Full Press Release Details
Fortress Biotech Reports First Quarter 2021
Financial Results and Recent Corporate Highlights
Rolling NDA submission for CUTX-101 for the
treatment of Menkes disease is expected to begin in the second half of 2021
On track to report top-line results from
the registration-enabling study of cosibelimab in metastatic cutaneous squamous cell carcinoma by year-end 2021
Ended first quarter 2021 with $291.5 million
in consolidated cash, cash equivalents and restricted cash
New York, NY - May 16, 2021 -
Fortress Biotech, Inc. (NASDAQ: FBIO) ("Fortress"), an innovative biopharmaceutical company focused on acquiring, developing
and commercializing or monetizing promising biopharmaceutical products and product candidates cost-effectively, today announced financial
results and recent corporate highlights for the first quarter ended March 31, 2021.
Lindsay A. Rosenwald, M.D., Fortress' Chairman,
President and Chief Executive Officer, said, "Fortress and our partner companies had an exciting start to the year, including the
addition and commercial launch of two dermatology products, bringing our total number of marketed products to seven. Moreover, we continued
to achieve significant milestones in the advancement of multiple key development programs. Notably, in February, our partner company,
Cyprium Therapeutics ("Cyprium"), and Sentynl Therapeutics ("Sentynl"), a wholly owned subsidiary of the Zydus
Group, signed a Development and Asset Purchase Agreement for CUTX-101 for the treatment of Menkes disease. This agreement, which included
an $8 million upfront payment for the ongoing development of CUTX-101, in addition to regulatory and sales milestone payments plus royalties,
allows us to potentially maximize the value of this important asset as Cyprium continues to advance CUTX-101 toward a rolling submission
of a New Drug Application ("NDA") later this year."
Dr. Rosenwald continued, "Our portfolio
continues to grow with more than 25 product candidates across our partner companies, including 17 clinical programs, of which four are
pivotal programs. We expect to have a multitude of regulatory and clinical inflection points throughout the remainder of 2021, including
the availability of clinical data from cosibelimab, CAEL-101 and MB-106. Importantly, our diversified business model is supported by a
strong balance sheet, as we ended the first quarter with $291.5 million in consolidated cash, cash equivalents and restricted cash. Our
operational catalysts and financial strength have us well-positioned for success and we remain focused on creating long-term shareholder
Recent Corporate Highlights1:
Marketed Dermatology Products
| Our seven dermatology products are marketed by our partner company, Journey Medical Corporation ("Journey"). | ||
| Our products generated net revenues of $10.7 million for the first quarter of 2021, compared to first quarter 2020 net revenues of $11.9 million. While product demand increased in the first quarter of 2021 compared to the first quarter of 2020, the decrease in net revenue in the first quarter of 2021 is primarily attributable to increased coupon expense costs related to standard insurance deductible resets. We expect year-over-year annual revenue growth in 2021 to exceed the 28% growth Journey achieved in 2020. |
1 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 partners, as dictated by context.
CUTX-101 (Copper Histidinate for Menkes disease)
CAEL-101 (Light Chain Fibril-reactive Monoclonal
Antibody for AL Amyloidosis)
Cosibelimab (formerly CK-301, an anti-PD-L1
MB-107 and MB-207 (Lentiviral Gene Therapies
for X-linked Severe Combined Immunodeficiency)
MB-106 (CD20-targeted CAR T Cell Therapy)
| Also in May 2021, we announced that CD20-targeted CAR T data were selected for presentation at EHA2021 scheduled to take place in June. Dr. Mazyar Shadman of Fred Hutchinson Cancer Research Center will present updated interim data from the ongoing Phase 1/2 clinical trial for B-NHL and CLL. A copy of the abstract can be viewed online through the EHA2021 website here . | ||
| MB-106 is currently in development at our partner company, Mustang Bio. |
Dotinurad (Urate Transporter (URAT1) Inhibitor)
To assist our stockholders in understanding our
company, we have prepared non-GAAP financial results for the three months ended March 31, 2021 and 2020. These results exclude the operations
of our three public partner companies: Avenue, Checkpoint, and Mustang Bio. The goal in providing these non-GAAP financial metrics is
to highlight the financial results of Fortress' core operations, which are comprised of our commercial-stage business, our privately
held development-stage entities, as well as our business development and finance functions.
