JFrog stock rises as Cantor Fitzgerald maintains Overweight rating after strong Q2
On Thursday, H.C. Wainwright analyst downgraded Tempest Therapeutics (NASDAQ:TPST) stock from Buy to Neutral, despite the company's strong Phase 2 data in a study conducted by Roche. The downgrade comes as the stock has fallen over 85% in the past year, though InvestingPro analysis suggests the stock is currently undervalued. The downgrade was attributed to a series of challenging macroeconomic events rather than any failure on the part of Tempest. The analyst expressed disappointment in the need for the downgrade, citing Tempest's possession of "striking, positive, randomized Phase 2 data with amezalpat in 1L HCC that could alter the current standard-of-care."
These promising results emerged from the MORPHEUS-Liver study, which was not conducted by Tempest but by Roche (RHHBY (OTC:RHHBY); not rated). The analyst pointed out that Tempest is actively seeking strategic alternatives to advance its clinical-stage oncology assets, given the current difficult funding environment and recent regulatory uncertainties following shakeups at the FDA. InvestingPro data reveals the company's financial health score is rated as WEAK, with rapid cash burn being a key concern despite maintaining more cash than debt on its balance sheet.
The company's management has indicated that the strategic alternatives being considered may include mergers, acquisitions, partnerships, joint ventures, licensing arrangements, or other strategic transactions. The analyst made it clear that the decision to downgrade the stock was influenced by the broader healthcare sector's challenges and the unprecedented funding difficulties.
H.C. Wainwright's analyst concluded by stating that they would continue to monitor Tempest's developments and reassess the situation pending further visibility. Until then, the future course of action for the company remains under consideration, with a range of strategic options on the table to support the advancement of its oncology pipeline.
In other recent news, Tempest Therapeutics has reported its fourth-quarter and full-year 2024 financial results, which did not meet expectations from both H.C. Wainwright and consensus estimates. The company recorded an earnings per share of ($0.34) for the quarter and ($1.50) for the year. Additionally, Tempest has announced a 1-for-13 reverse stock split, effective recently, which consolidates shares to potentially boost the market price of its common stock. The reverse stock split was authorized during a Special Meeting and is aimed at improving liquidity and meeting stock exchange requirements.
Tempest Therapeutics is also exploring strategic alternatives, including potential mergers and partnerships, to enhance stockholder value amidst capital market challenges. The company is advancing its clinical programs, with amezalpat receiving FDA clearance for a pivotal Phase 3 trial in hepatocellular carcinoma. Meanwhile, Tempest has received authorization from the FDA to proceed with a Phase 2 clinical trial for TPST-1495, targeting Familial Adenomatous Polyposis, supported by the National Cancer Institute. Analyst firm H.C. Wainwright has lowered Tempest's stock target to $16, citing several factors, including a revised timeline for the amezalpat study, while maintaining a Buy rating. These developments reflect Tempest's ongoing efforts to progress its clinical programs and secure necessary resources.
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