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What changed in Forte Biosciences, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Forte Biosciences, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+340 added−293 removedSource: 10-K (2025-03-28) vs 10-K (2024-03-18)

Top changes in Forte Biosciences, Inc.'s 2024 10-K

340 paragraphs added · 293 removed · 254 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

43 edited+17 added−6 removed126 unchanged
Biggest changeOur common stock is publicly traded on the Nasdaq Capital Market under the ticker symbol FBRX. Prior to our merger with Tocagen, Inc., a publicly traded biotechnology company, Forte was a privately held company incorporated in Delaware on May 3, 2017.
Biggest changePrior to our merger with Tocagen, Inc., a publicly traded biotechnology company, Forte was a privately held company incorporated in Delaware on May 3, 2017. 3 On November 21, 2024, we 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 process generally involves the following: 4 • Completion of extensive preclinical studies in accordance with applicable regulations, including studies conducted in accordance with good laboratory practice (“GLP”), requirements; • Submission to the FDA of an Initial New Drug (“IND”) application, which must become effective before human clinical trials may begin; • Approval by an Institutional Review Board (“IRB”), or independent ethics committee at each clinical trial site before each trial may be initiated; • Performance of adequate and well-controlled human clinical trials in accordance with applicable IND regulations, good clinical practice (“GCP”) requirements and other clinical trial-related regulations to establish the safety and efficacy of the investigational product for each proposed indication; • Submission to the FDA of a BLA; • A determination by the FDA within 60 days of its receipt of a BLA to accept the filing for review; • Satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities where the biologic will be produced to assess compliance with cGMP requirements to assure that the facilities, methods and controls are adequate to preserve the biologic’s identity, strength, quality and purity; • Potential FDA audit of the clinical trial sites that generated the data in support of the BLA; and • FDA review and approval of the BLA, including consideration of the views of any FDA advisory committee, prior to any commercial marketing or sale of the biologic in the United States.
The process generally involves the following: • Completion of extensive preclinical studies in accordance with applicable regulations, including studies conducted in accordance with good laboratory practice (“GLP”), requirements; • Submission to the FDA of an Initial New Drug (“IND”) application, which must become effective before human clinical trials may begin; • Approval by an Institutional Review Board (“IRB”), or independent ethics committee at each clinical trial site before each trial may be initiated; • Performance of adequate and well-controlled human clinical trials in accordance with applicable IND regulations, good clinical practice (“GCP”) requirements and other clinical trial-related regulations to establish the safety and efficacy of the investigational product for each proposed indication; • Submission to the FDA of a BLA; • A determination by the FDA within 60 days of its receipt of a BLA to accept the filing for review; • Satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities where the biologic will be produced to assess compliance with cGMP requirements to assure that the facilities, methods and controls are adequate to preserve the biologic’s identity, strength, quality and purity; • Potential FDA audit of the clinical trial sites that generated the data in support of the BLA; and • FDA review and approval of the BLA, including consideration of the views of any FDA advisory committee, prior to any commercial marketing or sale of the biologic in the United States.
Date of first licensure does not include the date of licensure of (and a new period of exclusivity is not available for) a biological product if the licensure is for a supplement for the biological product or for a subsequent application by the same sponsor or manufacturer of the biological product (or licensor, predecessor in interest, or other related entity) for a change (not including a modification to the structure of the biological product) that results in a new indication, route of administration, dosing schedule, dosage form, delivery system, delivery device or strength, or for a modification to the structure of the biological product that does not result in a change in safety, purity, or potency.
Date of first licensure does not include the date of licensure of (and a new period of exclusivity is not available for) a biological product if the licensure is for a supplement for the biological product or for a subsequent application by the same sponsor or manufacturer of the biological product (or licensor, predecessor in interest, or other related entity) for a change (not including a modification to the structure of the biological product) that results in a new indication, route of administration, dosing 11 schedule, dosage form, delivery system, delivery device or strength, or for a modification to the structure of the biological product that does not result in a change in safety, purity, or potency.
The FDA does not always meet its PDUFA goal dates for standard and priority BLAs, and the review process is often extended by FDA requests for additional information or clarification. 6 Before approving a BLA, the FDA will conduct a pre-approval inspection of the manufacturing facilities for the new product to determine whether they comply with cGMP requirements.
The FDA does not always meet its PDUFA goal dates for standard and priority BLAs, and the review process is often extended by FDA requests for additional information or clarification. Before approving a BLA, the FDA will conduct a pre-approval inspection of the manufacturing facilities for the new product to determine whether they comply with cGMP requirements.
Clinical trials generally are conducted in three sequential phases, known as Phase 1, Phase 2 and Phase 3, which may overlap. 5 • Phase 1 clinical trials generally involve a small number of healthy volunteers or disease-affected patients who are initially exposed to a single dose and then multiple doses of the product candidate.
Clinical trials generally are conducted in three sequential phases, known as Phase 1, Phase 2 and Phase 3, which may overlap. • Phase 1 clinical trials generally involve a small number of healthy volunteers or disease-affected patients who are initially exposed to a single dose and then multiple doses of the product candidate.
Pediatric Information Under the Pediatric Research Equity Act, as amended (“PREA”), a BLA or supplement to a BLA must contain data to assess the safety and efficacy of the drug for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective.
Pediatric Information Under the Pediatric Research Equity Act, as amended (“PREA”), a BLA or supplement to a BLA must contain data to assess the safety and efficacy of the drug for the claimed indications in all relevant pediatric subpopulations and to support dosing and 7 administration for each pediatric subpopulation for which the product is safe and effective.
It is possible that the information we post on our website could be deemed material information. We may use our website to comply with our disclosure obligations under Regulation FD. Therefore, investors should monitor our website in addition to following our press releases, SEC filings, public conference calls, and webcasts.
It is 13 possible that the information we post on our website could be deemed material information. We may use our website to comply with our disclosure obligations under Regulation FD. Therefore, investors should monitor our website in addition to following our press releases, SEC filings, public conference calls, and webcasts.
None of Forte’s employees are represented by labor unions or covered by collective bargaining agreements. Forte considers its relationship with its employees to be good. 12 Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new employees, advisors and consultants.
None of Forte’s employees are represented by labor unions or covered by collective bargaining agreements. Forte considers its relationship with its employees to be good. Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new employees, advisors and consultants.
In the 10 future, Forte may apply for restoration of a patent term for Forte’s currently owned or licensed patents to add patent life beyond its current expiration date, depending on the expected length of the clinical trials and other factors involved in the filing of the relevant BLA.
In the future, Forte may apply for restoration of a patent term for Forte’s currently owned or licensed patents to add patent life beyond its current expiration date, depending on the expected length of the clinical trials and other factors involved in the filing of the relevant BLA.
Concurrent with clinical trials, companies usually complete additional animal studies and also must develop additional information about the chemistry and physical characteristics of the drug or biologic, as well as finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.
Concurrent with clinical trials, companies usually complete additional animal studies and also must develop additional information about the chemistry and physical characteristics of the drug or biologic, as well as finalize a process for manufacturing the product in commercial quantities in 6 accordance with cGMP requirements.
Such laws include, without limitation, U.S. federal anti-kickback, anti-self-referral, false claims, transparency, including the federal Physician Payments Sunshine Act, consumer fraud, pricing reporting, data privacy, data protection, and security laws and regulations as well as similar foreign laws in the jurisdictions outside the U.S.
Such laws include, without limitation, U.S. federal anti-kickback, anti-self-referral, false claims, transparency, including the federal Physician Payments Sunshine Act, 8 consumer fraud, pricing reporting, data privacy, data protection, and security laws and regulations as well as similar foreign laws in the jurisdictions outside the U.S.
Forte expects that current laws, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous 8 coverage criteria and additional downward pressure on the price that Forte, or any of its collaborators, may receive for any approved products.
Forte expects that current laws, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and additional downward pressure on the price that Forte, or any of its collaborators, may receive for any approved products.
These manufacturers must comply with cGMP regulations that require, among other things, quality 7 control and quality assurance, the maintenance of records and documentation and the obligation to investigate and correct any deviations from cGMP.
These manufacturers must comply with cGMP regulations that require, among other things, quality control and quality assurance, the maintenance of records and documentation and the obligation to investigate and correct any deviations from cGMP.
Accordingly, the ACA remains in effect in its current form. In January 2021, President Biden issued an executive order to initiate a special enrollment period to allow people to obtain health insurance coverage through the ACA marketplace, and instructs certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, among others.
Accordingly, the ACA remains in effect in its current form. In January 2021, President Trump issued an executive order to initiate a special enrollment period to allow people to obtain health insurance coverage through the ACA marketplace, and instructs certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, among others.
On 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.
On April 1, 2022, we 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.
The global vitiligo treatment market size was estimated at $1.2 billion in 2018 and is projected to reach $1.9 billion by 2026 (Fortune Business Insights). AA is a disease in which immune cells attack and damage hair follicles and is mediated primarily by CD8+ T cells and NK cells.
The global vitiligo treatment market size was estimated at $1.2 billion in 2018 and is projected to reach $1.9 billion by 2026 (Fortune Business Insights). Alopecia areata is a disease in which immune cells attack and damage hair follicles and is mediated primarily by CD8+ T cells and NK cells.
There is a risk that if such supplies or services were interrupted, it could materially harm the manufacturing and development of FB-102. Competition The biotechnology and pharmaceutical industries are characterized by rapidly advancing technologies, strong competition and an emphasis on proprietary products.
There is a risk that if such supplies or services were interrupted, it could materially harm the manufacturing and development of FB102. Competition The biotechnology and pharmaceutical industries are characterized by rapidly advancing technologies, strong competition and an emphasis on proprietary products.
Forte is currently eligible to sell securities under Form S-3 only if and to the extent the aggregate market value of securities sold by Forte pursuant to General Instruction I.B.6 of Form S-3 during the twelve-month period immediately prior to, and including, the date of any such sale, does not exceed one-third of the aggregate market value of Forte’s common stock held by non-affiliates (as determined by General Instruction I.B.6 of Form S-3), and Forte will remain subject to such limitation for so long as the aggregate market value of Forte’s common stock held by non-affiliates is less than $75 million (as determined by General Instruction I.B.6 of Form S-3).
We are currently eligible to sell securities under Form S-3 only if and to the extent the aggregate market value of securities sold by us pursuant to General Instruction I.B.6 of Form S-3 during the twelve-month period immediately prior to, and including, the date of any such sale, does not exceed one-third of the aggregate market value of our common stock held by non-affiliates (as determined by General Instruction I.B.6 of Form S-3), and we will remain subject to such limitation for so long as the aggregate market value of our common stock held by non-affiliates is less than $75.0 million (as determined by General Instruction I.B.6 of Form S-3).
Certain executive officers, senior management, and board members of the Company participated in this Private Placement, purchasing approximately $1.16 million of shares of common stock at a purchase price of $1.01 per share. In connection with the Private Placement, the Company filed a registration statement on Form S-3 that was declared effective on September 8, 2023.
Certain of our executive officers, senior management, and board members participated in this 2023 Private Placement, purchasing $1.16 million of shares of common stock at a purchase price of $25.25 per share. In connection with the 2023 Private Placement, we filed a registration statement on Form S-3 that was declared effective on September 8, 2023.
Publication of discounts by third-party payors or authorities may lead to further pressure on the prices or reimbursement levels within the country of publication and other countries. Employees and Human Capital As of March 15, 2024, we had 9 full-time employees, primarily engaged in research and development, manufacturing and administration.
Publication of discounts by third-party payors or authorities may lead to further pressure on the prices or reimbursement levels within the country of publication and other countries. Employees and Human Capital As of March 24, 2025, we had 14 full-time employees, primarily engaged in research and development, manufacturing and administration.
As such, while the ATM Facility remains in place, Forte remains restricted in its ability to access additional funding from the sale of securities under Form S-3. 3 Manufacturing and Supply Forte has outsourced the manufacturing of FB-102 to facilities at third party contract manufacturing organizations (CMOs) and the preclinical testing and development to clinical research organizations (CROs).
As such, while the ATM Facility remains in place, we remain restricted in our ability to access additional funding from the sale of securities under Form S-3. Manufacturing and Supply Forte has outsourced the manufacturing of FB102 to facilities at third party contract manufacturing organizations (CMOs) and the preclinical testing and clinical development to clinical research organizations (CROs).
The pre-funded warrants have an exercise price of $0.001 per share of common stock, are immediately exercisable and remain exercisable until exercised in full. The gross proceeds of the Private Placement were approximately $25 million and the Company incurred $272 thousand in issuance costs.
The pre-funded warrants have an exercise price of $0.025 per share of common stock, are immediately exercisable and remain exercisable until exercised in full. The gross proceeds of the 2023 Private Placement were $25.0 million and we incurred $272 thousand in issuance costs.
For example, FDA recently authorized the state of Florida to import certain prescription drugs from Canada for a period of two years to help 9 reduce drug costs, provided that Florida’s Agency for Health Care Administration meets the requirements set forth by the FDA. Other states may follow Florida.
For example, FDA has authorized the state of Florida to develop a program to import certain prescription drugs from Canada for a limited period to help reduce drug costs, provided that Florida’s Agency for Health Care Administration meets the requirements set forth by the FDA. Other states may follow Florida.
On March 31, 2022, Forte entered into an “at-the-market” equity offering program (“ATM Facility”) whereby Forte may from time to time offer and sell shares of its common stock up to an aggregate offering price of $25.0 million during the term of the ATM Facility.
On March 31, 2022, we entered into an ATM Facility whereby we may from time to time offer and sell shares of its common stock up to an aggregate offering price of $25.0 million during the term of the ATM Facility.
Preclinical Studies and IND Preclinical studies include laboratory evaluation of product chemistry and formulation, as well as in vitro and animal studies to assess the potential for adverse events and in some cases, to establish a rationale for therapeutic use. The conduct of preclinical studies is subject to federal regulations and requirements, including GLP regulations for safety/toxicology studies.
Preclinical Studies and IND Preclinical studies include laboratory evaluation of product chemistry and formulation, as well as in vitro and animal studies to assess the potential for adverse events and in some cases, to establish a rationale for therapeutic use.
A sponsor must submit the results of the preclinical tests, together with manufacturing information, analytical data, any available clinical data or literature and plans for clinical studies, among other things, to the FDA as part of an IND.
The conduct of preclinical studies is subject to federal regulations and requirements, including GLP regulations for safety/toxicology studies. 5 A sponsor must submit the results of the preclinical tests, together with manufacturing information, analytical data, any available clinical data or literature and plans for clinical studies, among other things, to the FDA as part of an IND.
Changes in regulations, statutes or the interpretation of existing regulations could impact Forte’s business in the future by requiring, for example: (i) changes to Forte’s manufacturing arrangements; (ii) additions or modifications to product labeling; (iii) the recall or discontinuation of Forte’s approved products; or (iv) additional record-keeping requirements.
Prohibitions or restrictions on sales or withdrawal of future products marketed by Forte could materially affect its business in an adverse way. 10 Changes in regulations, statutes or the interpretation of existing regulations could impact Forte’s business in the future by requiring, for example: (i) changes to Forte’s manufacturing arrangements; (ii) additions or modifications to product labeling; (iii) the recall or discontinuation of Forte’s approved products; or (iv) additional record-keeping requirements.
Vitiligo is a disease of the skin mediated primarily by NK and CD8+ T cells that attack melanocytes leading to patchy depigmentation of the skin. It is estimated that vitiligo affects 2 million people in the U.S (NIH).
FB102 has potentially other autoimmune and autoimmune-related applications including vitiligo, alopecia areata, and type 1 diabetes (T1D). Vitiligo is a disease of the skin mediated primarily by NK and CD8+ T cells that attack melanocytes leading to patchy depigmentation of the skin. It is estimated that vitiligo affects 2 million people in the U.S (NIH).
These changes included aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, effective April 1, 2013, which, due to subsequent legislative amendments, will remain in effect through 2031, with the exception of a temporary suspension implemented under various COVID-19 relief legislation from May 1, 2020 through 2032, unless Congress takes additional action.
These changes included aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, effective April 1, 2013, which, due to subsequent legislative amendments, will remain in effect through 2032, unless Congress takes additional action.
Any action against Forte for violation of these laws, even if Forte successfully defend against it, could cause Forte to incur significant legal expenses and divert Forte’s management’s attention from the operation of its business. Prohibitions or restrictions on sales or withdrawal of future products marketed by Forte could materially affect its business in an adverse way.
