Fortress Biotech, Inc. (Nasdaq: FBIO) (“Fortress” or “Company”), an
innovative biopharmaceutical company focused on efficiently
acquiring, developing and commercializing or monetizing promising
therapeutic products and product candidates, today announced
financial results and recent corporate highlights for the third
quarter ended September 30, 2022.
Lindsay A. Rosenwald, M.D., Fortress’ Chairman,
President and Chief Executive Officer, said, “Fortress’ unique
business model continues to provide value-creating events for our
shareholders with a 17.5% net revenue increase for the first nine
months of 2022, compared to the first nine months of 2021. We,
along with our partner companies and subsidiaries, are focused on
successfully advancing our 20 clinical-stage programs in 31 ongoing
clinical trials, including seven1 pivotal clinical trials.
Additionally, we have eight marketed dermatology products in our
portfolio.”
Dr. Rosenwald continued, “Urica Therapeutics
initiated a Phase 1 clinical trial of dotinurad, which we are
developing for the treatment of gout and possibly other
hyperuricemic conditions. Our cell and gene therapy partner
company, Mustang Bio, announced that the first patient was treated
in its multicenter Phase 1/2 clinical trial to evaluate the safety
and efficacy of MB-106, a first-in-class CD20-targeted, autologous
CAR T cell therapy for the treatment of relapsed or refractory
B-cell non-Hodgkin lymphomas (“B-NHL”) and chronic lymphocytic
leukemia (“CLL”). Additionally, MB-106 data from the ongoing Phase
1/2 clinical trial underway at Fred Hutchinson Cancer Center (“Fred
Hutch”) continue to demonstrate a high rate of complete, durable
responses and a favorable safety profile across a wide range of
hematologic malignancies, including a 100% complete response rate
in patients with Waldenstrom macroglobulinemia (“WM”), a rare form
of B-NHL, for which we were granted Orphan Drug Designation. MB-106
also shows potential to treat patients in an outpatient setting and
provides an option for patients treated previously with
CD19-targeted CAR T cell therapy.”
Dr. Rosenwald concluded, “Looking ahead, we have
several near-term milestones planned including the announcement of
early results from the Mustang Bio-sponsored Phase 1/2 clinical
trial of MB-106 and Checkpoint Therapeutics’ planned Biologics
License Application (“BLA”) submission of cosibelimab for both
metastatic and locally advanced cutaneous squamous cell carcinoma
indications. In the first half of 2023, we anticipate Phase 1 data
from the dotinurad clinical trial and topline data from the two
DFD-29 Phase 3 clinical trials for the treatment of papulopustular
rosacea. In 2023, we also expect the first data publication of
Mustang's novel in vivo CAR T platform technology which has the
potential to transform oncology therapy through our collaboration
with the Mayo Clinic. Additionally, in 2023, we expect to complete
the rolling submission of the New Drug Application (“NDA”) for
CUTX-101 for the treatment of Menkes disease. We believe this
ongoing progress shows the efficiency of Fortress’ model and its
ability to advance potentially meaningful treatments while
continuing to build long-term value for our
shareholders.”
Recent Corporate
Highlights2:
Marketed Dermatology Products and
Product Candidates
- Journey Medical Corporation
(“Journey Medical”), a Fortress partner company, currently has
eight marketed prescription dermatology products.
- Journey Medical generated total
revenue of $57.7 million for the first nine months of 2022,
compared to total revenue of $45.6 million for the first nine
months of 2021; Journey Medical generated total revenue of $16.1
million in the third quarter of 2022, compared to total revenue of
$19.6 million in the third quarter of 2021.
- To date, Journey Medical has
achieved 75% enrollment in the Phase 3 clinical program of DFD-29
for the treatment of papulopustular rosacea. Topline data are
anticipated in the first half of 2023 with a New Drug Application
(“NDA”) filing expected in the second half of 2023.
- In August 2022, an additional $5.0
million was drawn from Journey Medical’s term loan facility with
East West Bank as part of the operating plan for additional working
capital.
- Journey Medical intends to launch
an additional prescription product in the coming months.
Cosibelimab (Anti-PD-L1 Antibody for
Solid Tumors)
- In July 2022, Checkpoint
Therapeutics, Inc. (“Checkpoint”) successfully completed two
pre-BLA meetings with the FDA (chemistry, manufacturing and
controls (“CMC”) and clinical/non-clinical). Based upon favorable
interactions with the agency, the planned BLA submission by January
2023 will include both the metastatic and locally advanced
cutaneous squamous cell carcinoma indications. Checkpoint also
reached agreement with the FDA on all key aspects discussed
regarding the content of the upcoming BLA submission.
- Cosibelimab was sourced by Fortress
and is currently in development at our partner company,
Checkpoint.
MB-106 (CD20-targeted CAR T Cell
Therapy)
- In October 2022, we announced that
the first patient was treated in Mustang Bio, Inc.’s (“Mustang
Bio”) multicenter, open-label, non-randomized Phase 1/2 clinical
trial evaluating the safety and efficacy of MB-106, Mustang Bio’s
first-in-class CD20-targeted, autologous CAR T cell therapy for the
treatment of relapsed or refractory B-NHL and CLL.
