Good afternoon, everyone. My name is Ted Tenthoff. I'm a senior biotech analyst at Piper Sandler, and before I begin, I'm required to point out certain disclosures regarding the relationship between our next presenting company, Tempest, and Piper, that are located both at the back of the room and also the registration desk. So over the course of my career, I've learned that biotech investing is not for the faint of heart, but I've never seen anything like Tempest's 3,940% move. 3,940% move in one day on encouraging liver cancer data on October 11th. That's, that's got to be some kind of record.
But truthfully, I don't know what shocked me more, the fact that you moved that much or that the stock had gone down that much prior to set up the move from a $4 million company. I think this just really reflects how disconnected the biotech valuations have become. Fresh off the rollercoaster, I'm pleased to have my good friend, Steve Brady, CEO, and Sam Whiting, Ph.D. and Chief Medical Officer. What a wild ride, and I know you guys aren't finished yet.
Yeah. No, thank you for having us, Ted. Yeah, it would have been nice if the 39-40 was off of, you know, a 10 or-
Yeah.
... $20 stock price.
Yeah.
But, no, but it is true. I mean, we came out as a reminder. You know, we had an early look at this same study, and we discussed it back in April. And this is the data that Ted's referring to are from the per protocol analysis of an ongoing randomized study where we combined our PPARα antagonist, TPST-1120, with the standard of care, and there's in liver cancer, which is interesting because there's kind of a single dominant standard of care, which is atezo plus bev. We combined 1120 and then compared it against the standard of care. At the early look, every single signpost was positive, right?
Yeah.
We didn't have any of the deep data. We had no biomarker data. We had none of the charts or tables, but we came out to the street, this is to your disconnect point, and said, "Isn't this great?" And the stock went up 37%. We said, "We'll be back, you know, in fall," and then it just dropped down to $0.20-something. And then we came out with the data, and we had that, you know, I don't even know what the rocket ride-
Yeah.
Right? And the nice thing is that it did shift. I mean, it obviously, you probably saw the Fortune article. Things went more broadly. It definitely got out of the biotech bubble-
Yeah.
... into a broader community, and the stock definitely is trading differently.
Yes.
Right?
No question.
I mean, the volume went from, you know, 30,000 shares to over 1 million on average, right?
Yep.
I think people are just waiting to see what's next.
Yeah.
I mean, we have these data. What are we doing with them?
Yeah. So we're gonna get into that. Why don't we start with describing what TPST-1120 is? You mentioned it targets PPARα. Describe the biology around this target, and then we'll build from there into the data itself.
Perfect. Yeah, I'll start, and then Sam, you know, jump in. We interrupt each other almost organically now. So it's a PPARα antagonist, right? And to our knowledge, it is the only PPARα antagonist in clinical development right now. And a little bit of history, we always had to sort of sell, for lack of a better word, why people should be excited about this target. Because unlike some other really popular targets, there, there aren't a ton of people working on it, right? We think that's gonna change now with these data. But the beautiful thing about the way this program and the biology here has evolved is the hypotheses we had X number of years ago when we launched this program, right?
That it should show efficacy or clinical benefit at this stage in liver cancer, in kidney cancer, in cholangiocarcinoma, and that it should work with a checkpoint inhibitor and a VEGF/TKI. All of that with these data are coming to fruition. It's literally like what we thought was gonna happen, the complete story is happening, right? So one of the theories, and again, we... You know, it's gonna take time to prove this, is we were always excited about this program 'cause we thought it would have a dual mechanism of action, right? You've got the target itself expressed on cells, and HCC being a very high expressor, and then you have it expressed on immune cells.
Mm-hmm.
So the way we've always summarized it to people is we think it should have a direct cellular activity, anticancer effect, and that should, it should, for lack of a better term, reignite the immune system. I mean, what the holy grail used to be at the beginning of IO, right? That you can make cold tumors hot. Well, in our new data set, we're looking at patients with almost, you know, PD-L1 negative expression profiles, and the activity of the 1120 arm is indifferent-
Yeah
... to PD-L1 status. So that mechanistically is making us very excited. I mean, that everything seems to be coming full circle.
Absolutely. So at a mechanistic level, the target of the drug is a master regulator of fatty acid oxidation transcription profile. So it's more than 100 genes that are controlled by the molecule PPARα, and the drug 1120 is designed to inhibit that. Within what it covers are, as Steve said, the direct metabolism of tumor cells-
Mm-hmm
... which over the course of particularly metastasis and spread and growth in hypoxic environments, et cetera, tend to migrate from using glucose to using fatty acids as an energy source. So we can directly target tumor cells with this. Also, inhibitory immune cells tend to use fatty acid oxidation rather than glucose as a source of energy, so we can inhibit the immune suppressive immune cells in the tumor environment. And then, finally, there's actually a link of the PPARα transcriptome to angiogenesis, and so this drug is an inhibitor of angiogenesis that's unique and different from Avastin or bevacizumab or the other VEGF-targeting therapies.