Any action against Forte for violation of these laws, even if Forte successfully defend against it, could cause Forte to incur significant legal expenses and divert Forte’s management’s attention from the operation of its business.
We also own two pending PCT applications, one pending application in Taiwan, one pending application in Argentina, and three pending US patent applications related to the FB-102 program. The estimated expiration dates of these patents are 2043-2044.
The patent’s estimated expiration date is 2039. This patent is not material to Forte’s FB102 program. We also own three pending PCT applications, one pending US application, one pending application in Taiwan and one pending application in Argentina related to the FB102 program. The estimated expiration dates of these patents are 2043-2045.
As a result, the coverage determination process may be a time-consuming and costly process that will require Forte to provide scientific clinical, and cost-effective data to support the use of Forte’s approved products to each payor separately, with no assurance that coverage and adequate reimbursement will be obtained.
As a result, the coverage determination process may be a time-consuming and costly process that will require Forte to provide scientific clinical, and cost-effective data to support the use of Forte’s approved products to each payor separately, with no assurance that coverage and adequate reimbursement will be obtained. 12 Third-party payors are increasingly challenging the prices charged, examining the medical necessity and reviewing the cost effectiveness of pharmaceutical products, in addition to questioning their safety and efficacy.
Certain payments made in connection with clinical trials and other work have been deemed to be improper payments to government officials and have led to FCPA enforcement actions. 11 Various laws, regulations and executive orders also restrict the use and dissemination outside of the United States, or the sharing with certain non-U.S. nationals, of information classified for national security purposes, as well as certain products and technical data relating to those products.
Various laws, regulations and executive orders also restrict the use and dissemination outside of the United States, or the sharing with certain non-U.S. nationals, of information classified for national security purposes, as well as certain products and technical data relating to those products.
In June 2021, Forte filed a shelf registration statement on Form S-3 that went effective in June 2021 which allowed Forte to raise up to $300 million in additional capital.
In June 2021, we filed a shelf registration statement on Form S-3 that went effective in June 2021 to register the issuance of up to $300 million in securities.
The global alopecia treatment market was valued at $2.7 billion in 2018, and is projected to reach $3.9 billion by 2026, resulting in a CAGR of 4.6% from 2019 to 2026 (Allied Mkt Research)​. We had approximately $37.1 million in cash and cash equivalents as of December 31, 2023.
The global alopecia treatment market was valued at $2.7 billion in 2018, and is projected to reach $3.9 billion by 2026, registering a CAGR of 4.6% from 2019 to 2026 (Allied Mkt Research)​. Type 1 diabetes is caused by autoreactive T Cells destroying insulin-producing pancreatic β- cells.
Our commercial opportunities will be reduced or eliminated if our competitors develop and commercialize similar products that are safer, more effective, have fewer side effects or are less expensive than any products that we and/or our collaborators may develop.
Our commercial opportunities will be reduced or eliminated if our competitors develop and commercialize similar products that are safer, more effective, have fewer side effects or are less expensive than any products that we and/or our collaborators may develop. 4 Intellectual Property We own one US patent for administering a combination of Gram-positive and Gram-negative bacteria along with metabolites for treatment of a wide variety of skin conditions.
On July 31, 2023, the Company issued 15,166,957 shares of the Company’s common stock at a purchase price of $1.006 per Share, and 9,689,293 pre-funded warrants to purchase shares of common stock at a purchase price of $1.005 per pre-funded warrant ("Private Placement").
On July 31, 2023, we issued 606,678 shares of our common stock at a purchase price of $25.15 per share, and 387,566 pre-funded warrants to purchase shares of common stock at a purchase price of $25.13 per pre-funded warrant ("2023 Private Placement").
We cannot predict how the Supreme Court ruling, other litigation, or the healthcare reform measures of the Biden administration will impact our business. Complying with any new legislation or reversing changes implemented under the ACA could be time-intensive and expensive, resulting in a material adverse effect on our business.
Complying with any new legislation or reversing changes implemented under the ACA could be time-intensive and expensive, resulting in a material adverse effect on our business. 9 In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted.
Item 1. Business Overview Forte Biosciences, Inc. and its subsidiaries ( www.fortebiorx.com ) (“Forte”, “we”, “our”) is a clinical-stage biopharmaceutical company whose lead product candidate, FB-102, is currently in a Phase 1 trial. FB-102 is a proprietary molecule with potentially broad autoimmune and autoimmune-related applications including in such indications as graft-versus-host disease (“GvHD”), vitiligo and alopecia areata (“AA”).
Item 1. Business Overview Forte Biosciences, Inc. and its subsidiaries ( www.fortebiorx.com ) (“Forte”, “we”, “our”) is a clinical-stage biopharmaceutical company whose current lead product candidate is FB102. FB102 is a proprietary anti-CD122 monoclonal antibody therapeutic candidate with potentially broad autoimmune and autoimmune-related indications. Our FB102 program aims to address key pathways implicated in these indications with a CD122 antagonist.
On August 12, 2022, Forte filed an additional prospectus supplement relating to offer and sell an additional $2.7 million of shares of common stock.
On August 12, 2022, we filed an additional prospectus supplement relating to offer and sell an additional $2.7 million of shares of common stock. However, this shelf registration statement on Form S-3 expired in June 2024, and the Company would need to file a new registration statement on Form S-3 to sell additional shares under the ATM Facility.
The Company’s FB-102 program aims to address key pathways implicated in these indications with a CD122 antagonist. CD122 is a subunit of IL-2/IL-15 receptors which are key regulators of NK cells and T cell subsets.
CD122 is a subunit of IL-2/IL-15 receptors which are key regulators of NK cells and certain T cell subsets. In FB102 mechanistic in-vitro studies, human donor T and NK cells were stimulated with either IL2 or IL15 in the presence or absence of FB102.
The primary objective of the Phase 1 trial is to assess the safety, tolerability and pharmacokinetics of single and multiple ascending doses of FB-102 under intravenous and subcutaneous administration. Three cohorts of single ascending doses were successfully completed in March 2024. Cohorts of multiple ascending doses have commenced.
Three cohorts of single and two cohorts of multiple ascending doses in a Phase 1 trial of healthy volunteers were completed in which FB102 demonstrated a good safety profile. The primary objective of the Phase 1 trial was to assess the safety, tolerability and pharmacokinetics of single and multiple ascending doses of FB102. No dose limiting toxicities were observed.
Data obtained from clinical trials are not always conclusive and the FDA may interpret data differently than an applicant does.
Data obtained from clinical trials are not always conclusive and the FDA may interpret data differently than an applicant does. In June 2024, the U.S. Supreme Court overruled the Chevron doctrine in Loper Bright Enterprises v. Raimondo , which historically has provided deference to regulatory agencies’ statutory interpretations in litigation against the government where the law is ambiguous.
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GvHD is a complication that may occur after an allogeneic transplant and is where donor's T-cells attack the patient's healthy cells . There are 2 main types of GvHD – acute GvHD and chronic GvHD. The severity of symptoms range from mild to fatal.
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FB102 significantly inhibited proliferation (4-5x inhibition in the proliferation of T cells and 6-8 fold inhibition in the proliferation of NK cells) and also inhibited activation of T cells. The level of FB102 inhibition of proliferation and activation was at levels comparable to unstimulated cells.
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US prevalence of acute GvHD is estimated at approximately 5,000 cases and occurs in up to 50% of allogeneic stem cell transplant recipients. Onset of acute GvHD typically occurs within 3 months of transplant. Symptoms occur in the skin (rash), GI tract (vomiting, diarrhea) and liver (jaundice).
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Human donor regulatory T cell (Treg) studies stimulated with IL2 demonstrated comparable proliferation both in the presence and absence of FB102. Additionally, in-vitro assays demonstrated superiority of FB102 compared to competing antibodies. In the 4- and 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%).
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US prevalence of chronic GvHD is estimated at approximately 14,000 cases and occurs in up to 40% of recipients. In addition to symptoms in the skin, GI tract and liver, chronic GvHD may also manifest itself in the lungs, mucosal surfaces (eyes, mouth, GU tract), muscle and joints (connective tissue).
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Additionally, after multiple doses at exposures comparable to human therapeutic doses, Treg levels in the FB102 dosing arm were similar to vehicle supporting the in-vitro data and the mechanism of action of FB102.
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Intellectual Property We own one US patent for administering a combination of Gram-positive and Gram-negative bacteria along with metabolites for treatment of a wide variety of skin conditions. The patent’s estimated expiration date is 2039. This patent is not material to Forte’s FB-102 program.
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FB102 demonstrated significant reductions in the NK cell pharmacodynamic marker (greater than approximately 70%). Based on the successful completion of the phase 1 healthy volunteer cohorts, we initiated a patient-based trial in celiac disease in the third quarter of 2024. The trial is currently enrolling and top-line results are expected in the second quarter of 2025.
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In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted.
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Celiac disease is an autoimmune disease that is triggered by consuming gluten and results in damage to the small intestine. Symptoms include diarrhea, fatigue, headaches, anemia, nausea and dermatitis herpetiformis (an itchy skin rash). A significant patient population of celiac disease patients do not respond to gluten free diet.
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Third-party payors are increasingly challenging the prices charged, examining the medical necessity and reviewing the cost effectiveness of pharmaceutical products, in addition to questioning their safety and efficacy.
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The health consequences for not treating include malnourishment, cancer, other autoimmune conditions. It is estimated that 1:133 in US (2.5 million people) have celiac disease (Fasano, Arch Intern Med. 2003 PMID: 12578508) and that 0.3% to 0.5% of celiac disease patients are non-responsive (Malamut Gastroenterology. 2024 38556189). There are no approved treatment options for celiac disease.
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CD8+ T cells with receptors recognizing β-cell specific peptides are enriched in pancreatic islets of T1D patients. Environmental stress causes β-cells to upregulate MHC and to express IL-15 and IL-15RA. (Herold 2024 Nat Rev Immunol. PMID 38308004). It is estimated that 64,000 people are diagnosed with T1D annually (https://beyondtype1.org/type-1-diabetes-statistics/).
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We had approximately $58.4 million in cash, cash equivalents and short-term investments as of December 31, 2024. Our common stock is publicly traded on the Nasdaq Capital Market under the ticker symbol FBRX.
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The pre-funded warrants have an exercise price of $0.001 per share of common stock, are immediately exercisable and remain exercisable until exercised in full. The gross proceeds of the 2024 Private Placement were $53.0 million and we incurred $3.4 million in issuance costs.
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In connection with the 2024 Private Placement, we filed a registration statement on Form S-3 that was declared effective on December 20, 2024.
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We also own one pending PCT application that is not material to Forte's FB102 program.
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This landmark Supreme Court decision may invite various stakeholders to bring lawsuits against the FDA and other federal agencies to challenge longstanding decisions and policies, such as market exclusivities, which could lead to uncertainties in the industry.
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Further, changes in the leadership of the FDA and other federal agencies under the Trump administration, as well as polices implemented by the Department of Government Efficiency, may lead to new policies, changes in the regulations, or disruptions to the operations of federal agencies, any of which may impact our clinical development plans.
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We cannot predict how the Supreme Court ruling, other litigation, or the healthcare reform measures of the Trump administration will impact our business.
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Only high-expenditure single-source drugs that have been approved for at least 7 years (11 years for single-source biologics) can qualify for negotiation, with the negotiated price taking effect two years after the selection year. For 2026, CMS selected 10 high-cost Medicare Part D drugs in 2023 and the negotiated maximum fair price for each drug has been announced.
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CMS has selected 15 additional Medicare Part D drugs for negotiated maximum fair pricing in 2027. For 2028, up to an additional 15 drugs, which may be covered under either Medicare Part B or Part D, will be selected, and for 2029 and subsequent years, up to 20 additional Part B or Part D drugs will be selected.
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Certain payments made in connection with clinical trials and other work have been deemed to be improper payments to government officials and have led to FCPA enforcement actions.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

159 edited+43 added−27 removed445 unchanged
Biggest changeThese risks include, among others, the following: • Forte’s business is almost entirely dependent on the success of developing FB-102, which may not be successful. • Results from early preclinical and clinical studies may not be predictive of results from later stage studies or clinical trials. • Forte has no approved products and has a limited operating history, which may make it difficult to evaluate its technology and product development capabilities and predict its future performance. • Forte has incurred net losses in every year since its inception and anticipates that it will continue to incur net losses in the future. • Even after the Private Placement, Forte 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, FB-102, or any future product candidates. • Forte’s ability to successfully develop any product candidate is highly uncertain. • Clinical development is a lengthy and expensive process, with an uncertain outcome.
Biggest changeThese risks include, among others, the following: • Forte 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. • Forte’s business is almost entirely dependent on the success of developing FB102, which may not be successful. • Results from early preclinical studies and clinical trials may not be predictive of results from later stage studies or clinical trials. • Forte has no approved products and has a limited operating history, which may make it difficult to evaluate its technology and product development capabilities and predict its future performance. • Forte has incurred net losses in every year since its inception and anticipates that it will continue to incur net losses in the future. • Forte’s ability to successfully develop any product candidate is highly uncertain. • Clinical development is a lengthy and expensive process, with an uncertain outcome.
Forte also may experience numerous unforeseen events during, or as a result of, any future clinical trials that Forte could conduct that could delay or prevent its ability to receive marketing approval or commercialize its product candidate, including: • regulators or IRBs, or ethics committees may not authorize Forte or its investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; • Forte may experience delays in reaching, or fail to reach, agreement on acceptable terms with prospective trial sites and prospective CROs, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • clinical trials of any product candidate may fail to show safety, purity or potency, or produce negative or inconclusive results and Forte may decide, or regulators may require it, to conduct additional preclinical studies or clinical trials or Forte may decide to abandon product development programs; • the number of patients required for clinical trials of any product candidate may be larger than Forte anticipates, enrollment in these clinical trials may be slower than Forte anticipates, or participants may drop out of these clinical trials or fail to return for post-treatment follow-up at a higher rate than Forte anticipates; • clinical trials of its product candidates may produce negative or inconclusive results, and Forte may decide, or regulators may require it, to conduct additional clinical trials or abandon product development programs; • regulators may require Forte to perform additional or unanticipated clinical trials to obtain approval or Forte may be subject to additional post-marketing testing requirements to maintain regulatory approval; • regulators may revise the requirements for approving its product candidates, or such requirements may not be as Forte anticipate; • Forte’s third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to it in a timely manner, or at all, or may deviate from the clinical trial protocol or drop out of the trial, which may require that Forte add new clinical trial sites or investigators; • the cost of clinical trials of its product candidates may be more than Forte anticipates or more than its available financial resources, and Forte may need to delay or suspend one or more trials until Forte completes additional financing transactions or otherwise receives adequate funding; • the supply or quality of Forte’s product candidates or other materials necessary to conduct clinical trials of its product candidate may be insufficient or inadequate and may not achieve compliance with applicable cGMPs; • Forte’s product candidates may have undesirable side effects or other unexpected characteristics, causing it or its investigators, regulators or IRBs or ethics committees to suspend or terminate clinical trials, or reports may arise from clinical testing of its product candidate that raise safety or efficacy concerns about its product candidate; • clinical trials of Forte’s product candidates may produce negative or inconclusive results, which may result in it deciding, or regulators requiring it, to conduct additional clinical trials or suspend or terminate its clinical trials; • the FDA or other regulatory authorities may disagree with the design, implementation or results of its clinical trials, or require Forte to submit additional data such as long-term toxicology studies or impose other requirements before permitting it to initiate a clinical trial; • regulatory authorities may suspend or withdraw their approval of a product or impose restrictions on its distribution; • Forte’s limited experience in filing and pursuing a BLA necessary to gain regulatory approval; • any failure to develop substantial evidence of clinical efficacy and safety, and to develop quality standards and manufacturing processes to demonstrate consistent safety, purity, identity, and/or potency standards; • a decision by Forte, IRBs, or regulators to suspend or terminate its clinical trials for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks; • regulatory inspections of its clinical trials, clinical trial sites or manufacturing facilities, which may, among other things, require Forte to undertake corrective action or suspend or terminate its clinical trials if regulators find it not to be in compliance with applicable regulatory requirements; • Forte’s ability to produce sufficient quantities of the product candidate to complete its clinical trials; 20 • varying interpretations of the data generated from its clinical trials; and • changes in governmental regulations or administrative action.