- Also in October 2022, we announced
that results from the WM cohort and other interim data from the
ongoing Phase 1/2 clinical trial of MB-106 at Fred Hutch were
presented at the 11th International Workshop for Waldenstrom's
Macroglobulinemia that took place in Madrid, Spain. Mustang Bio’s
MB-106 program was granted Orphan Drug Designation by the FDA for
WM, and Mustang plans to treat additional WM patients in the
Mustang Bio-sponsored Phase 1 portion of its multicenter trial in
order to potentially support an accelerated Phase 2 strategy for
this indication.
- Additionally, in October 2022, we
shared interim data from 28 patients treated in the initial,
ongoing Phase 1/2 investigator-sponsored clinical trial at Fred
Hutch. These data continue to support MB-106 as a viable CAR T cell
therapy for B-NHLs and CLL. An overall response rate of 96% and
complete response (“CR”) rate of 75% were observed in a wide range
of hematologic malignancies including follicular lymphoma, CLL,
diffuse large B-cell lymphoma and WM. Twelve patients have
experienced CR for more than 12 months (10 ongoing), including four
patients with CR for more than two years and the longest patient
with CR at 33 months. Six patients with initial partial response
(“PR”) at 28 days post-treatment improved to CR, presumably due to
the demonstrated persistence of CAR T cells in these patients, and
all remain in ongoing CR. All three patients previously treated
with CD19 CAR T cell therapy responded to treatment with MB-106. A
favorable safety profile for MB-106 as an outpatient therapy
remains with no cytokine release syndrome or immune effector
cell-associated neurotoxicity syndrome ≥ Grade 3.
- MB-106 continues to generate
compelling safety and efficacy data and the CD20 CAR T’s product
profile is favorable compared to the approved autologous CAR Ts,
which are generating an annualized run rate of $3 billion in net
sales, based on reported sales in the third quarter of 2022.
- Early results from the Mustang
Bio-sponsored multicenter MB-106 trial are expected to be announced
later this quarter.
- MB-106 was sourced by Fortress and
is currently in development at our partner company, Mustang
Bio.
CUTX-101 (Copper
Histidinate for Menkes disease)
-
In December 2021, Cyprium Therapeutics, Inc. (“Cyprium”) initiated
the rolling submission of an NDA to the FDA for CUTX-101. The
rolling submission of the NDA for CUTX-101 is ongoing and is
expected to be completed in 2023.
-
Cyprium is currently in a dispute with its contract manufacturing
organization (the “CMO”), regarding the CMO’s attempt to terminate
a Master Services Agreement (together with related work orders, the
“MSA”) between Cyprium and the CMO. Cyprium believes the CMO’s
grounds for purporting to terminate the MSA are without merit and
is currently availing itself of all appropriate legal remedies in
efforts to ensure that the CMO abides by its obligations under the
MSA and/or to pursue monetary damages claims against the CMO.
To that end, Cyprium obtained a temporary restraining order in
August 2022 and a preliminary injunction in September 2022 from a
court in New York State; the injunction enjoined the CMO from
terminating the MSA and prohibited the CMO from further attempts to
terminate the MSA during the pendency of dispute resolution
procedures.
-
CUTX-101 was sourced by Fortress and is currently in development at
our subsidiary company, Cyprium.
IV Tramadol
- In September 2022, Avenue
Therapeutics, Inc. (“Avenue”) received the official meeting minutes
from the FDA regarding a meeting conducted on August 9, 2022, for
IV Tramadol. At the meeting, Avenue presented a study design
for a single safety clinical trial that Avenue believes could
address the concerns regarding risks related to opioid stacking.
The FDA stated that the proposed study design appears reasonable
and agreed on various study design aspects with the expectation
that additional feedback would be provided to Avenue upon review of
a more detailed study protocol. Avenue intends to incorporate the
FDA’s suggestions from the meeting minutes and submit a detailed
study protocol that could form the basis for the submission of a
complete response to the second Complete Response Letter for IV
Tramadol.
- IV Tramadol was
sourced by Fortress and is currently in development at our partner
company, Avenue.
Triplex (Cytomegalovirus (“CMV”)
Vaccine)
- In August 2022, we announced that
Triplex received a grant from the National Institute of Allergy and
Infectious Diseases of the National Institutes of Health that could
provide over $20 million in non-dilutive funding. This competitive
award will fund a multi-center, placebo-controlled, randomized
Phase 2 study of Triplex for control of CMV in patients undergoing
liver transplantation. The company believes this data set could
ultimately be used to support approval of Triplex in this
setting.
- Triplex is currently the subject of
five ongoing trials, funded by non-dilutive sources, in various
clinical settings including: CMV control in stem cell and solid
organ transplantation; the treatment of HIV; and in combination
with a CAR T cell therapy for the treatment of NHL.
- Triplex was sourced by Fortress and
is currently in development at our subsidiary company, Helocyte,
Inc.
Dotinurad (Urate Transporter (URAT1)
Inhibitor)
- In June 2022, we initiated a Phase
1 clinical trial to evaluate dotinurad in healthy volunteers in the
United States. Dotinurad is in development for the treatment of
gout. We anticipate topline data from the Phase 1 trial in early
2023.
- Dotinurad (URECE® tablet) was
approved in Japan in 2020 as a once-daily oral therapy for gout and
hyperuricemia. Dotinurad was efficacious and well-tolerated in more
than 500 Japanese patients treated for up to 58 weeks in Phase 3
clinical trials. The clinical program supporting approval included
over 1,000 patients.
