Checkpoint Therapeutics, Inc. (NASDAQ:CKPT) is a clinical-stage immunotherapy and targeted oncology company focused on the development and commercialization of novel treatments for patients with solid tumor cancers. The company's lead product candidate, cosibelimab, an anti-PD-L1 antibody, is currently being evaluated in an ongoing global, open-label, multicohort Phase 1 clinical trial in checkpoint therapy-naïve patients with selected recurrent or metastatic cancers, including ongoing cohorts in locally advanced and metastatic cutaneous squamous cell carcinoma (CSCC).
Regulatory Developments
Based on top-line and interim results in metastatic and locally advanced CSCC, respectively, Checkpoint submitted a Biologics License Application (BLA) to the U.S. Food and Drug Administration (FDA) for these indications in January 2023. However, in December 2023, the FDA issued a complete response letter (CRL) for the cosibelimab BLA due to inspection issues at the third-party contract manufacturing organization. Checkpoint intends to seek to address the issues raised in the CRL in a potential BLA resubmission.
Product Pipeline
In addition to cosibelimab, Checkpoint is evaluating its lead small-molecule, targeted anti-cancer agent, olafertinib, a third-generation epidermal growth factor receptor (EGFR) inhibitor, as a potential new treatment for patients with EGFR mutation-positive non-small cell lung cancer (NSCLC). The company plans to use data from its licensor's ongoing Phase 3 clinical trial of olafertinib, conducted only in China, to potentially support a U.S. New Drug Application (NDA) and comparable applications for marketing approval outside the U.S.
Financials
Checkpoint's financial performance has been marked by significant losses since its inception in 2014. For the fiscal year ended December 31, 2023, the company reported an annual net loss of $51.8 million, annual revenue of $103,000, annual operating cash flow of -$47.6 million, and annual free cash flow of -$47.6 million. This trend has continued into the first quarter of 2024, with the company reporting a net loss of $10.9 million, no revenue, and net cash used in operating activities of $6.5 million.
Liquidity
The company's cash and cash equivalents stood at $11.2 million as of March 31, 2024, which management believes is only sufficient to fund its operating expenses into the third quarter of 2024, assuming no exercises of outstanding cash warrants. To address this liquidity concern, Checkpoint has been actively pursuing additional financing through public or private equity or debt offerings, as well as potential partnerships or other corporate development transactions.
Quarterly Financial Results
In the first quarter of 2024, Checkpoint reported research and development expenses of $8.5 million, a decrease from $15.8 million in the same period of the prior year. This decrease was primarily due to reduced manufacturing costs and clinical trial expenses for cosibelimab. General and administrative expenses, on the other hand, increased slightly to $2.5 million in the first quarter of 2024, compared to $2.3 million in the same period of 2023.
Recent Developments
Checkpoint's lead product candidate, cosibelimab, has shown promising results in its ongoing Phase 1 clinical trial. In January 2022, the company announced top-line results from a registration-enabling cohort of the trial in patients with metastatic CSCC, where cosibelimab demonstrated a confirmed objective response rate (ORR) of 47.4%. In June 2022, Checkpoint reported interim results from a registration-enabling cohort in patients with locally advanced CSCC, where cosibelimab demonstrated a confirmed ORR of 54.8%. More recently, in July 2023, the company announced longer-term results for cosibelimab, which showed a deepening of response over time, with complete response rates of 26% and 13% in locally advanced and metastatic CSCC, respectively. Additionally, the confirmed ORR in metastatic CSCC increased to 50.0%.
Checkpoint's other product candidate, olafertinib, is also progressing through clinical development. The company plans to use data from its licensor's ongoing Phase 3 clinical trial of olafertinib, conducted only in China, to potentially support a U.S. NDA and comparable applications for marketing approval outside the U.S.
Outlook
The company's future growth and success will depend on its ability to successfully develop and commercialize its product candidates, as well as its ability to acquire or in-license additional products or product candidates. Checkpoint faces several risks, including the potential for delays or failures in its clinical trials, the possibility of not receiving regulatory approvals for its product candidates, and the challenge of establishing a commercial organization to market and sell any approved products.
Risks and Challenges
Checkpoint's liquidity position is a significant concern, as the company's cash and cash equivalents are only expected to fund its operations into the third quarter of 2024, assuming no exercises of outstanding cash warrants. The company will need to secure additional funding through equity or debt offerings, partnerships, or other corporate development transactions to continue its operations and advance its product candidates through clinical development and potential commercialization.
Conclusion
Checkpoint Therapeutics is a promising oncology player with a diversified pipeline of product candidates, including the anti-PD-L1 antibody cosibelimab and the EGFR inhibitor olafertinib. While the company has faced regulatory setbacks with the cosibelimab BLA, it remains committed to addressing the issues raised by the FDA and resubmitting the application. Checkpoint's financial performance has been marked by significant losses, and its liquidity position is a concern that will need to be addressed through additional financing or strategic partnerships. Investors should closely monitor the company's progress in navigating the clinical and regulatory landscape, as well as its efforts to secure the necessary funding to advance its pipeline and achieve its long-term goals.