By David Bautz, PhD

NASDAQ:FBLG

READ THE FULL FBLG RESEARCH REPORT

Business Update

Phase 1/2 Trial in Diabetic Foot Ulcers to Initiate in 2Q25

FibroBiologics, Inc. (NASDAQ:FBLG) is continuing preparations for a Phase 1/2 trial of CYWC628, a fibroblast-based spheroid product candidate, in patients suffering from diabetic foot ulcers (DFUs), which we anticipate initiating in the second quarter of 2025 and completing before the end of 2025. Recent activities the company has accomplished to support the upcoming clinical trial include:

• In October 2024, FibroBiologics and Charles River Laboratories announced a master services agreement to develop and manufacture the company’s therapeutic master cell bank, working cell bank, and fibroblast-based spheroids product CYWC628. In addition, the company announced the technology transfer for cGMP manufacturing was successfully completed along with feasibility studies evaluating the cell manufacturing processes. Based on the positive results of the feasibility studies, Charles River became the contract development and manufacturing organization (CDMO) to produce drug products for the upcoming Phase 1/2 for CYWC628.

• In February 2025, FibroBiologics and Charles River announced the completion of FibroBiologics’ proprietary master cell bank, which will support the upcoming clinical trial of CYWC628. In addition, the cell bank, which was manufactured in accordance with cGMP, successfully passed all required safety testing.

• In September 2024, FibroBiologics announced it had engaged Southern Star Research to provide clinical research organization (CRO) services for the company in Australia, including preparation for the planned Phase 1/2 clinical trial of CYWC628 for the treatment of DFUs.

CYWC628 is being developed for the treatment of DFUs, which cause significant morbidity for the 6.3% of diabetic adults (~33 million) that develop them. Of those, 20% will require lower extremity amputation and 10% will die within the first year of their first DFU. In addition, once a DFU forms there is a high rate of recurrence, both at one year (40%) and three years (70%).

Fibroblasts have excellent therapeutic potential in the treatment of DFUs due to the critical role they play in every stage of wound healing, including hemostasis, inflammation, proliferation, and remodeling. Importantly, fibroblasts are the key cells that secrete extracellular matrix proteins that maintain all the tissues and organs in the body.

The company does not utilize single cell fibroblasts for treatment but instead a fibroblast spheroid, which is composed of approximately 3,000 fibroblasts and is administered to the top of the wound at which time the cells migrate from the surface of the wound and release various cytokines and growth factors to initiate the wound healing process. The use of spheroids is more practical from a therapeutic perspective as they have higher viability than single cells, they don’t require pre-culturing before administration, they can be easily frozen and thawed, and they have a significantly higher potency and efficacy compared to single cells.

FibroBiologics has compiled a robust pre-clinical data set showing the efficacy of fibroblast spheroids in the treatment of wounds. For example, the following figure shows results using a diabetic mouse model in which administration of fibroblasts led to a statistically significant average 83.8% wound closure by Day 19 compared to 66.0% for Grafix™ and only 51.2% for control.

While wound healing is important, the quality of the wound healing is just as important. FibroBiologics has data on seven key biomarkers that are key to demonstrating the quality of the wound healing. Fibroblast treatment shows much better re-epithelialization, granulation, cell proliferation, neo-vascularization, recruitment and proliferation of fibroblasts, keratinocyte migration, and epithelial-mesenchymal transition. Intriguingly, even though the fibroblast spheroids are administered topically, there appears to be a systemic effect on cytokine levels, including IL-6, TNF-α, IL-1β, and IL-10.

The use of fibroblast spheroids for wound healing can be thought of as a platform technology. In addition to the treatment of DFUs, fibroblast spheroids could also be used for the treatment of burns and surgical wounds.

In regards to safety, the company has performed a number of experiments to examine any potential adverse events associated with fibroblast-based therapy. The cells do not graft into tissue. Following application, the cells stay on the surface of the wound and initiate the healing process before gradually dying off within four days of treatment. In addition, there is no impact on CBC, WBC, liver function, or kidney function, thus showing that administration of fibroblasts appears to be quite safe.

Fibroblasts Exhibit Remyelination Properties

On April 2, 2025, FibroBiologics announced preclinical results using the Cuprizone animal model (Torkildsen et al., 2008) that intravenous fibroblasts can facilitate remyelination. The myelin sheath is the insulating later around nerve fibers and is critical for proper nerve function. It is often damaged in neurodegenerative diseases such as multiple sclerosis. The company reported a statistically significant increase in myelin expression within seven weeks after both single and multiple dose fibroblast treatments. These results confirm those previously reported by the company in which remyelination was shown in the Experimental Autoimmune Encephalomyelitis (EAE) animal model. Having a confirmed remyelination effect in two separate animal models is compelling evidence that the company’s fibroblast therapy may have an important impact in the treatment of neurodegenerative diseases. 

