After laying off 80% of staffers this spring, Tempest Therapeutics is acquiring several CAR-T programs from Factor Bioscience and bringing the latter’s CEO on board to helm the company.
The asset purchase deal includes an investment commitment from Factor and is designed to extend Tempest’s runway into mid-2027, according to a Nov. 19 release. The California oncology biotech ended Q3 with $7.5 million in cash and cash equivalents, according to a Nov. 5 filing with the Securities and Exchange Commission.
Now, Tempest is inking an all-stock transaction with Massachusetts-based Factor for four of the biotech’s CAR-T candidates. The deal, which still needs to receive shareholder approval, will also see Factor’s CEO and co-founder Matt Angel, Ph.D., take the top spot at Tempest. The CEO role is currently held by Stephen Brady, who is expected to transition to serve as the biotech’s board chair.
In connection with his expected CEO appointment, Angel will receive an annual base salary of $650,000 and will also be eligible for a yearly bonus of $325,000. Meanwhile, Tempest will offer Brady a salary of $600,000 per year.
If the proposal is approved, Tempest will issue 8,268,495 new shares of its common stock to an affiliate of Factor called Erigen. Tempest currently has about 4.44 million outstanding shares, so the new tranche will represent about 65% of its total equity after the deal.
After closing, Tempest equityholders are expected to own about 35% of the company, while Erigen equityholders Matt Angel, Ph.D., and Lotus Capital are expected to own 38% and 27%, respectively.
The asset acquisition is expected to close early next year.
Tempest's share price fell by about 46% to $4.86 in the wake of the announcement Wednesday.
Tempest’s plan is to use the new cash infusion to further Factor’s dual CD19/BCMA CAR-T program, now coded TPST-2003. The clinical-stage candidate is designed to target patients with extramedullary disease (EMD), an aggressive type of multiple myeloma in which tumors form outside of the bone marrow.
A phase 1 study in patients with relapsed multiple myeloma is expected to read out in 2026, with a biologics license application in China anticipated for the year after that, according to the release.
Under the terms of the deal, Tempest will have rights to TPST-2003 outside of China, India, Turkey and Russia. The California biotech said it plans to launch a possibly registrational study in rrMM in the U.S. the year after next.
The dual CAR-T is also being tested out in an early clinical trial for POEMs syndrome, a rare blood disorder, with data slated for 2027 and a regulatory filing in China expected for 2028.
The company will also gain access to three preclinical or research programs: a dual-targeting CD70/CD70 CAR-T for renal cell carcinoma; an allogeneic dual-targeting CD19/BCMA asset; and an allogeneic dual-targeting CD70/CD70 program.
Meanwhile, Tempest will continue to search for a partner or additional financing for its late-stage PPAR⍺ antagonist dubbed amezalpat. In early April, after failing to secure further funding, Tempest put out a call seeking a partner to take the liver cancer drug into phase 3.
The biotech has already completed the necessary interactions with U.S. and EU regulators to launch a phase 3 trial of amezalpat in combination with Tecentriq and Avastin, but has struggled to scrounge up the money required to get the drug back into the clinic.
The plan to continue with amezalpat in first-line hepatocellular carcinoma is dependent on the company’s ability to come up with further resources or partnerships, the biotech said.
Tempest also has a dual EP2/4 antagonist called TPST-1495 that will be studied in a phase 2 trial for a genetic colon disorder called familial adenomatous polyposis (FAP). The study will be funded by the National Cancer Institute and is expected to enroll its first patient next year.
The deal comes after Tempest launched a search for strategic alternatives earlier this year. Days after starting the search for external partners in April, the biotech laid off 21 of its 26 full-time employees in an effort to stretch its limited cash reserves.
“The proposed transaction will result in an even more diversified portfolio that we believe provides stockholders with new opportunity for value creation and patients with new potential therapies,” Tempest CEO Brady said in the release.
“With the new funding support, Tempest has increased its opportunity to realize potential value-creating milestones in the midst of this prolonged challenging market,” Brady added.