Failing to find buyer, Fresh Tracks to dissolve, lay off workers

BOULDER — It’s been a wild ride over the past year or so for Fresh Tracks Therapeutics Inc., which plans to dissolve, liquidate and eliminate its workforce after failing to find a buyer or merger partner. 

Last year the drug developer rebranded from Brickell Biotech and sold off rights to its excessive-sweating drug to Botanix Pharmaceuticals Ltd. The company, which has seen its stock price tank in recent years, then began exploring the possibility of a merger or other strategic options for boosting shareholder value, elevated a new CEO and paused research and development. 

Fresh Tracks’ board of directors this week approved a liquidation and dissolution plan that will see between $5 million and $7 million distributed to shareholders.

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Meanwhile, Freshtracks CEO Andrew Sklawer will be removed from his position on Oct. 1. 

The remainder of the staff will be terminated “by early October 2023, except for certain employees, consultants, and advisers who will supervise or facilitate the dissolution and wind down of the company,” Freshtracks said in a regulatory filing. The company has about a dozen employees.

Freshtracks chief financial officer Albert Marchio will replace Sklawer as CEO and board chairman while also remaining in the CFO seat.

“After conducting an extensive and thorough evaluation of strategic options for the company throughout this year, the board of directors has unanimously concluded that it is in the best interests of our shareholders to dissolve and liquidate the company in an orderly fashion, and return all remaining cash to shareholders,” Sklawer said in a prepared statement. “Over the past several months, the board and management have worked together with our external advisers to identify, evaluate and pursue a range of different strategic opportunities, which included but was not limited to potential mergers, reverse mergers, and acquisitions, to maximize shareholder value. However, this process did not yield a potential transaction that would provide greater and more certain realizable value to shareholders than the complete dissolution and liquidation of the company with distribution of all remaining cash to shareholders.”

News of the liquidation put Fresh Tracks’ stock on the fast track upward, adding nearly 43% in late trading Tuesday. The stock opened on Wednesday trading at 89 cents per share.

A meeting of Fresh Tracks shareholders will be held in the fourth quarter of this year to approve the liquidation and dissolution. 

The 2022 rebrand of Fresh Tracks 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.

The firm 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. But this summer, Fresh Tracks amended the purchase agreement with Botanix, opting to forgo future paydays for an immediate $8.25 million lump sum.

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 the spring, the company had been mum on the results of its search for strategic options. This week, Fresh Tracks acknowledged those efforts had failed. 

Last month, the company posted 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.

Alongside its second-quarter earnings report, Fresh Tracks revealed that it had “paused substantially all of its research and development activities in order to conserve capital resources during its ongoing evaluation of potential strategic options.”