Use of Non-GAAP Measures:
In addition to the GAAP financial measures as
presented in our Form 10-Q that will be filed with the Securities and Exchange Commission ("SEC") on May 17, 2021, the Company
has, in this press release, 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 and Mustang Bio. 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.
Management believes use 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 results. 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 March 31, | ||||||||
| ($ in thousands) | 2021 | 2020 | ||||||
| Net income (loss) attributable to common stockholders | $ | (8,822 | ) | $ | (12,370 | ) | ||
| Net (Loss) income attributable to common stockholders - Avenue 1 | (225 | ) | (287 | ) | ||||
| Net (Loss) income attributable to common stockholders - Checkpoint 2 | (1,158 | ) | (753 | ) | ||||
| Net (Loss) income attributable to common stockholders - Mustang 3 | (2,917 | ) | (3,599 | ) | ||||
| Non-GAAP net loss attributable to common stockholders | $ | (4,522 | ) | $ | (7,731 | ) | ||
| Stock based compensation | 1,889 | 1,740 | ||||||
| Non-cash interest | 210 | 769 | ||||||
| Amortization of licenses | 584 | 355 | ||||||
| Amortization of debt discount | 309 | 488 | ||||||
| Depreciation | 141 | 154 | ||||||
| Increase in fair value of investment 4 | (5,913 | ) | - | |||||
| Fortress non-GAAP loss attributable to common stockholders | $ | (7,302 | ) | $ | (4,224 | ) | ||
| Per common share - basic and diluted: | ||||||||
| Net income (loss) attributable to common stockholders (GAAP) | $ | (0.11 | ) | $ | (0.19 | ) | ||
| Non-GAAP net loss attributable to common stockholders | $ | (0.06 | ) | $ | (0.12 | ) | ||
| Fortress non-GAAP loss attributable to common stockholders | $ | (0.09 | ) | $ | (0.07 | ) | ||
| Weighted average common shares outstanding - basic and diluted | 80,851,671 | 63,496,256 |
Reconciliation to non-GAAP research and development
and general and administrative costs:
| For the quarter ended March 31, | ||||||||
| ($ in thousands) | 2021 | 2020 | ||||||
| Research and development 1 | $ | 20,154 | $ | 15,117 | ||||
| Less: | ||||||||
| Research and development Avenue | 258 | 697 | ||||||
| Research and development Checkpoint | 4,213 | 2,635 | ||||||
| Research and development Mustang 2 | 11,556 | 9,502 | ||||||
| Non-GAAP research and development costs | $ | 4,127 | $ | 2,283 | ||||
| Selling, general and administrative | $ | 17,542 | $ | 15,519 | ||||
| Less: | ||||||||
| General and administrative Avenue | 743 | 577 | ||||||
| General and administrative Checkpoint 3 | 1,615 | 1,553 | ||||||
| General and administrative Mustang 4 | 2,210 | 1,768 | ||||||
| Non-GAAP selling, general and administrative costs | $ | 12,974 | $ | 11,621 |
About Fortress Biotech
Fortress Biotech, Inc. ("Fortress")
is an innovative biopharmaceutical company that was ranked in Deloitte's 2019 and 2020 Technology Fast 500 , annual rankings
of the fastest-growing North American companies in the technology, media, telecommunications, life sciences and energy tech sectors,
based on percentages of fiscal year revenue growth over three-year periods. Fortress is focused on acquiring, developing and commercializing
high-potential marketed and development-stage drugs and drug candidates. The company has seven marketed prescription pharmaceutical products
and 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 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 Alexion Pharmaceuticals, Inc., AstraZeneca,
City of Hope, Fred Hutchinson Cancer Research Center, St. Jude Children's Research Hospital and Nationwide Children's Hospital.
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; 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