Forte also may experience numerous unforeseen events during, or as a result of, any future clinical trials that Forte could conduct that could delay or prevent its ability to receive marketing approval or commercialize its product candidate, including: • regulators or IRBs, or ethics committees may not authorize Forte or its investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; 20 • Forte may experience delays in reaching, or fail to reach, agreement on acceptable terms with prospective trial sites and prospective CROs, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • clinical trials of any product candidate may fail to show safety, purity or potency, or produce negative or inconclusive results and Forte may decide, or regulators may require it, to conduct additional preclinical studies or clinical trials or Forte may decide to abandon product development programs; • the number of patients required for clinical trials of any product candidate may be larger than Forte anticipates, enrollment in these clinical trials may be slower than Forte anticipates, or participants may drop out of these clinical trials or fail to return for post-treatment follow-up at a higher rate than Forte anticipates; • clinical trials of its product candidates may produce negative or inconclusive results, and Forte may decide, or regulators may require it, to conduct additional clinical trials or abandon product development programs; • regulators may require Forte to perform additional or unanticipated clinical trials to obtain approval or Forte may be subject to additional post-marketing testing requirements to maintain regulatory approval; • regulators may revise the requirements for approving its product candidates, or such requirements may not be as Forte anticipate; • Forte’s third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to it in a timely manner, or at all, or may deviate from the clinical trial protocol or drop out of the trial, which may require that Forte add new clinical trial sites or investigators; • the cost of clinical trials of its product candidates may be more than Forte anticipates or more than its available financial resources, and Forte may need to delay or suspend one or more trials until Forte completes additional financing transactions or otherwise receives adequate funding; • the supply or quality of Forte’s product candidates or other materials necessary to conduct clinical trials of its product candidate may be insufficient or inadequate and may not achieve compliance with applicable cGMPs; • Forte’s product candidates may have undesirable side effects or other unexpected characteristics, causing it or its investigators, regulators or IRBs or ethics committees to suspend or terminate clinical trials, or reports may arise from clinical testing of its product candidate that raise safety or efficacy concerns about its product candidate; • clinical trials of Forte’s product candidates may produce negative or inconclusive results, which may result in it deciding, or regulators requiring it, to conduct additional clinical trials or suspend or terminate its clinical trials; • the FDA or other regulatory authorities may disagree with the design, implementation or results of its clinical trials, or require Forte to submit additional data such as long-term toxicology studies or impose other requirements before permitting it to initiate a clinical trial; • regulatory authorities may suspend or withdraw their approval of a product or impose restrictions on its distribution; • Forte’s limited experience in filing and pursuing a BLA necessary to gain regulatory approval; • any failure to develop substantial evidence of clinical efficacy and safety, and to develop quality standards and manufacturing processes to demonstrate consistent safety, purity, identity, and/or potency standards; • a decision by Forte, IRBs, or regulators to suspend or terminate its clinical trials for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks; • regulatory inspections of its clinical trials, clinical trial sites or manufacturing facilities, which may, among other things, require Forte to undertake corrective action or suspend or terminate its clinical trials if regulators find it not to be in compliance with applicable regulatory requirements; • Forte’s ability to produce sufficient quantities of the product candidate to complete its clinical trials; • varying interpretations of the data generated from its clinical trials; and • changes in governmental regulations or administrative action.
The U.S. government has made and continues to make significant additional changes in U.S. trade policy and may continue to take future actions that could negatively impact U.S. trade.
The U.S. government has made and continues to make significant additional changes in U.S. trade policy and may continue to take future actions that could negatively impact U.S. trade.
For example, legislation has been introduced in Congress to limit certain U.S. biotechnology companies from using equipment or services produced or provided by select Chinese biotechnology companies, and others in Congress have advocated for the use of existing executive branch authorities to limit those Chinese service providers’ ability to engage in business in the U.S.
For example, legislation has been introduced in Congress to limit certain U.S. biotechnology companies from using equipment or services produced or provided by select Chinese biotechnology companies, and others in Congress have advocated for the use of existing executive branch authorities to limit those Chinese service providers’ ability to engage in business in the U.S.
We cannot predict what actions may ultimately be taken with respect to trade relations between the United States and China or other countries, what products and services may be subject to such actions or what actions may be taken by the other countries in retaliation.
We cannot predict what actions may ultimately be taken with respect to trade relations between the United States and China or other countries, what products and services may be subject to such actions or what actions may be taken by the other countries in retaliation.
HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions; • the federal Physician Payments Sunshine Act requires applicable manufacturers of covered drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to annually report to CMS information regarding payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician healthcare professionals (such as physician assistants and nurse practitioners, among others), and teaching hospitals as well as information regarding ownership and investment interests held by physicians and their immediate family members; • federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; • analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, and may be broader in scope than their federal equivalents; state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts; and • GDPR and other ex-U.S. protections.
HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions; 31 • the federal Physician Payments Sunshine Act requires applicable manufacturers of covered drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to annually report to CMS information regarding payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician healthcare professionals (such as physician assistants and nurse practitioners, among others), and teaching hospitals as well as information regarding ownership and investment interests held by physicians and their immediate family members; • federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; • analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, and may be broader in scope than their federal equivalents; state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts; and • GDPR and other ex-U.S. protections.
Relationships Forte enters into may pose a number of risks, including the following: • third parties have, and future third-party collaborators may have, significant discretion in determining the efforts and resources that they will apply; • current and future third parties may not perform their obligations as expected; • current and future third parties may not pursue development and commercialization of any product candidate that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the third parties’ strategic focus or available funding, or external factors, such as a strategic merger that may divert resources or create competing priorities; • third parties may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; • current and future third parties could independently develop, or develop with third parties, products that compete directly or indirectly with Forte’s products and product candidate if the third parties believe that the competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • product candidates discovered in collaboration with Forte may be viewed by its current or future third parties as competitive with their own product candidate or products, which may cause such third parties to cease to devote resources to the commercialization of its product candidate; • current and future third parties may fail to comply with applicable regulatory requirements regarding the development, manufacture, distribution or marketing of a product candidate or product; 46 • current and future third parties with marketing and distribution rights to one or more of Forte’s product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product or products; • disagreements with current or future third parties, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays or terminations of the research, development or commercialization of product candidate, might lead to additional responsibilities for Forte with respect to product candidate, or might result in litigation or arbitration, any of which would be time-consuming and expensive; • current and future third parties may not properly maintain or defend its intellectual property rights or may use its proprietary information in such a way as to invite litigation that could jeopardize or invalidate its intellectual property or proprietary information or expose Forte to potential litigation; • current and future third parties may infringe the intellectual property rights of third parties, which may expose Forte to litigation and potential liability; • if a current or future third parties of ours is involved in a business combination, the collaborator might deemphasize or terminate the development or commercialization of any product candidate licensed to it by Forte; and • current and future relationships may be terminated by the collaborator, and, if terminated, Forte could be required to raise additional capital to pursue further development or commercialization of the applicable product candidate.
Relationships Forte enters into may pose a number of risks, including the following: • third parties have, and future third-party collaborators may have, significant discretion in determining the efforts and resources that they will apply; • current and future third parties may not perform their obligations as expected; • current and future third parties may not pursue development and commercialization of any product candidate that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the third parties’ strategic focus or available funding, or external factors, such as a strategic merger that may divert resources or create competing priorities; • third parties may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; • current and future third parties could independently develop, or develop with third parties, products that compete directly or indirectly with Forte’s products and product candidate if the third parties believe that the competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • product candidates discovered in collaboration with Forte may be viewed by its current or future third parties as competitive with their own product candidate or products, which may cause such third parties to cease to devote resources to the commercialization of its product candidate; • current and future third parties may fail to comply with applicable regulatory requirements regarding the development, manufacture, distribution or marketing of a product candidate or product; • current and future third parties with marketing and distribution rights to one or more of Forte’s product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product or products; • disagreements with current or future third parties, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays or terminations of the research, development or commercialization of product candidate, might lead to additional responsibilities for Forte with respect to product candidate, or might result in litigation or arbitration, any of which would be time-consuming and expensive; • current and future third parties may not properly maintain or defend its intellectual property rights or may use its proprietary information in such a way as to invite litigation that could jeopardize or invalidate its intellectual property or proprietary information or expose Forte to potential litigation; • current and future third parties may infringe the intellectual property rights of third parties, which may expose Forte to litigation and potential liability; • if a current or future third parties of ours is involved in a business combination, the collaborator might deemphasize or terminate the development or commercialization of any product candidate licensed to it by Forte; and • current and future relationships may be terminated by the collaborator, and, if terminated, Forte could be required to raise additional capital to pursue further development or commercialization of the applicable product candidate.
Forte may seek regulatory approval of its product candidate outside of the United States and, if so, Forte expects that it will be subject to additional risks related to operating in foreign countries if Forte obtains the necessary approvals, including: • differing regulatory requirements in foreign countries; 25 • unexpected changes in tariffs, trade barriers, price and exchange controls, import or export controls, and other regulatory requirements; • economic weakness, including inflation, or political instability in particular foreign economies and markets; • compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • foreign taxes, including withholding of payroll taxes; • foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; • difficulties staffing and managing foreign operations; • workforce uncertainty in countries where labor unrest is more common than in the United States; • potential liability under the Foreign Corrupt Practices Act (“FCPA”), or comparable foreign regulations; • challenges enforcing its contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States; • production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and • business interruptions resulting from geo-political actions, including war, terrorism and public health crises, such as COVID-19 and its variants.
Forte may seek regulatory approval of its product candidate outside of the United States and, if so, Forte expects that it will be subject to additional risks related to operating in foreign countries if Forte obtains the necessary approvals, including: • differing regulatory requirements in foreign countries; • unexpected changes in tariffs, trade barriers, price and exchange controls, import or export controls, and other regulatory requirements; • economic weakness, including inflation, or political instability in particular foreign economies and markets; • compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • foreign taxes, including withholding of payroll taxes; • foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; • difficulties staffing and managing foreign operations; • workforce uncertainty in countries where labor unrest is more common than in the United States; • potential liability under the Foreign Corrupt Practices Act (“FCPA”), or comparable foreign regulations; • challenges enforcing its contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States; • production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and • business interruptions resulting from geo-political actions, including war, terrorism and public health crises, such as COVID-19 and its variants.
For example: • others may be able to make products that are similar to Forte’s product candidate or utilize similar technology but that are not covered by the claims of the patents that Forte may own; • Forte, or its current or future licensors or collaborators, might not have been the first to make the inventions covered by the issued patent or pending patent application that Forte may own in the future; • Forte, or its current or future licensors or collaborators, might not have been the first to file patent applications covering certain of its or their inventions; • others may independently develop similar or alternative technologies or duplicate any of Forte’s technologies without infringing Forte’s owned intellectual property rights; • it is possible that Forte’s future pending owned patent applications will not lead to issued patents; • future issued patents that Forte holds rights to may be held invalid or unenforceable, including as a result of legal challenges by its competitors or other third parties; • Forte’s competitors or other third parties might conduct research and development activities in countries where Forte does not have patent rights and then use the information learned from such activities to develop competitive products for sale in its major commercial markets; • Forte may not develop additional proprietary technologies that are patentable; • the patents of others may harm Forte’s business; and • Forte may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property.
For example: • others may be able to make products that are similar to Forte’s product candidate or utilize similar technology but that are not covered by the claims of the patents that Forte may own; • Forte, or its current or future licensors or collaborators, might not have been the first to make the inventions covered by the issued patent or pending patent application that Forte may own in the future; • Forte, or its current or future licensors or collaborators, might not have been the first to file patent applications covering certain of its or their inventions; • others may independently develop similar or alternative technologies or duplicate any of Forte’s technologies without infringing Forte’s owned intellectual property rights; 45 • it is possible that Forte’s future pending owned patent applications will not lead to issued patents; • future issued patents that Forte holds rights to may be held invalid or unenforceable, including as a result of legal challenges by its competitors or other third parties; • Forte’s competitors or other third parties might conduct research and development activities in countries where Forte does not have patent rights and then use the information learned from such activities to develop competitive products for sale in its major commercial markets; • Forte may not develop additional proprietary technologies that are patentable; • the patents of others may harm Forte’s business; and • Forte may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property.
If its product candidate receives marketing approval and Forte or others identify undesirable side effects caused by such product candidate (or any other similar drugs) after such approval, a number of potentially significant negative consequences could result, including: • regulatory authorities may withdraw or limit their approval of such product candidate; • regulatory authorities may require the addition of labeling statements, such as a “boxed” warning or a contraindication; • Forte may be required to create a medication guide outlining the risks of such side effects for distribution to patients; • Forte may be required to change the way such product candidate is distributed or administered, conduct additional clinical trials or change the labeling of the product candidate; • regulatory authorities may require a Risk Evaluation and Mitigation Strategy (“REMS”), plan to mitigate risks, which could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools; • Forte may be subject to regulatory investigations and government enforcement actions; • Forte may decide to remove such product candidate from the marketplace; • Forte could be sued and held liable for injury caused to individuals exposed to or using its product candidate; and • Forte’s reputation may suffer.
If its product candidate receives marketing approval and Forte or others identify undesirable side effects caused by such product candidate (or any other similar drugs) after such approval, a number of potentially significant negative consequences could result, including: • regulatory authorities may withdraw or limit their approval of such product candidate; • regulatory authorities may require the addition of labeling statements, such as a “boxed” warning or a contraindication; • Forte may be required to create a medication guide outlining the risks of such side effects for distribution to patients; • Forte may be required to change the way such product candidate is distributed or administered, conduct additional clinical trials or change the labeling of the product candidate; 34 • regulatory authorities may require a Risk Evaluation and Mitigation Strategy (“REMS”), plan to mitigate risks, which could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools; • Forte may be subject to regulatory investigations and government enforcement actions; • Forte may decide to remove such product candidate from the marketplace; • Forte could be sued and held liable for injury caused to individuals exposed to or using its product candidate; and • Forte’s reputation may suffer.
Even if we are able to establish agreements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including: • the failure of the third party to manufacture our product candidates according to our schedule and specifications, or at all, including if our third-party contractors give greater priority to the supply of other products over our product candidates or otherwise do not satisfactorily perform according to the terms of the agreements between us and them; • the reduction or termination of production or deliveries by suppliers, or the raising or prices or renegotiation of terms; • the termination or nonrenewal of arrangements or agreements by our third-party contractors at a time that is costly or inconvenient for us; • the breach by the third-party contractors of our agreements with them; 45 • the failure of third-party contractors to comply with applicable regulatory requirements, including cGMPs; • the breach by the third-party contractors of our agreements with them; • the failure of the third party to manufacture our product candidates according to our specifications; • the mislabeling of clinical supplies, potentially resulting in the wrong dose amounts being supplied or active drug or placebo not being properly identified; • clinical supplies not being delivered to clinical sites on time, leading to clinical trial interruptions, or of drug supplies not being distributed to commercial vendors in a timely manner, resulting in lost sales; and • the misappropriation of our proprietary information, including our trade secrets and know-how.
Even if we are able to establish agreements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including: • the failure of the third party to manufacture our product candidates according to our schedule and specifications, or at all, including if our third-party contractors give greater priority to the supply of other products over our product candidates or otherwise do not satisfactorily perform according to the terms of the agreements between us and them; • the reduction or termination of production or deliveries by suppliers, or the raising or prices or renegotiation of terms; • the termination or nonrenewal of arrangements or agreements by our third-party contractors at a time that is costly or inconvenient for us; • the breach by the third-party contractors of our agreements with them; • the failure of third-party contractors to comply with applicable regulatory requirements, including cGMPs; • the breach by the third-party contractors of our agreements with them; • the failure of the third party to manufacture our product candidates according to our specifications; • the mislabeling of clinical supplies, potentially resulting in the wrong dose amounts being supplied or active drug or placebo not being properly identified; • clinical supplies not being delivered to clinical sites on time, leading to clinical trial interruptions, or of drug supplies not being distributed to commercial vendors in a timely manner, resulting in lost sales; and • the misappropriation of our proprietary information, including our trade secrets and know-how.
