Tempest Therapeutics, Inc. (TPST): PESTLE Analysis [Nov-2025 Updated]

You're looking at Tempest Therapeutics, Inc. (TPST) and seeing a classic biotech paradox: incredible clinical potential running head-first into a brutal financial reality. Yes, their lead candidate, amezalpat (TPST-1120), has crucial FDA Fast Track status, but the economic runway is defintely short. With cash and equivalents at just $7.5 million as of September 30, 2025, down from $30.3 million at the end of 2024, the strategic review isn't a suggestion-it's a necessity. We need to map these near-term risks to the long-term opportunity, so let's dig into the full 2025 PESTLE breakdown.

Tempest Therapeutics, Inc. (TPST) - PESTLE Analysis: Political factors

US FDA grants Orphan Drug and Fast Track designations, signaling government priority for amezalpat (TPST-1120)

The US government's regulatory bodies are defintely signaling a high priority for Tempest Therapeutics' lead candidate, amezalpat (TPST-1120), which is a huge political tailwind for the company. The Food and Drug Administration (FDA) granted amezalpat two critical designations in early 2025 for treating hepatocellular carcinoma (HCC), a form of liver cancer. In January 2025, the drug received Orphan Drug Designation (ODD), which provides benefits like tax credits and seven years of market exclusivity upon approval.

Then, in February 2025, the FDA granted the program Fast Track Designation (FTD). This FTD status means the FDA will expedite the development and review process, allowing for more frequent interactions and the potential for accelerated approval. This regulatory support is based on compelling Phase 1b/2 data showing a six-month improvement in median overall survival (OS) with a hazard ratio (HR) of 0.65 for the amezalpat combination therapy compared to standard of care. This is a clear political statement that the government wants this drug on the market fast.

Global regulatory alignment with the EMA and China's NMPA on the pivotal Phase 3 trial design for TPST-1120

A key political factor for a global oncology company is regulatory alignment across major markets-it streamlines the path to commercialization, and Tempest Therapeutics has achieved this with amezalpat. The company has secured agreement from both the US FDA and the European Medicines Agency (EMA) on the Phase 3 study design, the amezalpat dose, and the statistical plan for the pivotal trial (TPST-1120-301). This alignment minimizes the risk of having to run separate, costly trials for different regions.

Plus, in June 2025, the company received approval from the National Medical Products Administration (NMPA) in China to proceed with the same pivotal Phase 3 trial. This is crucial, as HCC has a high prevalence in East Asia, making China a massive potential market. This global regulatory consensus is a strong political de-risking factor.

Government-funded collaborations, like the NCI sponsoring the TPST-1495 Phase 2 trial

Another major political advantage is the direct financial and logistical support from a key US government agency. The Phase 2 trial for TPST-1495, targeting Familial Adenomatous Polyposis (FAP), is being funded by the National Cancer Institute (NCI) Division of Cancer Prevention. The NCI is a component of the National Institutes of Health (NIH), so this is a significant government investment.

The trial is being run by the Cancer Prevention Clinical Trials Network, which essentially outsources a substantial part of the clinical trial cost and complexity for Tempest Therapeutics. The company's research and development expenses for the nine months ended September 30, 2025, were $12.1 million, so having a government partner absorb the costs of a Phase 2 trial is an enormous financial and political benefit for a smaller biotech. This collaboration validates the science and conserves the company's limited cash and equivalents of $7.5 million as of Q3 2025.

Broader political pressure on drug pricing in the US remains a long-term risk for future commercialization

While the regulatory path is clear, the political environment around drug pricing is a persistent, long-term risk you can't ignore. In 2025, the US administration continued to apply pressure, with threats of imposing steep tariffs-up to 250%-on imported pharmaceuticals and pushing for a 'Most Favored Nation' (MFN) pricing regime.

MFN pricing, which would tie US drug costs to the lowest prices paid in other developed countries, is a major concern for the entire biotech sector. The Biotechnology Innovation Organization (BIO) has publicly stated that this proposal 'would devastate' small- and mid-size biotech companies like Tempest Therapeutics. Even though the immediate threat of MFN seemed to be 'largely neutralised' by late 2025 for some larger companies, the political appetite for price controls has not faded. This is a macro-political headwind that will affect the commercial value of amezalpat if it is approved, potentially capping its peak sales. You must factor this political reality into your discounted cash flow (DCF) model.