- In October 2022, our
subsidiary company, Urica Therapeutics, Inc. (“Urica”) strengthened
its leadership team by appointing Jay D. Kranzler, M.D., Ph.D. as
Chairman and Chief Executive Officer, and Vibeke Strand, M.D.,
MACR, FACP, Adjunct Clinical Professor, Division of
Immunology/Rheumatology, Stanford University, to Urica’s Board of
Directors.
- Dotinurad was sourced by Fortress
and is currently in development at Urica.
CAEL-101 (Light Chain Fibril-reactive
Monoclonal Antibody for AL Amyloidosis)
- On October 5, 2021, AstraZeneca plc
acquired Caelum Biosciences, Inc. (“Caelum”) for an upfront payment
of approximately $150 million paid to Caelum shareholders, of which
approximately $56.9 million was paid to Fortress, net of Fortress’
$6.4 million portion of the $15 million, 24-month escrow holdback
amount and other miscellaneous transaction expenses. The agreement
also provides for additional potential payments to Caelum
shareholders totaling up to $350 million, payable upon the
achievement of regulatory and commercial milestones. Fortress is
eligible to receive 42.4% of all potential milestone payments,
which together with the upfront payment, would total up to
approximately $212 million.
- There are two ongoing Phase 3
studies of CAEL-101 for AL amyloidosis. (ClinicalTrials.gov
identifiers: NCT04512235 and NCT04504825).
- CAEL-101 was sourced by Fortress
and was developed by Caelum (founded by Fortress) until its
acquisition by AstraZeneca in October 2021.
MB-110 (Lentiviral Gene Therapy for RAG1
Severe Combined Immunodeficiency (RAG1-SCID))
- In July 2022, we announced that the
first patient successfully received LV-RAG1 ex vivo lentiviral gene
therapy to treat recombinase-activating gene-1 (“RAG1”) severe
combined immunodeficiency (“RAG1-SCID”) in an ongoing Phase 1/2
multicenter clinical trial taking place in Europe. LV-RAG1 is
exclusively licensed by Mustang Bio for the development of MB-110,
a first-in-class ex vivo lentiviral gene therapy for the treatment
of RAG1-SCID.
- MB-110 was sourced by Fortress and
is currently in development at our partner company, Mustang
Bio.
General Corporate:
- In July 2022, we announced that
David Jin, who has served as Vice President of Corporate
Development since May 2020, was also appointed as Chief Financial
Officer effective August 16, 2022.
- In September 2022, Avenue effected
a 1-for-15 reverse stock split to bring the company in compliance
with the minimum bid price listing requirements of The Nasdaq
Capital Market.
- In October 2022, Avenue closed a
$12 million underwritten public offering. Avenue received net
proceeds of approximately $10.4 million at closing after deducting
underwriting discounts and commissions and other expenses of the
offering.
- Fortress’ Board of Directors
declared the regular monthly dividend of $0.1953125 per share of
the Company’s 9.375% Series A Cumulative Redeemable Perpetual
Preferred Stock (the “Series A Preferred Stock”) for the months of
October, November and December 2022. The dividend will be payable
on the last day of each month (October 31, November 30 and December
31) to holders of record as of the close of business on the
fifteenth of that same month (October 15, November 15, December
15). Dividends will be paid in cash. Going forward, future
notifications related to dividends for the Series A Preferred Stock
will be disclosed on the Fortress website in the Investors section
on the FBIOP Announcements page under Resources,
https://www.fortressbiotech.com/investors/resources/fbiop-announcements.
In addition, investors will also be able to find Form 8937s related
to FBIOP on the same page.
- On October 31, 2022, Fortress
received a letter from the Listing Qualifications Staff of Nasdaq
indicating that the bid price of the Company’s common stock had
closed below $1.00 per share for 30 consecutive business days and,
as a result, Fortress is not in compliance with Nasdaq minimum bid
price requirement. Nasdaq’s notice has no immediate effect on the
listing of the common stock on Nasdaq. The Company intends to
closely monitor the closing bid price of the Common Stock and
consider all available options to remedy the bid price deficiency,
but no decision regarding any action has yet been made.
- In November 2022, Avenue announced
the completion of the acquisition of Baergic Bio, Inc. from
Fortress, pursuant to a Share Contribution Agreement.
- Also in November 2022, holders of a
majority of the voting power of the capital stock of Checkpoint
approved a 1-for-10 reverse stock split of Checkpoint’s common
stock. Checkpoint expects its common shares will begin trading on a
split-adjusted basis on The Nasdaq Capital Market in December 2022.
The Board of Directors determined the 1-for-10 ratio to be
appropriate in order to improve the marketability and liquidity of
Checkpoint’s common stock and to remain in compliance with all of
Nasdaq’s continued listing requirements.
Financial Results:
To assist our stockholders in understanding our
company, we have prepared non-GAAP financial results for the three
months ended September 30, 2022 and 2021. These results exclude the
operations of our four public partner companies: Avenue,
Checkpoint, Journey Medical and Mustang Bio, as well as any
one-time, non-recurring, non-cash transactions. The goal in
providing these non-GAAP financial metrics is to highlight the
financial results of Fortress’ core operations, which are comprised
of our privately held development-stage entities, as well as our
business development and finance functions. See “Use of Non-GAAP
Measures” below.
- As of September 30, 2022, Fortress’
consolidated cash, cash equivalents and restricted cash totaled
$210.6 million3, compared to $251.0 million4 as of June 30, 2022
and $308.0 million as of December 31, 2021, a decrease of $40.4
million during the prior quarter and a decrease of $97.4 million
year-to-date.
