DEFA14A: Tempest Therapeutics Expands Pipeline with CAR T-Cell Assets

Tempest Therapeutics, Inc. announced the acquisition of a portfolio of CAR T-cell therapy assets from Erigen LLC and Factor Bioscience Inc. in exchange for 8.27 million shares of its common stock.

Summary

• Tempest Therapeutics, Inc. (the Company) executed an Asset Purchase Agreement with Erigen LLC and Factor Bioscience Inc. (Sellers) on November 19, 2025.
• The Company will acquire all rights, title, and interest in assets primarily related to four CAR T-cell therapies: ERI-2003 (autologous BCMA/CD19), ERI-2206 (autologous CD70/CD70), ERI-3003 (allogeneic BCMA/CD19), and ERI-3206 (allogeneic CD70/CD70).
• The aggregate consideration for the acquisition is 8,268,495 shares of Company Common Stock, issued to Erigen on behalf of both Sellers.
• Following the Closing and the intended dissolution of Erigen, pre-Closing equityholders of the Company are expected to own approximately 35.0% of the Company, while Erigen's equityholders (Matt Angel, Ph.D. and Lotus Capital (BVI) Limited) are expected to own approximately 38.0% and 27.0% respectively, on a fully diluted basis.
• The transaction requires approval by the Company's stockholders and the closing of an equity financing that results in gross proceeds of at least $5.0 million (Pre-Closing Financing).
• Immediately prior to the Closing, the Company will declare a dividend to its stockholders, issuing one warrant to purchase one share of Company Common Stock for each share held, with an exercise price of $18.48 per share and a five-year term.
• The Closing is expected to occur in early 2026, subject to stockholder approval and other customary conditions.
• A termination fee of $300,000 may be payable by the Company to Sellers under specified circumstances, including if the Company enters into a definitive agreement for a Superior Offer or if the Pre-Closing Financing is not satisfied by December 5, 2025.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive. The acquisition significantly expands the Company's pipeline into the high-potential CAR T-cell therapy space and brings in experienced new leadership. However, the substantial dilution for existing shareholders, the immediate need for additional financing, and the early-stage nature of most acquired assets introduce considerable risks and future capital requirements, tempering the overall positive outlook.

Positives

• Significant expansion of the Company's pipeline with four new CAR T-cell therapy programs (ERI-2003, ERI-2206, ERI-3003, ERI-3206), diversifying its therapeutic focus.
• Appointment of Dr. Matt Angel, an experienced co-founder and CEO of Factor Bioscience Inc., as the new President and Chief Executive Officer, bringing new leadership and expertise.
• The transaction includes a commitment letter from Factor Bioscience Inc. to provide funding to the Company until the earlier of 18 months post-Closing or when the Company has raised at least $20.0 million (inclusive of the Pre-Closing Financing), providing a potential funding runway.
• The acquired ERI-2003 asset has ongoing Phase 1b and Phase 1/2a clinical trials in China, with potential for a licensing application in China if data is positive, offering a near-term development pathway.

Negatives

• The issuance of 8,268,495 shares of Common Stock to the Sellers will result in significant dilution for existing shareholders, with pre-Closing equityholders expected to own only approximately 35.0% of the Company post-transaction.
• The transaction is contingent on a Pre-Closing Financing of at least $5.0 million, indicating an immediate need for capital, which may be challenging to secure on favorable terms.
• The Company may be required to pay a termination fee of $300,000 under certain conditions, representing a potential financial cost if the transaction does not close.
• The acquired assets are largely in preclinical or discovery stages (ERI-2206, ERI-3003, ERI-3206), requiring substantial future investment and time for development.

