Fresh Tracks Therapeutics is dissolving after spending months searching for alternatives, with the company’s board unanimously approving a liquidation plan.
To lighten its load and wind down, the Colorado-based biotech is discontinuing all clinical and preclinical development programs and laying off most of its team by early October, according to a Sept. 19 release.
In connection with the proposed liquidation—which still needs to be approved by shareholders—the board has let go of Fresh Tracks President and CEO Andrew Sklawer, effective Oct. 2, according to Securities and Exchange Commission documents. The company’s chief financial officer Albert Marchio II will take the top spot while also holding CFO and secretary along with director and chair of the board titles.
Over the last few months, Fresh Tracks has searched for potential strategic alternatives including possible mergers, reverse mergers and acquisitions before reaching this conclusion. Over the summer, the autoimmune-focused biotech shut down R&D work to search for a potential buyer to overcome its limited resources.
Fresh Tracks also recently sold its rights to $168 million in biobucks back to Botanix Pharmaceuticals for anticholinergic drug sofpironium bromide in return for just $6.6 million upfront. Botanix had already bought the overall rights to the drug, which was in late-stage development for excessive underarm sweating, the previous year.
With sofpironium bromide sold off, Fresh Track’s most advanced asset is FRTX-02, the first oral DYRK1A inhibitor to enter the clinic for an autoimmune condition. This spring, the biotech touted phase 1 results showing that the therapy is a “generally safe and well-tolerated, once-daily oral treatment for a broad range of autoimmune and inflammatory diseases.”
However, all of Fresh Tracks’ efforts have come up short. The company now plans on holding a special shareholder meeting in the fourth quarter of this year to ask for approval of the liquidation and dissolution.
Upon approval and the filing of the certificate of dissolution, Fresh Tracks plans to make liquidating distributions to shareholders in an aggregate amount between $5 million and $7 million, or 84 cents and $1.17 per share—figures that exclude money the company intends to save. Those estimates are based on 5,926,497 shares of outstanding common stock existing as of Sept. 19. However, the biotech added that the amount actually distributed to shareholders could “vary substantially” based on a number of factors.
Before market close, the company’s stock stood at 58 cents per share. The liquidation, which was announced right after market close Sept. 19, sent the stock up to 91 cents as of 5 p.m. ET.
With all that said, Fresh Tracks is still hanging on to a sliver of hope it can keep operating. If, before the dissolution is finalized, the biotech receives an offer that would provide superior value to shareholders, the liquidation and dissolution could be abandoned, the company said.