- On a GAAP basis, Fortress’ net
revenue totaled $16.5 million for the third quarter of 2022, which
included $16.0 million in net revenue generated from our marketed
dermatology products. This compares to net revenue totaling $21.1
million for the third quarter of 2021, which included $19.6 million
in net revenue generated from our marketed dermatology
products.
- On a GAAP basis, consolidated
research and development expenses including license acquisitions
were $29.9 million for the third quarter of 2022, compared to $28.1
million for the third quarter of 2021. On a non-GAAP basis,
Fortress research and development expenses were $2.7 million for
the third quarter of 2022, compared to $3.0 million for third
quarter of 2021.
- On a GAAP basis, consolidated
selling, general and administrative expenses were $30.1 million for
the third quarter of 2022, compared to $22.2 million for the third
quarter of 2021. On a non-GAAP basis, Fortress selling, general and
administrative expenses were $9.2 million, for the third quarter of
2022, compared to $6.9 million for the third quarter of 2021.
- On a GAAP basis, consolidated net
loss attributable to common stockholders was $(22.5) million, or
$(0.25) per share, for the third quarter of 2022, compared to
consolidated net loss attributable to common stockholders of
$(20.8) million, or $(0.26) per share for the third quarter of
2021.
- Fortress’ non-GAAP loss
attributable to common stockholders was $(7.4) million, or $(0.08)
per share, for the third quarter of 2022, compared to Fortress’
non-GAAP income attributable to common stockholders of $48.7
million, or $0.60 per share, for the third quarter of 2021.
Use of Non-GAAP Measures:In
addition to the GAAP financial measures as presented in this press
release and that will be presented in our Form 10-Q for the third
quarter of 2022 to be filed with the Securities and Exchange
Commission (“SEC”), the Company, in this press release, has
included certain non-GAAP measurements. The non-GAAP net loss
attributable to common stockholders is defined by the Company as
GAAP net loss attributable to common stockholders, less net losses
attributable to common stockholders from our public partner
companies Avenue, Checkpoint, Journey Medical and Mustang Bio
(“public partner companies”), as well as our former subsidiary,
Caelum. In addition, the Company has also provided a Fortress
non-GAAP loss attributable to common stockholders which is a
modified EBITDA calculation that starts with the non-GAAP loss
attributable to common stockholders and removes stock-based
compensation expense, non-cash interest expense, amortization of
licenses and debt discount, changes in fair values of investment,
changes in fair value of derivative liability, and depreciation
expense. The Company also provides non-GAAP research and
development expenses including license acquisitions, defined as
GAAP research and development costs, less research and development
costs of our public partner companies and non-GAAP consolidated
selling, general and administrative expenses, defined as GAAP
selling, general and administrative expenses, less selling, general
and administrative costs of our public partner companies.
Management believes each of these non-GAAP
measures provide meaningful supplemental information regarding the
Company's performance because (i) it allows for greater
transparency with respect to key measures used by management in its
financial and operational decision-making; (ii) it excludes the
impact of non-cash or, when specified, non-recurring items that are
not directly attributable to the Company's core operating
performance and that may obscure trends in the Company's core
operating performance; and (iii) it is used by institutional
investors and the analyst community to help analyze the Company's
standalone results separate from the results of its public partner
companies. However, non-GAAP loss attributable to common
stockholders and any other non-GAAP financial measures should be
considered as a supplement to, and not as a substitute for, or
superior to, the corresponding measures calculated in accordance
with GAAP. Further, non-GAAP financial measures used by the Company
and the manner in which they are calculated may differ from the
non-GAAP financial measures or the calculations of the same
non-GAAP financial measures used by other companies, including the
Company's competitors.
