Tempest Therapeutics cuts 21 of 26 employees as it explores strategic alternatives

Tempest Therapeutics, Inc. (Nasdaq: TPST) said it will reduce its workforce by 21 of its 26 full-time employees, effective April 30, 2025. The company disclosed the cut in a Form 8-K filed April 18, 2025, under Item 2.05, which covers costs tied to exit or disposal activities. The company says the plan is meant to extend its capital resources while it starts a process to explore a full range of strategic alternatives.

What the filing says

Tempest adopted the plan on April 17, 2025, in connection with starting the process it had already announced to explore strategic alternatives. The filing does not name the alternatives, and it does not say whether a sale, merger or licensing deal is in view. Key employees in the affected group are expected to move to consulting agreements and remain available to the company.

The cost

Tempest estimates about $1.5 million of cash expenditures, mainly one-time severance, benefits and related costs. That figure excludes non-cash charges tied to equity compensation. Most of the cost is expected in the second quarter of 2025. The filing warns that the estimates depend on assumptions and that actual results may differ. It also says the company may take other charges, including possible impairment charges, that it cannot yet size. If it can estimate those charges in good faith, it says it will amend the 8-K.

The cash position

The company's annual report on Form 10-K, filed March 27, 2025, reports a net loss of $41.8 million for 2024, against $29.5 million for 2023. Its risk factors say the company has raised $232.1 million since inception and has no products approved for sale and no product revenue. It reports an accumulated deficit of $207.1 million and cash and cash equivalents of $30.3 million at December 31, 2024. Based on that balance, the report says the company expects its cash to fund operations for at least the next 12 months from the date the financial statements were available.

That 12-month claim is management's estimate. The filing does not connect the cut to the 12-month estimate, and it does not give a runway date after the restructuring.

The lead drug

The 10-K names amezalpat, formerly TPST-1120, as the lead program. It is an oral small-molecule antagonist of peroxisome proliferator-activated receptor alpha, in development for first-line unresectable or metastatic hepatocellular carcinoma. The report says a randomized Phase 1b/2 study reported in June 2024 showed a six-month improvement in median overall survival, with a hazard ratio of 0.65, when amezalpat was added to atezolizumab and bevacizumab compared with those two drugs alone.

That study enrolled 40 patients in the amezalpat arm and 30 in the control arm, a small base for a survival claim, with median overall survival of 21 months against 15 months. The FDA cleared a Phase 3 trial in November 2024, with overall survival as the primary endpoint and a pre-specified early efficacy analysis. The second candidate, TPST-1495, was expected to enter Phase 2 in 2025. The 10-K says the company believes both drugs are the first clinical-stage molecules designed to inhibit their respective targets. That is the company's belief, and the filing offers no independent comparison to test it. The 10-K says funding the Phase 3 trial "will require significant additional capital," and its pipeline notes say Phase 3 timelines are subject to funding.

Who signed

President and Chief Executive Officer Stephen Brady signed the 8-K. The 10-K lists Michael Raab as chairman of the board and Nicholas Maestas as chief financial officer and head of corporate strategy.

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