Any product candidate Forte seeks to develop could be delayed in receiving, or fail to receive, regulatory approval for many reasons, including the following: • the FDA or comparable foreign regulatory authorities may disagree with the design, including study population, dose level, dose regimen, endpoint measure of efficacy, and bioanalytical assay methods, or implementation of its clinical trials; • Forte may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that its product candidate is safe and effective for its proposed indication; • the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval; • Forte may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks; • the FDA or comparable foreign regulatory authorities may disagree with its interpretation of data from preclinical studies or clinical trials; • the data collected from clinical trials of its product candidate may not be sufficient to support the submission of a BLA or other submission or to obtain regulatory approval in the United States or elsewhere; • the FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes or facilities of third-party manufacturers with which Forte contracts for clinical and commercial supplies; and • the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering its clinical data insufficient for approval.
Any product candidate Forte seeks to develop could be delayed in receiving, or fail to receive, regulatory approval for many reasons, including the following: • the FDA or comparable foreign regulatory authorities may disagree with the design, including study population, dose level, dose regimen, endpoint measure of efficacy, and bioanalytical assay methods, or implementation of its clinical trials; • Forte may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that its product candidate is safe and effective for its proposed indication; • the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval; 33 • Forte may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks; • the FDA or comparable foreign regulatory authorities may disagree with its interpretation of data from preclinical studies or clinical trials; • the data collected from clinical trials of its product candidate may not be sufficient to support the submission of a BLA or other submission or to obtain regulatory approval in the United States or elsewhere; • the FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes or facilities of third-party manufacturers with which Forte contracts for clinical and commercial supplies; and • the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering its clinical data insufficient for approval.
There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution, but the exceptions and safe harbors are drawn narrowly and require strict compliance in order to offer protection; • federal civil and criminal false claims laws, including the FCA, and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, false or fraudulent claims for payment to, or approval by Medicare, Medicaid, or other federal healthcare programs, knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim or an obligation to pay or 29 transmit money to the federal government, or knowingly concealing or knowingly and improperly avoiding or decreasing or concealing an obligation to pay money to the federal government.
There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution, but the exceptions and safe harbors are drawn narrowly and require strict compliance in order to offer protection; • federal civil and criminal false claims laws, including the FCA, and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, false or fraudulent claims for payment to, or approval by Medicare, Medicaid, or other federal healthcare programs, knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim or an obligation to pay or transmit money to the federal government, or knowingly concealing or knowingly and improperly avoiding or decreasing or concealing an obligation to pay money to the federal government.
For example, in August 2022, Congress passed the Inflation Reduction Act of 2022, which includes prescription drug provisions that have significant implications for the pharmaceutical industry and Medicare beneficiaries, including allowing the federal government to negotiate a maximum fair price for certain high-priced single source Medicare drugs, imposing penalties and excise tax for manufacturers that fail to comply with the drug price negotiation requirements, requiring inflation rebates for all Medicare Part B and Part D drugs, with limited exceptions, if their drug prices increase faster than inflation, and redesigning Medicare Part D to reduce out-of-pocket prescription drug costs for beneficiaries, among other changes.
For example, in August 2022, Congress passed the Inflation Reduction Act of 2022, which includes prescription drug provisions that have significant implications for the pharmaceutical industry and Medicare beneficiaries, including allowing the federal government to negotiate a maximum fair price for certain high-priced single source Medicare drugs, imposing penalties and excise tax for manufacturers that fail to comply with the drug price negotiation requirements, requiring inflation rebates for all Medicare Part B and Part D drugs, with limited exceptions, if their drug prices increase faster than inflation, and redesigning Medicare Part D to reduce out-of-pocket prescription 19 drug costs for beneficiaries, among other changes.
A suspension or termination may be imposed due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or its clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a product or treatment, failure to establish or achieve clinically meaningful trial endpoints, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.
A suspension or termination may be imposed due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or its clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the 21 imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a product or treatment, failure to establish or achieve clinically meaningful trial endpoints, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.
Moreover, if disputes over intellectual property that Forte has optioned or licensed prevent or impair our ability to maintain such arrangements on commercially acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates, which could have a material adverse effect on our business, financial conditions, results of operations, and growth prospects.
Moreover, if disputes over intellectual property that Forte has optioned or licensed prevent or impair our ability to maintain such arrangements on 39 commercially acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates, which could have a material adverse effect on our business, financial conditions, results of operations, and growth prospects.
An adverse result in any litigation proceeding could put one or more of its owned future patents at risk of being invalidated or interpreted narrowly. Even if Forte establishes infringement, the court may decide not to grant an 43 injunction against further infringing activity and instead award only monetary damages, which may or may not be an adequate remedy.
An adverse result in any litigation proceeding could put one or more of its owned future patents at risk of being invalidated or interpreted narrowly. Even if Forte establishes infringement, the court may decide not to grant an injunction against further infringing activity and instead award only monetary damages, which may or may not be an adequate remedy.
Future growth would impose significant added responsibilities on members of management, including: • identifying, recruiting, compensating, integrating, maintaining and motivating additional employees; • managing its internal research and development efforts effectively, including identifying clinical candidates, scaling its manufacturing process and navigating the clinical and FDA review process for its product candidate; and • improving its operational, financial and management controls, reporting systems and procedures.
Future growth would impose significant added responsibilities on members of management, including: • identifying, recruiting, compensating, integrating, maintaining and motivating additional employees; • managing its internal research and development efforts effectively, including identifying clinical candidates, scaling its manufacturing process and navigating the clinical and FDA review process for its product candidate; and 24 • improving its operational, financial and management controls, reporting systems and procedures.
Moreover, because of the extensive time required for development, testing and 36 regulatory review of a potential product, it is possible that, before any particular product candidate can be commercialized, any related patent that may issue to Forte may expire or remain in force for only a short period following commercialization, thereby reducing any advantage of the patent.
Moreover, because of the extensive time required for development, testing and regulatory review of a potential product, it is possible that, before any particular product candidate can be commercialized, any related patent that may issue to Forte may expire or remain in force for only a short period following commercialization, thereby reducing any advantage of the patent.
Such a license may not be available on commercially reasonable terms or at all. Even if Forte is able to obtain a license, the license would likely obligate Forte to pay license fees or royalties or both, and the rights granted to Forte might be non-exclusive, which could result in its competitors gaining access to the same intellectual property.
Such a license may not be available on commercially reasonable terms or at all. Even if Forte is able to obtain a license, the license would likely obligate Forte to pay license 44 fees or royalties or both, and the rights granted to Forte might be non-exclusive, which could result in its competitors gaining access to the same intellectual property.
If these third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct our clinical trials in accordance with regulatory requirements or our stated protocols, or if these third parties need to be replaced, we will not be able to obtain, or may be delayed in obtaining, marketing approvals for our product candidates and will not be able to, or may be delayed in our efforts to, successfully commercialize our product candidates.
If these third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct our clinical trials in accordance with regulatory requirements or our stated protocols, or if these third parties need to be replaced, we will not be able to 46 obtain, or may be delayed in obtaining, marketing approvals for our product candidates and will not be able to, or may be delayed in our efforts to, successfully commercialize our product candidates.
Any action for violation of these laws, even if successfully defended, could cause a pharmaceutical 30 manufacturer to incur significant legal expenses and divert management’s attention from the operation of the business. Prohibitions or restrictions on sales or withdrawal of future marketed products could materially affect business in an adverse way.
Any action for violation of these laws, even if successfully defended, could cause a pharmaceutical manufacturer to incur significant legal expenses and divert management’s attention from the operation of the business. Prohibitions or restrictions on sales or withdrawal of future marketed products could materially affect business in an adverse way.
Intellectual property generated under a government funded program is also subject to certain reporting requirements, compliance with which may require us to expend substantial resources. In addition, the United States government requires that any products embodying any of these inventions or produced through the use of any of these inventions be manufactured substantially in the United States.
Intellectual property generated under a government funded program is also subject to certain reporting requirements, compliance with which may require us to expend substantial resources. In addition, the United States 40 government requires that any products embodying any of these inventions or produced through the use of any of these inventions be manufactured substantially in the United States.
Any delays in its future clinical development programs may harm its business, financial condition and prospects significantly. Forte’s planned additional preclinical studies or future clinical trials or those of its future collaborators may reveal significant adverse events and may result in a safety profile that could inhibit regulatory approval or market acceptance of any of its product candidates.
Any delays in its future clinical development programs may harm its business, financial condition and prospects significantly. Forte’s planned additional preclinical studies or current and future clinical trials or those of its future collaborators may reveal significant adverse events and may result in a safety profile that could inhibit regulatory approval or market acceptance of any of its product candidates.
Many of its competitors have substantially greater financial, technical and other resources, such as larger research and development staff, experienced marketing and manufacturing organizations and well-established sales forces. Smaller or 22 early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies.
Many of its competitors have substantially greater financial, technical and other resources, such as larger research and development staff, experienced marketing and manufacturing organizations and well-established sales forces. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies.
Such changes may include changes in: • FDA regulations; • laws related to product candidate labeling; • advertising and marketing laws and practices; • laws and programs restricting the sale and advertising of certain products; 28 • increased regulatory scrutiny of, and increased litigation involving, product claims and concerns regarding the actual or possible effects or side effects of its product candidate; and • state and federal consumer protection and disclosure laws.
Such changes may include changes in: • FDA regulations; • laws related to product candidate labeling; • advertising and marketing laws and practices; • laws and programs restricting the sale and advertising of certain products; • increased regulatory scrutiny of, and increased litigation involving, product claims and concerns regarding the actual or possible effects or side effects of its product candidate; and • state and federal consumer protection and disclosure laws.
Violations of Trade Laws can result in substantial criminal fines and civil penalties, imprisonment, the loss of trade privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm, and other consequences. Forte has direct or indirect interactions with officials and employees of government agencies or government-affiliated hospitals, universities, and other organizations.
Violations of Trade Laws can result in substantial criminal fines and civil penalties, imprisonment, the loss of trade 36 privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm, and other consequences. Forte has direct or indirect interactions with officials and employees of government agencies or government-affiliated hospitals, universities, and other organizations.
Despite Forte’s efforts, any of the aforementioned parties may breach the agreements and disclose Forte’s proprietary information, including its trade secrets, or there may be a lapses or failures in its physical and electronic security systems which lead to its proprietary information being disclosed, and Forte may not be able to obtain adequate remedies in the event of any such breaches.
Despite Forte’s efforts, any of the aforementioned parties may breach the agreements and disclose Forte’s proprietary information, including its trade secrets, or there may be lapses or failures in its physical and electronic security systems which lead to its proprietary information being disclosed, and Forte may not be able to obtain adequate remedies in the event of any such breaches.
Such claims could have a material adverse effect on Forte’s business, financial condition, results of operations, and prospects. Third-party claims of intellectual property infringement, misappropriation or other violation against Forte or its collaborators may prevent or delay the development and commercialization of any product candidates Forte develops and other technologies.
Such claims could have a material adverse effect on Forte’s business, financial condition, results of operations, and prospects. 43 Third-party claims of intellectual property infringement, misappropriation or other violation against Forte or its collaborators may prevent or delay the development and commercialization of any product candidates Forte develops and other technologies.
As such, we monitor third-party patents in the fields in which Forte is developing its product candidate. In addition, because patent applications can take many years to issue, there may be currently 42 pending patent applications that may later result in issued patents that future Forte product candidates or other technologies may infringe.
As such, we monitor third-party patents in the fields in which Forte is developing its product candidate. In addition, because patent applications can take many years to issue, there may be currently pending patent applications that may later result in issued patents that future Forte product candidates or other technologies may infringe.
The third parties we rely on for these services may also have relationships with other entities, some of 44 which may be our competitors, for whom they may also be conducting clinical trials or other drug development activities, which could affect their performance on our behalf. Some of these third parties may terminate their engagements with us at any time.
The third parties we rely on for these services may also have relationships with other entities, some of which may be our competitors, for whom they may also be conducting clinical trials or other drug development activities, which could affect their performance on our behalf. Some of these third parties may terminate their engagements with us at any time.
If Forte does not receive the funding Forte expects under these agreements, its development of its technology and product candidates could be delayed, and Forte may need additional resources to develop product candidate and its technology. All of the risks relating to product development, regulatory approval and commercialization described in this prospectus also apply to the activities of its collaborators.
If Forte does not receive the funding Forte expects under these agreements, its development of its technology and product candidates could be delayed, and Forte may need additional resources to develop product candidate and its technology. 48 All of the risks relating to product development, regulatory approval and commercialization described in this prospectus also apply to the activities of its collaborators.
Forte may need the cooperation of any such co-owners of its patent rights in order to enforce such patent rights against third parties, and such cooperation may not be provided to us. Any of the foregoing could have a material adverse effect on its competitive position, business, financial conditions, results of operations, and prospects.
Forte may need the cooperation of any such co-owners of its patent rights in order to enforce such patent rights against third parties, and such cooperation 38 may not be provided to us. Any of the foregoing could have a material adverse effect on its competitive position, business, financial conditions, results of operations, and prospects.
If a court were 50 to find the choice of forum provision contained in the bylaws to be inapplicable or unenforceable in an action, Forte may incur additional costs associated with resolving such action in other jurisdictions. Forte does not anticipate paying any cash dividends in the foreseeable future.
If a court were to find the choice of forum provision contained in the bylaws to be inapplicable or unenforceable in an action, Forte may incur additional costs associated with resolving such action in other jurisdictions. Forte does not anticipate paying any cash dividends in the foreseeable future.
Product candidates that appear promising in the early phases of development may fail to reach the market for several reasons, including: • preclinical study or clinical study results may show the product candidate to be less effective than desired or to have harmful or problematic side effects or toxicities; • clinical trial results may show the product candidate to be less effective than expected (e.g., a clinical trial could fail to meet its primary endpoint(s)) or to have unacceptable side effects or toxicities; • failure to execute the clinical trials caused by slow enrollment in clinical trials, patients dropping out of clinical trials, length of time to achieve clinical trial endpoints, additional time requirements for data analysis, inability to validate the manufacturing process or to achieve cGMP compliance for the product candidate or inability to identify a suitable bioanalytical assay method agreeable to applicable regulators; • failure to receive the necessary regulatory approvals or a delay in receiving such approvals, delays in preparation responding to an FDA request for additional clinical data or unexpected safety or manufacturing issues; • manufacturing costs, formulation issues, manufacturing deficiencies or other factors that that make FB-102 or any future product candidate uneconomical; and • proprietary rights of others and their competing products and technologies that may prevent FB-102 or any future product candidate from being commercialized.
Product candidates that appear promising in the early phases of development may fail to reach the market for several reasons, including: • preclinical study or clinical study results may show the product candidate to be less effective than desired or to have harmful or problematic side effects or toxicities; • clinical trial results may show the product candidate to be less effective than expected (e.g., a clinical trial could fail to meet its primary endpoint(s)) or to have unacceptable side effects or toxicities; • failure to execute the clinical trials caused by slow enrollment in clinical trials, patients dropping out of clinical trials, length of time to achieve clinical trial endpoints, additional time requirements for data analysis, inability to validate the manufacturing process or to achieve cGMP compliance for the product candidate or inability to identify a suitable bioanalytical assay method agreeable to applicable regulators; • failure to receive the necessary regulatory approvals or a delay in receiving such approvals, delays in preparation responding to an FDA request for additional clinical data or unexpected safety or manufacturing issues; • manufacturing costs, formulation issues, manufacturing deficiencies or other factors that that make FB102 or any future product candidate uneconomical; and • proprietary rights of others and their competing products and technologies that may prevent FB102 or any future product candidate from being commercialized.
Successful completion of clinical trials is a prerequisite to submitting a BLA to the FDA, and similar marketing applications to comparable foreign regulatory authorities, for each product candidate, and, consequently, the ultimate approval and commercial marketing of any product candidate. 19 Forte may experience delays in initiating or completing any future clinical trials.
Successful completion of clinical trials is a prerequisite to submitting a BLA to the FDA, and similar marketing applications to comparable foreign regulatory authorities, for each product candidate, and, consequently, the ultimate approval and commercial marketing of any product candidate. Forte may experience delays in initiating or completing any future clinical trials.
Many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition, many countries limit the enforceability of patents against government agencies or government contractors. In these 38 countries, the patent owner may have limited remedies, which could materially diminish the value of such patent.
Many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition, many countries limit the enforceability of patents against government agencies or government contractors. In these countries, the patent owner may have limited remedies, which could materially diminish the value of such patent.
