- Tempest Therapeutics is a clinical-stage biotech developing small molecule therapy to treat cancer.
- CEO Stephen Brady joined us to discuss clinical studies, partnering with Roche and how he thinks about licensing and M&A.
- Allowing the immune system to do its job; biotech investing trends.
- 1:40 - Steve left life as a banker and lawyer on his way to becoming Tempest's (NASDAQ:TPST) CEO.
- 12:30 - Hematological malignancies, solid tumors and treating unmet needs.
- 18:00 - Clinical studies and data updates.
- 27:00 - Roche (OTCQX:RHHBY) partnership; licensing and M&A.
- 38:00 - Biotech investing trends. Leveraging immune system with different opportunities.
Please note that transcription may not be perfect. We encourage you to listen to the video, embedded above, if you need any clarification.
Jason Robinson: Welcome to Seeking Alpha CEO interviews. Today I'm joined by Steve Brady, CEO of Tempest Therapeutics. Tempest is a clinical stage biotech company focusing on developing first in class small molecule therapeutics to treat cancer through mechanisms that directly kill tumors, tumor cells and activate tumor specific immunity.
Tempest trades on the Nasdaq under the ticker symbol TPST and Steve, welcome, and thanks for joining us. I really appreciate you jumping on.
Stephen Brady: Thank you, Jason. Appreciate you having us.
Jason Robinson: Of course, and just some background context for our viewers. I know Tempest went public early 2021 via the reverse merger with Melindo. I know you have an extensive background, a lot of experience in the biotech industry, with a number of different various roles eventually resulting in the CEO position.
So if you give me a little background and context on your background and kind of how you landed attempt, this would be fantastic.
Stephen Brady: Sure. So I actually started out as a corporate finance attorney while I was in grad school in New York and at Merck. I'm a Californian, came back to California after graduating from NYU, did the big firm Morrison and force their lawyer piece and then was recruited out to be an investment banker on one of the deals I was working on by one of the banks, Lazard. And that was around 2000 2000. Yeah, it was right around 2000, and there was a little bit of a pattern in all the closing dinners for the deals, which was I was jealous of the management teams, right?
We work on the deals that are exciting. You get a ton of experience, but the people walking away, leaving the dinner, we're walking away with the results of the deal, right? And so there was I remember one of my bosses back at Mofo said, You're not long for this job because you care too much about why our clients do things and not how our clients do it right. And of course, at the time, you're in your twenties and you're thinking, No, I really need this job right now. But it was true. And so being a banker and a lawyer, it was wonderful from an experience perspective, right?
You're working with really hard working right people and the deal flow you get you do see a lot in a very short amount of time. But he was right. I cared about how the companies were building. So now it's been about 20 years.
I left banking and went into a company which used to be called Lexicon Genetics, now called Lexicon Pharmaceuticals. And that was the beginning of the operational role was really getting in. I was hired back then into this hybrid legal BD role because I had the legal training, but being a banker and having done a lot of deals, they said, you know, come in and sit, you know, straddle this fence, right? Because it's not. We need you to go out and actually drum up deals and revenue as well. And so great experience worked there for years, got started to get involved in corporate communications back then.
And another interesting thing all the way back to being the lawyer is even when you're young and you're getting right out of school, you're in the boardrooms, right? So you're seeing and hearing the board and senior management side from very early on when you can add nothing in those meetings, but you're actually beginning to learn about what goes on behind the curtain, which obviously is relevant for the job I have now and so stayed in operations and then primarily in oncology, came back to California, worked at proteomics, which is a proteasome inhibition company. We were private this you'll remember this is oh, 789 when there were tumbleweed rolling around there, Austin.
Yeah, yeah. And you can have the most amazing, you could be a unicorn back then and you were not going public. We were acquired and that was the first M&A cell site deal where I was sitting in the chair and how to run the deal.
I've been fortunate enough to have two key experiences there with two different companies. Very different proteomics was we had a tiger by the tail. It was, you know, everybody was courting you again. There were no public equity markets during that period.
We were in play with all the big names and that's, you know, that's its own set of of of learning and challenges around, you know, is this the right time to sell and then how to manage that? But that also saw the first expansion of my job, you know, I went for it went from being pure M&A and BD to more operational, so I started getting more of Gina. And that? Became the pattern, right? The the pyramid just got bigger and bigger with each job as I did more and more DNA and strategy and planning for the companies, and I'm kind of wired to think about what we're going to do in 18, 24, 36 months anyway. But this was the formalization of that job. Fast forward to my most recent company before temp business called immune design wonderful high science company. Write to Nobel Prize laureate associated with the company Ralph Steinman, David Baltimore.