The tables below provide a reconciliation from
GAAP to non-GAAP measures:
|
|
For the three months ended September 30, |
|
For the nine months ended September 30, |
($ in thousands except for share and per share amounts) |
|
|
2022 |
|
|
|
20211 |
|
|
|
2022 |
|
|
|
20211 |
|
Net loss attributable to common stockholders |
|
$ |
(22,511 |
) |
|
$ |
(20,781 |
) |
|
$ |
(59,627 |
) |
|
$ |
(33,138 |
) |
Net loss attributable to common stockholders - Avenue2 |
|
|
(254 |
) |
|
|
(196 |
) |
|
|
(1,143 |
) |
|
|
(636 |
) |
Net loss attributable to common stockholders - Checkpoint3 |
|
|
(1,900 |
) |
|
|
(2,126 |
) |
|
|
(7,420 |
) |
|
|
(4,995 |
) |
Net loss attributable to common stockholders - Journey
Medical4 |
|
|
(6,017 |
) |
|
|
(12,863 |
) |
|
|
(11,581 |
) |
|
|
(26,605 |
) |
Net loss attributable to common stockholders - Mustang Bio5 |
|
|
(2,365 |
) |
|
|
(3,085 |
) |
|
|
(6,281 |
) |
|
|
(8,499 |
) |
Non-GAAP (loss) income attributable to common
stockholders |
|
$ |
(11,975 |
) |
|
$ |
(2,511 |
) |
|
$ |
(33,202 |
) |
|
$ |
7,597 |
|
Stock based compensation |
|
|
4,096 |
|
|
|
2,587 |
|
|
|
9,763 |
|
|
|
7,363 |
|
Non-cash interest |
|
|
4 |
|
|
|
14 |
|
|
|
12 |
|
|
|
37 |
|
Amortization of debt discount |
|
|
364 |
|
|
|
72 |
|
|
|
1,125 |
|
|
|
975 |
|
Depreciation |
|
|
93 |
|
|
|
78 |
|
|
|
291 |
|
|
|
356 |
|
Increase in fair value of investment in Caelum6 |
|
|
- |
|
|
|
(8,376 |
) |
|
|
- |
|
|
|
(39,294 |
) |
Realization in Caelum investment6 |
|
|
- |
|
|
|
56,860 |
|
|
|
- |
|
|
|
56,860 |
|
Fortress non-GAAP (loss) income attributable to common
stockholders |
|
$ |
(7,418 |
) |
|
$ |
48,724 |
|
|
$ |
(22,011 |
) |
|
$ |
33,894 |
|
|
|
|
|
|
|
|
Per common share - basic and diluted: |
|
|
|
|
|
|
Net loss attributable to common stockholders (GAAP) |
|
$ |
(0.25 |
) |
|
$ |
(0.26 |
) |
|
$ |
(0.68 |
) |
|
$ |
(0.41 |
) |
Non-GAAP net loss attributable to common stockholders |
|
$ |
(0.13 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.38 |
) |
|
$ |
0.09 |
|
Fortress non-GAAP loss attributable to common stockholders |
|
$ |
(0.08 |
) |
|
$ |
0.60 |
|
|
$ |
(0.25 |
) |
|
$ |
0.42 |
|
Weighted average common shares outstanding - basic and diluted |
|
|
89,424,947 |
|
|
|
81,348,243 |
|
|
|
88,291,970 |
|
|
|
81,056,165 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Results for the
three and nine months ended September 30, 2021 have been adjusted
to present Journey Medical separately as a public entity.
- Avenue net loss
for the three months ended September 30, 2022 and 2021 of $0.6
million and $0.9 million, respectively, net of non-controlling
interest of $0.4 million and $0.7 million, respectively. Avenue net
loss for the nine months ended September 30, 2022 and 2021 of $4.1
million and $2.8 million, respectively, net of non-controlling
interest of $3.0 million and $2.2 million, respectively.
- Checkpoint net
loss of $10.6 million net of non-controlling interest of $8.6
million, Fortress management services agreement ("MSA") fee of $0.1
million, and Fortress financing fee of approximately $26,000 for
the three months ended September 30, 2022; and net loss of $11.3
million net of non-controlling interest of $9.0 million, Fortress
MSA fee of $0.1 million, and Fortress financing fee of
approximately $39,000 for the three months ended September 30,
2021; net loss of $41.6 million net of non-controlling interest of
$33.6 million, Fortress MSA fee of $0.4 million, and Fortress
financing fee of $0.2 million for the nine months ended September
30, 2022; and net loss of $26.9 million net of non-controlling
interest of $20.6 million, Fortress MSA fee of $0.4 million, and
Fortress financing fee of $0.9 million for the nine months ended
September 30, 2021.
- Journey Medical
net loss for the three months ended September 30, 2022 of $10.1
million net of non-controlling interest of $4.1 million and tax
benefit recognized on a stand-alone basis of $10,000; and net loss
for the three months ended September 30, 2021 of $10.6 million, net
non-controlling interest of approximately $1.2 million and tax
benefit recognized on a stand-alone basis of $3.4 million; and net
loss of $19.0 million net of non-controlling interest of $7.4
million and tax expense recognized on a stand-alone basis of
$50,000 for the 9 months ended September 30, 2022, and net loss of
$22.2 million net non-controlling interest of $2.3 million and tax
benefit recognized on a stand-alone basis of $6.7 million for the
nine months ended September 30, 2021.
- Mustang Bio net
loss of $19.0 million net of non-controlling interest of $16.4
million, Fortress MSA fee of $0.3 million and Fortress financing
fee of $18,000 for the three months ended September 30, 2022; and
net loss of $17.0 million net of non-controlling interest of $13.7
million, Fortress MSA fee of $0.1 million and Fortress financing
fee of $0.1 million for the three months ended September 30, 2021;
and net loss of $57.9 million net of non-controlling interest of
$49.9 million, Fortress MSA fee of $0.8 million and Fortress
financing fee of $0.9 million for the nine months ended September
30, 2022; and net loss of $46.3 million net of non-controlling
interest of $35.8 million, Fortress financing fee of $0.4 million
and Fortress financing fee of $1.7 million for the nine month
period ended September 30, 2021.
- On October 5,
2021, AstraZeneca plc (acquiror of Alexion) purchased 100% of our
partner company Caelum Biosciences, Inc. (“Caelum”) for
approximately $150 million upfront and up to $350 million in
contingent regulatory and sales milestone payments.