If any of its scientific advisors, employees, contractors and consultants who are parties to 41 these agreements breaches or violates the terms of any of these agreements, Forte may not have adequate remedies for any such breach or violation, and Forte could lose its trade secrets as a result.
If any of its scientific advisors, employees, contractors and consultants who are parties to these agreements breaches or violates the terms of any of these agreements, Forte may not have adequate remedies for any such breach or violation, and Forte could lose its trade secrets as a result.
Obtaining and maintaining regulatory approval of a product candidate in one jurisdiction does not guarantee that Forte will be able to obtain or maintain regulatory approval in any other jurisdiction, while a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in others.
Obtaining and maintaining regulatory approval of a product candidate in one jurisdiction does not guarantee that 27 Forte will be able to obtain or maintain regulatory approval in any other jurisdiction, while a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in others.
There can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur. Forte’s general business strategy may be adversely affected by any such economic downturn, volatile business environment or continued unpredictable and unstable market conditions.
There can be no assurance that further deterioration in 28 credit and financial markets and confidence in economic conditions will not occur. Forte’s general business strategy may be adversely affected by any such economic downturn, volatile business environment or continued unpredictable and unstable market conditions.
Securing regulatory approval requires the submission of extensive preclinical and 31 clinical data and supporting information to the various regulatory authorities for each therapeutic indication to establish the drug candidate’s safety, efficacy, purity, and potency. Securing regulatory approval also requires the submission of information about the drug manufacturing process to, and inspection of manufacturing facilities by, the relevant regulatory authority.
Securing regulatory approval requires the submission of extensive preclinical and clinical data and supporting information to the various regulatory authorities for each therapeutic indication to establish the drug candidate’s safety, efficacy, purity, and potency. Securing regulatory approval also requires the submission of information about the drug manufacturing process to, and inspection of manufacturing facilities by, the relevant regulatory authority.
Forte has and will continue to have broad discretion over the use of proceeds from any capital raising efforts, including private placement financings and public offerings completed in 2020 and 2023 and an “at the market” equity offering program commenced in 2022.
Forte has and will continue to have broad discretion over the use of proceeds from any capital raising efforts, including private placement financings and public offerings completed in 2020, 2023 and 2024 and an “at the market” equity offering program commenced in 2022.
Some of the factors that may cause the market price of Forte’s common stock to fluctuate include: • any strategic decisions that Forte pursues or announces, including Forte’s decision to focus on the development of FB-102; • Forte’s ability to obtain regulatory approvals for any product candidates it develops, and delays or failures to obtain such approvals; • failure of any of Forte’s product candidates, if approved, to achieve commercial success; • Forte’s failure to maintain its existing third-party license and supply agreements; • failure by Forte or its licensors to prosecute, maintain, or enforce its intellectual property rights; • changes in laws or regulations applicable to product candidates Forte develops; • any inability to obtain adequate supply of any product candidates Forte develops or the inability to do so at acceptable prices; • adverse regulatory authority decisions; • introduction of new products, services or technologies by Forte’s competitors; • failure to meet or exceed financial and development projections Forte may provide to the public; • failure to meet or exceed the financial and development projections of the investment community; • the perception of the pharmaceutical industry by the public, legislatures, regulators and the investment community; • announcements of significant acquisitions, strategic collaborations, joint ventures or capital commitments by Forte or its competitors; • disputes or other developments relating to proprietary rights, including patents, litigation matters, and Forte’s ability to obtain patent protection for its technologies; 48 • additions or departures of key personnel; • significant lawsuits, including patent or stockholder litigation; • claims or litigation related to the Rights Plan; • if securities or industry analysts do not publish research or reports about Forte’s business, or if they issue an adverse or misleading opinion regarding its business and stock; • changes in the market valuations of similar companies; • general market or macroeconomic conditions; • the ability for Forte’s common stock to continue to be listed on Nasdaq; • sales of Forte’s common stock by Forte or its stockholders in the future; • trading volume of Forte’s common stock; • announcements by commercial partners or competitors of new commercial products, clinical progress or the lack thereof, significant contracts, commercial relationships or capital commitments; • adverse publicity generally, including with respect to other products and potential products in such markets; • the introduction of technological innovations or new therapies that compete with potential products of Forte; • changes in the structure of health care payment systems; and • period-to-period fluctuations in Forte’s financial results.
Some of the factors that may cause the market price of Forte’s common stock to fluctuate include: • any strategic decisions that Forte pursues or announces, including Forte’s decision to focus on the development of FB102; • Forte’s ability to obtain regulatory approvals for any product candidates it develops, and delays or failures to obtain such approvals; • failure of any of Forte’s product candidates, if approved, to achieve commercial success; • Forte’s failure to maintain its existing third-party license and supply agreements; • failure by Forte or its licensors to prosecute, maintain, or enforce its intellectual property rights; • changes in laws or regulations applicable to product candidates Forte develops; • any inability to obtain adequate supply of any product candidates Forte develops or the inability to do so at acceptable prices; • adverse regulatory authority decisions; • introduction of new products, services or technologies by Forte’s competitors; • failure to meet or exceed financial and development projections Forte may provide to the public; • failure to meet or exceed the financial and development projections of the investment community; • the perception of the pharmaceutical industry by the public, legislatures, regulators and the investment community; • announcements of significant acquisitions, strategic collaborations, joint ventures or capital commitments by Forte or its competitors; 49 • disputes or other developments relating to proprietary rights, including patents, litigation matters, and Forte’s ability to obtain patent protection for its technologies; • additions or departures of key personnel; • significant lawsuits, including patent or stockholder litigation; • claims or litigation related to the Rights Plan; • if securities or industry analysts do not publish research or reports about Forte’s business, or if they issue an adverse or misleading opinion regarding its business and stock; • changes in the market valuations of similar companies; • general market or macroeconomic conditions; • the ability for Forte’s common stock to continue to be listed on Nasdaq; • sales of Forte’s common stock by Forte or its stockholders in the future; • trading volume of Forte’s common stock; • announcements by commercial partners or competitors of new commercial products, clinical progress or the lack thereof, significant contracts, commercial relationships or capital commitments; • adverse publicity generally, including with respect to other products and potential products in such markets; • the introduction of technological innovations or new therapies that compete with potential products of Forte; • changes in the structure of health care payment systems; and • period-to-period fluctuations in Forte’s financial results.
If we are unable to obtain or use services from existing service providers or 35 become unable to export or sell our products to any of our customers or service providers, our business, liquidity, financial condition, and/or results of operations would be materially and adversely affected.
If we are unable to obtain or use services from existing service providers or become unable to export or sell our products to any of our customers or service providers, our business, liquidity, financial condition, and/or results of operations would be materially and adversely affected.
Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that could have a material adverse effect on Forte’s future patent portfolio and its ability to protect and enforce its intellectual property in the future.
Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that 41 could have a material adverse effect on Forte’s future patent portfolio and its ability to protect and enforce its intellectual property in the future.
Moreover, preclinical and clinical data are often susceptible to varying 21 interpretations and analyses and many companies that believed their product candidate performed satisfactorily in preclinical studies and clinical trials nonetheless failed to obtain FDA or similar regulatory approval.
Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses and many companies that believed their product candidate performed satisfactorily in preclinical studies and clinical trials nonetheless failed to obtain FDA or similar regulatory approval.
Forte may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of any product candidate. 13 • Forte’s planned preclinical studies or future clinical trials or those of its future collaborators may reveal significant adverse events and may result in a safety profile that could inhibit regulatory approval or market acceptance of any of its product candidates. • Positive results from early preclinical and clinical studies are not necessarily predictive of the results of any future clinical trials of product candidates.
Forte may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of any product candidate. • Forte’s planned preclinical studies, current clinical trials or future clinical trials or those of its future collaborators may reveal significant adverse events and may result in a safety profile that could inhibit regulatory approval or market acceptance of any of its product candidates. • Positive results from early preclinical studies and current clinical trials are not necessarily predictive of the results of any future clinical trials of product candidates.
Assuming that other 39 requirements for patentability are met, prior to March 2013, in the United States, the first to invent the claimed invention was entitled to the patent, while outside the United States, the first to file a patent application was entitled to the patent.
Assuming that other requirements for patentability are met, prior to March 2013, in the United States, the first to invent the claimed invention was entitled to the patent, while outside the United States, the first to file a patent application was entitled to the patent.
For example, even if the FDA grants marketing approval of a product candidate, comparable regulatory authorities in foreign jurisdictions must also approve the manufacturing, marketing and promotion of the product candidate in those countries.
For example, even if the FDA grants marketing approval of a product candidate, 32 comparable regulatory authorities in foreign jurisdictions must also approve the manufacturing, marketing and promotion of the product candidate in those countries.
The outcome of such post-grant proceedings is uncertain and if the USPTO upholds the validity of this third-party patent, it could have an adverse impact on Forte’s ability to commercialize its future products, including either an injunction prohibiting its manufacture or future sales, or, with respect to its future sales, an obligation on its part to pay royalties and/or other forms of compensation to third parties, which could be significant.
The outcome of such post-grant proceedings is uncertain and if the USPTO upholds the validity of a third-party patent, it could have an adverse impact on Forte’s ability to commercialize its future products, including either an injunction prohibiting its manufacture or future sales, or, with respect to its future sales, an obligation on its part to pay royalties and/or other forms of compensation to third parties, which could be significant.
A control system, no matter how well designed and operated, can provide only reasonable, not 51 absolute, assurance that the control system’s objectives will be met.
A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met.
These factors could involve financial institutions or financial services industry companies with which we 27 have financial or business relationships but could also include factors involving financial markets or the financial services industry generally.
These factors could involve financial institutions or financial services industry companies with which we have financial or business relationships but could also include factors involving financial markets or the financial services industry generally.
Food and Drug Administration (“FDA”), and other comparable foreign regulatory authorities; 16 • delay or failure in obtaining the necessary approvals from regulators or institutional review boards (“IRBs”) in order to commence a clinical trial at a prospective trial site, or their suspension or termination of a clinical trial once commenced; • failure of third-party contractors, such as contract research organizations (“CROs”), or investigators to comply with regulatory requirements, including Good Clinical Practice (“GCP”); • governmental or regulatory delays and changes in regulation or policy relating to the development and commercialization of its product candidate by the FDA or other comparable foreign regulatory authorities; • undertaking and completing additional preclinical studies to generate data required to support the continued clinical development of a product candidate; • inability to enroll sufficient patients to complete a protocol; • difficulty in having patients complete a trial or return for post-treatment follow-up; • clinical sites deviating from trial protocol or dropping out of a trial; • problems with biopharmaceutical product candidate storage, stability and distribution; • its inability to add new or additional clinical trial sites; • varying interpretations of the data generated from its preclinical or clinical trials; • Forte’s inability to manufacture, or obtain from third parties, adequate supply of biopharmaceutical product candidate sufficient to complete its preclinical studies and clinical trials; • the costs of establishing, maintaining, and overseeing a quality system compliant with current good manufacturing practice requirements (“cGMPs”) and a supply chain for the development and manufacture of its product candidate; • the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against Forte, FB-102; • the effect of competing technological and market developments; • the cost and timing of establishing, expanding and scaling manufacturing capabilities; • the effect of potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from a potential resurgence of the COVID‑19 pandemic, the military conflicts in Eastern Europe and the Middle East, recent and any potential future financial institution failures, and otherwise; • the effect of inflationary pressure on the United States capital markets and our ability to raise capital, including any impact of adverse developments affecting the financial services industry, such as those based on liquidity constraints or concerns; • the cost of establishing sales, marketing and distribution capabilities for any product candidate for which Forte may receive regulatory approval in regions where Forte chooses to commercialize its products on its own; and • potential unforeseen business disruptions or market fluctuations that delay its product development or clinical trials and increase its costs or expenses, such as business or operational disruptions, delays, or system failures due to malware, unauthorized access, terrorism, war, natural disasters, strikes, geopolitical conflicts, restrictions on trade, import or export restrictions, or public health crises, such as the COVID-19 outbreak.
Food and Drug Administration (“FDA”), and other comparable foreign regulatory authorities; • delay or failure in obtaining the necessary approvals from regulators or institutional review boards (“IRBs”) in order to commence a clinical trial at a prospective trial site, or their suspension or termination of a clinical trial once commenced; • failure of third-party contractors, such as contract research organizations (“CROs”), or investigators to comply with regulatory requirements, including Good Clinical Practice (“GCP”); • governmental or regulatory delays and changes in regulation or policy relating to the development and commercialization of its product candidate by the FDA or other comparable foreign regulatory authorities; • undertaking and completing additional preclinical studies to generate data required to support the continued clinical development of a product candidate; • inability to enroll sufficient patients to complete a protocol; • difficulty in having patients complete a trial or return for post-treatment follow-up; 15 • clinical sites deviating from trial protocol or dropping out of a trial; • problems with biopharmaceutical product candidate storage, stability and distribution; • its inability to add new or additional clinical trial sites; • varying interpretations of the data generated from its preclinical or clinical trials; • Forte’s inability to manufacture, or obtain from third parties, adequate supply of biopharmaceutical product candidate sufficient to complete its preclinical studies and clinical trials; • the costs of establishing, maintaining, and overseeing a quality system compliant with current good manufacturing practice requirements (“cGMPs”) and a supply chain for the development and manufacture of its product candidate; • the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against Forte, FB102; • the effect of competing technological and market developments; • the cost and timing of establishing, expanding and scaling manufacturing capabilities; • the effect of potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from epidemic diseases such as COVID-19, the military conflicts in Eastern Europe and the Middle East, recent and any potential future financial institution failures, and otherwise; • the effect of inflationary pressure on the United States capital markets and our ability to raise capital, including any impact of adverse developments affecting the financial services industry, such as those based on liquidity constraints or concerns; • the cost of establishing sales, marketing and distribution capabilities for any product candidate for which Forte may receive regulatory approval in regions where Forte chooses to commercialize its products on its own; and • potential unforeseen business disruptions or market fluctuations that delay its product development or clinical trials and increase its costs or expenses, such as business or operational disruptions, delays, or system failures due to malware, unauthorized access, terrorism, war, natural disasters, strikes, geopolitical conflicts, restrictions on trade, import or export restrictions, or public health crises.
Forte may be unable to successfully develop, obtain regulatory approval for and commercialize any product candidates. • Interim top-line and preliminary data from future clinical trials that Forte announces or publishes from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data. • The market opportunities for FB-102 may be limited and Forte’s estimates of the incidence and prevalence of its target patient populations may be inaccurate. • Forte is very early in its development efforts.
Forte may be unable to successfully develop, obtain regulatory approval for and commercialize any product candidates. • Interim top-line and preliminary data from future clinical trials that Forte announces or publishes from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data. • The market opportunities for FB102 may be limited and Forte’s estimates of the incidence and prevalence of its target patient populations may be inaccurate. • Forte is very early in its development efforts.
Forte’s future funding requirements, both near and long-term, will depend on many factors, including, but not limited to: • the initiation, progress, timing, costs and results of additional preclinical studies and clinical trials for FB-102 and any future product candidates and any need to conduct additional such studies as may be required by a regulator; • the clinical development plans Forte establishes for FB-102 and any future product candidates; • the terms of any collaboration agreements Forte may choose to initiate or conclude; • the outcome, timing and cost of meeting regulatory requirements established by the U.S.
Forte’s future funding requirements, both near and long-term, will depend on many factors, including, but not limited to: • the initiation, progress, timing, costs and results of additional preclinical studies and clinical trials for FB102 and any future product candidates and any need to conduct additional such studies as may be required by a regulator; • the clinical development plans Forte establishes for FB102 and any future product candidates; • the terms of any collaboration agreements Forte may choose to initiate or conclude; • the outcome, timing and cost of meeting regulatory requirements established by the U.S.
Forte is currently eligible to sell securities under Form S-3 only if and to the extent the aggregate market value of securities sold by Forte pursuant to General Instruction I.B.6 of Form S-3 during the twelve-month period immediately prior to, and including, the date of any such sale, does not exceed one-third of the aggregate market value of Forte’s common stock held by non-affiliates (as determined by General Instruction I.B.6 of Form S-3), and Forte will remain subject to such limitation for so long as the aggregate market value of Forte’s common stock held by non-affiliates is less than $75 million (as determined by General Instruction I.B.6 of Form S-3).
