10-K: Forte Biosciences Reports Full Year 2024 Results, Focuses on FB102 Clinical Development

Sentiment:

Annual Results 28 March 2025 8:01 PM

Forte Biosciences details its financial results for 2024 and provides an update on the clinical development of its lead product candidate, FB102.

Capital raiseOn November 21, 2024, the Company issued 4,931,389 shares of our common stock at a purchase price of $5.5520 per share, and 4,615,555 pre-funded warrants to purchase shares of common stock at a purchase price of $5.5510 per pre-funded warrant ('2024 Private Placement').The gross proceeds of the 2024 Private Placement were $53.0 million and we incurred $3.4 million in issuance costs.In July 2023, the Company completed the 2023 Private Placement financing pursuant to which the Company sold (i) 606,678 shares of Common Stock, and (ii) 387,566 pre-funded warrants to purchase Common Stock at a purchase price of $25.13 per pre-funded warrant.The gross proceeds of the 2023 Private Placement were approximately $25 million, before deducting offering expenses payable by the Company.

Summary

Forte Biosciences, a clinical-stage biopharmaceutical company, is focused on developing FB102, a monoclonal antibody therapeutic candidate for autoimmune and autoimmune-related indications.
FB102 has shown promising results in mechanistic in-vitro studies, inhibiting proliferation and activation of T and NK cells.
A Phase 1 trial of FB102 in healthy volunteers demonstrated a good safety profile and significant reductions in the NK cell pharmacodynamic marker.
Based on Phase 1 results, a patient-based trial in celiac disease was initiated in Q3 2024, with top-line results expected in Q2 2025.
The company estimates that 1 in 133 people in the US have celiac disease, and a significant portion of these patients do not respond to a gluten-free diet.
FB102 also has potential applications in vitiligo, alopecia areata, and type 1 diabetes.
As of December 31, 2024, Forte Biosciences had approximately $58.4 million in cash, cash equivalents, and short-term investments.
The company issued 4,931,389 shares of common stock and 4,615,555 pre-funded warrants in a private placement in November 2024, generating gross proceeds of $53.0 million.
The company outsources the manufacturing of FB102 to third-party contract manufacturing organizations (CMOs) and preclinical testing and clinical development to clinical research organizations (CROs).

Sentiment

Score: 6

Explanation: The document presents a mix of positive and negative aspects. The company has promising clinical data for FB102 and has secured funding through private placements. However, it is still in the early stages of development, has a history of net losses, and faces significant competition and risks.

Positives

FB102 has shown promising results in in-vitro studies, inhibiting T and NK cell proliferation and activation.
A Phase 1 trial demonstrated a good safety profile.
A patient-based trial in celiac disease was initiated in Q3 2024, with top-line results expected in Q2 2025.
The company completed a private placement in November 2024, generating gross proceeds of $53.0 million.
In the 4and 13-week non-human primate (NHP) studies, after a single dose, FB102 demonstrated significant reductions in the NK cell pharmacodynamic marker (up to approximately 80%-90%).

Negatives

The company has incurred net losses in every year since its inception and anticipates that it will continue to incur net losses in the future.
The company is almost entirely dependent on the success of developing FB102, which may not be successful.
The company is very early in its development efforts and FB102 will require significant additional clinical development before Forte seeks regulatory approval of any product candidate.

Risks

The company will require additional capital to fund its operations and if Forte fails to obtain necessary financing, Forte will not be able to complete the development and commercialization of its current lead product candidate, FB102, or any future product candidates.
Results from early preclinical studies and clinical trials may not be predictive of results from later stage studies or clinical trials.
The market opportunities for FB102 may be limited and Fortes estimates of the incidence and prevalence of its target patient populations may be inaccurate.
If Forte is unable to obtain and maintain patent protection for any product candidate Forte develops, its competitors could develop and commercialize products or technology similar or identical to Fortes, and its ability to successfully commercialize any product candidate Forte may develop, and its technology, may be adversely affected.
Forte expects to rely on third parties to conduct its preclinical studies and clinical trials and to manufacture its product candidates.
The market price of Fortes common stock is expected to be volatile.
A variety of risks associated with public health threats and epidemics, including epidemic diseases such as COVID-19, or the emergence of another public health emergency could materially adversely affect Fortes business.

Future Outlook

The company believes that its existing cash, cash equivalents and short-term investments will be sufficient to fund its operations for at least 12 months from the filing date of this Form 10-K and anticipates research and development expenses to increase in the future as it continues to develop its current lead product candidate, FB102.

Industry Context

The biotechnology and pharmaceutical industries are characterized by rapidly advancing technologies, strong competition and an emphasis on proprietary products. Forte faces competition from many different sources, including commercial pharmaceutical and biotechnology enterprises, academic institutions, government agencies and private and public research institutions.

