Executive Summary / Key Takeaways

• Forte Biosciences is a clinical-stage biopharmaceutical company focused on developing FB102, a proprietary anti-CD122 monoclonal antibody, for autoimmune and autoimmune-related diseases, representing a strategic pivot from its prior program.
• FB102 targets key immune pathways by inhibiting T and NK cell proliferation while sparing regulatory T cells, a mechanism potentially applicable across multiple indications including celiac disease and non-segmental vitiligo.
• Recent positive top-line data from the Phase 1b celiac disease study provides initial clinical validation for FB102 in a patient population with significant unmet need, serving as a crucial catalyst for the program.
• The company's financial position was recently bolstered by a $75 million public offering in June 2025, following prior private placements, providing capital to advance ongoing clinical trials for celiac disease and vitiligo.
• Forte operates in a highly competitive landscape against larger, established players with approved products, necessitating successful clinical execution and potential technological differentiation to capture market share and achieve commercial viability.

A Strategic Pivot Towards Autoimmunity

Forte Biosciences, Inc. is a clinical-stage biopharmaceutical company dedicated to addressing significant unmet needs in autoimmune and autoimmune-related diseases. The company's current focus centers entirely on its lead product candidate, FB102, a proprietary anti-CD122 monoclonal antibody. This represents a significant strategic evolution for Forte, which previously invested substantial resources into FB-401, a live biotherapeutic for inflammatory skin diseases. Following the discontinuation of the FB-401 program in 2021 after its clinical trial did not meet the primary endpoint, Forte underwent a strategic re-evaluation, culminating in the decision to concentrate efforts on the FB102 program in 2022.

The company's journey began as a privately held entity in 2017, merging with publicly traded Tocagen, Inc. in June 2020 to become a Nasdaq-listed company. This history underscores Forte's transition from an early-stage private company to a public entity navigating the complexities and capital requirements of clinical development. The shift to FB102 positions Forte within the competitive landscape of autoimmune disease therapies, a market characterized by intense innovation and the presence of numerous large pharmaceutical and biotechnology companies.

The Science Behind FB102: Targeting Immune Regulation

FB102 is designed as an antagonist of CD122, a subunit shared by the receptors for Interleukin-2 (IL-2) and Interleukin-15 (IL-15). These cytokines are critical regulators of the immune system, particularly influencing the activity and proliferation of Natural Killer (NK) cells and certain subsets of T cells. Dysregulation of these cell types is implicated in the pathology of various autoimmune conditions.

The strategic rationale for targeting CD122 with FB102 is rooted in preclinical and early clinical observations. In-vitro studies demonstrated that FB102 significantly inhibited the proliferation and activation of human donor T and NK cells stimulated by IL-2 or IL-15. Crucially, these studies also indicated that FB102 allowed for comparable proliferation of regulatory T cells (Tregs) stimulated with IL-2, suggesting a potential for selective immune modulation that could dampen harmful effector responses while preserving beneficial regulatory functions. Non-human primate studies further supported this mechanism, showing significant reductions in the NK cell pharmacodynamic marker (up to 80-90%) after a single dose and maintenance of Treg levels similar to vehicle after multiple doses.

This targeted approach aims to offer a differentiated therapeutic profile compared to broader immunosuppressants. While precise, quantifiable comparative benefits over specific competitor mechanisms are still being established through clinical trials, the preclinical data suggests FB102 could offer a balance of efficacy in modulating disease-driving cells while potentially maintaining immune tolerance via Tregs. This mechanism forms the core of Forte's technological moat and its strategy to address diseases where IL-2/IL-15 signaling plays a central role.

Advancing FB102: Clinical Trials and Recent Milestones

Forte has successfully completed Phase 1 single and multiple ascending dose cohorts in healthy volunteers, demonstrating a good safety profile and significant reductions in the NK cell pharmacodynamic marker (greater than approximately 70%). Building on these results, the company initiated patient-based clinical trials for two distinct autoimmune indications: celiac disease and non-segmental vitiligo.

The trial for celiac disease was initiated in the third quarter of 2024. Celiac disease represents a significant market opportunity with an estimated 2.5 million people affected in the U.S., including a substantial non-responsive patient population with no approved treatment options. Top-line results from this Phase 1b study were expected in the second quarter of 2025, and recent news in June 2025 confirmed positive data from this trial. This positive readout is a critical validation point for the FB102 mechanism in a relevant patient population and serves as a major catalyst for the program's future.

A patient-based trial for non-segmental vitiligo was initiated in the first quarter of 2025. Vitiligo, estimated to affect 2 million people in the U.S., is another autoimmune skin condition mediated by NK and CD8 T cells, aligning with FB102's proposed mechanism of action. The initiation of this trial expands the clinical evaluation of FB102 and targets another area of high unmet need. Potential future indications under consideration include alopecia areata and type 1 diabetes, further highlighting the broad potential of the anti-CD122 approach.