Really high science. In fact, when we took immune design public, one of the bankers joked, You know, can we just watermark the, you know, David Baltimore's face into the S-1? It's very exciting, right? I mean, and we were going to revolutionize cancer vaccines that ended up being an M&A experience for me as well.
We sold immune design to Merck very different than the proteomics deal, right? Proteomics was flawed. Everybody was on you. And as the filings show for immune design, that was Merck was a single acquirer in that case. So that was a great experience on how to manage that right.
When you have one person on the line, can you close that deal, right? And it was at immune design when we announced the deal that my colleague Tom Devinsky here at Tempest, our president, then CEO of Tempest, called me up and said, You know, do you want to work together on Tempest?
And we knew each other already from all the medical congresses. He had done incredibly well at a durrow is actually the first person to put a sting agonist into a human being, which resulted in a really big deal with Novartis.
And then he left Odoro when Adara was doing really well, came to Tempest, and we were a Versant backed company at that point. We had been incubated inside of a Versant incubator in San Diego, which ends up being relevant to potential competitive advantage because we have very, very high end chemistry, which is relevant to our programs.
And then when we did our brand, that's when all the other investors came in. So fidelity came in, Rock Springs came in. We had a set of Chinese investors, which partially because of our lead programs to with two programs in the clinic right now, as you mentioned, have potential enormous or enormous commercial potential in China.
And so we had a portion of the company with investors focused on China. I came in and joined when we were private. We expanded the B round, and the understanding when I joined was when Tempest became a listed company.
We thought we would flip chairs because at the time post design sale, all the jobs that I was getting called for were CEO job because of that evolution, right? The job. It just kept getting organically closer to that job.
And so when we from a strategic perspective, we said, I'm an IPO guy that's all I've ever worked on. I've never helped take a company public via a reverse merger. But it was fall of 2019. And one of those other interviews that I was having was from a publicly traded company that was looking for really interesting assets. And, you know, here I am talking to these guys. I don't want to work there, but Tempest has very cool programs. So the board members over the company, other company, I said, What if we merged? And, you know, because I'm going to go join Tempest because actually, I think Tempest has the longer, more interesting run and also hugely important, I guess at this stage, the people I liked, the people inside Tempest, I knew some of the investors and some of the board members. And at some point in your career, that becomes just as important as the science, if not more right?
Yes. And so as a verse infidelity company, as you probably know, they're not their front door, their front door investors, they their companies go public, right? They don't via IPOs. They don't tend to reverse merge. But, you know, I pitched it to them when I was coming in and I said, we should at least be open minded to this because we've been in a bull market for a really long time. This is, you know, back then and we don't know that this is going to last. Hope is not a business strategy. I, you know, we all agree that given how robust Tempest pipeline is and it was, it looked good back then, it looks a lot better now. So this panel is not of a private company, right? So we should become public. And they said we agree. And so, you know, fast forward, we're getting through 2020 in the pandemic and everything, and the market's still crazy positive for biotech, right?
And as it look, we were planning on a 2021 IPO. We should keep an open mind because I don't know how long this bull market's going to last right. I'm not prescient. And they said, that's fine. And then we actually had given up on the idea.
We looked at some mergers in 2020 for lack of a better term that were hair on some of the deals. Things didn't come to fruition. And so we were reverting back to the standard go public via IPO and then JPMorgan 2020 1:21 that we met Melinda.
And it was a very clean transaction. And you know, I will say, obviously, stock and trading dynamics aside, what's what's happened and then? On the Nasdaq, for the last month or so, we knew we were going to have a post merger, you know, closing clean up because of the nature of reverse mergers.
But you know, in retrospect, I'm glad we did it because obviously this fall was not the greatest time to try to go public. And so when we closed that deal at the end of June, that's when I formally became CEO.
Jason Robinson: OK, so that's a that's a good understanding of that. And I got to say, I mean, it's really, you know, we gave you a lot of CEOs are who are pure scientists, you know, they their entire career. And that's fantastic.
But having, you know, there's a lot of what I would categorize as like smart individuals, right? But understanding the financial markets is a huge part of the equation. So it's almost just as important as obviously your technology has to be sound.
But understanding these things, you know, the capital markets, debt structures, all these things are hugely important IPOs and everything you mentioned. And the answer to that question are so important. So I think it's a great asset for your organization I think having having you with that experience.
Stephen Brady: Thank you. But I will say we still have to read the papers, right? So that's one of the joke, right? When I joined this company and I came in and I had read all the papers and read the company's posters and sat down for that first coffee and said, OK, you know, in fact, you sit you said it in the intro, right? One of the beautiful things about Tempest in my mind that excites me is we're not a pure Io company. I had worked in a pure immuno oncology company before and to sit down and see molecules that have what we call a dual mechanism of action direct antitumor and immune mediated right.
