Forte Biosciences(FBRX) - 2024 Q1 - Quarterly Report

Financial Performance - Forte Biosciences reported a net loss of approximately $7.4 million for the three months ended March 31, 2024, compared to a net loss of $6.8 million for the same period in 2023, reflecting an increase in loss of $667,000 [117]. - General and administrative expenses increased to $3.5 million for the three months ended March 31, 2024, from $2.1 million in the same period in 2023, driven by a $1.4 million increase in legal and professional expenses [120]. - For the three months ended March 31, 2024, net cash used in operating activities was $6.7 million, compared to $5.2 million for the same period in 2023, reflecting an increase in net loss from $6.8 million to $7.4 million [131]. - The company has not generated any revenue from product sales or out-licensing and expects ongoing losses as it develops its lead product candidate, FB102, currently in Phase 1 clinical trials [127]. Research and Development - Research and development expenses were $4.4 million for the three months ended March 31, 2024, a decrease of $434,000 from $4.8 million in the same period in 2023, primarily due to a reduction in manufacturing costs [118]. - Forte anticipates research and development expenses to continue to increase as the company advances its FB102 program through clinical trials [112]. - Forte's lead product candidate, FB102, is currently in a Phase 1 trial, with patient-based studies anticipated to begin in 2024 [97]. Market Opportunity - The U.S. prevalence of acute graft-versus-host disease (GvHD) is estimated at approximately 5,000 cases, occurring in up to 50% of allogeneic stem cell transplant recipients [99]. - The global vitiligo treatment market was valued at $1.2 billion in 2018 and is projected to reach $1.9 billion by 2026, indicating a significant market opportunity for FB102 [101]. - The global alopecia treatment market was valued at $2.7 billion in 2018 and is projected to reach $3.9 billion by 2026, with a CAGR of 4.6% from 2019 to 2026 [102]. Capital and Funding - As of March 31, 2024, Forte had approximately $30.4 million in cash and cash equivalents, which is expected to fund operations for at least 12 months [124]. - The company has a shelf registration statement effective for raising up to $300 million in additional capital, but its ability to access this funding is restricted due to market value limitations [126]. - On July 31, 2023, the company issued 15,166,957 shares at $1.006 per share and 9,689,293 pre-funded warrants at $1.005, raising approximately $25 million in gross proceeds [125]. - Future capital requirements are uncertain and will depend on various factors, including clinical trial outcomes and regulatory approvals [128]. - The company may face dilution if it raises additional funds by issuing equity securities, which could also impose operational restrictions [128]. Cash Flow and Expenses - Net cash used in investing activities for the three months ended March 31, 2024, was minimal, primarily due to the purchase of property and equipment [132]. - The company incurred $272,000 in issuance costs related to the recent private placement of shares and warrants [125]. - Net cash provided by financing activities for the three months ended March 31, 2023, was primarily due to the issuance of shares under the employee stock purchase plan [133]. Accumulated Deficit - The company has an accumulated deficit of approximately $125.9 million as of March 31, 2024 [123]. - The company has not entered into any off-balance sheet arrangements or holds variable interest entities [134].