Business Overview and History
Checkpoint Therapeutics, Inc. (CKPT) is a clinical-stage immunotherapy and targeted oncology company that has made significant strides in developing novel treatments for patients with solid tumor cancers. As the company navigates a pivotal moment in its history, with a Biologics License Application (BLA) for its lead candidate cosibelimab under review by the U.S. Food and Drug Administration (FDA), it is essential to examine Checkpoint's journey, financial standing, and the potential road ahead.
Checkpoint Therapeutics was incorporated in Delaware in November 2014 and commenced principal operations in March 2015. The company is a majority-controlled subsidiary of Fortress Biotech, Inc. and is focused on the acquisition, development, and commercialization of novel treatments for patients with solid tumor cancers.
In March 2015, Checkpoint entered into an exclusive license agreement with Dana-Farber Cancer Institute to develop a portfolio of fully human immuno-oncology targeted antibodies. This agreement provided Checkpoint with the rights to develop antibodies targeting PD-L1, GITR, and Carbonic anhydrase IX. Additionally, in October 2015, Fortress, Checkpoint's parent company, entered into a collaboration agreement with Adimab, LLC to discover and optimize antibodies, including Checkpoint's anti-PD-L1 antibody cosibelimab.
Checkpoint's lead antibody product candidate, cosibelimab, is an anti-programmed death-ligand 1 (PD-L1) antibody licensed from the Dana-Farber Cancer Institute. In January 2023, Checkpoint submitted a BLA to the FDA for cosibelimab in the treatment of patients with metastatic or locally advanced cutaneous squamous cell carcinoma (cSCC) who are not candidates for curative surgery or radiation. This submission was based on positive results from the company's ongoing Phase 1 clinical trial, which demonstrated cosibelimab's ability to achieve a confirmed objective response rate of 47.4% in metastatic cSCC and 54.8% in locally advanced cSCC.
However, in December 2023, the FDA issued a Complete Response Letter (CRL) for the cosibelimab BLA, citing findings from a multi-sponsor inspection of Checkpoint's third-party contract manufacturing organization (CMO) as the reason for the delay in approval. Undeterred, Checkpoint resubmitted the BLA in July 2024, and the FDA has set a Prescription Drug User Fee Act (PDUFA) goal date of December 28, 2024, for the review of the resubmission.
Throughout its history, Checkpoint has relied on funding from equity offerings to advance its clinical programs. The company has raised capital multiple times through registered direct offerings, helping to fund the development of its product candidates, including cosibelimab. However, Checkpoint has yet to generate any revenue from product sales, having incurred significant operating losses since inception.
Checkpoint has also entered into various collaboration agreements with TG Therapeutics, Inc. (TGTX), a related party, to develop and commercialize certain assets in connection with its licenses in the field of hematological malignancies, while retaining the rights to develop and commercialize these assets in solid tumors. Effective September 30, 2023, Checkpoint and TGTX mutually agreed to terminate these collaborations, with full rights reverting back to Checkpoint.
Financial Overview
Checkpoint Therapeutics has incurred significant losses since its inception, reporting a net loss of $51.85 million in 2023, $62.62 million in 2022, and $56.67 million in 2021. The company's accumulated deficit as of September 30, 2024, stood at $341.70 million.
In 2023, Checkpoint reported total revenue of $103,000, a decrease from $192,000 in 2022 and $268,000 in 2021. The company's research and development expenses were $43.57 million in 2023, $49.83 million in 2022, and $48.45 million in 2021, reflecting its focus on the development of its product candidates.
For the most recent fiscal year (2023), Checkpoint reported the following financial metrics: - Revenue: $103,000 - Net Income: -$51,847,000 - Operating Cash Flow (OCF): -$47,590,000 - Free Cash Flow (FCF): -$47,590,000
In the most recent quarter (Q3 2024), the company's financial performance was as follows: - Revenue: $0 - Net Income: -$9,725,000 - Operating Cash Flow (OCF): -$11,210,000 - Free Cash Flow (FCF): -$11,210,000
The decrease in revenue and increase in net loss in the most recent quarter was primarily due to continued investment in research and development activities, including commercial manufacturing costs and clinical trials for the company's lead product candidate, cosibelimab.
Liquidity
Checkpoint's cash and cash equivalents amounted to $4.93 million as of December 31, 2023, a decrease from $12.07 million at the end of 2022 and $54.73 million at the end of 2021. The company's working capital, calculated as current assets minus current liabilities, was negative $13.05 million as of December 31, 2023, compared to negative $19.48 million in 2022 and positive $29.75 million in 2021.
As of September 30, 2024, Checkpoint had $4.7 million in cash and cash equivalents. The company does not have any outstanding debt or available credit lines, resulting in a debt-to-equity ratio of 0. The current ratio and quick ratio both stand at 0.29, indicating potential liquidity challenges in the near term.
Checkpoint believes its current cash and cash equivalents are only sufficient to fund its operating expenses into the first quarter of 2025, assuming no exercises of outstanding common stock warrants. The company will need to secure additional funding through equity or debt offerings, or other potential sources such as partnerships, to fully develop and commercialize its product candidates, if approved.
Product Pipeline and Development
Checkpoint's product pipeline includes two main candidates:
1. Cosibelimab (CK-301): This is the company's lead antibody product candidate, an anti-PD-L1 antibody licensed from the Dana-Farber Cancer Institute. Checkpoint is evaluating cosibelimab 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).
2. Olafertinib (CK-101): This is Checkpoint's lead small-molecule, targeted anti-cancer agent. It is a third-generation epidermal growth factor receptor (EGFR) inhibitor being evaluated as a potential new treatment for patients with EGFR mutation-positive non-small cell lung cancer.
Geographic Performance
Checkpoint Therapeutics is a small-cap company that currently only sells products in the United States. As the company is still in the clinical stage and has not yet commercialized its products, its geographic performance is limited to its ongoing clinical trials and research activities within the United States.
Risks and Challenges
Checkpoint Therapeutics faces several risks and challenges that investors should consider. The company's ability to successfully develop and commercialize its product candidates, particularly cosibelimab, is critical to its future success. The FDA's review and potential approval of the cosibelimab BLA resubmission represent a significant milestone, and any delays or setbacks could have a material impact on the company's operations and financial condition.
Additionally, Checkpoint's reliance on third-party manufacturers and contract research organizations (CROs) for the production and testing of its product candidates introduces operational risks that could disrupt the company's development timeline. The highly competitive nature of the biopharmaceutical industry also poses a challenge, as Checkpoint must differentiate its therapies and navigate the regulatory landscape to gain market share.
The company's financial position remains a concern, with limited cash reserves and ongoing operating losses. Checkpoint will need to secure additional funding to support its operations and continue the development of its product candidates, which may result in dilution for existing shareholders or increased financial obligations.
Conclusion
Checkpoint Therapeutics is a clinical-stage oncology company that has made notable advancements in the development of novel cancer treatments, particularly with its lead candidate cosibelimab. As the company navigates the critical juncture of the FDA's review of the cosibelimab BLA resubmission, Checkpoint's ability to overcome operational challenges and secure regulatory approval will be pivotal to its future success and the creation of shareholder value.
The company's financial position remains precarious, with limited cash reserves and no revenue from product sales. However, the potential approval of cosibelimab could significantly change Checkpoint's trajectory. Investors should closely monitor the FDA's decision on the BLA resubmission, expected by December 28, 2024, as it will likely have a substantial impact on the company's future prospects and financial stability.