Full Press Release Details
Fortress Biotech Reports First Quarter
2019 Financial Results and Recent Corporate Highlights
New York, NY - May 10, 2019
- Fortress Biotech, Inc. (NASDAQ: FBIO) ("Fortress"), an innovative biopharmaceutical company focused on identifying,
in-licensing and developing high-potential marketed and development-stage drugs and drug candidates, today announced financial
results and recent corporate highlights for the first quarter ended March 31, 2019.
Lindsay A. Rosenwald, M.D., Fortress'
Chairman, President and Chief Executive Officer, said, "We enjoyed a strong start to 2019, with compelling data recently
published in the New England Journal of Medicine pertaining to our partner company Mustang's lentiviral gene therapy
for infants under the age of two diagnosed with X-linked severe combined immunodeficiency ("XSCID"), and the closing
of two promising partnership deals with Alexion Pharmaceuticals and InvaGen Pharmaceuticals (a subsidiary of Cipla Limited) in
the first quarter. These significant achievements demonstrate how our business model is designed to drive value for our shareholders.
We have several opportunities to increase economics and decrease risk for our shareholders with multiple possible near-term revenue
streams due to our specialty pharmaceutical business; large equity stakes in our partner companies; strategic, flexible potential
exits; and potential royalties on product sales."
Dr. Rosenwald continued, "We look
forward to advancing our and our partner companies' development programs and achieving numerous milestones during the remainder
of 2019, including important data readouts and the potential for the first New Drug Application ("NDA") filing by a
Fortress partner company later this year. Our sizable business development team continues to source and in-license high-potential
marketed and development-stage programs to enhance the growing, diversified portfolio of seven commercial products and over 25
product candidates in development across our partner companies."
Recent Corporate Highlights:2
Marketed Dermatology Products
MB-107 (XSCID gene therapy)
Cosibelimab (formerly referred to as
CK-301, an anti-PD-L1 antibody)
CK-101 (third-generation EGFR inhibitor)
MB-108 (Oncolytic Virus C134)
MB-104 (CS1-specific CAR T)
About Fortress Biotech
Fortress Biotech, Inc. ("Fortress")
is an innovative biopharmaceutical company focused on identifying, in-licensing and developing high-potential marketed and development-stage
drugs and drug candidates. The company has over 25 programs in development at Fortress, at its majority-owned and majority-controlled
partners and at partners it founded and in which it holds significant minority ownership positions. Such product candidates span
six large-market therapeutic areas, including oncology, rare diseases and gene therapy, which allow it to create value while mitigating
risk 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 Alexion Pharmaceuticals, Inc., City of Hope, Fred Hutchinson Cancer Research
Center, InvaGen Pharmaceuticals, Inc. (a subsidiary of Cipla Limited), St. Jude Children's Research Hospital and UCL Business
PLC. 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. 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 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 may be required by law. The information contained herein is intended to be reviewed in its totality, and any stipulations,
conditions or provisos that apply to a given piece of information in one part of this press release should be read as applying
mutatis mutandis to every other instance of such information appearing herein.
Jaclyn Jaffe and William Begien
Fortress Biotech, Inc.
Investor Relations Contact:
LifeSci Advisors, LLC
Media Relations Contact:
Financial results do not include National Holdings Corporation ("National"), as Fortress sold all of its remaining
shares in National in February 2019 for an aggregate purchase price totaling approximately $22.9 million. The National segment
results have been classified as discontinued operations in the accompanying Consolidated Balance Sheets and Consolidated Statements
Includes product candidates in development at Fortress, majority-owned and controlled partners and partners in which Fortress holds
significant minority ownership positions. As used herein, the words "we", "us" and "our" may
refer to Fortress individually or together with our affiliates and/or partners, as dictated by context.