Reconciliation to non-GAAP research and
development and general and administrative costs:
|
|
For the quarter ended September 30, |
|
For the nine months ended September 30, |
($ in thousands) |
|
|
2022 |
|
|
|
20211 |
|
|
|
2022 |
|
|
|
20211 |
|
Research and development2 |
|
$ |
29,903 |
|
|
$ |
28,080 |
|
|
$ |
99,755 |
|
|
$ |
85,811 |
|
Less: |
|
|
|
|
|
|
|
|
Research and development -
Avenue |
|
|
194 |
|
|
|
278 |
|
|
|
2,153 |
|
|
|
864 |
|
Research and development -
Checkpoint |
|
|
8,866 |
|
|
|
9,384 |
|
|
|
35,589 |
|
|
|
20,795 |
|
Research and development -
Journey Medical |
|
|
2,812 |
|
|
|
794 |
|
|
|
6,687 |
|
|
|
14,566 |
|
Research and development -
Mustang Bio3 |
|
|
15,334 |
|
|
|
14,651 |
|
|
|
46,537 |
|
|
|
38,046 |
|
Non-GAAP research and
development costs |
|
$ |
2,697 |
|
|
$ |
2,973 |
|
|
$ |
8,789 |
|
|
$ |
11,540 |
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative |
|
$ |
30,139 |
|
|
$ |
22,221 |
|
|
$ |
85,457 |
|
|
$ |
59,145 |
|
Less: |
|
|
|
|
|
|
|
|
General and administrative -
Avenue |
|
|
469 |
|
|
|
594 |
|
|
|
1,978 |
|
|
|
1,960 |
|
General and administrative -
Checkpoint4 |
|
|
1,695 |
|
|
|
1,759 |
|
|
|
5,604 |
|
|
|
5,109 |
|
Selling, general and
administrative - Journey Medical |
|
|
15,575 |
|
|
|
10,755 |
|
|
|
45,481 |
|
|
|
24,776 |
|
General and administrative -
Mustang Bio5 |
|
|
3,246 |
|
|
|
2,226 |
|
|
|
8,524 |
|
|
|
6,522 |
|
Non-GAAP selling,
general and administrative costs |
|
$ |
9,154 |
|
|
$ |
6,887 |
|
|
$ |
23,870 |
|
|
$ |
20,778 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Results for the three and nine
months ended September 30, 2021 have been adjusted to present
Journey Medical separately as a public entity.
- Includes Research and development
expense and Research and development - licenses acquired expense
for the periods presented.
- Excludes $0.1 million of Fortress
MSA expense for the three months ended September 30, 2022 and 2021;
$0.4 million of Fortress MSA expense for the nine months ended
September 30, 2022, and $0.2 million of Fortress MSA for the nine
months ended September 30, 2021.
- Excludes $0.1 million of Fortress
MSA expense and $26,000 Fortress financing fee for the three months
ended September 30, 2022; and $0.1 million of Fortress MSA expense
and $39,000 Fortress financing fee for the three months ended
September 30, 2021; and excludes $0.4 million Fortress MSA expense
and $0.2 million Fortress financing fee for the nine months ended
September 30, 2022, and $0.4 million Fortress MSA expense and $0.9
million Fortress financing fee for the nine months ended September
30, 2021.
- Excludes $0.1 million of Fortress
MSA expense and $18,000 Fortress financing fee for the three months
ended September 30, 2022; and $0.1 million of Fortress MSA expense
and $0.1 million Fortress financing fee for the three months ended
September 30, 2021; and excludes $0.4 million of Fortress MSA
expense and $0.9 million Fortress financing fee for the nine months
ended September 30, 2022; and $0.2 million of Fortress MSA expense
and $1.7 million Fortress financing fee for the nine months ended
September 30, 2021.
About Fortress Biotech Fortress
Biotech, Inc. (“Fortress”) is an innovative biopharmaceutical
company focused on acquiring, developing and commercializing
high-potential marketed and development-stage drugs and drug
candidates. The company has eight marketed prescription
pharmaceutical products and over 30 programs in development at
Fortress, at its majority-owned and majority-controlled partners
and subsidiaries and at partners and subsidiaries it founded and in
which it holds significant minority ownership positions. Such
product candidates span six large-market areas, including oncology,
rare diseases and gene therapy, which allow it to create value for
shareholders. Fortress advances its diversified pipeline through a
streamlined operating structure that fosters efficient drug
development. The Fortress model is driven by a world-class business
development team that is focused on leveraging its significant
biopharmaceutical industry expertise to further expand the
company’s portfolio of product opportunities. Fortress has
established partnerships with some of the world’s leading academic
research institutions and biopharmaceutical companies to maximize
each opportunity to its full potential, including AstraZeneca plc,
City of Hope, Fred Hutchinson Cancer Research Center, St. Jude
Children’s Research Hospital, Nationwide Children’s Hospital and
Sentynl Therapeutics, Inc. For more information, visit
www.fortressbiotech.com.
Forward-Looking StatementsThis
press release may contain “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934, as amended. As used
below and throughout this press release, the words “we”, “us” and
“our” may refer to Fortress individually or together with one or
more partner companies, as dictated by context. Such statements
include, but are not limited to, any statements relating to our
growth strategy and product development programs, ability to
generate shareholder value, ability of our products to receive
necessary approvals, including FDA, ability of our products and
therapies to help treat patients and any other statements that are
not historical facts. Forward-looking statements are based on
management’s current expectations and are subject to risks and
uncertainties that could negatively affect our business, operating
results, financial condition and stock price. Factors that could
cause actual results to differ materially from those currently
anticipated include: risks relating to our growth strategy; our
ability to obtain, perform under and maintain financing and
strategic agreements and relationships; risks relating to the
results of research and development activities; uncertainties
relating to preclinical and clinical testing; risks relating to the
timing of starting and completing clinical trials, including
disruptions that may result from hostilities in Europe; our
dependence on third-party suppliers; risks relating to the COVID-19
outbreak and its potential impact on our employees’ and
consultants’ ability to complete work in a timely manner and on our
ability to obtain additional financing on favorable terms or at
all; our ability to attract, integrate and retain key personnel;
the early stage of products under development; our need for
substantial additional funds; government regulation; patent and
intellectual property matters; competition; our compliance with
applicable Nasdaq listing standards; as well as other risks
described in our SEC filings. We expressly disclaim any obligation
or undertaking to release publicly any updates or revisions to any
forward-looking statements contained herein to reflect any change
in our expectations or any changes in events, conditions or
circumstances on which any such statement is based, except as may
be required by law, and we claim the protection of the safe harbor
for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995.
