Business Overview and History

Checkpoint Therapeutics, Inc. (CKPT) is a clinical-stage immunotherapy and targeted oncology company that has recently made significant strides in the biopharmaceutical industry. The company's flagship product, Cosibelimab, has garnered significant attention after receiving FDA approval for the treatment of metastatic or locally advanced cutaneous squamous cell carcinoma (cSCC) in adults who are not candidates for curative surgery or radiation.

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. (FBIO), a biopharmaceutical company focused on acquiring and advancing assets to enhance long-term value for shareholders.

Checkpoint Therapeutics' primary focus is the development and commercialization of novel treatments for patients with solid tumor cancers. In March 2015, the company entered into an exclusive license agreement with Dana-Farber Cancer Institute to develop a portfolio of fully human immuno-oncology targeted antibodies, including those targeting PD-L1, Glucocorticoid-induced TNFR-related protein (GITR), and Carbonic anhydrase IX.

The company's pipeline includes several product candidates, with Cosibelimab being the most advanced. In October 2015, Checkpoint entered into a collaboration agreement with Adimab, LLC to discover and optimize antibodies, including Cosibelimab. Additionally, the company secured license agreements with NeuPharma, Inc. in March 2015 for novel EGFR inhibitors, and with Jubilant Biosys Limited in May 2016 for BET inhibitors.

In 2016, Checkpoint formed collaborations with TG Therapeutics, Inc. (TGTX) to develop and commercialize anti-PD-L1 and anti-GITR antibody research programs in hematological malignancies, while retaining rights for solid tumors. These collaborations, including a sublicense agreement for BET inhibitors, were mutually terminated effective September 30, 2023.

Financial Performance and Ratios

Checkpoint Therapeutics' financial performance has been characterized by significant research and development expenses, as the company focuses on advancing its pipeline of product candidates. For the fiscal year ended December 31, 2023, the company reported total revenue of $103,000 and a net loss of $51.85 million, or a net loss per share of $3.17. The annual operating cash flow and free cash flow for 2023 were both negative $47.59 million.

For the third quarter of 2024, Checkpoint Therapeutics reported no revenue and a net loss of $9.73 million. The company's financial performance reflects increased research and development expenses as it advanced its pipeline, including preparing for a potential commercial launch of Cosibelimab.

As of September 30, 2024, Checkpoint Therapeutics had cash and cash equivalents of $4.70 million, which the company believes are only sufficient to fund its operating expenses into the first quarter of 2025, assuming no exercises of outstanding common stock warrants. The company's current ratio and quick ratio, both measures of liquidity, stood at 0.29 as of September 30, 2024, indicating a potential need for additional financing to support its operations. Notably, the company has a debt-to-equity ratio of 0, suggesting no long-term debt on its balance sheet.

Checkpoint Therapeutics currently only sells in the US market, limiting its geographic diversification. The company does not have any disclosed available credit lines, which may restrict its financial flexibility.

Key Developments and Risks

The FDA's approval of Cosibelimab in December 2024 was a significant milestone for Checkpoint Therapeutics, as it marked the company's transformation into a commercial-stage biopharmaceutical entity. The approval of Cosibelimab, the first and only PD-L1 blocking antibody approved for the treatment of advanced cSCC, has the potential to generate substantial revenue for the company and provide a new treatment option for patients with this challenging form of skin cancer.

In January 2023, Checkpoint Therapeutics submitted a Biologics License Application (BLA) to the FDA for Cosibelimab based on positive top-line and interim results in metastatic and locally advanced cSCC, respectively. However, in December 2023, the FDA issued a complete response letter (CRL) due to inspection issues at the company's third-party contract manufacturing organization. In July 2024, Checkpoint announced the completion of a BLA resubmission to address the approvability issues cited in the CRL. The FDA accepted this resubmission as a complete response and set a Prescription Drug User Fee Act (PDUFA) goal date of December 28, 2024.

In addition to Cosibelimab, Checkpoint is evaluating 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. The company announced positive top-line results from a registration-enabling cohort of its Phase 1 clinical trial for Cosibelimab in metastatic cSCC in January 2022, followed by promising interim results for locally advanced cSCC in June 2022.

However, Checkpoint Therapeutics faces several risks that could impact its future performance. The company's heavy reliance on the success of Cosibelimab, its sole approved product, exposes it to significant concentration risk. Additionally, the company's limited financial resources and the need for additional funding to support its operations and future development activities pose a risk to its long-term viability.

Furthermore, the highly competitive nature of the biopharmaceutical industry, with the potential for new entrants and the development of alternative treatments, could challenge Checkpoint Therapeutics' ability to maintain a significant market share for Cosibelimab. The company also faces the risk of potential product liability claims, intellectual property disputes, and regulatory challenges that could delay or prevent the commercialization of its products.

Outlook and Conclusion

Checkpoint Therapeutics' recent FDA approval of Cosibelimab has positioned the company for a transformative period. With the PDUFA goal date for the BLA resubmission set for December 28, 2024, the company is poised to potentially add a new treatment option for patients with advanced cSCC, a disease with limited therapeutic alternatives.

As of September 30, 2024, Checkpoint Therapeutics had an accumulated deficit of $341.7 million, highlighting the significant investments made in research and development. The company's ability to secure additional funding through equity or debt offerings, or other potential sources such as partnerships, will be crucial for fully developing and commercializing its product candidates.

Checkpoint Therapeutics must navigate the challenges of commercializing Cosibelimab, securing additional financing to support its operations, and diversifying its product pipeline to mitigate the risks associated with its current concentration on a single approved product. The company's ability to execute on its strategic initiatives and effectively manage the risks it faces will be crucial in determining its long-term success and value creation for shareholders.

The company's focus on developing novel treatments for solid tumor cancers, particularly its lead candidates Cosibelimab and olafertinib, positions it in a high-potential area of oncology research. However, the path from clinical development to successful commercialization remains challenging and resource-intensive. Checkpoint Therapeutics' future success will depend on its ability to navigate regulatory hurdles, establish a strong market presence for Cosibelimab, and advance its pipeline while managing its financial resources effectively.