FORTRESS BIOTECH, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
($ in thousands except for share and
| March 31, 2019 | December 31, 2018 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 116,444 | $ | 65,508 | ||||
| Accounts receivable | 8,022 | 5,498 | ||||||
| Short-term investments (certificates of deposit) | 5,044 | 17,604 | ||||||
| Inventory | 629 | 678 | ||||||
| Other receivables - related party | 2,129 | 2,095 | ||||||
| Prepaid expenses and other current assets | 4,281 | 6,735 | ||||||
| Current assets held for sale | - | 13,089 | ||||||
| Total current assets | 136,549 | 111,207 | ||||||
| Property and equipment, net | 11,833 | 12,019 | ||||||
| Operating lease right-of-use asset, net | 22,618 | - | ||||||
| Restricted cash | 16,074 | 16,074 | ||||||
| Long-term investment, at fair value | 11,056 | - | ||||||
| Intangible asset | 1,183 | 1,417 | ||||||
| Other assets | 1,225 | 276 | ||||||
| Total assets | $ | 200,538 | $ | 140,993 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued expenses | $ | 37,073 | $ | 34,067 | ||||
| Accounts payable and accrued expenses - related party | 16 | 149 | ||||||
| Interest payable | 1,013 | 1,232 | ||||||
| Interest payable - related party | 97 | 97 | ||||||
| Notes payable, short-term - related party (net of debt discount of $223 and $336 at March 31, 2019 and December 31, 2018, respectively) | 9,277 | 9,164 | ||||||
| Partner company convertible note, short-term, at fair value | - | 9,914 | ||||||
| Operating lease liabilities - short-term | 1,481 | - | ||||||
| Derivative warrant liability | - | 991 | ||||||
| Total current liabilities | 48,957 | 55,614 | ||||||
| Notes payable, long-term (net of debt discount of $6,385 and $4,567 at March 31, 2019 and December 31, 2018, respectively) | 73,607 | 60,425 | ||||||
| Operating lease liabilities - long-term | 24,989 | - | ||||||
| Other long-term liabilities | 2,276 | 5,211 | ||||||
| Total liabilities | 149,829 | 121,250 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' equity | ||||||||
| Preferred stock, $.001 par value, 15,000,000 authorized, 5,000,000 designated Series A shares, 1,000,000 shares issued and outstanding as of March 31, 2019 and December 31, 2018; liquidation value of $25.00 per share | 1 | 1 | ||||||
| Common stock, $.001 par value, 100,000,000 shares authorized, 63,126,521 and 57,845,447 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively | 63 | 58 | ||||||
| Common stock issuable, 475,225 and 744,332 shares as of March 31, 2019 and December 31, 2018, respectively | 765 | 659 | ||||||
| Additional paid-in-capital | 414,870 | 397,408 | ||||||
| Accumulated deficit | (394,882 | ) | (396,274 | ) | ||||
| Total stockholders' equity attributed to the Company | 20,817 | 1,852 | ||||||
| Non-controlling interests | 29,892 | 17,891 | ||||||
| Total stockholders' equity | 50,709 | 19,743 | ||||||
| Total liabilities and stockholders' equity | $ | 200,538 | $ | 140,993 |
FORTRESS BIOTECH, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of
($ in thousands except for share and
| For the Three Months Ended March 31, | ||||||||
| 2019 | 2018 | |||||||
| Revenue | ||||||||
| Product revenue, net | $ | 6,125 | $ | 5,509 | ||||
| Revenue - from a related party | 352 | 394 | ||||||
| Net revenue | 6,477 | 5,903 | ||||||
| Operating expenses | ||||||||
| Cost of goods sold - product revenue | 1,884 | 1,472 | ||||||
| Research and development | 23,273 | 24,958 | ||||||
| Research and development - licenses acquired | 450 | 97 | ||||||
| General and administrative | 13,478 | 13,548 | ||||||
| Total operating expenses | 39,085 | 40,075 | ||||||
| Loss from operations | (32,608 | ) | (34,172 | ) | ||||
| Other income (expenses) | ||||||||
| Interest income | 438 | 278 | ||||||
| Interest expense and financing fee | (2,469 | ) | (2,403 | ) | ||||
| Change in fair value of derivative liabilities | - | 23 | ||||||
| Change in fair value of subsidiary convertible note | - | 250 | ||||||
| Change in fair value of investments | - | (118 | ) | |||||
| Gain on deconsolidation of Caelum | 18,384 | - | ||||||
| Total other income (expense) | 16,353 | (1,970 | ) | |||||
| Loss from continuing operations | (16,255 | ) | (36,142 | ) | ||||
| Discontinued operations | ||||||||
| Loss from discontinued operations, net of tax | - | (2,076 | ) | |||||
| Total loss from discontinued operations | - | (2,076 | ) | |||||
| Net loss | (16,255 | ) | (38,218 | ) | ||||
| Less: net loss attributable to non-controlling interests | 17,647 | 17,200 | ||||||
| Net income (loss) attributable to common stockholders | $ | 1,392 | $ | (21,018 | ) | |||
| Loss from continuing operations per common share - basic and diluted | $ | (0.34 | ) | $ | (0.85 | ) | ||
| Loss from discontinued operations per common share - basic and diluted | $ | - | $ | (0.05 | ) | |||
| Net income (loss) per common share attributable to common stockholders - basic | $ | 0.03 | $ | (0.49 | ) | |||
| Net income (loss) per common share attributable to common stockholders - diluted | $ | 0.02 | $ | (0.49 | ) | |||
| Weighted average common shares outstanding - basic | 48,506,994 | 42,518,403 | ||||||
| Weighted average common shares outstanding - diluted | 63,811,136 | 42,518,403 |