Risks

• The consummation of the Contemplated Transactions is subject to customary closing conditions, including stockholder approval, which may not be obtained.
• There is a risk that the Pre-Closing Financing of at least $5.0 million may not be secured on a timely basis or at all, which could terminate the Asset Purchase Agreement.
• Integrating the acquired assets and operations may present unexpected costs, charges, or expenses, and could disrupt current plans or operations.
• The Company will require additional capital to continue advancing its product candidates, including the newly acquired assets, and such capital may not be available on favorable terms or at all.
• Competitive responses to the Contemplated Transactions or the Company's expanded pipeline could adversely affect its business.
• The Company's ability to attract, hire, and retain skilled executive officers and employees, particularly with the management changes, is crucial for successful integration and development.
• Protecting intellectual property and proprietary technologies for the expanded pipeline will be critical and may face challenges.
• Clinical utility, potential benefits, and market acceptance of the Company's product candidates, including the acquired CAR T-cell therapies, are uncertain.
• Broader macroeconomic conditions, policy and regulatory changes, geopolitical events, and general biotech industry trends could adversely affect the Company's operations and financial performance.

Future Outlook

The Company intends to continue advancing amezalpat and TPST-1495, and will begin development of the newly acquired CAR T-cell therapies (TPST-2003, TPST-2206, TPST-3003, TPST-3206). Plans include pursuing business development or additional financing for amezalpat's pivotal development in first-line liver cancer (HCC). The Company will support a National Cancer Institute-funded Phase 2 study of TPST-1495 in Familial Adenomatous Polyposis, expected to start in late 2026 or early 2027. For TPST-2003, preclinical comparability activities and an IND submission are planned to initiate U.S. clinical development, leveraging existing Phase 1b/2a trials in China. TPST-2206, TPST-3003, and TPST-3206 are preclinical or discovery-stage assets for which the Company will pursue preclinical activities and potentially future clinical development.

Management Comments

• Stephen Brady, President and Chief Executive Officer, signed the report on behalf of Tempest Therapeutics, Inc.

Industry Context

This acquisition positions Tempest Therapeutics to significantly expand its presence in the rapidly evolving CAR T-cell therapy space, a high-growth area within oncology and autoimmune diseases. The move from small molecule therapies (amezalpat, TPST-1495) to cell therapies represents a strategic diversification into a more complex but potentially higher-value segment of the biotechnology industry. The focus on both autologous and allogeneic CAR T-cell platforms suggests an aim to address different market needs and overcome manufacturing challenges associated with autologous therapies. The need for a pre-closing financing and future capital raises is typical for biotech companies expanding their pipeline, especially into capital-intensive cell therapy development.

Comparison to Industry Standards

• The acquisition of multiple CAR T-cell assets, including both autologous and allogeneic platforms, is a common strategy for biotech companies seeking to build a comprehensive cell therapy pipeline, similar to larger players like Gilead Sciences (with Kite Pharma) or Bristol Myers Squibb (with Celgene/Juno Therapeutics).
• The valuation implied by the share issuance (8.27 million shares for four programs) and the required $5.0 million pre-closing financing, followed by a $20.0 million commitment, suggests an early-stage valuation typical for preclinical and Phase 1 assets in the highly competitive CAR T-cell market.
• The appointment of a new CEO with a strong background in co-founding and leading other biotech companies (Factor Bioscience, Ernexa Therapeutics, Exacis Biotherapeutics, Novellus) is a standard practice when a company undergoes a significant strategic shift or expansion, aiming to bring in specialized leadership for the new direction.
• The issuance of warrants to existing shareholders prior to a dilutive acquisition is a mechanism sometimes used to mitigate the immediate impact of dilution and provide a potential future upside, though it also adds to the fully diluted share count.

Management Changes

Corporate Governance

Related Party Transactions

• The Asset Purchase Agreement is between Tempest Therapeutics, Inc. and Erigen LLC and Factor Bioscience Inc. Matt Angel, Ph.D., a co-founder, President, CEO, and Chairman of Factor Bioscience Inc., is expected to become the new President and CEO of Tempest Therapeutics and a significant equityholder post-transaction.
• Factor Bioscience Inc. has also entered into a commitment letter to provide funding to Tempest Therapeutics post-Closing, indicating an ongoing financial relationship between the Company and a related entity/individual.

