Full Press Release Details
Fortress Biotech Reports Financial Results
for the Fourth Quarter and Full Year Ended December 31, 2016
New York, NY - March 16, 2017
- Fortress Biotech, Inc. (NASDAQ: FBIO) ("Fortress"), a biopharmaceutical company dedicated to acquiring, developing
and commercializing novel pharmaceutical and biotechnology products, today announced financial results and recent corporate highlights
for the fourth quarter and full year ended December 31, 2016.
Dr. Lindsay A. Rosenwald, Fortress'
Chairman, President and Chief Executive Officer, said, "Fortress had another productive year in 2016 and early 2017, with
the launch of three additional Fortress Company subsidiaries, Cellvation, Caelum Biosciences, and Cyprium Therapeutics, which broaden
our pipeline in cellular therapeutics and rare disease. In addition, we completed a tender offer purchasing a majority of National
Holdings Corporation, a full service investment banking and advisory firm, which has a significant presence in biotechnology
and the life sciences. National presents multiple opportunities for synergies with our core biotech drug development
business. At the same time, our established Fortress Companies have continued to achieve significant milestones, including the
publication of a case study in The New England Journal of Medicine in which Mustang Bio's MB-101 CAR T therapy achieved
an unprecedented complete response in a glioblastoma patient. In 2017, we plan to continue to work with our Fortress Companies
to advance their pipelines in and toward clinical development, and explore opportunities to strengthen our subsidiary company portfolio."
Recent Fortress Biotech and Fortress Company Highlights:
Fortress Biotech, Inc.
Avenue Therapeutics, Inc.
Caelum Biosciences, Inc.
Checkpoint Therapeutics, Inc.
Cyprium Therapeutics, Inc.
Journey Medical Corporation (JMC)
About Fortress Biotech
Fortress Biotech, Inc. ("Fortress")
is a biopharmaceutical company dedicated to acquiring, developing and commercializing novel pharmaceutical and biotechnology products.
Fortress develops and commercializes products both within Fortress and through certain of its subsidiary companies, also known
as Fortress Companies. Additionally, Fortress recently acquired a controlling interest in National Holdings Corporation (NASDAQ:
NHLD), a diversified independent brokerage company (together with its subsidiaries, "NHLD"). In addition to its internal
development programs, Fortress leverages its biopharmaceutical business expertise and drug development capabilities and provides
funding and management services to help the Fortress Companies achieve their goals. Fortress and the Fortress Companies may seek
licensings, acquisitions, partnerships, joint ventures and/or public and private financings to accelerate and provide additional
funding to support their research and development programs. For more information, visit www.fortressbiotech.com.
Forward-Looking Statements
This 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. Such statements include, but are not limited to, any statements relating to our growth strategy and product
development programs 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; our dependence on third-party suppliers;
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; 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 required by law.
Lucy Lu, MD, Executive Vice President & Chief Financial
Fortress Biotech, Inc.
781-652-4500; ir@fortressbiotech.com
Fortress Biotech Media Relations
(312) 448-8098; lbagby@6degreespr.com
FORTRESS BIOTECH, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
($ in thousands except for share and
| December 31, | ||||||||
| 2016 | 2015 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 88,294 | $ | 98,182 | ||||
| Accounts receivable | 1,830 | - | ||||||
| Cash deposits with clearing organizations | 1,030 | - | ||||||
| Receivables from broker-dealers and clearing organizations | 3,357 | - | ||||||
| Forgivable loans receivable | 1,712 | - | ||||||
| Securities owned, at fair value | 2,357 | - | ||||||
| Inventory | 203 | - | ||||||
| Other receivables - related party | 1,790 | 156 | ||||||
| Prepaid expenses and other current assets | 9,061 | 1,599 | ||||||
| Total current assets | 109,634 | 99,937 | ||||||
| Property and equipment, net | 7,376 | 309 | ||||||
| Restricted cash | 15,860 | 14,586 | ||||||
| Long-term investments, at fair value | 1,414 | 2,485 | ||||||
| Intangible asset - license | 17,408 | 1,250 | ||||||
| Goodwill | 18,645 | - | ||||||
| Other assets | 394 | 43 | ||||||
| Total assets | $ | 170,731 | $ | 118,610 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued expenses | $ | 24,295 | $ | 10,438 | ||||
| Accrued commissions and payroll payable | 11,940 | - | ||||||