But yes, that's absolutely part of my job, just as much. And to be honest, it's interesting. You know, it's one of the reasons I work in a novel science company as you got to get up in the morning and be excited about what you're doing.
Jason Robinson: I agree completely. It's and it's a tribute to the scientists that are really brilliant in their own right. It's where I kind of consider myself like a layman. It's like, I'm just trying to just keep up with these guys a lot of times.
And, you know, and it's just it's a credit to you to be able to kind of sit down and go through this and kind of get that dual tool capabilities of having a financial background, but also really understanding the science and kind of aspiring to understand these guys life's work.
Basically, you know, in a context of like a PDF. So it's a it's a lot. It's very heady.
Stephen Brady: Yeah, it is a lot. We've never, never seen him back to that time when we sold proteomics right, there was not a lot going on scientific. Now look at the last five years in terms of new science. It is. It's phenomenal, right? And it actually goes to well, not actually. It's the reason there have been so many biotech IPOs in the last two plus years.
Jason Robinson: Absolutely. And just from your because I think there should be a good a good question to before we kind of get into specifics, too with solid tumor work. I've noticed a lot of companies focusing on this, whether it be viral, you know, they're doing some type of a v scale or doing like T-cell modification or whatever it may be. It's a really big focus now. Do you just see it as kind of a high unmet need or just attacking the tumor, a solid tumor, either through, you know, the immune system to immuno oncology is kind of the way to go.
What is your color commentary on that or just what you see?
Stephen Brady: No, no. That's a great question, because I've worked in he-malignancies as well as solid tumors. I would say from a from a commercial perspective, if you want to talk about it purely in terms of return on investment there, the the NPV of the models for solid tumors is higher for a lot of investors than it is for hematological malignancies. So that's the cold, you know, purely financial perspective on it from a patient focused perspective. We have made great inroads in him, right? So again, back when I was at proteomics that was myeloma, multiple myeloma, horrible, right, horrible disease at the time I joined the company.
I think the median life expectancy was three years, right? We are well, well beyond that right now from the drug that we worked on, which is now an approved drug. Kyprolis we you named it Carville is actually named after our founder and his wife, Carla and Phil, and that either.
Yeah, no, it was. It was wonderful to actually have been part of an approved drug that you read about what's happening with it. I mean, it's part of the goal for all of us. And this right is to actually change patient, you know, treatments and improve lives.
But back to your question, there have been wonderful inroads made in him. I mean, lymphoma, for example, Hodgkin's lymphoma looking to cure aids now T cell therapies, that's their big. That's where they've made their biggest impact, right? A lot of the valuations assume there's going to be solid tumor penetration as well.
So when you get to that side of it, there's still a lot of work to be done in solid tumors. Right? two of our lead indications or target indications for our two lead clinical programs, one is hepatocellular carcinoma and the other. One is called me CRC microsatellite stable colorectal cancer, massive unmet need, massive opportunity for to improve patient care there.
Jason Robinson: Absolutely, absolutely. And then there is a huge unmet need across the board in kind of look, you kind of lose this to looking at some of the clinical pre-clinical portfolio. It does suggest a really broad opportunity for Tempest's portfolio across the board and current thinking on how to take a bite out of this right with with your main candidates to T 149511 and then TBST 112. Oh, and then there's the track's one inhibitor, maybe starting with TBST 1495. It's kind of based on the understanding of the PPG two signaling cancer progression. Could you elaborate? And where that said, I know some of these are kind of moving to stage one, but maybe where that's at, maybe clinic or pre clinic and what this looks like and what it targets?
Absolutely. Actually, the two clinical programs are at a really I want to make sure we cover this that are really exciting point 'cause they're moving either have already or are moving into targeted patient populations. This goes to one of the strategies inside Tempest around doing really thoughtful development and understanding earlier, but we can get to that.
So 1495, yeah, you had it. It's in the prostaglandin pathway and this goes back to the Versant incubator chemistry. So there are these four targets in the Prostaglandin Pathway EP one, two, three and four. They're very, very similar, right?
In terms of if you're going to try to hit them with a small molecule, what we would say is they're highly homologous targets, right? But so the chemistry has to be very elegant to hit what you want to hit now, prostaglandin or PG e two, it's a well known well-studied pathway has been for many, many years, and in oncology it's been of interest. If you talk to my colleague, Sam Whiting, our chief medical officer, said he was a practicing GI oncologist very relevant to Tempest four years up at the Hutch in Seattle. And Sam will always tell you that the prostate gland and pathway for them has been of interest rate.
So, you know, everybody knows very famous drugs that work in the prostate gland and pathway and sets right. So ibuprofen, Advil, right, work in that pathway. But what they do is very different than when 1495 does because it's hit all of one through four, right?
