Full Press Release Details
Fortress Biotech Reports Second Quarter
2017 Financial Results and Recent Corporate Highlights
New York, NY - August 9, 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 second quarter ended June 30, 2017.
Dr. Lindsay A. Rosenwald, Fortress'
Chairman, President and Chief Executive Officer, said, "Fortress and our Fortress subsidiaries achieved important corporate
and clinical milestones during the second quarter of 2017. Avenue Therapeutics completed a $38 million initial public offering,
and is on track to initiate a Phase 3 clinical trial in the third quarter of IV tramadol in patients undergoing bunionectomy surgery.
If approved, IV tramadol will be the only intravenous Schedule IV opioid for use in the United States. Avenue, along with Checkpoint
Therapeutics, began trading their common shares on The NASDAQ Capital Market during the last week of June. In addition, Caelum
Biosciences announced the dosing of the final patient in a Phase 1b clinical trial of its lead therapy, CAEL-101, in AL amyloidosis,
with a data readout expected in the second half of 2017. Mustang Bio licensed three CAR T cell therapies from its research partner
City of Hope, expanding its pipeline to five novel CAR T candidates."
Dr. Rosenwald continued, "Our strong business development
engine continues to deliver on our goal of acquiring novel pharmaceutical and biotechnology products for development within Fortress
and through our Fortress Companies. We look forward to continuing to execute on our business plan and reaching important milestones
in the third quarter to add value for our shareholders."
Recent Fortress Biotech and Fortress Company Highlights:
Fortress Biotech, Inc.
Avenue Therapeutics, Inc.
Caelum Biosciences, Inc.
Checkpoint Therapeutics, Inc.
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 subsidiary companies, also known as Fortress
Companies. 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 licensing arrangements, 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.
Fortress Biotech, Inc.
Fortress Biotech Media Relations
FORTRESS BIOTECH, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
($ in thousands except for share and
| June 30, | December 31, | |||||||
| 2017 | 2016 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 144,344 | $ | 88,294 | ||||
| Accounts receivable | 3,336 | 1,830 | ||||||
| Short-term investment (certificate of deposit) | 20,038 | - | ||||||
| Cash deposits with clearing organizations | 1,040 | 1,030 | ||||||
| Receivables from broker-dealers and clearing organizations | 2,813 | 3,357 | ||||||
| Forgivable loans receivable | 1,397 | 1,712 | ||||||
| Securities owned, at fair value | 3,406 | 2,357 | ||||||
| Inventory | 299 | 203 | ||||||
| Other receivables - related party | 1,605 | 1,790 | ||||||
| Prepaid expenses and other current assets | 11,902 | 9,061 | ||||||
| Total current assets | 190,180 | 109,634 | ||||||
| Property and equipment, net | 7,329 | 7,376 | ||||||
| Restricted cash | 15,860 | 15,860 | ||||||
| Long-term investments, at fair value | 903 | 1,414 | ||||||
| Intangible asset - license | 16,533 | 17,408 | ||||||
| Goodwill | 18,645 | 18,645 | ||||||
| Other assets | 396 | 394 | ||||||
| Total assets | $ | 249,846 | $ | 170,731 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued expenses | $ | 24,995 | $ | 23,871 | ||||
| Accrued expense - related party | 78 | - | ||||||
| Accrued commissions and payroll payable | 11,613 | 11,940 | ||||||
| Deferred clearing and marketing credits | 891 | 995 | ||||||
| Securities sold, not yet purchased, at fair value | 77 | 298 | ||||||
| Interest payable | 142 | 88 | ||||||
| Interest payable - related party | 326 | 77 | ||||||
| Notes payable, short-term | 3,007 | 1,000 | ||||||
| Subsidiary convertible note, short-term, at fair value | 3,211 | 1,031 | ||||||
| Contingent consideration payable | 630 | 424 | ||||||
| Warrants issued in 2017 and issuable in 2016 - National | 8,190 | 14,359 | ||||||
| Contingently issuable liabilities | - | 1,682 | ||||||
| Derivative warrant liability | 91 | 481 | ||||||
| Other current liabilities | 217 | 319 | ||||||
| Total current liabilities | 53,468 | 56,565 | ||||||
| Notes payable, long-term (net of debt discount of $4,723 and $2,009 at June 30, 2017 and December 31, 2016, respectively) | 39,274 | 22,528 | ||||||
| Subsidiary convertible note, long-term, at fair value | 1,462 | 3,656 | ||||||
| Other long-term liabilities | 5,026 | 5,014 | ||||||
