Full Press Release Details
Fortress Biotech Reports Second Quarter
2018 Financial Results and Recent Corporate Highlights
New York, NY - August 9, 2018
- 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, 2018.
Lindsay A. Rosenwald, M.D., Fortress'
Chairman, President and Chief Executive Officer, said, "During the second quarter, our Fortress Company subsidiaries reported
significant value-driving milestones, including positive Phase 3 data from Avenue Therapeutics' IV tramadol, which, if approved,
would be the only Schedule IV intravenous opioid in the U.S. and could replace highly addictive Schedule II narcotics in many patients
with moderate to moderately severe postoperative pain. Additionally, Cyprium Therapeutics was granted FDA Fast Track Designation
for its CUTX-101 Copper Histidinate injection in patients with Menkes disease, a rare pediatric disease with no FDA-approved treatments.
Also during the quarter, Mustang Bio expanded its infrastructure with the launch of a proprietary 27,000 sq. ft. CAR T cell manufacturing
facility that will enable us to oversee product safety from needle-to-needle and help improve supply chain efficiencies from clinical
development into commercialization."
Dr. Rosenwald continued, "We believe
in the value proposition represented by our company and strive to protect the best interests of our shareholders and those of our
subsidiaries. As we continue to build long-term value, our novel and efficient business model provides benefits for all stakeholders
and offers unique synergies not typical of traditional biopharma companies."
Recent Fortress and Fortress Company
Fortress Biotech, Inc.
Aevitas Therapeutics, Inc.
Avenue Therapeutics, Inc.
Caelum Biosciences, Inc.
Checkpoint Therapeutics, Inc.
Cyprium Therapeutics, Inc.
About Fortress Biotech
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 may be required by law.
Fortress Biotech, Inc.
Investor Relations Contact:
Managing Director, LifeSci Advisors, LLC
Media Relations Contact:
FORTRESS BIOTECH, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
($ in thousands except for share and per share amounts)
| June 30, | December 31, | |||||||
| 2018 | 2017 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 98,591 | $ | 113,915 | ||||
| Accounts receivable | 5,321 | 7,758 | ||||||
| Short-term investments (certificates of deposit) | 35,000 | 36,002 | ||||||
| Cash deposits with clearing organizations | 836 | 1,041 | ||||||
| Receivables from broker-dealers and clearing organizations | 11,412 | 7,395 | ||||||
| Forgivable loans receivable | 1,598 | 1,616 | ||||||
| Securities owned, at fair value | 3,812 | 1,985 | ||||||
| Inventory | 299 | 171 | ||||||
| Other receivables - related party | 775 | 618 | ||||||
| Prepaid expenses and other current assets | 13,880 | 12,680 | ||||||
| Total current assets | 171,524 | 183,181 | ||||||
| Property and equipment, net | 14,163 | 9,513 | ||||||
| Restricted cash | 17,389 | 17,387 | ||||||
| Long-term investments, at fair value | 565 | 1,390 | ||||||
| Intangible assets | 13,614 | 15,223 | ||||||
| Goodwill | 18,645 | 18,645 | ||||||
| Other assets | 966 | 611 | ||||||
| Total assets | $ | 236,866 | $ | 245,950 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued expenses | $ | 38,126 | $ | 36,127 | ||||
| Accounts payable and accrued expenses - related party | 73 | 222 | ||||||
| Accrued commissions and payroll payable | 10,652 | 10,065 | ||||||
| Deferred clearing and marketing credits | 681 | 786 | ||||||
| Securities sold, not yet purchased, at fair value | 8 | 151 | ||||||
| Warrants issued - National | - | 5,597 | ||||||
| Interest payable | 1,143 | 887 | ||||||
| Interest payable - related party | 94 | 97 | ||||||
| Notes payable, short-term (net of debt discount of $0 and $973 at June 30, 2018 and December 31, 2017, respectively) | - | 8,528 | ||||||
| Subsidiary convertible note, short-term, at fair value | 10,573 | 4,700 | ||||||
| Deferred revenue | 650 | - | ||||||
| Derivative warrant liability | - | 87 | ||||||
| Other current liabilities | 158 | 181 | ||||||
| Total current liabilities | 62,158 | 67,428 | ||||||
| Notes payable, long-term (net of debt discount of $1,035 and $62 at June 30, 2018 and December 31, 2017, respectively) | 73,456 | 43,222 | ||||||
| Subsidiary convertible note, long-term, at fair value | - | 10,059 | ||||||
| Other long-term liabilities | 4,987 | 4,739 | ||||||
| Total liabilities | 140,601 | 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 June 30, 2018 and December 31, 2017; liquidation value of $25.00 per share | 1 | 1 | ||||||
