Forte Biosciences, Inc. Announces 2023 Results and Provides Business Update
- Forte achieved a significant milestone by progressing FB-102 into clinical trials ahead of schedule.
- Research and development expenses surged to $21.9 million in 2023 compared to $5.6 million in 2022.
- General and administrative expenses rose to $10.6 million in 2023 from $8.3 million in 2022.
- Net losses per share were ($1.00) in 2023, higher than ($0.80) in 2022.
- Forte had approximately $37.1 million in cash and cash equivalents at the end of 2023.
- Forte reported around 36.3 million shares of common stock outstanding as of December 31, 2023.
- The increase in research and development expenses to $21.9 million could impact the company's bottom line.
- General and administrative expenses also rose to $10.6 million, potentially affecting overall profitability.
- Net losses per share increased to ($1.00) in 2023, indicating a decline in financial performance compared to 2022.
- Forte Biosciences ended 2023 with a reduced cash position of $37.1 million compared to the previous year.
- The significant increase in the number of shares outstanding may dilute shareholder value.
Insights
The reported increase in research and development expenses by Forte Biosciences, primarily driven by the clinical advancement of FB-102, signifies a strategic allocation of resources towards its core developmental programs. The substantial rise in expenses, from $5.6 million to $21.9 million year-over-year, reflects the company's transition from preclinical to clinical stages, which typically entails higher costs due to manufacturing, regulatory and trial management activities.
Investors should note the escalated general and administrative expenses, mainly attributed to professional and legal fees. This could indicate a ramp-up in activities necessitating external expertise, possibly in preparation for regulatory interactions or partnerships. However, the reduction in stock-based compensation suggests a possible strategic adjustment in employee remuneration, potentially to conserve cash.
Considering the net loss increase and the diluted net loss per share from ($0.80) to ($1.00), stakeholders should evaluate the company's burn rate in relation to its cash reserves of $37.1 million. The current cash position, in comparison to the net loss, suggests a runway that investors must scrutinize for future funding needs or dilutive financing activities.
Advancing FB-102 into clinical trials is a pivotal step for Forte Biosciences, as it marks the transition of their lead candidate from a conceptual stage to a tangible product undergoing human testing. The successful completion of the single ascending dose part of the phase 1 trial and the initiation of the multiple ascending dose cohorts are critical for gauging the drug's safety profile and determining appropriate dosing regimens.
For industry observers, the progress of FB-102 is of particular interest due to the high unmet need in autoimmune and autoimmune-related diseases. The company's focus on these conditions could address significant market gaps, providing a potential upside if the clinical outcomes are favorable. Yet, the long-term nature of biopharmaceutical development necessitates cautious optimism, as many compounds fail to make it past clinical hurdles.
From an industry perspective, Forte's progress should be contextualized within the broader competitive landscape. The company's performance, particularly in terms of trial outcomes and subsequent regulatory milestones, will be essential in determining its positioning against incumbents and emerging players in the autoimmune therapeutic area.
When assessing Forte Biosciences' market potential, it is important to consider the broader trends in the biopharmaceutical sector, particularly within the niche of autoimmune and autoimmune-related diseases. The successful clinical advancements of FB-102 could position Forte as a notable player in a market that is increasingly driven by personalized medicine and targeted therapies.
The stock market's response to such updates often hinges on investor sentiment towards the perceived risks and rewards. While clinical progress can fuel positive sentiment, the increased financial expenditure and subsequent net loss may temper investor enthusiasm. It's important to track the stock's performance in the wake of this announcement, as it may reflect the market's confidence in the company's strategic direction and its ability to bring FB-102 to market.
Furthermore, the dilution effect from an increased share count, as indicated by the rise from 21 million to over 36 million shares, is a critical factor for shareholders. This dilution can affect earnings per share and, consequently, the stock price. Investors will likely weigh the potential long-term gains from FB-102 against the immediate dilutive impact and increased operational costs.
2023 Business Highlights
“Forte achieved a major milestone by advancing FB-102 into the clinic and beating the timelines we targeted in our third quarter business update. The single ascending dose (SAD) portion of the FB-102 phase 1 trial was successfully completed and dosing has begun in the multiple ascending dose (MAD) cohorts.” said Paul Wagner, Ph.D., Chairman and Chief Executive Officer of Forte Biosciences. “I am deeply appreciative of the talented Forte team that made this achievement possible. I also want to thank our investors who believe in the potential of FB-102 and in the Forte team as we continue to advance this exciting program. We look forward to providing more clinical updates on FB-102 over the course of this year.”