In addition, Forte is currently eligible to sell securities under Form S-3 only if and to the extent the aggregate market value of securities sold by Forte pursuant to General Instruction I.B.6 of Form S-3 during the twelve-month period immediately prior to, and including, the date of any such sale, does not exceed one-third of the aggregate market value of Forte’s common stock held by non-affiliates (as determined by General Instruction I.B.6 of Form S-3), and Forte will remain subject to 16 such limitation for so long as the aggregate market value of Forte’s common stock held by non-affiliates is less than $75 million (as determined by General Instruction I.B.6 of Form S-3).
Forte has no approved products and has a limited operating history, which may make it difficult to evaluate its technology and product development capabilities and predict its future performance. We are very early in our development efforts of FB-102 and, prior to discontinuing the advancement of FB-401, were early in our clinical development efforts of FB-401.
Forte has no approved products and has a limited operating history, which may make it difficult to evaluate its technology and product development capabilities and predict its future performance. We are very early in our development efforts of FB102 and, prior to discontinuing the advancement of FB-401, were early in our clinical development efforts of FB-401.
The success of FB-102 will depend on several factors, including the following: • successful completion of additional preclinical and clinical studies; • successful enrollment in, and completion of, clinical trials; • receipt of regulatory approvals from applicable regulatory authorities for FB-102; • establishing cGMP-compliant clinical supply and commercial manufacturing operations or making arrangements with third-party manufacturers for clinical supply and commercial manufacturing; • obtaining and maintaining patent and trade secret protection or regulatory exclusivity for FB-102; • launching commercial sales of FB-102, if and when approved or allowed for marketing, whether alone or in collaboration with others; • acceptance of FB-102, if and when approved, by patients, the medical community and third-party payors; • obtaining and maintaining third-party insurance coverage and adequate reimbursement; • enforcing and defending intellectual property rights and claims; • the marketing of FB-102; and • maintaining a continued acceptable safety profile of FB-102 following approval or commercialization.
The success of FB102 will depend on several factors, including the following: • successful completion of additional preclinical and clinical studies; • successful enrollment in, and completion of, clinical trials; • receipt of regulatory approvals from applicable regulatory authorities for FB102; 29 • establishing cGMP-compliant clinical supply and commercial manufacturing operations or making arrangements with third-party manufacturers for clinical supply and commercial manufacturing; • obtaining and maintaining patent and trade secret protection or regulatory exclusivity for FB102; • launching commercial sales of FB102, if and when approved or allowed for marketing, whether alone or in collaboration with others; • acceptance of FB102, if and when approved, by patients, the medical community and third-party payors; • obtaining and maintaining third-party insurance coverage and adequate reimbursement; • enforcing and defending intellectual property rights and claims; • the marketing of FB102; and • maintaining a continued acceptable safety profile of FB102 following approval or commercialization.
The company will have broad discretion in the use of proceeds from any capital raising efforts, including the Private Placement and any future private placement financings, and may invest or spend the proceeds in ways with which its stockholders do not agree and in ways that may not increase the value of their investments.
The company will have broad discretion in the use of proceeds from any capital raising efforts, including the 2023 Private Placement, 2024 Private Placement and any future private placement financings, and may invest or spend the proceeds in ways with which its stockholders do not agree and in ways that may not increase the value of their investments.
In addition, there is a risk that one or more of our current service providers, manufacturers and 49 other partners may not survive an economic downturn, which could directly affect our ability to attain our operating goals on schedule and on budget.
In addition, there is a risk that one or more of our current service providers, manufacturers and 50 other partners may not survive an economic downturn, which could directly affect our ability to attain our operating goals on schedule and on budget.
Forte anticipates that its expenses will increase substantially if, and as, it: • conducts additional preclinical studies and clinical trials for FB-102 and any future product candidates; • continues to discover and develop additional applications for FB-102 and any future product candidates; 15 • maintains, expands and protects its intellectual property portfolio; • hires or contracts additional clinical, scientific, manufacturing and commercial personnel to support its product development and commercialization efforts; • validates a manufacturing process and specifications for FB-102 and any future product candidates; • establishes in-house manufacturing capabilities; • establishes a commercial manufacturing source and secures supply chain capacity sufficient to provide clinical trial material and commercial quantities of any product candidate for which Forte may obtain regulatory approval; • acquires or in-licenses other product candidates and technologies; • seeks various regulatory approvals; • establishes a sales, marketing and distribution infrastructure to commercialize any product candidate for which Forte may obtain regulatory approval; and • adds operational, compliance, financial and management information systems and personnel to support being a public company.
Forte anticipates that its expenses will increase substantially if, and as, it: • conducts additional preclinical studies and clinical trials for FB102 and any future product candidates; • continues to discover and develop additional applications for FB102 and any future product candidates; • maintains, expands and protects its intellectual property portfolio; • hires or contracts additional clinical, scientific, manufacturing and commercial personnel to support its product development and commercialization efforts; • validates a manufacturing process and specifications for FB102 and any future product candidates; • establishes in-house manufacturing capabilities; • establishes a commercial manufacturing source and secures supply chain capacity sufficient to provide clinical trial material and commercial quantities of any product candidate for which Forte may obtain regulatory approval; • acquires or in-licenses other product candidates and technologies; 18 • seeks various regulatory approvals; • establishes a sales, marketing and distribution infrastructure to commercialize any product candidate for which Forte may obtain regulatory approval; and • adds operational, compliance, financial and management information systems and personnel to support being a public company.
If FB-102 or any other product candidate Forte develops is approved, it will be subject to ongoing regulatory requirements for manufacturing, labeling, packaging, storage, distribution, advertising, promotion, sampling, record-keeping, export, import, conduct of post-marketing studies and submission of safety, efficacy and other post-market information, including both federal and state requirements in the United States and requirements of comparable foreign regulatory authorities.
If FB102 or any other product candidate Forte develops is approved, it will be subject to ongoing regulatory requirements for manufacturing, labeling, packaging, storage, distribution, advertising, promotion, sampling, record-keeping, export, import, conduct of post-marketing studies and submission of safety, efficacy and other post-market information, including both federal and state requirements in the United States and requirements of comparable foreign regulatory authorities.
The market price of Forte’s common stock is expected to be volatile. In the past, following periods of volatility in the market price of a company’s securities, stockholders have often instituted class action securities litigation against those companies. The market price of Forte’s common stock could be subject to significant fluctuations.
General Risks The market price of Forte’s common stock is expected to be volatile. In the past, following periods of volatility in the market price of a company’s securities, stockholders have often instituted class action securities litigation against those companies. The market price of Forte’s common stock could be subject to significant fluctuations.
Investment in product development in the healthcare industry, including of biopharmaceutical products, is highly speculative because it entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail to demonstrate adequate effect or an acceptable safety profile, gain regulatory approval and become commercially viable. Forte’s current lead product candidate, FB-102, is currently in clinical development.
Investment in product development in the healthcare industry, including of biopharmaceutical products, is highly speculative because it entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail to demonstrate adequate effect or an acceptable safety profile, gain regulatory approval and become commercially viable. Forte’s current lead product candidate, FB102, is currently in clinical development.
In addition, if Forte is unable to effectively manage its outsourced activities or if the quality or accuracy of the services provided by consultants is compromised for any reason, its preclinical studies and clinical trials may be extended, delayed or terminated, and Forte may not be able to obtain regulatory approval of FB-102 or any other future product candidate or otherwise advance its business.
In addition, if Forte is unable to effectively manage its outsourced activities or if the quality or accuracy of the services provided by consultants is compromised for any reason, its preclinical studies and clinical trials may be extended, delayed or terminated, and Forte may not be able to obtain regulatory approval of FB102 or any other future product candidate or otherwise advance its business.
Forte’s ability to generate product revenue or profits was dependent on the successful development and eventual commercialization of FB-401 prior to Forte’s decision to discontinue development of FB-401 and, following Forte’s decision to focus on development of FB-102, Forte’s prospects are currently highly dependent on Forte’s ability to successfully develop FB-102.
Forte’s ability to generate product revenue or profits was dependent on the successful development and eventual commercialization of FB-401 prior to Forte’s decision to discontinue development of FB-401 and, following Forte’s decision to focus on development of FB102, Forte’s prospects are currently highly dependent on Forte’s ability to successfully develop FB102.
Positive results from early preclinical studies are not necessarily predictive of the results of any future clinical trials of product candidates. Forte may be unable to successfully develop, obtain regulatory approval for and commercialize any product candidates.
Positive results from early preclinical studies are not necessarily predictive of the results of any current or future clinical trials of product candidates. Forte may be unable to successfully develop, obtain regulatory approval for and commercialize any product candidates.
However, its future capital requirements and the period for which its existing resources will support its operations may vary significantly from what Forte currently expects, and Forte will in any event require additional capital in order to complete the clinical development of FB-102. Forte’s monthly spending levels will vary based on new and ongoing development and corporate activities.
However, its future capital requirements and the period for which its existing resources will support its operations may vary significantly from what Forte currently expects, and Forte will in any event require additional capital in order to complete the clinical development of FB102. Forte’s monthly spending levels will vary based on new and ongoing development and corporate activities.
Before obtaining regulatory approvals for the commercial sale of any products, Forte must demonstrate through lengthy, complex and expensive preclinical studies and clinical trials that FB-102 is both safe and effective for use in each target indication. Preclinical and clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain.
Before obtaining regulatory approvals for the commercial sale of any products, Forte must demonstrate through lengthy, complex and expensive preclinical studies and clinical trials that FB102 is both safe and effective for use in each target indication. Preclinical and clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain.
Forte anticipates competing with the largest healthcare companies in the world, many of which have greater financial, human, and manufacturing resources than Forte currently has. In addition to these fully integrated healthcare companies, Forte will also compete with those companies whose products target the same indications as FB-102 or any future product candidate Forte develops.
Forte anticipates competing with the largest healthcare companies in the world, many of which have greater financial, human, and manufacturing resources than Forte currently has. In addition to these fully integrated healthcare companies, Forte will also compete with those companies whose products target the same indications as FB102 or any future product candidate Forte develops.
If Forte does not achieve one or more of these factors in a timely manner or at all, Forte could experience significant delays or an inability to successfully commercialize FB-102, which would materially harm its business. If Forte does not receive regulatory approvals for FB-102, it may not be able to continue its operations.
If Forte does not achieve one or more of these factors in a timely manner or at all, Forte could experience significant delays or an inability to successfully commercialize FB102, which would materially harm its business. If Forte does not receive regulatory approvals for FB102, it may not be able to continue its operations.
Forte’s future financial performance and its ability to commercialize FB-102 or any future product candidate will depend, in part, on its ability to effectively manage any future growth, and its management may also have to divert a disproportionate amount of its attention away from day-to-day activities in order to devote a substantial amount of time to managing these growth activities.
Forte’s future financial performance and its ability to commercialize FB102 or any future product candidate will depend, in part, on its ability to effectively manage any future growth, and its management may also have to divert a disproportionate amount of its attention away from day-to-day activities in order to devote a substantial amount of time to managing these growth activities.
While initial preclinical data demonstrated positive activity, additional preclinical studies may produce negative or inconclusive results. The FDA or a non-US regulatory authority may require us to conduct additional preclinical testing. Success of FB-102 in early preclinical studies does not mean that future clinical trials will be successful.
While initial preclinical data demonstrated positive activity, additional clinical studies may produce negative or inconclusive results. The FDA or a non-US regulatory authority may require us to conduct additional testing. Success of FB102 in early preclinical studies does not mean that future clinical trials will be successful.
Even if FB-102 or any other product candidate that Forte develops receives marketing approval, it may fail to achieve the degree of market acceptance by physicians, patients, third-party payors, consumers and others in the medical or healthcare community necessary for commercial success.
Even if FB102 or any other product candidate that Forte develops receives marketing approval, it may fail to achieve the degree of market acceptance by physicians, patients, third-party payors, consumers and others in the medical or healthcare community necessary for commercial success.
If Forte is unable to advance FB-102 to clinical development, obtain regulatory approval and ultimately commercialize a product candidate or experiences significant delays in doing so, its business will be materially harmed. Forte is very early in its development efforts and will invest substantially all of its efforts and financial resources in the development of FB-102.
If Forte is unable to advance FB102 to clinical development, obtain regulatory approval and ultimately commercialize a product candidate or experiences significant delays in doing so, its business will be materially harmed. Forte is very early in its development efforts and will invest substantially all of its efforts and financial resources in the development of FB102.
This will require Forte to be successful in a range of challenging activities, including completing additional preclinical studies and clinical trials, obtaining marketing approval for FB-102 or any future product candidates, manufacturing, marketing and selling products for which Forte may obtain marketing approval and satisfying any post-marketing requirements.
This will require Forte to be successful in a range of challenging activities, including completing additional preclinical studies and clinical trials, obtaining marketing approval for FB102 or any future product candidates, manufacturing, marketing and selling products for which Forte may obtain marketing approval and satisfying any post-marketing requirements.
If Forte is unable to raise additional capital in sufficient amounts or on terms acceptable to it, Forte may have to significantly delay, scale back or discontinue the development or commercialization of its current product candidate, FB-102, or one or more of its other current or future research and development initiatives.
If Forte is unable to raise additional capital in sufficient amounts or on terms acceptable to it, Forte may have to significantly delay, scale back or discontinue the development or commercialization of its current product candidate, FB102, or one or more of its other current or future research and development initiatives.
The Pre-Funded Warrants have an exercise price of $0.001 per share of Common Stock, were immediately exercisable and remain exercisable until exercised in full. The gross proceeds of the Private Placement were approximately $25 million, before deducting offering expenses payable by the Company.
The pre-funded warrants have an exercise price of $0.025 per share of Common Stock, were immediately exercisable and remain exercisable until exercised in full. The gross proceeds of the 2023 Private Placement were approximately $25 million, before deducting offering expenses payable by the Company.
Similarly, even if Forte is able to complete its current Phase 1 clinical trial and any future clinical trials of FB-102 or any other product candidates according to its current development timeline, the positive results from such clinical trial or future clinical trials may not be replicated in subsequent clinical trial results.
Similarly, even if Forte is able to complete its current Phase 1 clinical trial and any future clinical trials of FB102 or any other product candidates according to its current development timeline, the positive results from such clinical trial or future clinical trials may not be replicated in subsequent clinical trial results.
If FB-102 or any other future product candidate Forte develops receives marketing approval, it may nonetheless fail to gain sufficient market acceptance by physicians, patients, third-party payors, consumers and others in the medical community.
If FB102 or any other future product candidate Forte develops receives marketing approval, it may nonetheless fail to gain sufficient market acceptance by physicians, patients, third-party payors, consumers and others in the medical community.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe use third-party service providers to perform a variety of functions throughout our business, such as electronic communications service providers, cloud-based file storage service providers, and contract manufacturing and research organizations. 52 We evaluate the cybersecurity posture of such third-party service providers, including whether such providers maintain appropriate security measures and, where appropriate, require them to implement and maintain reasonable security measures in connection with their work with us.
Biggest changeWe evaluate the cybersecurity posture of such third-party service providers, including whether such providers maintain appropriate security measures and, where appropriate, require them to implement and maintain reasonable security measures in connection with their work with us.
Depending on the environment, we implement and maintain technical, physical, and organizational measures, processes, standards and policies designed to manage and mitigate risks from cybersecurity threats to our Information Systems and Data, including, for example: employee training; access controls; data encryption; systems monitoring; regular patching of operating systems and software; and a password policy.
Depending on the environment, we implement and maintain technical, physical, and organizational measures, processes, standards and policies designed to manage and mitigate risks from cybersecurity threats to our Information Systems and Data, including, 53 for example: employee training; access controls; data encryption; systems monitoring; regular patching of operating systems and software; and a password policy.
For additional information regarding whether any risks from cybersecurity threats are reasonably likely to materially affect our company, including our business strategy, results of operations, or financial condition, please refer to Item 1A, “Risk Factors” in this Annual Report on Form 10-K.
For additional information regarding whether any risks from cybersecurity threats are reasonably likely to materially affect our co mpany, including our business strategy, results of operations, or financial condition, please refer to Item 1A, “Risk Factors” in this Annual Report on Form 10-K.