And those targets do very different things. one and three are what we would call either pro drug antitumor. Whatever perspective you want to look at it, they allow signaling in your immune system for an antitumor effect so you don't want to hit one in three, which then said, Do you want to hit two and four?
And that's what 1495 is. It's a dual antagonist of just two and four and actually timely question because we were just at 60, the immunotherapy meeting that happens every year in Washington, D.C. it was actually the last medical Congress we went to before the pandemic shut down in the fall of 19.
It was the first one we just went to back trying to reopen thing or reopen things on the chronic side. And some new data came out that from an investigator at Johns Hopkins that signaling in this pathway prostaglandin pathway may be or is in her and her data relevant to checkpoint inhibitor resistance.
So people who take checkpoint inhibitors one of our biggest drugs period for treating tumors right, I mean, we all know about them now. The commercials are on television. It's an enormous, enormous move forward for patients. People become resistant to them.
Why? Well, her data show that it's signaling through prostaglandin, and she calls out EP two and four as targets that we should head to potentially re sensitize people to checkpoint inhibitors. So we, yeah, we are very excited about that program.
So it's in phase one monotherapy optimization right now, monotherapy dose and schedule optimization, it's almost done. We think we're going to be done in the first quarter and have our recommended phase two dose and very interesting, not just another checkpoint inhibitor combination study.
We just announced that a month or so a combination study. And based on what I just told you about the new data, we're very excited about combining with a checkpoint inhibitor with this molecule. It's part of our industry that a ton of oncology companies put their molecule with the checkpoint inhibitor, but there's a very strong mechanistic rationale around putting 1495 with Nevo Pembroke pick your checkpoint inhibitor. So we're excited about that and those data, we should have those data by the third or fourth quarter of next year.
Jason Robinson: That's fantastic. And even some kind of if you could elaborate, I think for viewers, which would be great and what you touched upon in most of the layman investors, they're going to be familiar with, like Advil and such right?
Or like, you know, ibuprofen or Motrin, right? And so you mentioned something about how that. Taken into the body through the GI tract or the stomach, or could you kind of elaborate how traditional maybe the one of two pathways are taken in due to this traditional over-the-counter medicines? Like what that looks like and why that's relevant to PGE2 for?
Stephen Brady: Yeah, yeah. So yeah, happy to. I mean that I feel like you're getting that question of, well, if this is the same pathway as ibuprofen and these NZ, why don't those work in cancer, right? And that has been a question of oncologists for a long time.
And in fact, there were studies done where people were looking at end sides in cancer treatment and part of the problem. And you, I'm sure you know this. You mentioned the GI tract. Some people, there's toxicity, GI toxicity when they take too many ads ads, but more importantly, for drug development.
High doses, events, ads have cardio talks. And so that just. A halt on on develop trying to develop an end said for cancer. Now we don't have cardio talks in the profile of 1495 and again, but we also mechanistically think that NSAIDs are not the right way to go because they block EP one in one and three.
Excuse me which you want. You want them for your, and you want the immune system to be working to help you fight those tumors again. Coming back to first principles for Tempest are to lead. Programs are a dual mechanism.
We want to use the immune system in addition to hitting those targets and EP two and four are expressed on a whole bunch of cancers. one of our primary ones of interest, MSG CRC, where speaking of checkpoint inhibitors, they largely don't work right.
They're very limited activity. So we want to hit those tumors directly, but we want to allow the immune system to do its job as well.
Jason Robinson: OK. And you mentioned that cardio stress, is that a cardio stress or what is that? What is that? What does that mean?
Stephen Brady: Toxicity? It was it was cardiac toxicity, unacceptable and drug development, right? one of the big things we we obviously tox profiles are incredibly important in drug development, period or excuse me, toxicity profiles in cancer. There's a little more leeway, right, because you are treating a deadly disease.
And so people and physicians are willing to deal with an upset stomach or, you know, fatigue if it's going to shrink their tumors and prolong their life and hopefully their quality of life. In other indications, those are not tolerated, like for dry eye or something where it's not a life threatening disease.
NSAIDs were found to have an unacceptable level of cardiac talks. And again, we're not seeing that with 1485.
Jason Robinson: Fantastic. And that's a great okay. OK, that's that's that's thank you for detailing that helps. I think viewers and myself even understand what that means. And so part of the fun part of where you're at is kind of determining the dose response right now.
And then the associated potential toxicology outcomes from that is that kind of where just, yeah.
Stephen Brady: So we're in a traditional phase one dose optimism, actually, I would say an enhanced phase one monotherapy and combination study with 1495. The reason I say enhanced is because traditionally back in the day, you would just do a single dose, you do a multiple dose, but you do a single schedule.
