Shares of Tempest Therapeutics, Inc. (TPST) declined by more than 45% on Wednesday afternoon after the company said that it had entered into definitive agreements to acquire certain dual-targeting CAR-T programs from Factor Bioscience Inc. and its affiliates.
Tempest said that the purchase will be made in an all-stock transaction. The transaction is expected to close in early 2026, provided it receives all required approvals.
As per Tempest, the transaction with Factor Bioscience will expand and diversify the company’s existing clinical-stage pipeline with the addition of a CAR-T designed to target patients with extramedullary disease. This is a condition where a cancer, most commonly multiple myeloma, spreads beyond the bone marrow to form tumors in other parts of the body, like the skin, lymph nodes, liver, or central nervous system.
A CAR T-cell program is a type of cancer therapy that genetically engineers a patient's own T-cells to better recognize and attack cancer cells.
The company now expects an investment commitment from Factor, in addition to existing cash, to support its planned operations through mid-2027. It also plans to pursue business development discussions or additional financing to advance the pivotal development of its Amezalpat in first-line liver cancer.
As part of the deal, Tempest will issue nearly 8.3 million shares of its common stock to an affiliate of Factor, equal to 65% of the outstanding shares of common stock, inclusive of newly issued shares, as of November 19.
Existing Tempest stockholders will be entitled to receive one common stock warrant for every share of common stock held and outstanding at a date immediately prior to the closing. The warrants will be immediately exercisable with an initial exercise price equal to $18.48 and will expire five years from the issuance date, the company said.
Upon closing of the deal, Factor CEO Matt Angel will become president and CEO of Tempest, and current Tempest president and CEO Stephen Brady will become Chairman of the company’s board of directors, they said.
On Stocktwits, retail sentiment around TPST stock stayed within the ‘bullish’ territory over the past 24 hours, while message volume rose from ‘normal’ to ‘high’ levels.
A Stocktwits user termed the deal a “gamble.”
However, another user highlighted the potential of the CAR-T therapies to drive a massive upside.
TPST stock is down 53% year-to-date and 55% over the past 12 months.
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