Full Press Release Details
Fortress Biotech Reports Fourth Quarter
and Full-Year 2018 Financial Results and Recent Corporate Highlights
New York, NY - March 18, 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 fourth quarter and full year ended December 31, 2018.
Lindsay A. Rosenwald, M.D., Fortress'
Chairman, President and Chief Executive Officer, said, "Fortress achieved significant milestones in 2018 and early 2019,
closing numerous business development transactions and developing high-quality partnerships with Alexion Pharmaceuticals and InvaGen
Therapeutics (a subsidiary of Cipla Limited), which could provide our shareholders with long-term revenue streams. These contingent
sale agreements have the potential for combined aggregate proceeds to shareholders of up to $680 million (excluding potential contingent
value right ("CVR") amounts based on drug sales). Also in 2018, our seven marketed specialty dermatology products generated
net revenue of $23.4 million and $3.8 million in net income. Additionally, Fortress and our development partners, continued to
efficiently advance more than 25 development-stage programs across seven therapeutic categories within a streamlined operating
structure, allowing us to create value while mitigating risk for our shareholders."
Dr. Rosenwald continued, "2019 is
positioned to be a successful year on the business development and partnership fronts. Our world-class business development team
continues to identify and in-license high-potential marketed and development-stage assets to further expand our portfolio of product
opportunities. We look forward to several important data readouts and the potential for our first New Drug Application ("NDA")
filing later this year."
2018 and Recent Corporate Highlights2:
Marketed Dermatology Products
MB-107 (XSCID Gene Therapy)
CK-301 (anti-PD-L1 antibody)
| In March 2018, we completed the dose escalation portion of the ongoing Phase 1 trial of CK-301, a fully human anti-PD-L1 antibody, in selected recurrent or metastatic cancers, and initiated the first dose expansion cohort, which is evaluating an 800 mg dose of CK-301 administered every two weeks. | ||
| In January 2019, we announced that the ongoing multi-center clinical trial of anti-PD-L1 antibody CK-301 was expanded to enroll patients in three endometrial and colorectal cohorts intended to support requests for accelerated approval and Biologics License Application ("BLA") submissions to the FDA. The ongoing trial is also enrolling cohorts of patients with NSCLC and cutaneous squamous cell carcinoma. | ||
| CK-301 (anti-PD-L1 antibody) is currently in development at our partner, Checkpoint Therapeutics, Inc. |
CK-101 (third-generation EGFR inhibitor)
CUTX-101 and AAV-based gene therapy
MB-102 (CD123 CAR T)
| In November 2018, we announced that additional safety and efficacy Phase 1 data evaluating MB-102 (CD123 CAR) in relapsed or refractory AML and BPDCN were presented in an oral session at the American Association for Cancer Research ("AACR") Special Conference on Tumor Immunology and Immunotherapy. | ||
| In December 2018, the FDA granted Orphan Drug Designation to MB-102 (CD123 CAR T) for the treatment of BPDCN, a rare and incurable blood cancer. Historically the median survival for BPDCN has been less than 18 months. | ||
| MB-102 (CD123 CAR T) is currently in development at our partner, Mustang Bio, Inc. |
MB-101 (IL13R 2-specific CAR T)
Oncolytic Virus (C134)
MB-103 (HER2-specific CAR T)
CK-103 (BET Inhibitor)
AVTS-001 (AAV Gene Therapy)
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.
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 $22.9 million. The National segment
results have been classified as discontinued operations in the accompanying Consolidated Balance Sheets and Consolidated Statements
Includes product candidates in development at Fortress, majority-owned and controlled partners and partners in which Fortress holds
significant minority ownership positions. As used herein, the words "we", "us" and "our" may
refer to Fortress individually or together with our affiliates and partners, as dictated by context.
