Why did CKPT's Q4 2023 earnings fall short of forecasts?

Checkpoint Therapeutics' (CKPT) Q4 2023 earnings fell short of forecasts due to **FDA Inspection Findings at Third-Party Manufacturer**. The FDA issued a complete response letter (CRL) for the cosibelimab biologic license application (BLA), solely due to inspection findings at the third-party contract manufacturing organization. This resulted in significant approvability issues that needed to be addressed in a resubmission, leading to delays in marketing approval and impacting financial performance. 1. **Impact of FDA CRL**: The FDA's CRL for the cosibelimab BLA cited only inspection findings at the third-party manufacturer as the basis for the approvability issues. This did not question the clinical data package, safety, or labeling but highlighted the need to address manufacturing-related concerns. 2. **Manufacturing Issues**: The FDA inspection findings at the third-party contract manufacturing organization were the primary reason for the CRL. This indicated that the manufacturing process needed to be improved to meet FDA standards, which posed a significant hurdle for Checkpoint Therapeutics. 3. **Financial Consequences**: The issuance of the CRL led to a significant drop in Checkpoint Therapeutics' stock price, as investors reacted to the uncertainty in the approval process. The company's cash position also decreased, as evidenced by the $1.8 million in cash and cash equivalents at the end of Q3 2023, down from $7.4 million at the end of Q2 2023 and $12.1 million at the end of 2022. This financial strain is a direct result of the delays caused by the FDA inspection findings. 4. **Resubmission Plans**: Checkpoint Therapeutics plans to address the FDA's concerns by resubmitting the BLA, aiming for marketing approval in 2024. The company's focus on working with the third-party manufacturer and the FDA to execute a resubmission indicates a path forward, but it also suggests that the Q4 2023 earnings fell short due to the need to address these manufacturing issues. In conclusion, CKPT's Q4 2023 earnings fell short of forecasts due to the FDA's inspection findings at the third-party manufacturer, which led to a CRL for the cosibelimab BLA. This manufacturing-related issue has significant financial and operational implications for the company, leading to a shortfall in earnings compared to forecasts.