• Political risk on pricing: Potential 250% tariffs on imported pharmaceuticals threatened in 2025.
• MFN pricing: Executive order in May 2025 aimed to align US prices with the lowest in peer countries.
• Industry response: Biotech trade groups warn MFN would 'devastate' smaller firms.

Tempest Therapeutics, Inc. (TPST) - PESTLE Analysis: Economic factors

You're looking at Tempest Therapeutics, Inc. (TPST) and the economic picture is stark: it's a high-burn, clinical-stage biotech that is running on fumes and actively restructuring its financial life. The key takeaway is that the company's financial runway is extremely short, forcing immediate and decisive capital raises and a major strategic pivot to survive. This is the reality of small-cap oncology development right now.

Cash and equivalents were only $7.5 million at the end of Q3 2025, down from $30.3 million at year-end 2024.

The company's cash position is the most immediate economic constraint. As of September 30, 2025, Tempest Therapeutics reported cash and cash equivalents of just $7.5 million. This is a dramatic drop from the $30.3 million reported at the close of the 2024 fiscal year. Here's the quick math: the company burned through over $22.8 million in the first nine months of 2025, despite efforts to slow spending. This rapid depletion highlights the inherent capital intensity and risk of the clinical-stage biotech business model.

Year-to-date net loss through Q3 2025 was $22.2 million, showing a high cash burn rate typical of clinical-stage firms.

The year-to-date net loss through the third quarter of 2025 stood at $22.2 million. This loss is a clear indicator of the company's high cash burn (the rate at which a company spends its capital, typically before generating positive cash flow). To be fair, this burn is not unusual for a clinical-stage firm, but it's unsustainable without constant financing. They did manage to reduce their Research and Development (R&D) expenses to $12.1 million for the nine months ended September 30, 2025, down from $17.7 million in the same period in 2024, largely by reprioritizing efforts towards exploring strategic alternatives.

Recent November 2025 registered direct offering to raise approximately $4.25 million to extend the short financial runway.

To address the immediate cash crunch, Tempest Therapeutics executed a registered direct offering in November 2025, expected to generate approximately $4.25 million in gross proceeds. This capital raise, while critical, is a small, short-term fix. It was coupled with a concurrent private placement of short-term warrants that could bring in an additional $4.1 million if fully exercised. This is a classic move to buy time.

High stock volatility and a short sale ratio of 31.78% as of November 2025 reflect significant market uncertainty.

Market sentiment is highly volatile, reflecting the company's precarious financial position and the binary nature of clinical trial success. The stock is considered 'very high risk'. The short sale ratio, a measure of bearish sentiment, was a significant 31.78% as of November 18, 2025. This high short interest indicates that a large portion of the market is betting on the stock price to fall further, signaling deep uncertainty about its long-term viability as a standalone entity. The daily volatility can be extreme; the stock fluctuated by 26.51% on November 24, 2025.

The company is actively exploring strategic alternatives (merger, acquisition, or partnership) to maximize shareholder value.

The company formally announced its plan to explore a full range of strategic alternatives in April 2025. This is the clearest signal of financial distress and the need for a major change. The goal is to maximize shareholder value through a merger, acquisition, partnership, or other strategic transaction. This process culminated in the November 2025 announcement of an all-stock acquisition of new Dual-CAR T programs from Factor Bioscience. This transaction is not just about adding pipeline assets; it's a financial lifeline, projected to extend the company's cash runway to mid-2027.

• Initiated strategic alternatives process in April 2025.
• Announced all-stock acquisition of Factor Bioscience CAR-T programs in November 2025.
• Proposed transaction is expected to extend the financial runway to mid-2027.

Tempest Therapeutics, Inc. (TPST) - PESTLE Analysis: Social factors

Sociological

The social dimension is a powerful, defintely underestimated driver for a company like Tempest Therapeutics, Inc., whose pipeline targets high-unmet-need oncology indications. When a drug addresses a dire medical situation with limited or toxic treatment options, the social demand translates directly into regulatory support, patient recruitment momentum, and market acceptance. This is not just about science; it's about public health urgency.

