Full Press Release Details
Fortress Biotech Reports Second Quarter 2022 Financial Results and Recent Corporate Highlights
Net revenue for the first half of 2022 increased 45.5% period-over-period to $42.8 million
Positive results from registration-enabling study of cosibelimab in metastatic cutaneous squamous cell carcinoma presented at ASCO in June 2022; BLA submission expected YE 2022
Miami, FL - August 11, 2022 - Fortress Biotech, Inc. (NASDAQ: FBIO) ("Fortress"), an innovative biopharmaceutical company focused on efficiently acquiring, developing and commercializing or monetizing promising therapeutic products and product candidates, today announced financial results and recent corporate highlights for the second quarter ended June 30, 2022.
Lindsay A. Rosenwald, M.D., Fortress' Chairman, President and Chief Executive Officer, said, "Fortress ended the first half of 2022 with $42.8 million in net revenue, which is a 45.5% increase over the same period last year. We currently have nine marketed prescription products and a growing portfolio of 20 clinical programs in over 30 ongoing clinical trials. We anticipate multiple important late-stage regulatory and clinical inflection points including the submission of a Biologics License Application ("BLA") to the U.S. Food and Drug Administration ("FDA") for cosibelimab for the treatment of metastatic cutaneous squamous cell carcinoma ("cSCC") and the continued rolling submission of Cyprium Therapeutics's CUTX-101 New Drug Application ("NDA"). CUTX-101 is eligible for a priority review voucher upon FDA approval."
Dr. Rosenwald continued, "We believe that our business is well-positioned for growth in the coming months. Our business development team is targeting potentially exciting clinical stage medicines with proof-of-concept data in areas of unmet need. We remain focused on creating long-term shareholder value through asset monetizations, equity holdings/appreciation in our subsidiaries and partner companies, annual equity dividends and royalty revenues."
Recent Corporate Highlights1:
Marketed Dermatology Products and Product Candidates
1 Includes product candidates in development at Fortress, majority-owned and controlled partners and/or subsidiaries, and partners and/or subsidiaries 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, subsidiaries and partners, and the word "partner" refers to either entities that are publicly traded and in which we own or control a majority of the ownership position or third-party entities with whom we have a significant business relationship, each as dictated by context.
CAEL-101 (Light Chain Fibril-reactive Monoclonal Antibody for AL Amyloidosis)
Cosibelimab (formerly CK-301, an anti-PD-L1 antibody)
CUTX-101 (Copper Histidinate for Menkes disease)
MB-106 (CD20-targeted CAR T Cell Therapy)
MB-107 and MB-207 (Lentiviral Gene Therapies for XSCID)
Triplex (Cytomegalovirus ("CMV") Vaccine)
Dotinurad (Urate Transporter (URAT1) Inhibitor)
MB-110 (Lentiviral Gene Therapy for RAG1 Severe Combined Immunodeficiency (RAG1-SCID))
MB-109 (MB-101 IL13R 2-targeted CAR T Cell Therapy + MB-108 C134 Oncolytic Virus)
To assist our stockholders in understanding our company, we have prepared non-GAAP financial results for the three months ended June 30, 2022 and 2021. These results exclude the operations of our four public partner companies: Avenue Therapeutics, Inc. ("Avenue"), Checkpoint, Journey Medical and Mustang Bio, as well as any one-time, non-recurring, non-cash transactions. The goal in providing these non-GAAP financial metrics is to highlight the financial results of Fortress' core operations, which are comprised of our privately held development-stage entities, as well as our business development and finance functions. See "Use of Non-GAAP Measures" below.
2 At June 30, 2022, we had cash and cash equivalents of $248.8 million, of which $71.5 million relates to Fortress and the private partner companies, primarily funded by Fortress, $30.9 million relates to Checkpoint, $107.4 million relates to Mustang Bio, $38.1 million relates to Journey Medical, and $0.9 million relates to Avenue. Restricted cash related to our leases was $2.2 million, of which $1.2 million relates to Fortress and $1.0 million relates to Mustang Bio.
Use of Non-GAAP Measures:
In addition to the GAAP financial measures as presented in this press release and that will be presented in our Form 10-Q for the second quarter of 2022 to be filed with the Securities and Exchange Commission ("SEC"), the Company, in this press release, has 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, Journey Medical and Mustang Bio ("public partner companies"), as well as our former subsidiary, Caelum. 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. The Company also provides non-GAAP research and development expenses including license acquisitions, defined as GAAP research and development costs, less research and development costs of our public partner companies and non-GAAP consolidated selling, general and administrative expenses, defined as GAAP selling, general and administrative expenses, less selling, general and administrative costs of our public partner companies.