Company Contact:Jaclyn JaffeFortress Biotech,
Inc.(781) 652-4500ir@fortressbiotech.com
Media Relations Contact:Tony Plohoros6
Degrees(908) 591-2839tplohoros@6degreespr.com
FORTRESS BIOTECH, INC. AND
SUBSIDIARIESUnaudited Condensed Consolidated
Balance Sheets ($ in thousands except for share
and per share amounts)
|
|
September 30, |
|
December 31, |
|
|
2022 |
|
2021 |
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
208,351 |
|
|
$ |
305,744 |
|
Accounts receivable, net |
|
|
28,533 |
|
|
|
23,112 |
|
Inventory |
|
|
15,230 |
|
|
|
9,862 |
|
Other receivables - related party |
|
|
153 |
|
|
|
678 |
|
Prepaid expenses and other current assets |
|
|
5,727 |
|
|
|
7,066 |
|
Total current assets |
|
|
257,994 |
|
|
|
346,462 |
|
|
|
|
|
|
|
|
Property, plant and equipment,
net |
|
|
13,773 |
|
|
|
15,066 |
|
Operating lease right-of-use
asset, net |
|
|
19,756 |
|
|
|
19,005 |
|
Restricted cash |
|
|
2,220 |
|
|
|
2,220 |
|
Intangible asset, net |
|
|
28,424 |
|
|
|
12,552 |
|
Other assets |
|
|
1,394 |
|
|
|
1,198 |
|
Total
assets |
|
$ |
323,561 |
|
|
$ |
396,503 |
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
93,817 |
|
|
$ |
90,660 |
|
Deferred revenue |
|
|
1,093 |
|
|
|
2,611 |
|
Income taxes payable |
|
|
— |
|
|
|
345 |
|
Operating lease liabilities, short-term |
|
|
2,271 |
|
|
|
2,104 |
|
Partner company line of credit |
|
|
— |
|
|
|
812 |
|
Partner company installment payments - licenses, short-term,
net |
|
|
9,122 |
|
|
|
4,510 |
|
Total current liabilities |
|
|
106,303 |
|
|
|
101,042 |
|
|
|
|
|
|
|
|
Notes payable, long-term,
net |
|
|
91,165 |
|
|
|
42,937 |
|
Operating lease liabilities,
long-term |
|
|
21,474 |
|
|
|
20,987 |
|
Partner company installment
payments - licenses, long-term, net |
|
|
1,374 |
|
|
|
3,627 |
|
Other long-term
liabilities |
|
|
1,893 |
|
|
|
2,033 |
|
Total
liabilities |
|
|
222,209 |
|
|
|
170,626 |
|
|
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
|
|
Cumulative redeemable perpetual preferred stock, $0.001 par value,
15,000,000 authorized, 5,000,000 designated Series A shares,
3,427,138 shares issued and outstanding as of
September 30, 2022 and December 31, 2021,
respectively, liquidation value of $25.00 per share |
|
|
3 |
|
|
|
3 |
|
Common
stock, $0.001 par value, 200,000,000 shares authorized, 108,259,353
shares issued and outstanding as of September 30, 2022;
170,000,000 shares authorized, 101,435,505 shares issued and
outstanding as of December 31, 2021, respectively |
|
|
108 |
|
|
|
101 |
|
Additional paid-in-capital |
|
|
668,650 |
|
|
|
656,033 |
|
Accumulated deficit |
|
|
(607,090 |
) |
|
|
(547,463 |
) |
Total
stockholders' equity attributed to the Company |
|
|
61,671 |
|
|
|
108,674 |
|
|
|
|
|
|
|
|
Non-controlling interests |
|
|
39,681 |
|
|
|
117,203 |
|
Total
stockholders' equity |
|
|
101,352 |
|
|
|
225,877 |
|
Total liabilities and stockholders' equity |
|
$ |
323,561 |
|
|
$ |
396,503 |
|
|
|
|
|
|
|
|
FORTRESS BIOTECH, INC. AND
SUBSIDIARIESUnaudited Condensed Consolidated
Statements of Operations ($ in thousands except
for share and per share amounts)
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
Product revenue, net |
|
$ |
16,043 |
|
|
$ |
19,610 |
|
|
$ |
55,074 |
|
|
$ |
45,617 |
|
Collaboration revenue |
|
|
364 |
|
|
|
1,446 |
|
|
|
1,518 |
|
|
|
4,646 |
|
Revenue - related party |
|
|
48 |
|
|
|
29 |
|
|
|
118 |
|
|
|
252 |
|
Other revenue |
|
|
73 |
|
|
|
— |
|
|
|
2,629 |
|
|
|
— |
|
Net
revenue |
|
|
16,528 |
|
|
|
21,085 |
|
|
|
59,339 |
|
|
|
50,515 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold - product revenue |
|
|
7,221 |
|
|
|
11,167 |
|
|
|
23,057 |
|
|
|
22,559 |
|
Research and development |
|
|
29,855 |
|
|
|
27,367 |
|
|
|
99,707 |
|
|
|
70,226 |
|
Research and development - licenses acquired |
|
|
47 |
|
|
|
713 |
|
|
|
48 |
|
|
|
15,585 |
|
Selling, general and administrative |
|
|
30,139 |
|
|
|
22,221 |
|
|
|
85,457 |
|
|
|
59,145 |
|
Wire transfer fraud loss |
|
|
— |
|
|
|
9,540 |