Added
We use third-party service providers to perform a variety of functions throughout our business, such as electronic communications service providers, cloud-based file storage service providers, and contract manufacturing and research organizations.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeHolders of Record As of March 11, 2024, there were 227 registered stockholders of record. We are unable to estimate the actual number of stockholders as our shares are also held by brokers and other institutions on behalf of our stockholders. Dividend Policy We have never declared or paid cash dividends on our capital stock.
Biggest changeHolders of Record As of March 24, 2025, there were 177 registered stockholders of record. We are unable to estimate the actual number of stockholders as our shares are also held by brokers and other institutions on behalf of our stockholders. Dividend Policy We have never declared or paid cash dividends on our capital stock.
Sales of Unregistered Securities During the year ended December 31, 2023, there have been no unregistered sales of securities other than previously disclosed by us in our Current Report on Form 8-K, as filed with the SEC on August 1, 2023. Item 6. R eserved 54
Sales of Unregistered Securities During the year ended December 31, 2024, there have been no unregistered sales of securities other than previously disclosed by us in our Current Report on Form 8-K, as filed with the SEC on August 1, 2023. Item 6. R eserved 55
Purchases of Equity Securities by the Issuer and Affiliated Purchasers There were no repurchases of shares of common stock made during the year ended December 31, 2023.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers There were no repurchases of shares of common stock made during the year ended December 31, 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults of Operations Comparison of the Years Ended December 31, 2023 and 2022 The following tables summarize our results of operations for the years ended December 31, 2023 and 2022 (in thousands): Year Ended December 31, 2023 2022 Change Operating expenses: Research and development $ 21,862 $ 5,594 $ 16,268 General and administrative 10,624 8,302 2,322 Total operating expenses 32,486 13,896 18,590 Interest income 1,124 162 962 Other expense, net (114 ) (145 ) 31 Net loss $ (31,476 ) $ (13,879 ) $ (17,597 ) Research and Development Expenses Research and development expenses were $21.9 million for the year ended December 31, 2023, compared to $5.6 million during the same period in 2022.
Biggest changeShares of common stock into which the pre-funded warrants may be exercised are considered outstanding for purposes of computing net loss per share because the shares may be issued for little or no consideration and are exercisable after the original issuance date. 59 Results of Operations Comparison of the Years Ended December 31, 2024 and 2023 The following tables summarize our results of operations for the years ended December 31, 2024 and 2023 (in thousands): Year Ended December 31, 2024 2023 Change Operating expenses: Research and development $ 21,193 $ 21,862 $ (669 ) General and administrative 15,409 10,624 4,785 Total operating expenses 36,602 32,486 4,116 Loss from operations (36,602 ) (32,486 ) (4,116 ) Interest income 1,314 1,124 190 Other expense, net (190 ) (114 ) (76 ) Net loss $ (35,478 ) $ (31,476 ) $ (4,002 ) Research and Development Expenses Research and development expenses were $21.2 million for the year ended December 31, 2024, compared to $21.9 million during the same period in 2023.
Macroeconomic Environment Businesses throughout our industry have been and will continue to be impacted by a number of challenging and unexpected global and national events and circumstances that continue to evolve, including without limitation, the military conflicts in Ukraine and the Middle East, increased economic uncertainty, inflation, rising interest rates, recent and any potential future financial institution 55 failures, and other geopolitical tensions.
Macroeconomic Environment Businesses throughout our industry have been and will continue to be impacted by a number of challenging and unexpected global and national events and circumstances that continue to evolve, including without limitation, the military conflicts in Ukraine and the Middle East, increased economic uncertainty, inflation, rising interest rates, recent and any potential future financial institution failures, and other geopolitical tensions.
Components of Operating Results Revenue We have no products approved for commercial sale or in active development and have not generated any revenue from product sales. In the future, we may generate revenue from product sales, royalties on product sales, license fees, milestones, or other upfront payments if we enter into any collaborations or license agreements.
Components of Operating Results Revenue We have no products approved for commercial sale or in active development and have not generated any revenue from product sales. In the future, we may generate revenue from product sales, royalties on product sales, license fees, milestones, or other 57 upfront payments if we enter into any collaborations or license agreements.
If we are unable to raise additional funds when needed, we may be required to delay, reduce or terminate some or all of our development programs and clinical trials. We may also be required to sell or license to other parties rights to develop or commercialize our drug candidates that we would prefer to retain.
If we are unable to raise additional funds when needed, we may be required to delay, reduce or terminate some or all of 61 our development programs and clinical trials. We may also be required to sell or license to other parties rights to develop or commercialize our drug candidates that we would prefer to retain.
This process involves reviewing open contracts and commitments, communicating with our personnel to identify services that have been performed for us and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of the actual cost.
This process involves reviewing open contracts and commitments, communicating with our personnel to identify services that have been performed for us and estimating the level of service performed and the associated cost incurred for the 58 service when we have not yet been invoiced or otherwise notified of the actual cost.
In addition, our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from the conflicts in Eastern Europe, 59 and otherwise.
In addition, our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from the conflicts in Eastern Europe, and otherwise.
The Company is currently eligible to sell securities under Form S-3 only if and to the extent the aggregate market value of securities sold by the Company pursuant to General Instruction I.B.6 of Form S-3 during the twelve-month period immediately prior to, and including, the date of any such sale, does not exceed one-third of the aggregate market value of our common stock held by non-affiliates (as determined by General Instruction I.B.6 of Form S-3), and we will remain subject to such limitation for so long as the aggregate market value of our common stock held by non-affiliates is less than $75 million (as determined by General Instruction I.B.6 of Form S-3).
We are currently eligible to sell securities under Form S-3 only if and to the extent the aggregate market value of securities sold by us pursuant to General Instruction I.B.6 of Form S-3 during the twelve-month period immediately prior to, and including, the date of any such sale, does not exceed one-third of the aggregate market value of our common stock held by non-affiliates (as determined by General Instruction I.B.6 of Form S-3), and we will remain subject to such limitation for so long as the aggregate market value of our common stock held by non-affiliates is less than $75.0 million (as determined by General Instruction I.B.6 of Form S-3).
Certain executive officers, senior management, and board members participated in this Private Placement, purchasing approximately $1.16 million of shares of common stock at a purchase price of $1.01 per share. In connection with the Private Placement, we filed a registration statement on Form S-3 that was declared effective on September 8, 2023.
Certain executive officers, senior management, and board members participated in this 2023 Private Placement, purchasing $1.16 million of shares of common stock at a purchase price of $25.25 per share. In connection with the 2023 Private Placement, we filed a registration statement on Form S-3 that was declared effective on September 8, 2023.
Our future capital requirements are difficult to forecast and will depend on many factors, including but not limited to: • the initiation and progress of additional clinical trials and preclinical studies for our product candidate; • the terms and timing of any strategic alliance, licensing and other arrangements that we may establish; • the number of programs we pursue; • the outcome, timing and cost of regulatory approvals; • the cost and timing of hiring new employees to support our continued growth; • the costs involved in patent filing, prosecution, and enforcement; and • the costs and timing of having clinical supplies of our product candidates manufactured.
Our future capital requirements are difficult to forecast and will depend on many factors, including but not limited to: • the initiation and progress of additional clinical trials and preclinical studies for our product candidate and other indications of FB102; • the terms and timing of any strategic alliance, licensing and other arrangements that we may establish; • the number of programs we pursue; • the outcome, timing and cost of regulatory approvals; • the cost and timing of hiring new employees to support our continued growth; • the costs involved in patent filing, prosecution, and enforcement; and • the costs and timing of having clinical supplies or clinical trial materials of our product candidates manufactured.
The Company uses information it receives from internal personnel and outside service providers to estimate the percentage of completion and therefore the expense to be incurred. We anticipate research and development expenses to continue to increase in the future as we develop our current lead product candidate, FB-102.
The Company uses information it receives from internal personnel and outside service providers to estimate the percentage of completion and therefore the expense to be incurred. We anticipate research and development expenses to continue to increase in the future as we develop our current lead product candidate, FB102.
Accordingly, we have not recorded any liabilities for these indemnification rights and agreements as of December 31, 2023 and 2022. Contractual Obligations See Note 6 Commitments and Contingencies to the Consolidated Financial Statements included elsewhere in this Form 10-K. 60
Accordingly, we have not recorded any liabilities for these indemnification rights and agreements as of December 31, 2024 and 2023. 62 Contractual Obligations See Note 6 Commitments and Contingencies to the Consolidated Financial Statements included elsewhere in this Form 10-K.
The pre-funded warrants have an exercise price of $0.001 per share of common stock, are immediately exercisable and remain exercisable until exercised in full. The gross proceeds of the Private Placement were approximately $25 million and we incurred $272 thousand in issuance costs.
The pre-funded warrants have an exercise price of $0.025 per share of common stock, are immediately exercisable and remain exercisable until exercised in full. The gross proceeds of the 2023 Private Placement were $25.0 million and we incurred $272 thousand in issuance costs.
On 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.
On April 1, 2022, we filed a prospectus supplement to the June 2021 Form S-3 relating to the offer and sale of shares under the ATM Facility covering sales of up to $7.0 million of shares of common stock.
Investing Activities Net cash provided by investing activities for the year ended December 31, 2023 was due to proceeds of $10.1 million from the redemption of U.S. treasury bills partially offset by their purchase of approximately $10.0 million.
Net cash provided by investing activities for the year ended December 31, 2023 was due to proceeds of $10.1 million from the redemption of U.S. treasury bills substantially offset by the purchase of $10.0 million of U.S treasury bills.
Certain executive officers, senior management, and board members of the Company participated in this Private Placement, purchasing approximately $1.16 million of shares of common stock at a purchase price of $1.01 per share. In connection with the Private Placement, the Company filed a registration statement on Form S-3 that was declared effective on September 8, 2023.
Certain of our executive officers, senior management, and board members participated in this 2023 Private Placement, purchasing $1.16 million of shares of common stock at a purchase price of $25.25 per share. In connection with the 2023 Private Placement, we filed a registration statement on Form S-3 that was declared effective on September 8, 2023.
The patent’s estimated expiration date is 2039. This patent is not material to Forte’s FB-102 program. We also own two pending PCT applications, one pending application in Taiwan, one pending application in Argentina, and three pending US patent applications related to the FB-102 program. The estimated expiration dates of these patents are 2043-2044.
The patent’s estimated expiration date is 2039. This patent is not material to Forte’s FB102 program. We also own three pending PCT applications, one pending application in Taiwan and one pending application in Argentina related to the FB102 program. The estimated expiration dates of these patents are 2043-2044.
The pre-funded warrants have an exercise price of $0.001 per share of common stock, are immediately exercisable and remain exercisable until exercised in full. The gross proceeds of the Private Placement were approximately $25 million and the Company incurred $272 thousand in issuance costs.
The pre-funded warrants have an exercise price of $0.025 per share of common stock, are immediately exercisable and remain exercisable until exercised in full. The gross proceeds of the 2023 Private Placement were $25.0 million and we incurred $272 thousand in issuance costs.
Forte is currently eligible to sell securities under Form S-3 only if and to the extent the aggregate market value of securities sold by Forte pursuant to General Instruction I.B.6 of Form S-3 during the twelve-month period immediately prior to, and including, the date of any such sale, does not exceed one-third of the aggregate market value of Forte’s common stock held by non-affiliates (as determined by General Instruction I.B.6 of Form S-3), and Forte will remain subject to such limitation for so long as the aggregate market value of Forte’s common stock held by non-affiliates is less than $75 million (as determined by General Instruction I.B.6 of Form S-3).
In addition, as discussed above, we are currently eligible to sell securities under Form S-3 only if and to the extent the aggregate market value of securities sold by us pursuant to General Instruction I.B.6 of Form S-3 during the twelve-month period immediately prior to, and including, the date of any such sale, does not exceed one-third of the aggregate market value of our common stock held by non-affiliates (as determined by General Instruction I.B.6 of Form S-3), and we will remain subject to such limitation for so long as the aggregate market value of our common stock held by non-affiliates is less than $75.0 million (as determined by General Instruction I.B.6 of Form S-3).
On March 31, 2022, we entered into an “at-the-market” equity offering program (“ATM Facility”) whereby we may from time to time offer and sell shares of its common stock up to an aggregate offering price of $25.0 million during the term of the ATM Facility.
On March 31, 2022, we entered into an ATM Facility whereby we may from time to time offer and sell shares of its common stock up to an aggregate offering price of $25.0 million during the term of the ATM Facility.
On August 12, 2022, we filed an additional prospectus supplement relating to offer and sell an additional $2.7 million of shares of common stock.
On August 12, 2022, we filed an additional prospectus supplement relating to the offer and sale of shares for an additional $2.7 million of shares of common stock.
Liquidity and Capital Resources We have no products approved for commercial sale and have not generated any revenue from product sales or out-licenses. We have never been profitable and have incurred operating losses in each year since inception. Our net loss was approximately $31.5 million for the year ended December 31, 2023.
Liquidity and Capital Resources We have no products approved for commercial sale and have not generated any revenue from product sales or other sources. We have never been profitable and have incurred operating losses in each year since inception. Our net loss was $35.5 million for the year ended December 31, 2024.
Our general and administrative expenses may increase due to increases in professional and advisory fees and as we build out our infrastructure to develop FB-102. Interest Income Interest income consists of interest earned on our cash, cash equivalents and short-term investments balances. Other Expense, net Other expense, net, consists of franchise taxes and foreign exchange gains and losses.
Our general and administrative expenses may fluctuate due to fluctuations in professional and advisory fees and as we build out our infrastructure to further develop FB102. Interest Income Interest income consists of interest earned on our cash, cash equivalents and short-term investment balances. Other Expense, net Other expense, net, consists of franchise taxes and foreign exchange gains and losses.
We anticipate research and development expenses to increase in the future as we continue to develop our current lead product candidate, FB-102. General and Administrative Expenses General and administrative expenses were $10.6 million for the year ended December 31, 2023 compared to $8.3 million for the same period in 2022.
We anticipate research and development expenses to increase in the future as we continue to develop our current lead product candidate, FB102. General and Administrative Expenses General and administrative expenses were $15.4 million for the year ended December 31, 2024 compared to $10.6 million for the same period in 2023.
On March 31, 2022, Forte entered into an “at-the-market” equity offering program (“ATM Facility”) whereby Forte may from time to time offer and sell shares of its common stock up to an aggregate offering price of $25.0 million during the term of the ATM Facility.
On March 31, 2022, we entered into an ATM Facility whereby we may from time to time offer and sell shares of our common stock up to an aggregate offering price of $25.0 million during the term of the ATM Facility.
Financing Activities Net cash provided by financing activities for the year ended December 31, 2023 was primarily due to the net proceeds of $24.8 million received from our Private Placement of 15,166,957 shares of the Company’s common stock at a purchase price of $1.006 per share, and 9,689,293 pre-funded warrants to purchase shares of common stock at a purchase price of $1.005 per pre-funded warrant.
Net cash provided by financing activities for the year ended December 31, 2023 was primarily due to the net proceeds of $24.8 million received from our 2023 Private Placement of 606,678 shares of the Company’s common stock at a purchase price of $25.15 per share, and 387,566 pre-funded warrants to purchase shares of common stock at a purchase price of $25.13 per pre-funded warrant.
We do not know when, or if, we will generate any revenue. We expect to incur ongoing losses as we develop our current lead product candidate, FB-102, which has potentially broad application for autoimmune and autoimmune-related indications such as graft-vs-host disease, vitiligo and alopecia areata. FB-102 is currently in Phase 1 clinical development.
We expect to incur ongoing losses as we develop our current lead product candidate, FB102, which has potentially broad application for autoimmune and autoimmune-related indications such as graft-vs-host disease, vitiligo and alopecia areata. FB102 is currently in Phase 1 clinical development.
Summary Consolidated Statements of Cash Flows The following table sets forth the primary sources and uses of cash for the years ended December 31, 2023 and 2022 (in thousands): Year Ended December 31, 2023 2022 Net cash (used in) provided by: Operating activities $ (28,706 ) $ (8,185 ) Investing activities 47 — Financing activities 24,684 7,241 Net decrease in cash $ (3,975 ) $ (944 ) Operating Activities Net cash used in operating activities for the year ended December 31, 2023 was $28.7 million and consisted primarily of a net loss of $31.5 million adjusted for non-cash stock-based compensation of $3.3 million and an increase in net operating assets of $0.4 million.