We've actually looked at multiple schedules in our monotherapy study with 1495, which is the way the FDA is going. They actually want oncology companies to start looking at more doses sooner to really optimize what's the right balance for patients.
So we're doing that with the monotherapy. We've started the combination therapy and back to the earlier comment about development strategies, you know, getting to an answer sooner and thinking about clinical development the right way. We're poised to very quickly next year, early next year go into targeted patient populations.
And by that, I mean for the monotherapy first, because it's ahead of the combination therapy. These targets, as I mentioned, EB two and four are expressed in a lot of tumors. So we're going into tumors in our expansion studies that are high expressed as a two and four.
And we also are interested in what's called a pick three K mutation. There's a mutation in certain tumors that's associated with this target. And so we think in those mutated tumors that 1495 may have a better opportunity to work for patients as well.
So we're very quickly moving from a general dose and schedule optimization study, you know, to all comers, so to speak, into targeted patient populations. And that's already happened with our second program, 1120.
Jason Robinson: So it's a good thing for us to keep an eye on kind of moving into next year, you would say then.
Stephen Brady: Yeah, absolutely. There's one of the takeaways for tempests for anyone. Investors, whether they're internal employees or external, is that 2022 is is poised to be a potentially transformative year for the company. Given the data that we are targeting.
Obviously, where you know, we have a good history so far of delivering on our timelines, but that we're targeting to have towards the end of next year. And that's one of em. 1495 should be really interesting, especially from its combination with Pembroke.
The dose escalation study agreed.
Jason Robinson: And I really encourage our viewers to check out your investor deck on your website. It's very thorough, and it's definitely indicative of that from your preferred page where everything is kind of really there, where it's kind of setting up for 2022 to kind of be transformative, transformative based on what kind of those outcomes.
So I really appreciate you detailing that. And so kind of segue into T 11 to go to first in class PR antagonists, it kind of inhibits cell proliferation, which I think is obviously obviously trying to do the genesis and promotes anti-tumor immunity.
A lot of you could touch on that kind of where that's at a clinic. I did see kind of a collaboration with Roche (OTCQX:RHHBY). Yeah, the clinical global studies. So just information that would be fantastic.
Stephen Brady: Yeah, that program for lack of a better term left or it just accelerated dramatically in 2021 and is another thing that's poised to be really interesting in 2020. So TBD 1120 to our alpha antagonist. Going back to that theme again of elegant, high end chemistry from our early days, we specifically hit that target.
There are PPR, there are multiple P part agonists actually that are approved agents. We are on the other side of the field. We are an antagonist and this isn't a fatty fatty acid oxidation or fatty acid oxidation approach or pathway.
So like 1495, eleven, 20 has both of an immune mediated aspect and a direct cellular activity aspect. So there are multiple multiple tumors, including HCC and cholangiocarcinoma and renal cell carcinoma that express people are alpha as a target.
Also, we have found that or now where it's generally known in the industry that T cells become fatty acid reliant and and we want to block that target to enable the T cells to actually become effector T cells again and hit the tumor.
So you've got your immune mediated aspect there as well. So this was in or is still in, but is almost done in a in a standard traditional phase one monotherapy combination study. We saw some interesting early data in both in the monotherapy we saw, and these are very late stage patients, as is becoming increasingly the case.
If you're an oncology drug developer, your patients are getting sicker and sicker and later as more drugs are coming into. You use, right? Good for patients, tougher for drug development. And we saw some interesting monotherapy data and then we saw some interesting responses and in the combination study, excuse me.
And then the program jumped, right. So we did this deal with Roche. We announced it before the merger actually closed. And it is a clinical collaboration, but it's not a garden variety clinical collaboration. Roche is taking 1120 into a first line so previously untreated study in a part of cellular carcinoma patients, and it's randomized.
So they're combining 1120 with a tease of a Tiso Bev, their first line hepatocellular carcinoma label, and their randomizing it against that combination. That doublet combination hepatocellular carcinoma has made great strides. The Tiso Bev combination has been great for patients, but there's room, there's room to improve.
And so that's why they were willing to do this study. So Tempest is not operationalizing it. Roche is doing it. What's wonderful for this program is that they're dropping it into the Roche machine, right? So this is over 25 sites globally around the world, and they're doing it all.
So it went from small Tempest phase one study into a frontline global randomized study. And we predict we're going to have at least objective response rate data by the fourth quarter of next year. And because it's a clinical collaboration, we haven't given up the rights to 1120.
So if that is if that is a positive readout, it's going to put Tempest in a really good situation towards the end of next year. So again, potentially transformative item number two.