Stakeholder Impact

• **Shareholders:** Significant dilution for existing shareholders (expected ownership ~35% post-transaction). Warrants will be issued to existing shareholders to mitigate some dilution. The transaction requires shareholder approval.
• **Employees:** Stephen Brady transitions from CEO/President to Chairman. Nicholas Maestas continues as CFO/Head of Strategy. Dr. Matt Angel appointed new CEO/President. Geoff Nichol resigns from the board. This indicates a significant shift in executive leadership and board composition.
• **Customers/Patients:** The expanded pipeline, particularly with CAR T-cell therapies, could lead to new therapeutic options in oncology and autoimmune diseases, potentially benefiting future patients.
• **Creditors:** The requirement for a $5.0 million Pre-Closing Financing and the commitment letter for up to $20.0 million in funding could improve the Company's financial stability and ability to fund its expanded pipeline, potentially benefiting creditors.
• **Suppliers/Partners:** The Company intends to continue advancing existing programs and developing new ones, which may lead to new or expanded relationships with suppliers and partners in the cell therapy and drug development sectors.

Next Steps

• Seek approval of the Contemplated Transactions by the Company's stockholders at a meeting.
• Close an equity financing resulting in gross proceeds of at least $5.0 million (Pre-Closing Financing).
• Complete the Closing of the Asset Purchase Agreement, expected in early 2026.
• Declare and issue warrants to existing stockholders immediately prior to the Closing.
• Appoint Dr. Matt Angel as President and Chief Executive Officer and a Class I director, and Stephen Brady as Chairman of the board, effective upon Closing.
• Geoff Nichol is expected to resign from the board of directors upon Closing.
• Prepare and file a registration statement on Form S-1 with the SEC for the resale of the Purchaser Common Stock comprising the Closing Consideration within 30 days of the Closing Date.
• Advance amezalpat and TPST-1495, and begin development of the acquired CAR T-cell therapies (TPST-2003, TPST-2206, TPST-3003, TPST-3206).
• Pursue business development discussions or additional financing to advance pivotal development of amezalpat in first-line liver cancer (HCC).
• Support a Phase 2 study of TPST-1495 in Familial Adenomatous Polyposis, expected to start in late 2026 or early 2027.
• Pursue preclinical comparability activities, pre-IND brief filings, and an IND submission to begin clinical development of TPST-2003 in the United States.
• Pursue preclinical activities for TPST-2206, TPST-3003, and TPST-3206, potentially leading to future clinical development.

Key Dates

Recommendation

The acquisition of four CAR T-cell therapy programs represents a significant strategic pivot and pipeline expansion for Tempest Therapeutics, moving into a high-growth and high-value segment of the biotech industry. The appointment of Dr. Matt Angel as CEO, with his extensive experience in founding and leading biotech companies, is a positive development for the Company's new direction. The commitment letter from Factor Bioscience for up to $20.0 million in funding provides a crucial financial runway for initial development. However, the transaction involves substantial dilution for existing shareholders, and the Company faces immediate capital needs with the $5.0 million Pre-Closing Financing requirement. Most of the acquired assets are in early preclinical or discovery stages, implying long development timelines and significant future capital expenditures. While the potential upside from these new programs is considerable, the associated risks, including successful integration, further financing, and regulatory hurdles, are also high. Therefore, a 'Hold' recommendation is appropriate, advising investors to monitor the Company's ability to secure the necessary financing, successfully integrate the new assets, and advance the pipeline through clinical development before making further investment decisions.

Keywords

CAR T-cell therapy, Asset Purchase Agreement, Biotechnology, Oncology, Immunotherapy, SEC filing, Stockholder vote, Equity financing, Pipeline expansion, Corporate governance, Management change, Clinical development, Preclinical assets