Summary Consolidated Statements of Cash Flows The following table sets forth the primary sources and uses of cash for the years ended December 31, 2024 and 2023 (in thousands): Year Ended December 31, 2024 2023 Net cash (used in) provided by: Operating activities $ (30,745 ) $ (28,706 ) Investing activities (35,993 ) 47 Financing activities 51,857 24,684 Net decrease in cash $ (14,881 ) $ (3,975 ) Operating Activities Net cash used in operating activities for the year ended December 31, 2024 was $30.7 million and consisted primarily of a net loss of $35.5 million adjusted for non-cash stock-based compensation of $3.1 million and a decrease in net operating assets of $1.7 million.
Interest Income The increase in interest income for the year ended December 31, 2023, compared with the same period in the prior year was primarily driven by higher interest income earned from our cash and cash equivalents as a result of higher interest rates.
Interest Income The increase in interest income for the year ended December 31, 2024, compared with the same period in the prior year was primarily driven by higher interest income earned from our cash and cash equivalents and short-term investments.
We had cash and cash equivalents of approximately $37.1 million as of December 31, 2023. We believe that our existing cash and cash equivalents will be sufficient to fund our operations for at least 12 months from the filing date of this Form 10-K. Future Capital Requirements We have not generated any revenue from product sales or from out-licensing.
We believe that our existing cash, cash equivalents and short-term investments will be sufficient to fund our operations for at least 12 months from the filing date of this Form 10-K. Future Capital Requirements We have not generated any revenue from product sales or from out-licensing. We do not know when, or if, we will generate any revenue.
Other Expense, net The decrease in other expense, net for the year ended December 31, 2023, compared with the same periods in the prior year was primarily driven by lower franchise tax expenses, partially offset by increased foreign exchange losses, net.
Other Expense, net The increase in other expense, net for the year ended December 31, 2024, compared with the same period in the prior year was primarily driven by higher franchise tax expenses, partially offset by foreign exchange gains.
We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates. 56 While our significant accounting policies are described in Note 2 of our consolidated financial statements included elsewhere in this Form 10-K, we believe that the following critical accounting policies are most important to understanding and evaluating our reported financial results.
While our significant accounting policies are described in Note 2 of our consolidated financial statements included elsewhere in this Form 10-K, we believe that the following critical accounting policies are most important to understanding and evaluating our reported financial results.
Net cash used in operating activities for the year ended December 31, 2022 was $8.2 million and consisted primarily of a net loss of $13.9 million adjusted for non-cash stock-based compensation of $4.0 million and a decrease in net operating assets of $1.7 million.
Net cash used in operating activities for the year ended December 31, 2023 was $28.7 million and consisted primarily of a net loss of $31.5 million adjusted for non-cash stock-based compensation of $3.3 million and an increase in net operating assets of $0.4 million.
The increase of $16.3 million was primarily due to a net increase of approximately $9.9 million in manufacturing expense, a net increase of approximately $6.0 million in preclinical and clinical expense as our FB-102 program entered the clinic, and a net increase in payroll and related expense of approximately $0.4 million primarily due to an increase in headcount.
The decrease of $0.7 million was primarily due to a decrease of approximately $7.0 million in manufacturing expenses offset by increases of $5.5 million in preclinical and clinical expense as our FB102 program entered the clinic, and a net increase in payroll and related expense of approximately $1.3 million primarily due to an increase in headcount.
In June 2021, we filed a shelf registration statement on Form S-3 that went effective in June 2021 which allowed us to raise up to $300 million in additional capital.
In June 2021, we filed a shelf registration statement on Form S-3 that went effective in June 2021 to register the issuance of up to $300 million in securities.
On July 31, 2023, we issued 15,166,957 shares of our common stock at a purchase price of $1.006 per Share, and 9,689,293 pre-funded warrants to purchase shares of common stock at a purchase price of $1.005 per pre-funded warrant ("in the Private Placement").
On July 31, 2023, we issued 606,678 shares of our common stock at a purchase price of $25.15 per share, and 387,566 pre-funded warrants to purchase shares of common stock at a purchase price of $25.13 per pre-funded warrant (the “2023 Private Placement").
Our general and administrative expenses may increase in the future due to increases in professional and advisory fees as we build out our infrastructure to develop FB-102.
The increase of $4.8 million was primarily due to an increase in professional and legal expenses. Our general and administrative expenses may fluctuate in the future due to fluctuations in professional and advisory fees as we build out our infrastructure to develop FB102.
As such, while the ATM Facility remains in place, Forte remains restricted in its ability to access additional funding from the sale of securities under Form S-3. We are not obligated to sell any shares under the ATM Facility.
As such, while the ATM facility remains in place, Forte remains restricted in its ability to access additional funding from the sale of securities under Form S-3. We had cash, cash equivalents and short-term investments of approximately $58.4 million as of December 31, 2024.
On July 31, 2023, the Company issued 15,166,957 shares of the Company’s common stock at a purchase price of $1.006 per Share, and 9,689,293 pre-funded warrants to purchase shares of common stock at a purchase price of $1.005 per pre-funded warrant ("Private Placement").
On July 31, 2023, we issued 606,678 shares of our common stock at a purchase price of $25.15 per Share, and 387,566 pre-funded warrants to purchase shares of common stock at a purchase price of $25.13 per pre-funded warrant ("2023 Private Placement").
We had approximately $37.1 million in cash and cash equivalents as of December 31, 2023. Our common stock is publicly traded on the Nasdaq Capital Market under the ticker symbol FBRX. Prior to our merger with Tocagen, Inc., a publicly traded biotechnology company, Forte was a privately held company incorporated in Delaware on May 3, 2017.
We had approximately $58.4 million in cash, cash equivalents and short-term investments as of December 31, 2024. Our common stock is publicly traded on the Nasdaq Capital Market under the ticker symbol FBRX.
On August 12, 2022, Forte filed an additional prospectus supplement relating to offer and sell an additional $2.7 million of shares of common stock.
On August 12, 2022, we filed an additional prospectus supplement relating to offer and sell an additional $2.7 million of shares of common stock. However, this shelf registration statement on Form S-3 expired in June 2024, and the Company would need to file a new registration statement on Form S-3 to sell additional shares under the ATM Facility.
We expect to incur operating losses in the future as we develop our current lead product candidate, FB-102. 58 In June 2021, Forte filed a shelf registration statement on Form S-3 that went effective in June 2021 which allowed Forte to raise up to $300 million in additional capital.
In June 2021, we filed a shelf registration statement on Form S-3 that went effective in June 2021 to register the issuance of up to $300 million in securities.
Overview Forte Biosciences, Inc. and its subsidiaries ( www.fortebiorx.com ) (“Forte”, “we”, “our”) is a clinical-stage biopharmaceutical company whose lead product candidate, FB-102, is currently in a Phase 1 trial. FB-102 is a proprietary molecule with potentially broad autoimmune and autoimmune-related applications including in such indications as graft-versus-host disease (“GvHD”), vitiligo and alopecia areata (“AA”).
Overview Forte Biosciences, Inc. and its subsidiaries ( www.fortebiorx.com ) (“Forte”, “we”, “our”) is a clinical-stage biopharmaceutical company whose current lead product candidate is FB102. FB102 is a proprietary anti-CD122 monoclonal antibody therapeutic candidate with potentially broad autoimmune and autoimmune-related indications. Our FB102 program aims to address key pathways implicated in these indications with a CD122 antagonist.
The Company’s FB-102 program aims to address key pathways implicated in these indications with a CD122 antagonist. CD122 is a subunit of IL-2/IL-15 receptors which are key regulators of NK cells and T cell subsets.
CD122 is a subunit of IL-2/IL-15 receptors which are key regulators of NK cells and certain T cell subsets. In FB102 mechanistic in-vitro studies, human donor T and NK cells were stimulated with either IL2 or IL15 in the presence or absence of FB102.
The primary objective of the Phase 1 trial is to assess the safety, tolerability and pharmacokinetics of single and multiple ascending doses of FB-102 under intravenous and subcutaneous administration. Three cohorts of single ascending doses were successfully completed in March 2024. Cohorts of multiple ascending doses have commenced.
Three cohorts of single and two cohorts of multiple ascending doses in a Phase 1 trial of healthy volunteers were completed in which FB102 demonstrated a good safety profile. The primary objective of the Phase 1 trial was to assess the safety, tolerability and pharmacokinetics of single and multiple ascending doses of FB102. No dose limiting toxicities were observed.
In addition, the warrants do not provide any guarantee of value or return.
In addition, the warrants do not provide any guarantee of value or return. Accordingly, the pre-funded warrants are classified as equity and accounted for as a component of additional paid-in capital at the time of issuance.
Net cash provided by financing activities for the year ended December 31, 2022 primarily consisted of $7.2 million in net proceeds from the sale of shares of our common stock under our ATM Facility.
Financing Activities Net cash provided by financing activities for the year ended December 31, 2024 was primarily due to the net proceeds of $51.9 million received from our 2024 Private Placement of 4,931,389 shares of the Company’s common stock at a purchase price of $5.552 per share, and 4,615,555 pre-funded warrants to purchase shares of common stock at a purchase price of $5.551 per pre-funded warrant.
Removed
Accordingly, the pre-funded warrants are classified as equity and accounted for as a component of additional paid-in capital at the time of issuance. 57 Shares of common stock into which the pre-funded warrants may be exercised are considered outstanding for purposes of computing net loss per share because the shares may be issued for little or no consideration and are exercisable after the original issuance date.
Added
FB102 significantly inhibited proliferation (4-5x inhibition in the proliferation of T cells and 6-8 fold inhibition in the proliferation of NK cells) and also inhibited activation of T cells. The level of FB102 inhibition of proliferation and activation was at levels comparable to unstimulated cells.
Removed
The increase of $2.3 million was primarily due to an increase in professional and legal expense of $2.6 million, an increase in other expense of $0.4 million including rent and personnel expenses, partially offset by a reduction in stock-based compensation expense of $0.7 million . The Company anticipates insurance reimbursements in subsequent quarters for portions of its litigation expense.
Added
Human donor regulatory T cell (Treg) studies stimulated with IL2 demonstrated comparable proliferation both in the presence and absence of FB102. Additionally, in-vitro assays demonstrated superiority of FB102 compared to competing antibodies. In the 4- and 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%).
Removed
As of December 31, 2023, we had an accumulated deficit of approximately $118.5 million.
Added
Additionally, after multiple doses at exposures comparable to human therapeutic doses, Treg levels in the FB102 dosing arm were similar to vehicle supporting the in-vitro data and the mechanism of action of FB102.
Removed
The ATM Facility may be terminated at any time upon ten days’ prior notice, or at any time in certain circumstances, including the occurrence of a material adverse effect on us.
Added
FB102 demonstrated significant reductions in the NK cell pharmacodynamic marker (greater than approximately 70%). Based on the successful completion of the phase 1 healthy volunteer cohorts, we initiated a patient-based trial in celiac disease in the third quarter of 2024. The study is currently enrolling and top-line results are expected in the second quarter of 2025.
Removed
We agreed to pay the sales agent a commission equal to 3.0% of the gross proceeds from the sales of shares under the ATM Facility and has agreed to provide the sales agent with customary indemnification and contribution rights.
Added
Celiac disease is an autoimmune disease that is triggered by consuming gluten and results in damage to the small intestine. Symptoms include diarrhea, fatigue, headaches, anemia, nausea and dermatitis herpetiformis (an itchy skin rash). A significant patient population of celiac disease patients do not respond to gluten free diet.
Removed
We issued 6.1 million shares of common stock for gross proceeds of approximately $7.7 million under the ATM Facility from July 1, 2022 through December 31, 2022 and incurred $595 thousand in issuance costs related to the ATM Facility and shelf registration statement.
Added
The health consequences for not treating include malnourishment, cancer, other autoimmune conditions. It is estimated that 1:133 in US (2.5 million people) have celiac disease (Fasano, Arch Intern Med. 2003 PMID: 12578508) and that 0.3% to 0.5% of celiac disease patients are non-responsive (Malamut Gastroenterology. 2024 38556189). There are no approved treatment options for celiac disease.
Added
FB102 has potentially other autoimmune and autoimmune-related applications including vitiligo, alopecia areata and type 1 diabetes (T1D). Vitiligo is a disease of the skin mediated primarily by NK and CD8+ T cells that attack melanocytes leading to patchy depigmentation of the skin. It is estimated that vitiligo affects 2 million people in the U.S (NIH).
Added
The global vitiligo treatment market size was estimated at $1.2 billion in 2018 and is projected to reach $1.9 billion by 2026 (Fortune Business Insights). Alopecia areata is a disease in which immune cells attack and damage hair follicles and is mediated primarily by CD8+ T cells and NK cells.
Added
The global alopecia treatment market was valued at $2.7 billion in 2018, and is projected to reach $3.9 billion by 2026, registering a CAGR of 4.6% from 2019 to 2026 (Allied Mkt Research)​. Type 1 diabetes is caused by autoreactive T Cells destroying insulin-producing pancreatic β- cells.
Added
CD8+ T cells with receptors recognizing β-cell specific peptides are enriched in pancreatic islets of T1D patients. Environmental stress causes β-cells to upregulate MHC and to express IL-15 and IL-15RA. (Herold 2024 Nat Rev Immunol. PMID 38308004). It is estimated that 64,000 people are diagnosed with T1D annually (https://beyondtype1.org/type-1-diabetes-statistics/).
Added
Prior to our merger with Tocagen, Inc., a publicly traded biotechnology company, Forte was a privately held company incorporated in Delaware on May 3, 2017. 56 On November 21, 2024, the Company issued 4,931,389 shares of the Company’s common stock at a purchase price of $5.552 per Share and 4,615,555 pre-funded warrants to purchase shares of common stock at a purchase price of $5.551 per pre-funded warrant ("2024 Private Placement") in connection with a Securities Purchase Agreement (the “2024 Purchase Agreement”).
Added
The pre-funded warrants have an exercise price of $0.001 per share of common stock, are immediately exercisable and remain exercisable until exercised in full.
Added
The holders of pre-funded warrants may not exercise a pre-funded warrant if the holder, together with its affiliates, would beneficially own more than 19.99% of the number of shares of common stock outstanding immediately after giving effect to such exercise.
Added
The holders of pre-funded warrants may increase or decrease such percentages not in excess of 19.99% by providing at least 61 days’ prior notice to the Company. In connection with the 2024 Private Placement, the Company filed a registration statement to register shares on Form S-3 that was declared effective on December 20, 2024.
Added
The gross proceeds of the 2024 Private Placement were $53.0 million and the Company incurred $3.4 million in issuance costs. Certain executive officers and senior management of the Company participated in this 2024 Private Placement, purchasing $475 thousand in shares of common stock at a purchase price of $5.552 per share.
Added
We also own one pending PCT application that is not material to Forte's FB102 program.
Added
We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.
Added
As of December 31, 2024, we had an accumulated deficit of $154.0 million. We expect to incur operating losses in the foreseeable future as we develop our current lead product candidate, FB102.
Added
On November 21, 2024, we issued 4,931,389 shares of our common stock at a purchase price of $5.552 per Share and 4,615,555 pre-funded warrants to purchase shares of common stock at a purchase price of $5.551 per pre-funded warrant in connection with a Securities Purchase Agreement.
Added
The pre-funded warrants have an exercise price of $0.001 per share of common stock, are immediately exercisable and remain exercisable until exercised in full.
Added
The holders of pre-funded warrants may not exercise a pre-funded warrant if the holder, together with its affiliates, would beneficially own more than 19.99% of the number of shares of common stock outstanding immediately after giving effect to such exercise.
Added
The holders of pre-funded warrants may increase or decrease such percentages not in excess of 19.99% by providing at least 61 days’ prior notice to the Company. In connection with the 2024 Private Placement, the Company filed a registration statement to register shares on Form S-3 that was declared effective on 60 December 20, 2024.
Added
The gross proceeds of the 2024 Private Placement were $53.0 million and the Company incurred $3.4 million in issuance costs. Certain executive officers and senior management of the Company participated in this 2024 Private Placement, purchasing $475 thousand in shares of common stock at a purchase price of $5.552 per share.
Added
However, this shelf registration statement on Form S-3 expired in June 2024, and the Company would need to file a new registration statement on Form S-3 to sell additional shares under the ATM Facility.
Added
Investing Activities Net cash used in investing activities for the year ended December 31, 2024 was primarily due to the purchase of U.S treasury bills.

Other FBRX 10-K year-over-year comparisons