Tempest Therapeutics' Shares Skyrocketed 4000% On Its Promising Drug For Liver Cancer

Yesterday, the stock of biotech company Tempest Therapeutics Inc. skyrocketed nearly 4000% at closing and attracted every investor's attention.

 

Stocks of Tempest Therapeutics opened at $2.13 on Wednesday, and eventually closed at a staggering $9.77, which boost the company's current market capitalization to $130 million.

The primary reason behind this surge is the newest experimental data released by the company indicating that its drug, TPST-1120, has shown promising results in the frontline treatment of advanced or metastatic hepatocellular carcinoma.

 

Tempest's data reveals that TPST-1120 has achieved a response rate of 30%, which is significantly better than the 13.3% observed two years earlier when combined with Roche Holdings' Avastin/Tecentriq. Crucially, Tempest currently holds all rights to TPST-1120, meaning all future profits from the drug's promotion and sales will belong solely to Tempest, proving highly beneficial for the biotech company both in terms of its growth and per-share earnings.

 

However, despite Tempest's seemingly bright outlook, the company still faces challenges. Some analysts have pointed out that while the company's market cap stands at $130 million based on stock price, its adjusted true market value is still $37.31 million. Moreover, its price-to-earnings ratio is -0.83, and its earnings per share over the past 12 months stand at -$2.41. This indicates that Tempest is still operating at a loss.

 

It is worth noting that in light of the volatile stock price and in the absence of specific acquisition threats, Tempest's board immediately took a defensive measure by initiating a poison pill strategy with a 10% trigger.

 

The poison pill strategy is designed to deter hostile takeovers by granting shareholders certain preferential rights. If an acquisition were to happen, the activation of these rights could result in a decrease in the company's assets and a loss of some voting rights for the acquiring party, making the stock less appealing or even more costly for potential acquirers.

 

Apart from bolstering Tempest's revenue data, the impressive clinical trial performance of TPST-1120 also offers hope for advancements in treatments for primary liver cancer. Researchers predict that by 2030, liver cancer will be the third leading cause of cancer deaths and the market size for its treatment will reach around $7.33 billion.

 

It's estimated that over 50% of liver cancer patients globally are in China. The country witnesses approximately 410,000 new cases and 391,000 deaths annually. Analysts project that China's liver cancer drug market will reach￥25.28 billion (roughly $3.4 billion)by 2025, revealing vast potential.