Tempest's focus on two such areas, Hepatocellular Carcinoma (HCC) and Familial Adenomatous Polyposis (FAP), positions them directly in the center of significant, global social concern. The lack of effective, tolerable treatments for these diseases creates a strong societal pull for their novel therapies.

Focus on High-Unmet-Need Oncology Indications

Tempest Therapeutics is strategically targeting cancers where the standard of care is insufficient, which creates a large social and medical vacuum for new treatments. For Hepatocellular Carcinoma (HCC), the company's lead candidate, amezalpat (TPST-1120), is in a pivotal Phase 3 study, initiated in the first quarter of 2025, following compelling Phase 1b/2 data.

The social impact of this data is clear: the combination therapy showed a median overall survival (OS) of over 21 months, a significant 6-month improvement compared to the 15 months seen in the standard-of-care arm (atezolizumab and bevacizumab) in the same trial. This kind of survival benefit in an aggressive cancer like HCC generates immediate, high demand from patient communities and oncologists globally.

For Familial Adenomatous Polyposis (FAP), the need is just as acute. The current standard often involves a prophylactic surgical removal of the colon (colectomy) early in life, a procedure with immense social and physical consequences. TPST-1495, a non-surgical option, is designed to reduce polyp burden and potentially delay or eliminate this drastic surgery.

HCC is a Growing Global Health Concern

Hepatocellular Carcinoma is a massive and growing global public health crisis. It is projected to become the third leading cause of cancer death by 2030 worldwide, underscoring the critical need for more effective first-line treatments like amezalpat.

The global burden is staggering: approximately 900,000 new cases are diagnosed annually. For context, the 5-year survival rate for HCC is notoriously poor, hovering around 18%, which highlights the profound social and economic toll of this disease. This rising incidence, driven by increasing rates of non-alcoholic fatty liver disease (NAFLD) and obesity, means the market for a superior therapy is expanding rapidly.

Here's the quick math on the need for better HCC treatment, as of 2025:

The Orphan Drug Designation for TPST-1495

The Orphan Drug designation (ODD) granted to TPST-1495 in April 2025 for Familial Adenomatous Polyposis is a critical social signal. This designation is given to drugs for rare diseases that affect fewer than 200,000 people in the United States. FAP is a genuinely rare, inherited syndrome, affecting approximately one in 5,000 to 10,000 US individuals.

This is a clear example of the regulatory framework aligning with social need. The ODD provides Tempest with benefits like tax credits and, most importantly, seven years of market exclusivity upon approval. This exclusivity is a direct financial incentive to address a small patient population that the market might otherwise ignore.

Public Health Advocacy and Patient Groups

The social landscape for cancer therapies is heavily influenced by patient advocacy and public health funding, which creates a powerful support system for novel treatments.

• Institutional Validation: The Phase 2 study for TPST-1495 in FAP is funded by the National Cancer Institute (NCI), a major US government agency. This institutional backing validates the social importance of finding a non-surgical therapy for FAP.
• Patient Trust and Access: While doctors are the most trusted source of cancer information (at 72.6%), a recent trend shows that unmet social needs-like housing or food insecurity-are associated with a 39% to 51% reduction in trust in the healthcare system. Developing a new, effective oral therapy like amezalpat, which could simplify treatment logistics, can help bridge these access and trust gaps by reducing the complexity of care for vulnerable populations.
• Demand for Innovation: The high recurrence rate of HCC (estimated at 70-80% even after early-stage surgery) fuels a persistent social demand for innovation that goes beyond the current standard of care. Patient groups actively lobby for faster access to drugs with promising data, like the 6-month OS advantage seen with amezalpat.

The bottom line is that the severe nature of these diseases creates a receptive and vocal patient community, which is a significant tailwind for Tempest's clinical and commercial strategy.

Tempest Therapeutics, Inc. (TPST) - PESTLE Analysis: Technological factors

You're looking at Tempest Therapeutics, Inc. (TPST) and trying to assess the core technology that underpins their valuation, and honestly, the technology story is a classic biotech pivot: a strong small-molecule foundation suddenly expanded into the cutting-edge of cell therapy. The key takeaway here is that Tempest is now a dual-platform company that has both a Phase 3-ready small molecule and a clinical-stage CAR-T program, which significantly derisks the pipeline.