| Common stock, $.001 par value, 100,000,000 shares authorized, 53,987,074 and 50,991,285 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively | 54 | 51 | ||||||
| Common stock issuable, 259,813 and 158,015 shares as of June 30, 2018 and December 31, 2017, respectively | 776 | 500 | ||||||
| Additional paid-in-capital | 397,858 | 364,148 | ||||||
| Accumulated deficit | (354,756 | ) | (312,127 | ) | ||||
| Total stockholders' equity attributed to the Company | 43,933 | 52,573 | ||||||
| Non-controlling interests | 52,332 | 67,929 | ||||||
| Total stockholders' equity | 96,265 | 120,502 | ||||||
| Total liabilities and stockholders' equity | $ | 236,866 | $ | 245,950 |
FORTRESS BIOTECH, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of
($ in thousands except for share and
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Revenue | ||||||||||||||||
| Fortress | ||||||||||||||||
| Product revenue, net | $ | 6,689 | $ | 4,054 | $ | 12,198 | $ | 6,139 | ||||||||
| Revenue - from a related party | 126 | 350 | 520 | 1,043 | ||||||||||||
| Net Fortress revenue | 6,815 | 4,404 | 12,718 | 7,182 | ||||||||||||
| National | ||||||||||||||||
| Commissions | 31,407 | 23,993 | 57,025 | 48,499 | ||||||||||||
| Net dealer inventory gains | 2,929 | 2,366 | 5,119 | 4,877 | ||||||||||||
| Investment banking | 11,037 | 10,592 | 23,741 | 17,653 | ||||||||||||
| Investment advisory | 5,197 | 3,490 | 10,530 | 6,875 | ||||||||||||
| Interest and dividends | 601 | 675 | 1,232 | 1,391 | ||||||||||||
| Transfer fees and clearing services | 1,777 | 1,687 | 4,074 | 4,185 | ||||||||||||
| Tax preparation and accounting | 3,868 | 3,144 | 4,391 | 4,000 | ||||||||||||
| Other | 203 | 346 | 429 | 717 | ||||||||||||
| Total National revenue | 57,019 | 46,293 | 106,541 | 88,197 | ||||||||||||
| Net revenue | 63,834 | 50,697 | 119,259 | 95,379 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Fortress | ||||||||||||||||
| Cost of goods sold - product revenue | 1,668 | 878 | 3,140 | 1,347 | ||||||||||||
| Research and development | 17,488 | 11,683 | 42,446 | 18,793 | ||||||||||||
| Research and development - licenses acquired | 1 | 1,800 | 98 | 3,094 | ||||||||||||
| General and administrative | 13,056 | 11,134 | 26,604 | 21,386 | ||||||||||||
| Total Fortress operating expenses | 32,213 | 25,495 | 72,288 | 44,620 | ||||||||||||
| National | ||||||||||||||||
| Commissions, compensation and fees | 49,345 | 41,762 | 92,906 | 79,020 | ||||||||||||
| Clearing fees | 578 | 618 | 1,321 | 1,356 | ||||||||||||
| Communications | 813 | 682 | 1,573 | 1,404 | ||||||||||||
| Occupancy | 1,141 | 936 | 2,096 | 1,944 | ||||||||||||
| Licenses and registration | 530 | 427 | 1,167 | 832 | ||||||||||||
| Professional fees | 578 | 991 | 1,971 | 2,254 | ||||||||||||
| Interest | 2 | 4 | 4 | 8 | ||||||||||||
| Underwriting costs | 42 | - | 187 | - | ||||||||||||
| Depreciation and amortization | 857 | 500 | 1,716 | 1,006 | ||||||||||||
| Other administrative expenses | 2,332 | 2,475 | 4,113 | 3,705 | ||||||||||||
| Total National operating expenses | 56,218 | 48,395 | 107,054 | 91,529 | ||||||||||||
| Total operating expenses | 88,431 | 73,890 | 179,342 | 136,149 | ||||||||||||
| Loss from operations | (24,597 | ) | (23,193 | ) | (60,083 | ) | (40,770 | ) | ||||||||
| Other income (expenses) | ||||||||||||||||
| Interest income | 294 | 190 | 572 | 326 | ||||||||||||
| Interest expense and financing fee | (2,144 | ) | (1,380 | ) | (4,227 | ) | (2,078 | ) | ||||||||
| Change in fair value of derivative liabilities | (6,866 | ) | 1,452 | (7,931 | ) | 5,794 | ||||||||||
| Change in fair value of subsidiary convertible note | (140 | ) | (188 | ) | 110 | (285 | ) | |||||||||
| Change in fair value of investments | (707 | ) | 157 | (825 | ) | (511 | ) | |||||||||
| Other loss | (118 | ) | 13 | (112 | ) | 13 | ||||||||||
| Total other (expenses) income | (9,681 | ) | 244 | (12,413 | ) | 3,259 | ||||||||||
| Loss before income taxes | (34,278 | ) | (22,949 | ) | (72,496 | ) | (37,511 | ) | ||||||||
| Income tax expense | 1,438 | - | 1,438 | - | ||||||||||||
| Net loss | (35,716 | ) | (22,949 | ) | (73,934 | ) | (37,511 | ) | ||||||||
| Less: net loss attributable to non-controlling interests | (14,105 | ) | (5,584 | ) | (31,305 | ) | (8,164 | ) | ||||||||
| Net loss attributable to common stockholders | $ | (21,611 | ) | $ | (17,365 | ) | $ | (42,629 | ) | $ | (29,347 | ) | ||||
| Basic and diluted net loss per common share | $ | (0.50 | ) | $ | (0.43 | ) | $ | (0.99 | ) | $ | (0.73 | ) | ||||
| Weighted average common shares outstanding-basic and diluted | 43,377,629 | 40,551,844 | 42,948,780 | 40,457,524 |