Intellectual Property Portfolio Continues to Grow

FibroBiologics has an extensive intellectual property portfolio that has continued to grow, as evidenced by the following activity:

• In August 2024, the company announced the filing of a patent application with the U.S. Patent and Trademark Office (USPTO) covering the use of fibroblast cell-based technology in an adhesive bandage for wound healing.

• In September 2024, the company announced the filing of a patent application with the USPTO for the use of fibroblast cell-based technology in generating there-dimensional hemopoietic organoids that can give rise to immune cells, such as T cells, B cells, NK cells, macrophages, etc. The patent describes a method for producing therapeutic hemopoietic organoids that can be transplanted into a living organism to generate desired functional immune cells, for example with the company’s artificial thymus program.

• In October 2024, the company announced the issuance of a patent from the European Patent Office (Patent Number 19795975.2) that covers methods and compositions for the treatment of cancer utilizing fibroblasts that have been modified to enhance their ability to deliver one or more anti-cancer agents. The fibroblasts would be engineered to express tumor-inhibiting agents to fight primary, metastatic, or treatment-resistant tumors.

• In November 2024, the company announced the filing of a patent with the USPTO covering methods that use fibroblasts or other tissue factor (TF)-expressing cells to prevent Instant Blood-Mediated Inflammatory Reaction (IBMIR) in cell-based therapeutics. One of the main challenges with cell therapy is the risk of instant IBMIR, which can lead to various complications including complement activation, immune cell infiltration, platelet adhesion, and coagulation. The patent describes how the company may be able to improve cell therapies by reducing the risk of adverse events and rejection by the body’s immune system, thereby potentially eliminating blood clotting induced by the body’s inflammatory response.

• In November 2024, the company announced the filing of a patent application covering methods for treating splenomegaly using a cell-based therapeutic approach. Splenomegaly, or an enlarged spleen, can occur in connection with immune-related conditions, including autoimmune diseases and chronic infections. An enlarged spleen can lead to discomfort, anemia, and a weakened immune system. The patent application describes the potential for fibroblasts to address immune dysregulation, thereby offering a solution aligned with host biological processes to help regulate immune activity.

• In March 2024, the company announced the filing of a patent application with the USPTO covering methods that use fibroblasts to improve mitochondrial performance in cells. Mitochondria are the cellular powerhouses where energy is produced. The dysregulation of mitochondrial activity is associated with aging and a wide range of other diseases. The patent describes the use of fibroblasts to improve the microenvironment of cells by modulating mitochondrial activity, which may offer a new therapeutic strategy for the treatment of multiple chronic diseases.

Financial Update

On March 31, 2025, FibroBiologics announced financial results for 2024. As expected, the company did not report any revenues in 2024. Research and development expenses were approximately $4.5 million in 2024, compared to approximately $2.4 million in 2023. The increase was primarily due to increased drug product expenses and other expenses to prepare for the Phase 1/2 clinical trial in DFU patients along with hiring of additional personnel. General and administrative expenses were approximately $9.2 million in 2024, compared to approximately $6.5 million in 2023. The increase was primarily due to the costs associated with the company’s Direct Listing, public company expenses, and additional personnel.

The company exited 2024 with approximately $14.0 million in cash and cash equivalents. In December 2024, FibroBiologics entered into a Standby Equities Purchase Agreement (SEPA) with YA II PN Ltd., an investment fund managed by Yorkville Advisors Global, LP. The SEPA allows FibroBiologics to sell up to $25 million in common stock to Yorkville over the next two years. As part of the agreement, Yorkville agreed to advance the first $15 million under the SEPA in three equal tranches. The first two tranches have been advanced and the third tranche of $5 million will be advanced following receipt of shareholder approval at FibroBiologics’ 2025 annual meeting of stockholders in June 2025. The company can sell an additional $10 million in common stock to Yorkville under the agreement, subject to Yorkville’s consent and other conditions.

As of March 28, 2025, FibroBiologics had approximately 37.7 million common shares outstanding and, when factoring in stock options and warrants, a fully diluted share count of approximately 43.1 million.

Conclusion

We look forward to a number of important milestones this year for FibroBiologics, including the initiation (in 2Q25) and completion (before YE25) of the Phase 1/2 clinical trial of CYWC628 in patients with DFUs. In addition, the company is hoping to determine the timeline for a Phase 1 clinical trial of CybroCell™, a fibroblast-based therapy for treatment of degenerative disc disease, and complete preclinical IND-enabling studies with CYPS317 for the treatment of psoriasis. With no changes to our model our valuation remains at $11 per share.

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