BOULDER — Fresh Tracks Therapeutics Inc., which has spent the past few months mulling its merger and acquisition options, said in the second quarter of 2023 that it has “paused substantially all of its research and development activities in order to conserve capital resources during its ongoing evaluation of potential strategic options.”
That evaluation process “will dictate the company’s future path including to what extent the current pipeline continues to be developed.”
The R&D pause came at around the same time the company amended its 2022 asset purchase agreement with Botanix Pharmaceuticals Ltd. to give Botanix future profits from the sale of its excessive-sweating drug.
Under the previous agreement, Fresh Tracks, previously called Brickell Biotech, received a $9 million upfront payment for rights to its excessive-sweating drug while maintaining the potential for another $168 million in future milestone payments. Now, it’s agreed to give up future paydays for a $8.25 million lump sum now.
“Over the past few months, the board and management have made several strategic decisions to strengthen the company’s balance sheet and significantly reduce our operating costs,” Fresh Tracks CEO Andrew Sklawer said in a prepared statement. “We believe these decisions better position the Company for potential strategic alternatives that could maximize shareholder value. We continue to seek and evaluate strategic options and will provide updates as appropriate.”
Company leaders say the move will boost Fresh Tracks’ cash position as they explore strategic options for a merger or sale.
The 2022 rebrand of Fresh Tracks, which promoted a new CEO this year amid ongoing financial woes, occurred as the company sought to pivot away from drugs that combat excessive sweating toward treatments for autoimmune, inflammatory and other debilitating diseases. The sale of the rights to sofpironium bromide, the excessive-sweating drug, kick-started that pivot.
In early March, Fresh Tracks announced that it had hired MTS Health Partners LP to explore its strategic options, which the company said could include “a financing, sale or licensing of assets, acquisition, merger, business combination, or other strategic transaction or series of related transactions.”
Since that move, the company has not provided a substantive update on the strategic option-exploration process.
“Fresh Tracks does not expect to disclose developments with respect to this process until the evaluation of strategic options has been completed or until the board has concluded disclosure is appropriate or legally required,” the company said.
Last week, the company recorded a net loss of $2.3 million for the second quarter of 2023, compared with a net loss of $1.1 million for the same period last year.
Fresh Tracks has a cash balance of about $15 million, which it said is “sufficient to fund its operations for at least the next 12 months.”