FORTRESS BIOTECH, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
($ in thousands except for share and
| December 31, | ||||||||
| 2018 | 2017 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 65,508 | $ | 94,952 | ||||
| Accounts receivable | 5,498 | 7,758 | ||||||
| Short-term investments (certificates of deposit) | 17,604 | 36,002 | ||||||
| Inventory | 678 | 171 | ||||||
| Other receivables - related party | 2,095 | 618 | ||||||
| Prepaid expenses and other current assets | 6,735 | 5,732 | ||||||
| Current assets held for sale | 13,089 | 37,948 | ||||||
| Total current assets | 111,207 | 183,181 | ||||||
| Property and equipment, net | 12,019 | 7,116 | ||||||
| Restricted cash | 16,074 | 16,006 | ||||||
| Long-term investments, at fair value | - | 1,390 | ||||||
| Intangible asset | 1,417 | 883 | ||||||
| Other assets | 276 | 258 | ||||||
| Noncurrent assets held for sale | - | 37,116 | ||||||
| Total assets | $ | 140,993 | $ | 245,950 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued expenses | $ | 34,067 | $ | 27,412 | ||||
| Accounts payable and accrued expenses - related party | 149 | 222 | ||||||
| Interest payable | 1,232 | 315 | ||||||
| Interest payable - related party | 97 | 669 | ||||||
| Notes payable, short-term - related party (net of debt discount of $336 and $973 at December 31, 2018 and December 31, 2017, respectively) | 9,164 | 8,528 | ||||||
| Partner company convertible note, short-term, at fair value | 9,914 | 4,700 | ||||||
| Derivative warrant liability | 991 | 309 | ||||||
| Current liabilities held for sale | - | 29,283 | ||||||
| Total current liabilities | 55,614 | 71,438 | ||||||
| Notes payable, long-term (net of debt discount of $4,567 and $4,072 at December 31, 2018 and December 31, 2017, respectively) | 60,425 | 39,212 | ||||||
| Partner company convertible note, long-term, at fair value | - | 10,059 | ||||||
| Other long-term liabilities | 5,211 | 4,739 | ||||||
| Total liabilities | 121,250 | 125,448 | ||||||
| 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 December 31, 2018 and December 31, 2017; liquidation value of $25.00 per share | 1 | 1 | ||||||
| Common stock, $.001 par value, 100,000,000 shares authorized, 57,845,447 and 50,991,285 shares issued and outstanding as of December 31, 2018 and December 31, 2017, respectively | 58 | 51 | ||||||
| Common stock issuable, 744,322 and 158,015 shares as of December 31, 2018 and December 31, 2017, respectively | 659 | 500 | ||||||
| Additional paid-in-capital | 397,408 | 364,148 | ||||||
| Accumulated deficit | (396,274 | ) | (312,127 | ) | ||||
| Total stockholders' equity attributed to the Company | 1,852 | 52,573 | ||||||
| Non-controlling interests | 17,891 | 67,929 | ||||||
| Total stockholders' equity | 19,743 | 120,502 | ||||||
| Total liabilities and stockholders' equity | $ | 140,993 | $ | 245,950 |
FORTRESS BIOTECH, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
($ in thousands except for share and
| For the Years Ended December 31, | ||||||||
| 2018 | 2017 | |||||||
| Revenue | ||||||||
| Product revenue, net | $ | 23,376 | $ | 15,520 | ||||
| Revenue - from a related party | 3,506 | 1,725 | ||||||
| Net revenue | 26,882 | 17,245 | ||||||
| Operating expenses | ||||||||
| Cost of goods sold - product revenue | 6,125 | 3,658 | ||||||
| Research and development | 83,333 | 48,322 | ||||||
| Research and development - licenses acquired | 4,050 | 4,164 | ||||||
| General and administrative | 53,371 | 50,897 | ||||||
| Total operating expenses | 146,879 | 107,041 | ||||||
| Loss from operations | (119,997 | ) | (89,796 | ) | ||||
| Other income (expenses) | ||||||||
| Interest income | 1,104 | 819 | ||||||
| Interest expense and financing fee | (10,340 | ) | (7,687 | ) | ||||
| Change in fair value of derivative liabilities | (682 | ) | (368 | ) | ||||
| Change in fair value of subsidiary convertible note | 437 | (457 | ) | |||||
| Change in fair value of investments | (1,390 | ) | 226 | |||||
| Other income (loss) | 68 | (250 | ) | |||||
| Total other expenses | (10,803 | ) | (7,717 | ) | ||||
| Loss from continuing operations | (130,800 | ) | (97,513 | ) | ||||
| Discontinued operations: | ||||||||
| Gain from disposal of National | 2,333 | - | ||||||
| Loss from discontinued operations, net of tax | (13,469 | ) | (2,323 | ) | ||||
| Total loss from discontinued operations | (11,136 | ) | (2,323 | ) | ||||
| Net loss | (141,936 | ) | (99,836 | ) | ||||
| Less: net loss attributable to non-controlling interests | 57,789 | 32,960 | ||||||
| Net loss attributable to common stockholders | $ | (84,147 | ) | $ | (66,876 | ) | ||
| Loss from continuing operations per common share - basic and diluted | $ | (3.01 | ) | $ | (2.34 | ) | ||
| Loss from discontinued operations per common share - basic and diluted | $ | (0.26 | ) | $ | (0.06 | ) | ||
| Net loss per common share attributable to common stockholders - basic and diluted | $ | (1.94 | ) | $ | (1.61 | ) | ||
| Weighted average common shares outstanding - basic and diluted | 43,461,978 | 41,658,733 |