Tempest Therapeutics is hunkering down to weather the storm that has engulfed its operations. Days after starting to look for partners, the company has moved to lay off 21 of its 26 full-time employees to stretch its limited cash reserves.
California-based Tempest revealed it was looking into strategic alternatives April 9. The biotech took the step after failing to find the money to run a phase 3 cancer trial from capital markets. April 17, Tempest adopted a plan to cut spending as it assesses its options. The biotech shared details of its plan publicly late Friday.
Tempest plans to complete the significant reduction in its head count by April 30. The biotech expects the action to cost it about $1.5 million, mainly in the form of severance payments. Tempest ended last year with $30.3 million.
“The company’s ability to continue as a going concern in the absence of additional capital is dependent upon its ability to control its expenses over the next 12 months, which include de-prioritizing R&D programs, a reduction in its workforce and controlling variable spend, while management secures sources of capital or another strategic opportunity,” Tempest said in its annual filing.
Having so far failed to secure additional capital, Tempest is moving to cut its costs. The action will buy the biotech time to try to enter into a merger or other strategic alternative that could support work on its lead candidate and maximize shareholder value.
Tempest has a phase 3-ready PPARα antagonist, amezalpat, that it wants to study as a first-line treatment for hepatocellular carcinoma, the most common type of primary liver cancer. The biotech has generated phase 1b/2 data on the candidate in combination with atezolizumab and bevacizumab, which Roche sells as Tecentriq and Avastin, respectively.
Separately, Tempus on Monday reported that the FDA has granted an orphan drug designation to another drug candidate. The designation covers the use of Tempest's TPST-1495, an inhibitor of prostaglandin signaling, for the treatment of familial adenomatous polyposis, an inherited syndrome associated with the development of cancer.