The company's technological strength is built on its two first-in-class small molecule candidates, but the near-term risk is funding the pivotal trial for the lead asset. Tempest reported cash and cash equivalents of only $7.5 million at the end of Q3 2025, down from $30.3 million at the end of 2024, which is a tight spot.

Portfolio includes two first-in-class small molecule candidates: amezalpat (TPST-1120) and TPST-1495.

Tempest's original technological focus is on small molecule oncology drugs that target metabolic pathways. The lead candidate, amezalpat (TPST-1120), is an oral, selective PPAR$\alpha$ antagonist, which is a protein better known for regulating metabolism but which Tempest is repurposing to fight cancer. The second candidate, TPST-1495, is a dual EP2/4 antagonist, targeting prostaglandin signaling, and it's moving into a Phase 2 study for Familial Adenomatous Polyposis (FAP) in 2025, with funding from the National Cancer Institute (NCI). That's a smart way to advance a program without burning cash.

Here's the quick look at the core small molecule pipeline:

Amezalpat's Phase 1b/2 data showed a six-month improvement in median overall survival for first-line HCC patients.

The most compelling technological data point for Tempest is the clinical performance of amezalpat. The randomized Phase 1b/2 MORPHEUS-LIVER trial data, updated in 2024 and cited throughout 2025, showed a significant survival benefit in first-line hepatocellular carcinoma (HCC) patients. This is defintely a blockbuster signal.

Specifically, the combination of amezalpat with the standard-of-care (atezolizumab and bevacizumab) achieved a median overall survival (mOS) of 21 months in the amezalpat arm (n=30), compared to only 15 months in the control arm (n=30). That six-month improvement in mOS, backed by a favorable Hazard Ratio (HR) of 0.65, is what earned the drug both Fast Track and Orphan Drug designations from the FDA in early 2025.

Mechanism of action data confirms amezalpat's dual role in targeting tumor cells and modulating the immune microenvironment.

The technology behind amezalpat is its dual mechanism of action (MOA). It doesn't just hit the tumor cells directly; it also fixes the broken immune system around the tumor. New data presented at the 2025 AACR Annual Meeting in April provided the scientific clarity on this.

• Inhibits PPAR$\alpha$: Amezalpat acts as a selective PPAR$\alpha$ antagonist, which is a key regulator of fatty acid oxidation (FAO).
• Reduces Immunosuppression: By inhibiting PPAR$\alpha$, the drug reduces tumor-promoting immunosuppression.
• Targets Immune Cells: This effect is seen specifically on key immunosuppressive cells like M2 macrophages and T regulatory cells (Tregs), which are often associated with poor prognosis in cancer.

Strategic acquisition of dual-CAR T programs (TPST-2003) in November 2025 diversifies the pipeline into cell therapy.

The biggest technological shift in 2025 came on November 19, 2025, when Tempest announced a strategic all-stock acquisition of dual-targeting chimeric antigen receptor T-cell (CAR-T) programs from Factor Bioscience Inc. This is a huge, immediate diversification into the high-tech field of cell therapy, which is a different technological beast entirely from small molecules. The lead acquired program is TPST-2003, a clinical-stage CD19/BCMA dual-CAR T designed for patients with extramedullary disease (EMD) in multiple myeloma.

The deal is structured so that Tempest will issue 8,268,495 shares of its common stock to Factor, representing 65% of the outstanding shares as of the announcement date. Plus, the acquisition, along with an investment commitment from Factor, is expected to extend the company's operational runway to mid-2027. This technological leap is essentially a lifeline and a new direction, but it comes with massive shareholder dilution.

Tempest Therapeutics, Inc. (TPST) - PESTLE Analysis: Legal factors

Multiple Regulatory Clearances: FDA Fast Track and Orphan Drug Status Accelerates the Review Process

The most significant near-term legal and regulatory advantage for Tempest Therapeutics is the multiple special designations granted by major regulatory bodies in 2025. These designations are critical because they formally acknowledge the unmet medical need for the company's drug candidates, which in turn accelerates the review process and provides market exclusivity benefits.