Jason Robinson: Absolutely, and as a CEO, Steve, do you see more licensing or and you've had so much experience with M&A IPOs, which do you see as more advantageous to you? I mean, do you kind of want to see Tempest as kind of this expanding thing or a part of another organization potentially like, where do you see this kind of going in a best case scenario?
Stephen Brady: Yeah, that's a great question, because it takes me back to when I was interviewed by the board. When you have when you've been fortunate, like I was to have sat in that chair and done the two sales, there's a risk whenever you're being interviewed for the next job that the investors want you to come in and flip the company right? Oh yeah. And so back in 2019, I actually had that conversation with them. I said, Look, if you're interviewing me to come in and, you know, let's that's great. I'll get you somebody else, right? Because my philosophy is always bet.
Well, at least if I've gotten older, I probably didn't know this when I was a kid, but you don't you don't build a company to sell it right? You build a company to be a successful entity. And because of the symbiotic nature between biotech and pharma, if you are successful, you will most likely get acquired.
Right, right. And that's just the way it works. You don't walk into work every day and and talk about selling the place or talk to your investors about selling best, make the program successful, build an integrated organization and then if you are fortunate enough to have M&A offers because it's the exception, obviously not the rule, then evaluate them as as as an alternate approach. You look at your programs and say, Look, these could be much more valuable or whatever your analysis is, we can move this faster and then get to the value faster or there's more value for investors now.
That's your analysis, right? As a steward of the company and for the shareholders. So we'll always entertain them. But that's definitely not what we're we're not building Tempest to sell it now to your BD question. We have actually four programs.
We haven't announced the fourth one deliberately because it's a novel target we licensed it in from Russell Vance's lab across the bay here over at Berkeley. Russell is a really well-known scientist, phenomenal lab. To our knowledge. No one is working on that target, so we're just going to keep it quiet for a little while until, well, it'll have its own, you know, coming out party in the future. But when you have a really nice portfolio like this of diversified assets, you know, we're not a we're not a platform company, right? All of these stand on their own two feet.
They're independent of each other. We're obviously not going to be able to launch, you know, or fully fund for programs. And so the BD is absolutely in the cards for the future, and we're in a great situation because we've had inbound interest on licensing some of the programs.
We've had term sheets on the table and we've said, you know what? Not the right time yet. You know, we'll we'll do these at the right time. And another great example when I mentioned earlier that 1120 and 1495 have large commercial potential in China.
We're not going to launch our first drug in China. Right, right. And the nice thing is there's been an evolution in Chinese biotech and pharma as well over the last five years, right? You know, beginning with Beijing and this whole new wave of companies in China had partnerships, there have changed as well.
In fact, I was back with my colleague Tom Devinsky, and I was back in Beijing right before the pandemic. I'm sorry, Shanghai right before the pandemic, talking to investors and and companies because it's just it's a different world now, right?
And so you can get it. You can license out there and still maintain the bulk of your at least implied value in your stock by keeping, you know, North America and Europe.
Jason Robinson: I agree totally, and I love what you said there, too, because I think it's like with anything, if you go into it with just like, Oh, I want to make money, right? Yeah, I want to do this. There's kind of a dilutive factor.
It's you need to be you need to be passionate about what you're doing and then everything else to kind of take care of itself and a lot of ways. So I apologize if paraphrasing. But.
Stephen Brady: No, no, no, no, it's great. It's part. And it's also about I'm pointing because I'm pointing out people in the hallway. It's also about how to keep everybody motivated in here. I would hate to be that guy that walks around and you keep your team together by saying, we're going to flip this because then those are those are the people you want to work with anyway. Drug development hard. We hit bumps. We all do. Yeah. And it's just about the money and not about getting you patients and actually being able to kind of have a legacy that says, Hey, I helped shift that entire standard of care and hepatocellular carcinoma or colorectal cancer, that's got to be a part of it. Or it's going to be hard to keep people motivated through the tough times.
Jason Robinson: Agreed, totally. That's another great perspective. As a team there, there's other people, actually, you know, they're doing the science and there could be an R&D aspect to create. Totally. I do want to ask one more question on the tracks one inhibitor targeting Sting and kind of selective activation of staying in tumors and oral delivery of the truck's one inhibitor. Would you mind just touching on that a little bit. I thought that was interesting and I felt like it was kind of in the same place, maybe from a clinical preclinical perspective where its earlier OK.
Stephen Brady: Yeah, no, it's earlier, Jason. So that's a really exciting program. Obviously, investors are, I would say, by and large, more focused on our clinical programs because there's more near-term valuation events. We internally are very excited about the transplant program and I would say the corporates are so the sting pathway.
As I mentioned earlier, my colleague Jim didn't give us the first person to put a Sting agonist into human being. Sting is an incredibly popular target, if you think kind of like crass, right? We always knew race was important and but the industry spent, I don't know.