Legal Proceedings

In November 2022, a stockholder of the Company, Camac Fund LP, filed a complaint in the Delaware Court of Chancery seeking to access certain books and records of the Company pursuant to Section 220 of the Delaware General Corporation Law, as well as to seek attorney fees (the Books and Records Action).
On August 10, 2023 , Camac Fund LP filed a complaint (the Complaint), captioned Camac Fund, LP v. Paul A. Wagner, et al., C.A. No. 2023-0817-MTZ, in the Delaware Court of Chancery, against the members of the Company's Board of Directors (the 'Directors') and entities affiliated with certain of the Companys investors (the Investors) and naming the Company as nominal defendant.
On October 28, 2023 , the Company filed a complaint (the Texas Complaint), captioned Forte Biosciences , Inc. v. Camac Fund, LP , et al., Case No. 3:23-cv-02399-N, in the U.S. District Court for the Northern District of Texas, against Camac Fund, LP, Camac Partners, LLC, Camac Capital, LLC, and Eric Shahinian (collectively, Camac), as well as against Michael G. Hacke, Chris McIntyre, McIntyre Partnerships, LP, McIntyre Capital GP, LLC, McIntyre Capital Management, LP, McIntyre Capital Management GP, LLC, ATG Fund II LLC, ATG Capital Management, LLC, Gabriel Gliksberg, Funicular Funds, LP, The Funicular Fund, LP, Cable Car Capital LLC, Jacob Ma-Weaver, BML Investment Partners, L.P., BML Capital Management, LLC, and Braden M. Leonard (collectively with Camac, the Texas Defendants).
On October 1, 2024 , the Company filed a complaint (the Wesco Complaint), captioned Forte Biosciences , Inc. v. Wesco Insurance Co. , et al., Case No. N24C-10-015 VLM CCLD, in the Superior Court of the State of Delaware, against its current and former carriers of Directors & Officers liability insurance, Wesco Insurance Company, Beazley Insurance Company, and Palms Insurance Company, Limited (collectively, Insurance Defendants).

Related Party Transactions

One of the Companys board of directors received cash payments of $479 thousand for scientific consulting services during the year ended December 31, 2024.
On November 19, 2024, certain executive officers and senior management of the Company participated in the 2024 Private Placement, purchasing $475 thousand in shares of common stock at a purchase price of $5.552 per share.
On July 31, 2023, certain executive officers, senior management, and board members of the Company participated in the Private Placement, purchasing approximately $1.16 million in shares of common stock at a purchase price of $25.25 per share.

Stakeholder Impact

Shareholders: The company's financial performance and clinical development progress directly impact shareholder value.
Employees: The company's ability to secure funding and advance its pipeline affects job security and potential for career growth.
Patients: Successful development of FB102 could provide new treatment options for autoimmune diseases.
Suppliers and CROs/CMOs: The company's financial stability and clinical trial plans impact its relationships with these partners.

Next Steps

Continue enrolling patients in the celiac disease trial.
Await top-line results from the celiac disease trial in Q2 2025.
Potentially advance FB102 into clinical trials for other autoimmune indications, such as vitiligo, alopecia areata, and type 1 diabetes.
Continue to seek additional funding to support operations and clinical development.

Key Dates

Date	Description
May 3, 2017	Forte was incorporated in Delaware as a privately held company.
June 15, 2020	Forte completed a business combination with Tocagen, Inc.
June 16, 2020	Forte's common stock began trading on the Nasdaq Capital Market under the ticker symbol FBRX.
June 2021	Forte filed a shelf registration statement on Form S-3 that went effective to register the issuance of up to $300 million in securities.
March 31, 2022	Forte entered into an ATM Facility whereby it may from time to time offer and sell shares of its common stock up to an aggregate offering price of $25.0 million.
April 1, 2022	Forte filed a prospectus supplement to the June 2021 Form S-3 for the offer and sale of the shares under the ATM Facility covering sales of up to $7.0 million of shares of common stock.
August 12, 2022	Forte filed an additional prospectus supplement relating to offer and sell an additional $2.7 million of shares of common stock.
July 31, 2023	Forte issued 606,678 shares of common stock and 387,566 pre-funded warrants in a private placement, generating gross proceeds of $25.0 million.
September 8, 2023	Forte filed a registration statement on Form S-3 that was declared effective in connection with the 2023 Private Placement.
November 21, 2024	Forte issued 4,931,389 shares of common stock and 4,615,555 pre-funded warrants in a private placement, generating gross proceeds of $53.0 million.
December 20, 2024	Forte filed a registration statement on Form S-3 that was declared effective in connection with the 2024 Private Placement.
December 31, 2024	Forte had approximately $58.4 million in cash, cash equivalents, and short-term investments.
Q2 2025	Top-line results are expected from the patient-based trial in celiac disease.

Keywords

FB102, Forte Biosciences, celiac disease, autoimmune, clinical trial, biopharmaceutical, monoclonal antibody, vitiligo, alopecia areata, T1D, NK cells, T cells, CD122

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