Specifically, the lead candidate, amezalpat (TPST-1120), a selective PPAR$\alpha$ antagonist, secured two key designations for the treatment of hepatocellular carcinoma (HCC) in the first quarter of 2025. This dual status is a powerful regulatory tool. The Orphan Drug Designation (ODD) was granted by the FDA in January 2025, followed by the Fast Track Designation (FTD) in February 2025. The ODD provides up to seven years of market exclusivity upon approval, plus tax credits for clinical testing, while FTD allows for more frequent FDA communication and the potential for rolling review or Accelerated Approval.

Moreover, the European Medicines Agency (EMA) granted amezalpat Orphan Drug Designation for HCC by August 2025, expanding the potential market protection beyond the US. A second pipeline candidate, TPST-1495, a dual EP2/EP4 prostaglandin receptor antagonist, also received FDA Orphan Drug Designation in April 2025 for Familial Adenomatous Polyposis (FAP), a rare, high-risk inherited syndrome. This is a defintely a clear, positive signal from regulators.

Compliance with Strict Global Clinical Trial Regulations (GCP)

Operating a global, randomized Phase 1b/2 study for amezalpat requires rigorous adherence to Good Clinical Practice (GCP) regulations, which are the international ethical and scientific quality standards for designing, conducting, recording, and reporting trials. Tempest Therapeutics has successfully navigated the complex regulatory landscape across three major jurisdictions for its pivotal Phase 3 trial of amezalpat in first-line HCC.

The company received clearance to proceed with the pivotal trial from the US Food and Drug Administration (FDA), the European Medicines Agency (EMA), and the Chinese National Medical Products Administration (NMPA) by August 2025. This clearance to initiate a global study across the US, Europe, and China is a significant legal milestone, confirming the trial protocol's compliance with disparate national and regional regulatory requirements. This multi-region approval is essential for recruiting the large patient cohort planned for the pivotal study. The company also received a Study May Proceed letter from the FDA for the Phase 2 trial of TPST-1495 for FAP, which is financially supported by the National Cancer Institute (NCI) Division of Cancer Prevention.

Intellectual Property Protection is Paramount for First-in-Class Drugs

For a clinical-stage biotech focused on 'first-in-class' targeted and immune-mediated therapeutics, intellectual property (IP) is the primary asset. The legal defense of patents covering the chemical composition, manufacturing process, and method of use for drugs like amezalpat and TPST-1495 is paramount to maintaining a competitive moat. The company must constantly monitor and defend its IP portfolio against infringement, particularly as their positive clinical data from the amezalpat global randomized Phase 1b/2 study becomes more public.

The value of Tempest Therapeutics is directly tied to its ability to 'obtain, maintain and enforce intellectual property protection for our products and technology.' Without robust IP, the multi-million dollar investment in R&D is at risk. Here's the quick math: Research and Development expenses for the first nine months of 2025 were $12.1 million, a substantial investment that must be protected by patents.

The Company Faces Inherent Litigation Risk Common to the Biotech Sector

Like all clinical-stage biotechnology companies, Tempest Therapeutics faces inherent litigation risk. This risk is primarily bifurcated into intellectual property disputes and litigation tied to clinical outcomes, such as unforeseen adverse events or product liability claims. The company's own filings explicitly list 'unexpected litigation or other disputes' as a material risk factor.

The financial pressure from the ongoing strategic alternatives process also heightens the risk of shareholder litigation. As of September 30, 2025, the company's cash and cash equivalents stood at only $7.5 million, a significant drop from the $30.3 million reported at the end of 2024. This tight cash position, coupled with a net loss of $22.2 million for the nine months ended September 30, 2025, creates a volatile environment where any unexpected legal challenge could severely impact the company's going concern status.

The table below summarizes the financial context of this legal risk, using the most recent available 2025 data:

The company's ability to manage its R&D spending, which decreased by $5.6 million in the first nine months of 2025, directly relates to the legal and financial necessity of finding a strategic partner or buyer to fund the pivotal Phase 3 trial.