And so the idea going in was that we could target tumor cells, cut off their food supply, cut off the food supply for immune suppressive cells, and then we looked at the panel of cancers that afflict humanity and liver cancer, our lead indication, is the highest expressor of PPARα and it's the genes that it controls. And so it was an obvious initial setting to go into. There's a mutation in liver cancer called beta-catenin activation, which is present in about 30%+ of patients with primary liver cancer that is actually controlled by PPARα.
Mm-hmm.
So we knew going in that an inhibitor of PPARα should be effective in these mutant patients. That's one of the reasons that Roche was so interested in taking 1120 into the randomized clinical trial. And again, as Steve said, lo and behold, it worked even better in those patients than in the whole population. So-
So Tim, walk us through the phase I-b, phase II MORPHEUS trial. This was the study that Roche has set up. It has a lot of different arms. As you mentioned, they approached you guys, or you partnered to include TPST-1120-
Yeah
Tell us about the design of your guys' cohort, and walk us through the data you've reported.
Sure. So the trial is a Roche study, as you said. It's designed and run by them, which we actually are very happy to take advantage of. It's a global study in 26 sites in seven countries, in Europe, Asia, and the United States, and Tempest would never been able to-
Yeah
... operationalize, you know, that kind of randomized study. From their perspective, it's their standard of care arm, atezolizumab and bevacizumab, which is 70% of the first-line liver cancer prescriptions today. And then they're looking for a third drug to activate and make that regimen better. When we entered the trial, all of the other drugs were Roche drugs-
Yeah
Which makes sense, obviously, from their perspective. But there was a lot of rationale for 1120 . Mechanistically, the mutation, as I said, and so the idea was that 1120 made a lot of sense to put it in the trial, and together we would basically assess how things worked. So the study is randomized. 1120 is added to atezo-bev. 40 patients were randomized to receive this combination, this triplet, as we call it. 30 patients were randomized to receive the standard of care, atezo-bev. The study took about a year and a half or so to fully enroll our arm.
Then the comparison for the top-line analysis, like the high level objective of the study, was to look at the response rate, tumor shrinkage by RECIST v1.1 criteria. And then importantly for us, 'cause we're looking at for the development, overall survival and progression-free survival. The survival endpoints were already also part of the secondary endpoints. And then there was the idea to look at this special population, the beta-catenin mutation. So what was found was that the confirmed response rate was dramatically improved in the 1120 arm compared to the standard of care. Went from 13%- 30% in the confirmed responders in the trial. The progression-free survival, we look at the hazard ratio, the benefit compared to the control arm, 0.7 favoring 1120 .
The median survivals were improved from four months in the control arm to seven months in the experimental arm. And then overall survival, the hazard ratio is 0.59, really healthy OS hazard ratio, and the median had been reached in the control arm 15 months versus not reached in our arm. And then beyond all these positive data, there were two subpopulations that were of interest. One was the beta-catenin population, which mechanistically should have done better. The response rate of TPST-1120 went up to 43%- 30%. That was confirmed responses, and the disease control rate was 100% in this mutation positive trial.
And then, very interestingly to us, in the immune-negative tumors, the tumors that are PD-L1 negative or that are the so-called immune desert tumors, where on histopathology, there are no immune cells in the tumor, the response rate of the 1120 arm was basically identical. It was 30% versus 27% in the negative tumors. The response rate of atezo-bev by itself, without 1120, went down to 7%. And what we say is that's not a criticism of atezo-bev-
Right
because that's the way immune therapy works. If there's no immune system in the tumor-
For a tumor.
If there's no... Yeah, then you know it's not gonna work well. So it's part of our mechanism, we think that we rescued, in a sense, the standard.
Yeah, I mean, one of the things as drug developers, while you will take any active therapy that's gonna help patients, you would prefer not to have activity in basically PD-L1 positive-
Yeah
Patients, right? Because you don't always want a hot tumor or an active immune system. You want to be able to help people that are not. And in HCC specifically, we were... I mean, as we, you know, learn more about the indication, we saw that that was the right place to go for patients. It is, it's really high percentage of the patients are PD-L1 negative.
Yeah.
Right? I mean, somewhere on the papers, between, you know, 50%-70-something%.
Yep.
And, yeah.
Yeah, no, I was just gonna ask. I mean, I think both of this, both the beta-catenin and the immune, you know, the PD-L1 negative. So clearly, you've explained this from a mechanistic standpoint. What does this mean for, you know, going forward with development of TPST-1120?