|
|
|
— |
|
|
|
9,540 |
|
Total
operating expenses |
|
|
67,262 |
|
|
|
71,008 |
|
|
|
208,269 |
|
|
|
177,055 |
|
Loss
from operations |
|
|
(50,734 |
) |
|
|
(49,923 |
) |
|
|
(148,930 |
) |
|
|
(126,540 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
419 |
|
|
|
132 |
|
|
|
711 |
|
|
|
505 |
|
Interest expense and financing fee |
|
|
(3,393 |
) |
|
|
(4,444 |
) |
|
|
(8,897 |
) |
|
|
(9,393 |
) |
Foreign exchange loss |
|
|
(21 |
) |
|
|
— |
|
|
|
(21 |
) |
|
|
— |
|
Change in fair value of investments |
|
|
— |
|
|
|
8,376 |
|
|
|
— |
|
|
|
39,294 |
|
Change in fair value of derivative liability |
|
|
— |
|
|
|
(2 |
) |
|
|
— |
|
|
|
(184 |
) |
Grant income |
|
|
669 |
|
|
|
— |
|
|
|
669 |
|
|
|
— |
|
Total
other income (expense) |
|
|
(2,326 |
) |
|
|
4,062 |
|
|
|
(7,538 |
) |
|
|
30,222 |
|
Net loss |
|
|
(53,060 |
) |
|
|
(45,861 |
) |
|
|
(156,468 |
) |
|
|
(96,318 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
attributable to non-controlling interests |
|
|
30,549 |
|
|
|
25,080 |
|
|
|
96,841 |
|
|
|
63,180 |
|
Net loss attributable to common stockholders |
|
$ |
(22,511 |
) |
|
$ |
(20,781 |
) |
|
$ |
(59,627 |
) |
|
$ |
(33,138 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
per common share - basic and diluted |
|
$ |
(0.59 |
) |
|
$ |
(0.56 |
) |
|
$ |
(1.77 |
) |
|
$ |
(1.19 |
) |
Net loss
per common share attributable to non - controlling interests -
basic and diluted |
|
$ |
(0.34 |
) |
|
$ |
(0.31 |
) |
|
$ |
(1.10 |
) |
|
$ |
(0.78 |
) |
Net loss
per common share attributable to common stockholders - basic and
diluted |
|
$ |
(0.25 |
) |
|
$ |
(0.26 |
) |
|
$ |
(0.68 |
) |
|
$ |
(0.41 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding - basic and diluted |
|
|
89,424,947 |
|
|
|
81,348,243 |
|
|
|
88,291,970 |
|
|
|
81,056,165 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_______________1 Includes two trials at Caelum
Biosciences; AstraZeneca’s Alexion acquired Caelum Biosciences, a
company founded by Fortress, on 10/5/2021 for up to $500 million,
including $150 million upfront and up to $350 million in future
contingent milestone payments. Fortress received ~$56.9 million of
such upfront amount and is eligible to receive ~42% of the proceeds
from all future milestone payments.2 Includes product candidates in
development at Fortress, majority-owned and controlled partners
and/or subsidiaries, and partners and/or subsidiaries in which
Fortress holds significant minority ownership positions. As used
herein, the words “we”, “us” and “our” may refer to Fortress
individually or together with our affiliates, subsidiaries and
partners, and the word “partner” refers to either entities that are
publicly traded and in which we own or control a majority of the
ownership position or third-party entities with whom we have a
significant business relationship, each as dictated by context.3 At
September 30, 2022, we had cash and cash equivalents of $208.4
million, of which $61.2 million relates to Fortress and the private
partner companies, primarily funded by Fortress, $20.5 million
relates to Checkpoint, $91.4 million relates to Mustang Bio, $34.9
million relates to Journey Medical, and $0.2 million relates to
Avenue. Restricted cash related to our leases was $2.2 million, of
which $1.2 million relates to Fortress and $1.0 million relates to
Mustang Bio.4 At June 30, 2022, we had cash and cash equivalents of
$248.8 million, of which $71.5 million relates to Fortress and the
private partner companies, primarily funded by Fortress, $30.9
million relates to Checkpoint, $107.4 million relates to Mustang
Bio, $38.1 million relates to Journey Medical, and $0.9 million
relates to Avenue. Restricted cash related to our leases was $2.2
million, of which $1.2 million relates to Fortress and $1.0 million
relates to Mustang Bio.
Fortress Biotech (NASDAQ:FBIO)
Historical Stock Chart
From Mar 2024 to Apr 2024
Fortress Biotech (NASDAQ:FBIO)
Historical Stock Chart
From Apr 2023 to Apr 2024