phase 3 plan2024Plan to advance into registrational Phase 3 in first-line HCC, subject to FDA feedback “Advancing amezalpat towards a pivotal Phase 3” in first-line HCC, subject to FDA feedback Maintained; reinforced by survival data
TPST-1495 – Phase 2 in FAP2024Plan to advance TPST-1495 into Phase 2 in FAP under NCI auspices Plan to advance TPST-1495 into Phase 2 in FAP in 2024 (subject to final NCI approval) Maintained
TPST-1495 – Endometrial combo-arm data2024Expect to report data at two highest doses in 2024 Expect to report data in 2024 Maintained
Cash runway2025Expected to fund operations into Q2 2025 (disclosed Q1) No update provided in Q2 materials Not updated

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2023 and Q1 2024)Current Period (Q2 2024)Trend
R&D execution (HCC)Clinical superiority across endpoints; HR 0.59; cORR 30%; PFS improvement; well-tolerated Six-month median OS advantage; HR 0.65; benefit across subpops; manageable safety Strengthening survival signal
Regulatory pathway (Phase 3)Preparing to move into pivotal Phase 3, subject to FDA Advancing toward pivotal Phase 3 in first-line HCC, subject to FDA feedback Progressing toward pivotal
Mechanistic/preclinical validationKidney cancer preclinical data; mechanistic data at AACR/SITC; positive Phase 1 publication Reinforced with AACR RCC data mention and Phase 1 publication complementing randomized trial Reinforced MoA
Partnerships/Trial operationsMorpheus program (Roche) randomized global multicenter study; Tempest retains product rights Continued reference to randomized global study; Tempest retains product rights Stable
Capital/OpExRunway into Q2 2025 disclosed; R&D/G&A rising with program activity Higher R&D and G&A; cash down to $31.1M OpEx rising; cash trending lower

Management Commentary

  • “Improving survival for these patients with the right safety profile is our goal… This remarkable six-month improvement in survival… and maintenance of a strong hazard ratio, gives us confidence in the potential success of the program” — Stephen Brady, President & CEO .
  • Q1 framing on confidence: “positive data and mechanistic analysis… further confirming and reinforcing our excitement… and our confidence… as it moves closer to a pivotal Phase 3 study in first-line HCC” .

Q&A Highlights

  • No Q2 2024 earnings call transcript was available; the company’s Q2 disclosure was via press release and 8-K. The June 20, 2024 webcast accompanied the survival data release, but a transcript was not available in the document set reviewed .

Estimates Context

  • Wall Street consensus (S&P Global) for Q2 2024 EPS and revenue was unavailable at time of query due to SPGI request limits; as a result, an estimates vs. actuals comparison could not be completed. In light of the strengthened survival dataset and Phase 3 trajectory, investor models may adjust R&D pacing and timelines, rather than near-term revenue/EPS, given Tempest’s pre-commercial profile .
  • Values retrieved from S&P Global were unavailable; no numerical consensus is provided here.

Key Takeaways for Investors

  • The HCC survival dataset strengthens the clinical narrative: 21-month median OS vs. 15 months control and a maintained 0.65 HR; this is a meaningful efficacy signal in first-line HCC and underpins Phase 3 readiness .
  • Phase 3 advancement is the primary stock catalyst; watch for FDA feedback timing and pivotal trial initiation specifics (design, sites, endpoints) .
  • Program breadth adds optionality: TPST-1495 advancing into Phase 2 FAP and expected endometrial combo-arm data in 2024 could provide incremental clinical validation beyond HCC .
  • Operating intensity rising: sequential and YoY increases in R&D and G&A and a widening operating loss reflect ramp toward pivotal activities; monitor cash utilization and financing optionality .
  • Balance sheet: $31.1M cash at quarter end; current loan payable increased to $8.6M, and equity declined to $16.9M—focus on runway updates and any partnership or non-dilutive funding potential .
  • Roche Morpheus framework continues to de-risk global operations; Tempest retains product rights, preserving upside on positive pivotal outcomes .
  • Near-term trading likely sensitive to any regulatory interactions, Phase 3 initiation timelines, and additional biomarker/subpopulation analyses disclosed in future updates .