While we are excited about the biomarker data, everybody loves for their drugs to be working mechanistically the way you think they should be working based on their design and the target. One thing that's important here is when you add 1120 onto standard of care, it's working in the overall population, right? So there's no reason to do a smaller biomarker-driven subpopulation, aside from having to get a companion diagnostic and all the cost and hassle involved with that. HCC, as we mentioned, is a highly PD-L1 negative population with a lot of beta-catenin mutants, so an 1120 advantage is effectively baked into the overall population.
Yeah.
Our plan at this time is to go forward. I mean, based on these data, we think it would be, it would be irrational to not go-
Yeah
- for the overall population.
Yep, agreed totally. So when can we get more data, and what are our next likely steps?
So this is the formal data cut, right? And if there is gonna be another data cut from this, it will be next year. And it would probably be similar to what Roche did with their own TIGIT molecule, right? They looked at the last possible moment before they went to a congress, and in that case, it was ASCO of this year. If we do jointly present with Roche, which is the way it would happen-
Sure
... that would be the next data cut. Now, if we, the reason I say if, and Roche has been a wonderful partner, but one of the beautiful things about 1120 , other than it appears to be working, is that we don't have to combine, in our view, with Atezo or Bev. We think our control arm in the phase III will be the standard of care, Atezo, Bev. But some of the conversations we're having with other folks is there's a view that we hold, and others agree with us, that you could take 1120 and combine with another checkpoint inhibitor-
Yeah.
PD-1, for example, and either a biosimilar VEGF or a TKI VEGF. And so the next step for us is we need to tell everybody what, what is that next step for us, right? What is the combination therapy gonna be in the, in the triplet arm? And then are we doing it alone? Are we doing it with a partner?
Yeah. Where are we in that? Kind of, what is the larger strategic plan for TPST-1120 and for Tempest as a whole?
So thank you for inviting us to the conference because we have very interesting conversations with investors, and it is completely fair to say that they span what they want us to do. We have a group of people that absolutely do not want us to give up rights in a partnership right now. They want us to fund the phase III, either via the capital markets or something, other magical non-capital markets act, source of funding, and keep all the commercial rights. 'Cause one of the things to remember about HCC, in addition to being one of the more uncrowded first-line oncology indications, the phase III would be 2.5-3.5 years to the data.
Yeah.
So it is not a very long time. And also the cost, if you're not paying for companion drugs, it's probably under $100 million to run the entire thing. So it's not this 5+ year, $300-$400 million phase III. So when investors say that to us, it's not irrational-
Yeah
... for them to say that, to keep all the commercial rights.
Yeah.
So that is still. We're still being open-minded to that, but we are in active BD discussions-
Yeah
... with people as well, because one of the other rare things, I think I'm up to like three or four things now, about HCC is it is largely an ex-U.S. indication.
Yeah.
So when you talk to people about, "Well, what could our deal structure be?" And as a guy who has been doing, you know, did BD and M&A for most of his career, the favorite thing to talk when you talk to bigger companies is, "Let's do an ex-U.S. deal," and they usually have anaphylaxis. In this case, you get to say, we're talking about 30,000-35,000 of the 400+ thousand HCC patients, and as Sam always loves to remind people, it's one of the few cancers that is growing on a global scale. The most of the market is outside of the U.S. So if we do do a partnership, our goal is not effectively to monetize the 1120 program. We don't, we are, you know, a publicly traded company. We don't want to give up a strategic premium in our stock.
Yeah.
And so those make for very interesting conversations.
There are other cancers you mentioned, I think-
RCC.
Yeah.
And RCC.
And RCC.
Yeah. So strategically-
Yeah
... if we had the capital, we would be starting an RCC study fast. As a reminder, we had an oral podium presentation last year at ASCO on our phase I for this program, and three out of the four RCC patients-
Yeah
... treated in the combination arm had significant tumor reduction. And so there's definitely interest in us doing RCC as well. I mean, mechanistically, it makes sense, too.
Yeah. Yeah. It's... So again, looking at the gene for what PPARα controls and how it's expressed, renal cell carcinoma is right behind liver cancer.
Yeah.
So it was one of our, one of our targets. Basically, we went into the phase I program, and we're, we're thrilled, actually, with the level of activity there.
Yep. Great. So we've got a little bit of time, so I'm gonna ask about your T-Rex program, as I like to call it.
Mm-hmm.
Or TREX. These guys always make fun of me for calling it-
Well, because our founder hated when we called it T-Rex, so every time you say that, it brings me joy.
So obviously, it's a little early here, but tell us about, you know, the biology here. I think people... You know, it's been gone after a lot of different ways, really hasn't progressed with the promise of STING that some people thought, but you guys have a pretty unique approach. So tell us a little bit about your program and maybe when that could enter the clinic.