Financial Standing and Capital Strategy

As a clinical-stage biopharmaceutical company without approved products, Forte Biosciences does not generate revenue from product sales. For the three months ended March 31, 2025, the company reported a net loss of $15.7 million, contributing to an accumulated deficit of $169.7 million as of that date. Operating expenses totaled $16.1 million in Q1 2025, a notable increase from $7.8 million in Q1 2024. This rise was primarily driven by a significant $8.9 million increase in manufacturing and clinical expenses to support the ongoing celiac disease and vitiligo trials, partially offset by lower personnel costs. General and administrative expenses remained relatively stable at $3.4 million in Q1 2025.

Cash flow from operations reflects the company's development stage. Net cash used in operating activities was $10.4 million for the three months ended March 31, 2025. As of March 31, 2025, Forte held approximately $45.9 million in cash and cash equivalents. Management stated that based on its current operating plan, this cash position was expected to be sufficient to fund operations for at least twelve months from the May 15, 2025 filing date of the 10-Q.

Recognizing the substantial capital requirements for clinical development, Forte has actively pursued financing. The company completed private placements in July 2023 ($25.0 million gross proceeds) and November 2024 ($53.0 million gross proceeds). Furthermore, in March 2025, Forte filed a shelf registration statement, declared effective in April 2025, for the issuance of up to $300.0 million in securities. Most recently, in June 2025, the company announced the pricing of a public offering expected to raise $75 million in gross proceeds. These financing activities are critical to extending the company's cash runway and funding the advancement of the FB102 program through key clinical milestones.

Navigating a Competitive Landscape

The autoimmune disease market is highly competitive, featuring numerous established players with significant resources and approved therapies. Key competitors include large pharmaceutical companies like Pfizer (PFE), as well as more specialized biotech firms such as Incyte (INCY) (with its approved vitiligo therapy, Opzelura) and others like Zydus Lifesciences (active in vitiligo in certain markets) and Incannex Healthcare (IXHL). Many of these competitors possess substantially greater financial, technical, and commercial capabilities than Forte.

Forte's competitive positioning hinges on the potential differentiation of FB102's mechanism and clinical profile. While competitors offer established treatments, Forte aims to demonstrate that FB102's targeted anti-CD122 approach can offer advantages in terms of efficacy, safety, or convenience, particularly for specific patient populations or disease severities. For instance, Incyte's Opzelura is a topical JAK inhibitor, while FB102 is a monoclonal antibody, representing a different therapeutic modality with potentially distinct benefits and side effect profiles. Zydus's Melgain is a peptide-based topical therapy, also distinct from FB102.

Forte's early stage of development means it currently holds negligible market share. Success will depend on generating compelling clinical data that supports regulatory approval and drives market acceptance among physicians, patients, and payors. Factors influencing market acceptance will include FB102's demonstrated efficacy and safety profile compared to existing and emerging alternatives, its ease of administration, pricing, and reimbursement coverage. Forte's reliance on third parties for manufacturing and clinical trials also presents operational risks that larger, more integrated competitors may mitigate internally. The ability to effectively manage these external relationships and ensure quality and timely supply is crucial for competitive execution.

Risks and Outlook

Investing in clinical-stage biopharmaceutical companies like Forte Biosciences involves significant risks. The company's future is heavily dependent on the successful development and potential commercialization of FB102. Clinical trials are inherently uncertain, with a high risk of failure at any stage due to lack of efficacy, unacceptable safety profiles, or unforeseen issues. Delays in clinical trials, which can arise from difficulties in patient enrollment, site activation, or regulatory requirements, would increase costs and push back potential approval timelines.

Forte will require substantial additional capital beyond its current resources to complete the clinical development of FB102 across multiple indications and potentially build commercial capabilities. The ability to raise this funding on favorable terms, or at all, is subject to market conditions and the company's clinical progress. Reliance on third parties for manufacturing and clinical execution introduces risks related to quality control, capacity, and timely delivery. Furthermore, the competitive landscape is dynamic, with rivals potentially developing superior therapies or securing intellectual property that could challenge Forte's position.

Despite these risks, the recent positive top-line data from the celiac disease trial provides a significant positive signal and supports the potential of the FB102 mechanism. This data, combined with the recent capital raise, positions Forte to continue advancing its clinical programs. The outlook hinges on the successful progression of the vitiligo trial and further data readouts from the celiac program, which will be critical in shaping the future trajectory and value of the company.

Conclusion

Forte Biosciences is at a pivotal juncture, having strategically refocused on the FB102 program following the setback with its prior candidate. The company's investment thesis is now centered on the potential of its anti-CD122 monoclonal antibody to offer a differentiated therapeutic approach for autoimmune diseases. The recent positive data in the Phase 1b celiac disease study marks a crucial step forward, providing initial clinical validation for FB102 and injecting positive momentum into the program.

While the company operates in a challenging and competitive environment and faces inherent risks associated with clinical development and financing, the recent capital infusion provides the necessary resources to pursue key near-term milestones, particularly the ongoing vitiligo trial and further development in celiac disease. The ability of Forte to translate promising preclinical and early clinical data into successful later-stage trials and ultimately achieve regulatory approval will determine its ability to capture market share and create value in the competitive autoimmune therapy landscape. Investors will be closely watching for subsequent clinical data and updates on the company's strategic path forward.