I don't know how technically it was 20 or 30 years trying to target rats. And then, you know, monotherapy success happened, right? We finally got that right. And now there's, you know, patients are going to realize the significant benefit from the the new and next generation rasp molecules coming out.
And obviously, investors have done quite well on that as well. Sting, in my mind fits into that category, right? We know it's important it's expressed all over the place, highly relevant in innate immune activation. Excuse me. So when Tom do the first Sting agonist, it was an intra tumor approach and not to go too far into the technical aspects. But when he and I used to talk about it, the evolution of that was, you know, that might have not been the best way to do it as we learn the science and we learn how the body works, right?
Tumors aren't the same all over your body, right? The antigens they express are heterogeneous. They have a different expression profile. So injecting into one tumor and creating an anti-tumor immune response is going to be based on that tumor where you inject.
So the the T cells that go out are targeted to head tumors that look like that tumor. And so when we talked about it, we said, Well, what is a better way to activate Sting but systemically, right? And that's a little scary, too, because you don't want to hit a target that's expressed everywhere in cancer.
You want to hit a target that are in your malignant cells. The bad cells right to Tom is brilliant, so we know there's this upstream tracks one target that is preferentially expressed in malignant tissue. If we hit that well, that would be really interesting, right?
Because if we had tracks one, we're actually going to activate Sting. So it's a little counterintuitive because you're antagonizing one, but by blocking it, you let Sting do its job right and activate the immune system to kill the cancer.
And so I was I'm comfortable saying that program is absolutely of interest to on the corporate side. And so that we are going back to your BD question, right? So again, three and a half or four programs, depending on how you want to view it, but is going to happen somewhere.
I'd say that Trex program is interesting for me because there is there are people hovering there interested in it, and we are targeting a development candidate next year. And if we do that, it's going to be the, to our knowledge, no one in the world.
Well, there are people working on it. I don't know if they're ahead of us. It's a little hard to tell. But if we get a development count and get in the clinic next year, I mean, we could be the first companies doing it.
And again, to sit to a systemic, orally bioavailable molecule to selectively activate Sting should be exciting.
Jason Robinson: Absolutely, and thank you for your time. It's a perfect segue way, too, because I wanted to ask when you talk about an oral aural availability rate for all of these candidates. Where is the benefit from or not even benefit maybe be the wrong term?
But what are some of the advantages of using oral versus intravenous or other methods? Where why is that kind of like a benefit? Just add me perspective like toxicology or what are your thoughts on that?
Stephen Brady: Well, it's harder up front, right? Because so we're a small molecule company, right? And I will say we're not biased. We've all worked in other modalities, whether they were vector based vaccine approaches or antibodies or what, what have you.
Our targets are small molecule targets. So the first the three public programs, we're all they're all small molecule and they're all oral, orally bioavailable. Well, the ones in the clinic are and we're intending that for the Trex one program.
So what's an advantage? So from a patient perspective, would you rather take a pill every morning or go in and get a needle in your arm? Right, right. And by the way, this goes to clinical development and optimizations.
I'm sorry, and dose schedule and optimization strategies, too is do I want somebody to take, you know, three pills a day or one? So we think about that when we're when we are developing our molecules as well. In fact, the 1495 program started out as bid or twice twice a day and we dialed it back.
We were fortunate to have phenomenal exposure with that molecule, so we're able to dial it back to once a day. Our goal would be to have a patient pop a pill once a day. It's easy to remember. They can do it at home.
So that's from the patient compliance perspective, from a running your business perspective, the cost of goods. Once you get down your manufacturing and your process development for an early available small molecule, it can become very, very efficient and inexpensive to manufacture.
That's why some of those bills that are long off patent you get your prescription for a dollar.
Jason Robinson: Right? And that's a great. This is such a great point because there's been such a big focus on selling gene therapy lately and that tastic technologies. But I think, right? Please. Yeah.
Stephen Brady: Yeah. No, no. But no, I don't. I don't want to. I don't want to do this. But just as a person who's been doing this for a while, if I'm going to go, you know, go talk to my elderly Italian grandmother or mother and talk to her about what I do, I would like to be able to say that we we have. Not only are we trying to change the course of medicine and help people and get our investors a return, but that in the long run we will be a very affordable therapy once our molecules go off patent that can be widely distributed.
You know, I feel good about that.
Jason Robinson: Absolutely, if you think about even the capital, some of the capital intensive intensity is needed for other other types of treatments, therapies, the amount of virus that you need, potentially for a carrier. I mean, it's just it's enormous when you think about a small molecule.