| Total liabilities | 99,230 | 87,763 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' equity | ||||||||
| Convertible preferred stock, $.001 par value, 129,767 Series C shares authorized, 0 shares issued and outstanding as of June 30, 2017 and December 31, 2016, respectively | - | - | ||||||
| Common stock, $.001 par value, 100,000,000 shares authorized, 50,463,245 and 48,932,023 shares issued and outstanding as of June 30, 2017 and December 31, 2016, respectively | 50 | 49 | ||||||
| Common stock issuable, 45,818 and 0 shares as of June 30, 2017 and December 31, 2016, respectively | 189 | - | ||||||
| Additional paid-in-capital | 346,630 | 283,697 | ||||||
| Accumulated deficit | (274,598 | ) | (245,251 | ) | ||||
| Total stockholders' equity attributed to the Company | 72,271 | 38,495 | ||||||
| Non-controlling interests | 78,345 | 44,473 | ||||||
| Total stockholders' equity | 150,616 | 82,968 | ||||||
| Total liabilities and stockholders' equity | $ | 249,846 | $ | 170,731 |
FORTRESS BIOTECH, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of
($ in thousands except for share and
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Revenue | ||||||||||||||||
| Fortress | ||||||||||||||||
| Product revenue, net | $ | 4,054 | $ | 981 | $ | 6,139 | $ | 1,364 | ||||||||
| Revenue - from a related party | 350 | 1,249 | 1,043 | 1,526 | ||||||||||||
| Net Fortress revenue | 4,404 | 2,230 | 7,182 | 2,890 | ||||||||||||
| National | ||||||||||||||||
| Commissions | 23,993 | - | 48,499 | - | ||||||||||||
| Net dealer inventory gains | 2,366 | - | 4,877 | - | ||||||||||||
| Investment banking | 10,592 | - | 17,653 | - | ||||||||||||
| Investment advisory | 3,490 | - | 6,875 | - | ||||||||||||
| Interest and dividends | 675 | - | 1,391 | - | ||||||||||||
| Transfer fees and clearing services | 1,687 | - | 4,185 | - | ||||||||||||
| Tax preparation and accounting | 3,144 | - | 4,000 | - | ||||||||||||
| Other | 346 | - | 717 | - | ||||||||||||
| Total National revenue | 46,293 | - | 88,197 | - | ||||||||||||
| Net revenue | 50,697 | 2,230 | 95,379 | 2,890 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Fortress | ||||||||||||||||
| Cost of goods sold - product revenue | 878 | 324 | 1,347 | 324 | ||||||||||||
| Research and development | 11,683 | 6,347 | 18,793 | 14,100 | ||||||||||||
| Research and development - licenses acquired | 1,800 | 2,060 | 3,094 | 2,143 | ||||||||||||
| General and administrative | 11,134 | 8,635 | 21,386 | 16,550 | ||||||||||||
| Total Fortress operating expenses | 25,495 | 17,366 | 44,620 | 33,117 | ||||||||||||
| National | ||||||||||||||||
| Commissions, compensation and fees | 41,762 | - | 79,020 | - | ||||||||||||
| Clearing fees | 618 | - | 1,356 | - | ||||||||||||
| Communications | 682 | - | 1,404 | - | ||||||||||||
| Occupancy | 936 | - | 1,944 | - | ||||||||||||
| Licenses and registration | 427 | - | 832 | - | ||||||||||||
| Professional fees | 991 | - | 2,254 | - | ||||||||||||
| Interest | 4 | - | 8 | - | ||||||||||||
| Depreciation and amortization | 500 | - | 1,006 | - | ||||||||||||
| Other administrative expenses | 2,475 | - | 3,705 | - | ||||||||||||
| Total National operating expenses | 48,395 | - | 91,529 | - | ||||||||||||
| Total operating expenses | 73,890 | 17,366 | 136,149 | 33,117 | ||||||||||||
| Loss from operations | (23,193 | ) | (15,136 | ) | (40,770 | ) | (30,227 | ) | ||||||||
| Other income (expenses) | ||||||||||||||||
| Interest income | 190 | 77 | 326 | 152 | ||||||||||||
| Interest expense and financing fee | (1,380 | ) | (529 | ) | (2,078 | ) | (1,149 | ) | ||||||||
| Change in fair value of derivative liabilities | 1,452 | - | 5,794 | (89 | ) | |||||||||||
| Change in fair value of subsidiary convertible note | (188 | ) | - | (285 | ) | - | ||||||||||
| Change in fair value of investments | 157 | (801 | ) | (511 | ) | (1,719 | ) | |||||||||
| Other income | 13 | - | 13 | - | ||||||||||||
| Total other income (expenses) | 244 | (1,253 | ) | 3,259 | (2,805 | ) | ||||||||||
| Net loss | (22,949 | ) | (16,389 | ) | (37,511 | ) | (33,032 | ) | ||||||||
| Less: net loss attributable to non-controlling interests | (5,584 | ) | (3,911 | ) | (8,164 | ) | (8,349 | ) | ||||||||
| Net loss attributable to common stockholders | $ | (17,365 | ) | $ | (12,478 | ) | $ | (29,347 | ) | $ | (24,683 | ) | ||||
| Basic and diluted net loss per common share | $ | (0.43 | ) | $ | (0.31 | ) | $ | (0.73 | ) | $ | (0.62 | ) | ||||
| Weighted average common shares outstanding-basic and diluted | 40,551,844 | 39,867,724 | 40,457,524 | 39,762,956 |