Tempest Therapeutics (TPST) Stock Plunged 31.7% on a Pullback

The Tempest Therapeutics Inc (NASDAQ: TPST) stock price was trading down 31.7% today in a pullback following the massive over 2000% rally witnessed in the stock earlier this week after releasing positive clinical trial data for its lead drug candidate TPST-1120.

TPST-1120 is meant to treat the most prevalent type of primary liver cancer, and the Phase 1b/2 clinical trial showed the drug’s superiority when combined with atezolizumab (Tecentriq) and bevacizumab (Avastin) in a randomised comparison to the two drugs acting alone as a first-line treatment for patients with liver cancer. 

The Brisbane, California-based company has reported significant data, including a confirmed objective response rate of 30% for the TPST-1120 triplet arm, in contrast to the 13.3% response rate observed in the Avastin/Tecentriq control arm.

Under a collaboration initiated in 2021, Roche oversees the study's management, while Tempest retains all product rights to TPST-1120. The two drugs that TPST-1120 is being tested against are all owned by Roche, which is looking for better outcomes for clients. 

In a separate development, Tempest's board announced the adoption of a limited-duration stockholder rights plan, commonly referred to as a “poison pill,” which has a 10% trigger. 

Poison pills are defensive mechanisms designed to thwart hostile takeovers by diluting the influence of activist shareholders, typically by flooding the market with new shares and elevating the cost of acquiring a controlling stake.

Tempest clarified that the decision to implement the rights plan was not prompted by any specific takeover threat. The move comes in response to what the company describes as a “significant and ongoing dislocation” in the trading price of its shares.

Stephen Brady, the president and CEO of Tempest, stated: “Today, we announced exciting new randomized data in first-line HCC from our lead program, TPST-1120. Unfortunately, Tempest, like many other biotechnology companies, continues to experience a significant and ongoing dislocation in the trading price of its common stock. We intend the Rights Plan to enable all of our stockholders to realize the long-term value of their investment.”

Tempest Therapeutics (TPST) stock is pulling back following its recent rally higher as investors cash out of their profitable positions. 

Tempest Therapeutics (TPST) stock price. 

The Tempest Therapeutics (TPST) stock price was trading down 31.66% at $2.72 from Thursday’s closing price of $3.98.