• Mitigate risk: Partner with a large pharmaceutical company for the Phase 3 trial to share legal and financial exposure.
• Actionable step: Review and update the company's D&O (Directors and Officers) insurance policy limits to reflect the increased litigation risk associated with the strategic alternatives process.

Tempest Therapeutics, Inc. (TPST) - PESTLE Analysis: Environmental factors

You're looking at the environmental factors for a clinical-stage biotech like Tempest Therapeutics, and the core takeaway is that compliance costs are a fixed, non-negotiable anchor on a tight budget, even with the small-molecule advantage. The near-term pressure isn't on a large carbon footprint, but on the hyper-specific, high-cost management of R&D waste and the growing expectation for transparent Environmental, Social, and Governance (ESG) reporting from investors.

Compliance with stringent EPA and state-level hazardous waste regulations for chemical and biohazardous materials from R&D labs.

Tempest Therapeutics, based in Brisbane, California, operates under some of the most rigorous environmental standards in the US, namely the federal Resource Conservation and Recovery Act (RCRA) enforced by the Environmental Protection Agency (EPA), plus the strict California Department of Toxic Substances Control (DTSC) regulations. This means every chemical, solvent, and biological byproduct from their small-molecule research must be meticulously tracked and disposed of.

A key compliance update for 2025 is the EPA's e-Manifest Third Final Rule. Beginning January 22, 2025, all Small Quantity Generators (SQGs) and Large Quantity Generators (LQGs) like Tempest must register with the e-Manifest system to access their final signed manifests. Plus, LQGs must submit all Exception Reports electronically starting December 1, 2025. This digitizes compliance, but it defintely requires dedicated internal training and process audits.

• Mandatory Registration: LQGs and SQGs must register for e-Manifest as of January 22, 2025.
• Digital Fee Advantage: Fully electronic manifest submissions incur a user fee of only $6.00 per manifest for FY 2025, a fraction of the cost for paper submissions.

Managing complex waste streams from clinical-stage research is a continuous operational cost.

The company's focus on small-molecule candidates, such as amezalpat (TPST-1120) and TPST-1495, means their waste profile is dominated by spent solvents, unreacted reagents, and cytotoxic compounds from synthesis and preclinical testing, rather than the vast bioreactors of a biologics company. Still, this waste is classified as high-hazard, translating to high per-pound disposal costs.

Here's the quick math: while Tempest's total Research and Development expenses were $12.1 million for the nine months ended September 30, 2025, the embedded cost for waste disposal is significant. For context, typical disposal rates for the specific waste classes generated by a biotech lab are substantial, creating a fixed burden that doesn't scale down easily with R&D reprioritization.

Increasing investor and public scrutiny on ESG standards, including e-waste disposal.

Investor scrutiny on ESG has intensified in 2025, driven by regulatory deadlines and a low tolerance for 'greenwashing.' A 2023 PwC survey showed 94% of investors believe corporate sustainability reports contain unsupported claims, so transparency is paramount. While Tempest Therapeutics is a clinical-stage company and not subject to the largest US and EU ESG reporting mandates, the California regulatory environment still applies pressure.

For instance, California's SB 261 requires companies with revenues over $500 million to disclose climate-related financial risks. Tempest is currently well below this threshold, but the trend is clear: investors expect a credible ESG strategy long before a company hits commercial-stage revenue. This means the e-waste from lab equipment and IT infrastructure must be managed with a clear chain of custody, a non-trivial task that falls under the 'E' of ESG.

The company's small-molecule focus reduces the large-scale manufacturing footprint compared to biologics, but lab waste is still a factor.

The small-molecule nature of Tempest's pipeline is a structural environmental advantage. They avoid the massive water and energy consumption associated with large-scale biologics manufacturing (like cell culture and purification). This is a strong point for their future ESG narrative, as their environmental 'E' footprint is inherently smaller and less complex than a large-scale biopharma company.

Still, the current operational focus is on R&D, which means managing the concentrated, high-hazard waste from their lab operations in Brisbane, CA. The compliance cost is a significant percentage of their General and Administrative expenses, which were $3.0 million in Q3 2025. It's a small footprint, but a costly one to keep clean.