After months of looking into various other possibilities, Fresh Tracks Therapeutics has decided to dissolve its operations, as the board of directors of the firm has unanimously approved a liquidation plan.
The medical device company, located in Colorado, will be ceasing all clinical and preclinical research programs as well as laying off the majority of its personnel by the beginning of October in order to lessen its burden and wind down.
According to records filed with the Securities and Exchange Commission, the governing board of Fresh Tracks has decided to terminate Andrew Sklawer’s position as president and chief executive officer, effective October 2. This decision was made in conjunction with the planned liquidation, which the shareholders must still approve. Albert Marchio II, currently the chief accounting officer of the company, will take the reins. In addition to his roles as director and head of the board, he will also assume the responsibilities of CFO and secretary.
Before coming to this determination, Fresh Tracks conducted an extensive investigation for prospective strategic alternatives over the course of the last several months. These options included probable mergers, reverse mergers, and acquisitions. The research and development operations at the autoimmune disease-focused biotech company were halted during the summer as the company looked for a prospective buyer to help it overcome its resource constraints.
Fresh Tracks just recently completed the sale of the rights to an additional $168 million in biobucks to Botanix Pharmaceuticals for the anticholinergic medication sofpironium bromide. The company received an upfront payment of only $6.6 million for this transaction. The previous year, Botanix had already purchased all of the rights to the drug, which at the time was in the last stages of the development process to treat excessive underarm perspiration.
After the sale of sofpironium bromide, the most significant asset that Fresh Track has is FRTX-02, which is the first oral DYRK1A inhibitor to become available in the clinic for the treatment of an autoimmune disorder. This spring, the biotechnology company announced the findings of phase 1 testing, which demonstrated that the drug is “generally safe and well-tolerated, once-daily oral treatment for a broad range of autoimmune and inflammatory diseases.”
The firm has tried everything, but nothing has worked. To seek consent for the liquidation and dissolution, the organization now intends to conduct a special shareholder conference in the last quarter of the current year.
Upon receiving the necessary approvals and submitting the certificate of dissolution, Fresh Tracks expects to issue liquidation dividends to shareholders in the range of $5 million to $7 million (without including any reserves). As of September 19th, there were estimated to be 5,926,497 shares of outstanding common stock. The biotech did note, however, that actual shareholder distributions might vary widely depending on a variety of circumstances.
The stock price of the firm was 58 cents per share just before the market closed. The stock price increased to 91 cents at 5 p.m. ET on September 19 after the announcement of the liquidation.
Despite all this, Fresh Tracks is clinging to a slim chance of survival. The biotech stated that before the dissolution is implemented, it may reconsider liquidating and dissolving if it receives an offer that would result in greater value for shareholders.