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On Thursday, H.C. Wainwright analyst Joseph Pantginis revised the price target for Tempest Therapeutics (NASDAQ:TPST) to $16.00, a significant decrease from the previous target of $47.00, while maintaining a Buy rating on the company’s shares. Currently trading at $0.84, the stock sits well below its 52-week high of $6.00. According to InvestingPro data, analyst consensus remains bullish with targets ranging from $5.00 to $47.00. The adjustment followed Tempest’s disclosure of its fourth-quarter and full-year 2024 financial results, which fell short of both the firm’s and consensus estimates. Tempest reported an earnings per share (EPS) of ($0.34) for the quarter and ($1.50) for the year, compared to the estimated figures of ($0.19) and ($1.27) by H.C. Wainwright and ($0.25) and ($1.35) by consensus, respectively.
Tempest concluded the year with a cash position of $30.3 million. InvestingPro analysis indicates the company holds more cash than debt on its balance sheet, though it’s quickly burning through available funds. In the past year, the company has been actively progressing its lead clinical program by evaluating amezalpat in first-line Hepatocellular Carcinoma (HCC) in preparation for pivotal studies, contingent on securing additional resources. The company has had a successful End of Phase 2 (EOP2) meeting with the FDA and received clearance to proceed with a Phase 3 study of amezalpat in combination with the standard of care, atezolizumab/bevacizumab.
This progress is further supported by a recent agreement with Roche, which will supply atezolizumab for the Phase 3 study, offering significant cost savings for Tempest. Additionally, Tempest’s secondary clinical program, TPST-1495, is advancing with the National Cancer Institute’s (NCI) final funding approval. This program is expected to move into a Phase 2 study for Familial Adenomatous Polyposis (FAP) in 2025, with results anticipated in 2026.
The decision to lower the price target to $16 is primarily based on several factors: an adjustment to the fully diluted share count, an increase in the discount rate to 20% to reflect the ongoing financing risk, a revision of the base year, and a modification of the amezalpat HCC timeline, with the study expected to start in late 2025. Despite these adjustments, H.C. Wainwright reaffirms its Buy rating for Tempest Therapeutics. The company’s financial health score from InvestingPro currently stands at WEAK, with the stock showing a -78.52% return over the past year.
In other recent news, Tempest Therapeutics has received authorization from the U.S. Food and Drug Administration to proceed with a Phase 2 clinical trial for its drug TPST-1495. This trial will focus on treating Familial Adenomatous Polyposis, with the study set to begin this year under the Cancer Prevention Clinical Trials Network, financially supported by the National Cancer Institute. The primary goal of the trial is to assess the drug’s ability to reduce duodenal polyp burden over six months. In other developments, Tempest Therapeutics has been notified by The Nasdaq Stock Market LLC regarding non-compliance with the minimum bid price requirement, as its stock has closed below $1.00 per share for 30 consecutive business days. The company has until June 25, 2025, to regain compliance by maintaining a closing bid price of at least $1.00 per share for 10 consecutive business days. Tempest Therapeutics has already secured stockholder approval for a potential reverse stock split to address this issue. The company is actively monitoring its stock price and considering various options to meet Nasdaq’s requirements.
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