You know, it's kind of interesting how things I've kind of noticed. Things have not come back around small molecules, but I don't know if you kind of if you have any commentary, it's still a big focus. It kind of went away that went away.
But yeah, unfocused. But now it's back. I feel like people understand is a good modality for it.
Stephen Brady: Yeah, we I mean, we've talked to a ton of it. So we were raising capital in the fall or we're not, but we've been talking to everybody doing conferences. We're covered by three analysts right now, by the way, which is great because again, we went public via a merger, so we didn't get five analysts out of the box, right? We had one channel started covering us first, and then Blair and CW picked us up without a financing because they were so interested in what the company was doing. But we've been talking to a lot of investors really to prime everybody.
One, we have relationships just from all of our prior jobs, but we want to prime everybody for next year. Hopefully, when biotech is trading in a more reasonable way and news flow will be, you know, treated in a in a proper manner.
But I will say to your point, it is interesting. I have had some conversations around, OK, are we swinging? We've all seen investor mood swing. Right. So for the last couple of years, platform or really early stage new idea companies have had fabulous IPOs with nice pre-money valuations have raised a lot of money and then have traded. If you had one point to 1.4 billion dollar companies with no clinical data purely target and idea based. What I'm wondering, and I think it's a reasonable position to take is are are we going to swing right? So some of those companies are twelve, 24 months out from their IPOs.
We all know the statistics around out what percentage are going to make it to the clinic and then make it all the way? Are investors going to say, You know what, I'm really I'm switching over at least X percent of my investments into clinical stage companies where I understand with these molecules are doing and I can see the road, it's much less idea and much more reality in patients. I mean, obviously, that's a self-serving statement because that's exactly where Tempest is right. And if that's where things switch, we're poised to be positioned quite well because we are going to we can talk to investors about that.
We can say this is what we're seeing. This is where we think our molecules are going to go. And we're not just telling you that here's our data, you know, data flow or news flow over the next twelve to 18 months.
And small molecules are easy, remember, you can get your head around them, right? It's this, it's this, it's this molecule hitting a target and in our case, solid dosage forms. Once you get your PD down, it's a pill.
It's a capsule, it's a tablet, right? It's much easier to get your head around.
Jason Robinson: I agree completely by the way. I mean, you try to talk about like a certain cell therapy. You know, what is the dose response? Where does the absorption? I mean, how do you look? How does it move through the body?
I mean, what does the toxicology function, I think, was the small molecule. It's much more people understand that too. Like I'm taking a pill. Is that rudimentary in a sense. So they have to thank you so much for touching on that.
A huge point. And just kind of kind of in closing, I think, appreciate you touching on so many things here and certainly your technology. You guys are financed through 2023.
Stephen Brady: Minutes into the second quarter of 2023, not through the whole year.
Jason Robinson: Okay. So the second quarter of 23 and like you mentioned, there's a number of potential catalysts in news flows that will be coming out as well. Are there a few high level things you want to leave investors with as we close or kind of anything?
I know you mentioned these clinicals kind of moving through, but into early next year. But is there anything else you'd like to have investors kind of keep an eye on?
Stephen Brady: Yeah, I mean, Tempest, again from my opinion, from our perspective, offers investors a truly diversified portfolio opportunity. All of these programs, they're novel programs, they stand on their own two feet. So there's it's almost as if you're investing in multiple companies with a single team running them eleven, 20 and 14.
95 are nothing like each other. Mechanistically, right? They had completely different targets, but they both leveraged the immune system. They both had cells independently and they, you know, directly sorry. And then they also both have enormous opportunity. And then finally, they're poised to deliver to investor news by the end of next year and 1120.
It's the frontline randomized battle cellular carcinoma study with Roche and then 1495 in combination with Pembroke already started. Expect that to read out in the second half of next year, and then we will have started multiple monotherapy expansions.
And then finally, there's the Trex one program in the stink at bay, right? Which could be really interesting. Even a development candidate with a robust pre-clinical package next year could be really interesting, interesting and catalyzed something. So when when I look at this company from the outside, I'm obviously an investor.
I don't see a one trick pony, right? Or an idea. I see a real asset of real diversified programs in people producing data, and hopefully investors will agree that that's worth supporting as we move into 2020.
Jason Robinson: Absolutely, Steve. I love the conversation. I loved everything you touched on. I really appreciate kind of your perspective on how to kind of grow a company and really stick with the stick with the process and kind of move through it for the long haul.
So I think that's really, really refreshing and beneficial end. Steve Brady, CEO of Tempest Therapeutics. I really appreciate your time and we'll be tracking your progress closely, sir.
Stephen Brady: Thank you, Jason. Appreciate it. Happy holidays.
Jason Robinson: Absolutely. Happy holidays. Take care, sir.
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