2023 Operating Results
Research and development expenses were
General and administrative expenses were
Net losses per share were (
Forte ended 2023 with approximately
CONSOLIDATED BALANCE SHEETS (in thousands except share and par value data) |
||||||||
|
|
|
|
|
||||
|
|
December 31, 2023 |
|
December 31, 2022 |
||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ |
37,125 |
|
$ |
41,100 |
|
||
| Prepaid expenses and other current assets |
|
1,202 |
|
|
411 |
|
||
| Total current assets |
|
38,327 |
|
|
41,511 |
|
||
| Property and equipment, net |
|
109 |
|
|
— |
|
||
| Other assets |
|
544 |
|
|
486 |
|
||
| Total assets | $ |
38,980 |
|
$ |
41,997 |
|
||
| Liabilities and stockholders' equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ |
1,424 |
|
$ |
1,153 |
|
||
| Accrued liabilities |
|
2,242 |
|
|
2,026 |
|
||
| Total current liabilities |
|
3,666 |
|
|
3,179 |
|
||
| Commitments and contingencies (Note 6) | ||||||||
| Stockholders’ equity: | ||||||||
| Common stock, December 31, 2023 and December 31, 2022; 36,335,105 and 21,000,069 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively |
|
36 |
|
|
21 |
|
||
| Additional paid-in capital |
|
153,794 |
|
|
125,841 |
|
||
| Accumulated other comprehensive income |
|
4 |
|
|
— |
|
||
| Accumulated deficit |
|
(118,520 |
) |
|
(87,044 |
) |
||
| Total stockholders’ equity |
|
35,314 |
|
|
38,818 |
|
||
| Total liabilities and stockholders’ equity | $ |
38,980 |
|
$ |
41,997 |
|
||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (in thousands, except share and per share amounts) |
||||||||
| Year Ended December 31, | ||||||||
|
2023 |
|
|
2022 |
|
|||
| Operating expenses: | ||||||||
| Research and development | $ |
21,862 |
|
$ |
5,594 |
|
||
| General and administrative |
|
10,624 |
|
|
8,302 |
|
||
| Total operating expenses |
|
32,486 |
|
|
13,896 |
|
||
| Loss from operations |
|
(32,486 |
) |
|
(13,896 |
) |
||
| Interest income |
|
1,124 |
|
|
162 |
|
||
| Other expense, net |
|
(114 |
) |
|
(145 |
) |
||
| Net loss | $ |
(31,476 |
) |
$ |
(13,879 |
) |
||
| Per share information: | ||||||||
| Net loss per share - basic and diluted | $ |
(1.00 |
) |
$ |
(0.80 |
) |
||
| Weighted average shares and pre-funded warrants outstanding, basic and diluted |
|
31,571,039 |
|
|
17,383,531 |
|
||
| Comprehensive Loss: | ||||||||
| Net loss | $ |
(31,476 |
) |
$ |
(13,879 |
) |
||
| Unrealized gain on available-for-sale securities |
|
4 |
|
|
— |
|
||
| Comprehensive loss | $ |
(31,472 |
) |
$ |
(13,879 |
) |
||
Additional details on our 2023 financial results can be found in Forte’s Form 10-K as filed with the SEC on March 18, 2024. You can also find more information in the investor relations section of our website at www.fortebiorx.com.
About Forte
Forte Biosciences, Inc. is a clinical-stage biopharmaceutical company that is advancing its product candidate, FB-102, which is a proprietary molecule with potentially broad autoimmune and autoimmune-related applications including in such indications as graft-versus-host disease, vitiligo and alopecia areata.
Forward-Looking Statements
Forte cautions you that statements included in this press release that are not a description of historical facts are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negatives of these terms or other similar expressions. These statements are based on the Company’s current beliefs and expectations. Forward looking statements include statements regarding the Company’s beliefs, goals, intentions and expectations regarding its product candidate, FB-102 and the therapeutic potential of FB-102. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of various risks and uncertainties, which include, without limitation: risks related to Forte’s ability to obtain sufficient additional capital to continue to advance Forte’s product candidate, FB-102; uncertainties associated with the clinical development and regulatory approval of Forte’s product candidate, FB-102, including potential delays in the commencement, enrollment and completion of clinical trials; the risk that results from preclinical studies may not be predictive of results from clinical trials; risks associated with the failure to realize any value from FB-102 in light of inherent risks and difficulties involved in successfully bringing product candidates to market; and additional risks, uncertainties, and other information affecting Forte’s business and operating results is contained in Forte’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission on March 18, 2024, and in its other filings with the Securities and Exchange Commission. All forward-looking statements in this press release are current only as of the date hereof and, except as required by applicable law, Forte undertakes no obligation to revise or update any forward-looking statement, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise. All forward-looking statements are qualified in their entirety by this cautionary statement. This caution is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Source: Forte Biosciences, Inc.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240318461092/en/
LifeSci Advisors
Mike Moyer, Managing Director
mmoyer@lifesciadvisors.com
Forte Biosciences, Inc.
Paul Wagner, CEO
investors@fortebiorx.com
Source: Forte Biosciences, Inc.
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