Yeah. So just... I can start on the business side of it, and if you wanna jump in on the biology. So, one of the founders of Tempest was the first person to put a STING agonist into clinical development, and so there's been an evolution of what's the right way to hit STING.
Yeah.
'Cause you make a really important point. Obviously, as a, as an industry, for lack of a better term, we have not done a great job collectively of modulating STING safely in people to a material cancer control benefit. And this is the outgrowth of thinking about that for years. So, TREX1 is a suppressor of STING. And from a business perspective, although investors have waned in their interest on STING as things haven't worked, that is not true of the bigger companies, right? STING is still, at least what we hear, one of their top targets. If we remember, KRAS used to be everybody's, "Oh, if we could only hit it," right? STING is still in that short list of targets. And so the reason we're optimistic is because we know that this makes a ton of sense.
We have not been shy, as you know, about saying this is a, this is a tough target to hit.
Yeah.
Right? And so we've been working on it for a few years. We've made a lot of progress this year, but if you wanna talk more about the biology, about why we're excited about it.
Yeah. So the... I mean, I think we all now know how important the immune system is in, controlling and in some cases, eradicating cancer. STING is part of the system to stimulate the earlier, kind of the primordial part of the immune system, the innate immune system, and drives the production of type one, what are called type one interferons. And the stimulation of interferons and innate immunity is actually a fundamental part of driving what's called adaptive immunity, which is B cells and T cells, and the place where checkpoint inhibitors, for example, are active.... And so how to stimulate this innate immune response has been a kind of an ongoing challenge, I guess, as we've tried to improve upon what this, the T cell targeting, therapies that are doing so well.
You probably have heard people have gone after toll-like receptors. People have gone after STING directly, because STING is a master controller of this. It turns out that TREX is an endonuclease, which degrades DNA in the cytoplasm. DNA is a stimulus for STING activation. STING senses DNA as basically foreign in the cytoplasm of the cell, and that triggers the cascade that induces interferon production. TREX negatively regulates that by degrading the DNA before it can stimulate STING. What Tempest did was set out to design a drug that would inhibit this negative regulator. It's kind of invisible to the cancer in terms of being selected against during cancer development, since it's a negative regulator.
So TREX1 is active in basically every cancer. There's no mutations to inactivate TREX1 in cancers, unlike many other targets that we go after in cancer. And then... And the idea, which is now borne out actually in a number of preclinical studies, is that inhibiting TREX1 activates STING, produces interferon, produces an innate immune response, which can then either on its own have anticancer activity or combined with other immune therapies. And it's been, I would say, a challenging target for the company. It's been a few years-
Mm-hmm
... of work, but we are getting very, very close. We anticipate this coming year would be when we would not be able to nominate our development candidate. From there, it's, you know, typically a year or so to IND, and we're really excited about where this program could go. And as Steve said, what we know is that nobody else knows how to target STING in the right way either. And so, it's so it is a kind of a desirable program to have from the standpoint of our BD work.
Actually, that's a great... Thank you for that segue.
Yeah.
1120, right, gets the lion's share of attention in the company right now. There's no question, and that's a fair point. But Tempest has four programs, and I mean, right, all the way back to your, you know, portfolio management perspective, they're truly diversified portfolio. They're all independent mechanisms from each other. They all stand on their own two feet. We will not develop four programs.
Yeah.
I mean, 1120 is beginning to feel like a company and a program anyway, right? So it is fair to say that if there's going to be BD activity outside of 1120-
Yeah
... the TREX program makes a lot of sense, right? Because from, you know, with scarce resources, we would want to, you know, fund the phase III in HCC, get an RCC study program. 1120 started out as a heme program.
Yeah.
We never talk about that. So we have folks, we have, investigators out there that want to look at heme malignancies as well. So that could be an interesting thing in the first half of next year around BD, around TREX.
Yeah. Very cool. So you guys ended the third quarter with $11 million in cash, but you were subsequently able to raise $25 million under the ATM, bringing cash somewhere to around $35 million.
Mm-hmm.
How long does this fund the company? What does it enable you guys to accomplish?
Yep, thank you, and Twitter, our friends on Twitter, figured out exactly at what price per share we sold out of the ATM, which was funny, and entirely what we're trading at. So that gets us into the first quarter of 2025. As a reminder to everybody listening, we are a small molecule company, and we were, I would say, are very reasonably sized. We've never been fans of overhiring, so that's why that much money gets us as far as it does. And we are full steam ahead on the pre, you know, phase III regulatory and CMC work right now. There's a lot we can do while we're parallel pathing conversations on what the final combination partner is going to be-
Yep
... so it doesn't hold us up.
Awesome. Very exciting time.
Thank you.
Great to be here with you this year and, talk to you after such an exciting run-up in the stock, and really looking forward to what you're going to do over the course of the next year.
Thank you. It's great to be here with good data.