| Deferred clearing and marketing credits | 995 | - | ||||||
| Securities sold, not yet purchased, at fair value | 298 | - | ||||||
| Warrants issuable - National | 14,359 | - | ||||||
| Interest payable | 88 | 27 | ||||||
| Interest payable - related party | 77 | - | ||||||
| Notes payable, short-term | 1,000 | - | ||||||
| Subsidiary convertible note, short-term, at fair value | 1,031 | - | ||||||
| Contingently issuable liabilities | 1,682 | - | ||||||
| Derivative warrant liability | 481 | 114 | ||||||
| Other current liabilities | 319 | - | ||||||
| Total current liabilities | 56,565 | 10,579 | ||||||
| Notes payable, long-term (net of debt discount of $2,009 and $835 at December 31, 2016 and December 31, 2015, respectively) | 22,528 | 23,174 | ||||||
| Subsidiary convertible note, long-term, at fair value | 3,656 | - | ||||||
| Other long-term liabilities | 5,014 | 584 | ||||||
| Total liabilities | 87,763 | 34,337 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' equity | ||||||||
| Convertible Preferred stock, $.001 par value, 129,767 Series C shares authorized, 0 shares issued and outstanding as of December 31, 2016 and December 31, 2015, respectively | - | - | ||||||
| Common Stock, $.001 par value, 100,000,000 shares authorized, 48,932,023 and 47,147,032 shares issued and outstanding as of December 31, 2016 and December 31, 2015, respectively | 49 | 47 | ||||||
| Additional paid-in-capital | 283,697 | 246,955 | ||||||
| Accumulated deficit | (245,251 | ) | (190,156 | ) | ||||
| Total stockholders' equity attributed to the Company | 38,495 | 56,846 | ||||||
| Non-controlling interests | 44,473 | 27,427 | ||||||
| Total stockholders' equity | 82,968 | 84,273 | ||||||
| Total liabilities and stockholders' equity | $ | 170,731 | $ | 118,610 |
FORTRESS BIOTECH, INC. AND SUBSIDIARIES
Consolidated Statement of Operations
($ in thousands except for share and
| For the Years Ended December 31, | ||||||||||||
| 2016 | 2015 | 2014 | ||||||||||
| Revenue | ||||||||||||
| Fortress | ||||||||||||
| Product revenue, net | $ | 3,587 | $ | 273 | $ | - | ||||||
| Revenue - from a related party | 2,570 | 590 | - | |||||||||
| Total Fortress revenue | 6,157 | 863 | - | |||||||||
| National | ||||||||||||
| Commissions | 5,388 | - | - | |||||||||
| Net dealer inventory gains | 253 | - | - | |||||||||
| Investment banking | 2,829 | - | - | |||||||||
| Investment advisory | 904 | - | - | |||||||||
| Interest and dividends | 155 | - | - | |||||||||
| Transfer fees and clearing services | 386 | - | - | |||||||||
| Tax preparation and accounting | 338 | - | - | |||||||||
| Other | 70 | - | - | |||||||||
| Total National revenue | 10,323 | - | - | |||||||||
| Total revenue | 16,480 | 863 | - | |||||||||
| Operating expenses | ||||||||||||
| Fortress | ||||||||||||
| Cost of goods sold - product revenue | 790 | - | - | |||||||||
| Research and development | 29,602 | 18,402 | 10,239 | |||||||||
| Research and development - licenses acquired | 5,532 | 11,408 | - | |||||||||
| General and administrative | 34,003 | 21,584 | 10,413 | |||||||||
| Total Fortress operating expenses | 69,927 | 51,394 | 20,652 | |||||||||
| National | ||||||||||||
| Commissions, compensation and fees | 10,414 | - | - | |||||||||
| Clearing fees | 144 | - | - | |||||||||
| Communications | 177 | - | - | |||||||||
| Occupancy | 193 | - | - | |||||||||
| Licenses and registration | 147 | - | - | |||||||||
| Professional fees | 327 | - | - | |||||||||
| Interest | 1 | - | - | |||||||||
| Depreciation and amortization | 545 | - | - | |||||||||
| Other administrative expenses | 315 | - | - | |||||||||
| Total National operating expenses | 12,263 | - | - | |||||||||
| Total operating expenses | 82,190 | 51,394 | 20,652 | |||||||||
| Loss from operations | (65,710 | ) | (50,531 | ) | (20,652 | ) | ||||||
| Other income (expenses) | ||||||||||||
| Interest income | 298 | 245 | 662 | |||||||||
| Interest expense and financing fee | (3,690 | ) | (1,484 | ) | (1,338 | ) | ||||||
| Change in fair value of derivative liabilities | (1,039 | ) | (438 | ) | - | |||||||
| Change in fair value of subsidiary convertible note | (78 | ) | - | - | ||||||||
| Change in fair value of investments | (1,071 | ) | (1,675 | ) | 942 | |||||||
| Total other expenses | (5,580 | ) | (3,352 | ) | 266 | |||||||
| Net loss | (71,290 | ) | (53,883 | ) | (20,386 | ) | ||||||
| Less: net loss attributable to non-controlling interests | 16,195 | 5,455 | - | |||||||||
| Net loss attributable to common stockholders | $ | (55,095 | ) | $ | (48,428 | ) | $ | (20,386 | ) | |||
| Basic and diluted net loss per common share | $ | (1.38 | ) | $ | (1.24 | ) | $ | (0.56 | ) | |||
| Weighted average common shares outstanding-basic and diluted | 39,962,657 | 39,146,589 | 36,323,596 |