Management believes each 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 standalone results separate from the results of its public partner companies. 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 June 30, | For the six months ended June 30, | |||||||||||
| ($ in thousands except for share and per share amounts) | 2022 | 2021 1 | 2022 | 2021 1 | ||||||||
| Net loss attributable to common stockholders | $ | (21,356) | $ | (3,535) | $ | (37,116) | $ | (12,357) | ||||
| Net loss attributable to common stockholders - Avenue 2 | $ | (354) | $ | (215) | $ | (889) | $ | (440) | ||||
| Net loss attributable to common stockholders - Checkpoint 3 | $ | (2,596) | $ | (1,711) | $ | (5,520) | $ | (2,869) | ||||
| Net loss attributable to common stockholders - Journey Medical 4 | $ | (4,747) | $ | (14,071) | $ | (5,564) | $ | (13,741) | ||||
| Net loss attributable to common stockholders - Mustang Bio 5 | $ | (1,374) | $ | (2,496) | $ | (3,916) | $ | (5,414) | ||||
| Non-GAAP (loss) income attributable to common stockholders | $ | (12,285) | $ | 14,958 | $ | (21,227) | $ | 10,107 | ||||
| Stockbased compensation | $ | 2,884 | $ | 2,910 | $ | 5,665 | $ | 4,777 | ||||
| Non-cash interest | $ | 4 | $ | 14 | $ | 8 | $ | 23 | ||||
| Amortization of debt discount | $ | 404 | $ | 594 | $ | 761 | $ | 903 | ||||
| Depreciation | $ | 98 | $ | 137 | $ | 198 | $ | 278 | ||||
| Increase in fair value of investment in Caelum 6 | $ | - | $ | (25,005) | $ | - | $ | (30,918) | ||||
| Fortress non-GAAP loss attributable to common stockholders | $ | (8,895) | $ | (6,392) | $ | (14,595) | $ | (14,830) | ||||
| Per common share - basic and diluted: | ||||||||||||
| Net loss attributable to common stockholders (GAAP) | $ | (0.24) | $ | (0.04) | $ | (0.42) | $ | (0.15) | ||||
| Non-GAAP net loss attributable to common stockholders | $ | (0.14) | $ | 0.18 | $ | (0.24) | $ | 0.12 | ||||
| Fortress non-GAAP loss attributable to common stockholders | $ | (0.1) | $ | (0.08) | $ | (0.17) | $ | (0.18) | ||||
| Weighted average common shares outstanding - basic and diluted | $ | 88,743,457 | $ | 80,962,994 | $ | 87,593,952 | $ | 80,907,671 |
| For the quarter ended June 30, | For the six months ended June 30, | |||||||||||
| ($ in thousands) | 2022 | 2021 1 | 2022 | 2021 1 | ||||||||
| Research and development 2 | $ | 33,131 | $ | 33,834 | $ | 69,853 | $ | 53,988 | ||||
| Less: | ||||||||||||
| Research and development - Avenue | 151 | 328 | 1,959 | 586 | ||||||||
| Research and development - Checkpoint | 12,053 | 7,198 | 26,723 | 11,411 | ||||||||
| Research and development - Journey Medical | 2,609 | 13,772 | 3,875 | 13,772 | ||||||||
| Research and development - Mustang Bio 3 | 15,039 | 11,840 | 31,203 | 23,395 | ||||||||
| Non-GAAP research and development costs | $ | 3,279 | $ | 697 | $ | 6,093 | $ | 4,824 | ||||
| Selling, general and administrative | $ | 29,048 | $ | 19,382 | $ | 55,318 | $ | 36,924 | ||||
| Less: | ||||||||||||
| General and administrative - Avenue | 454 | 623 | 1,509 | 1,336 | ||||||||
| General and administrative - Checkpoint 4 | 1,987 | 1,736 | 3,909 | 3,350 | ||||||||
| Selling, general and administrative - Journey Medical | 15,191 | 7,795 | 29,906 | 14,021 | ||||||||
| General and administrative - Mustang Bio 5 | 2,876 | 2,086 | 5,278 | 4,296 | ||||||||
| Non-GAAP selling, general and administrative costs | $ | 8,540 | $ | 7,142 | $ | 14,716 | $ | 13,891 |
Reconciliation to non-GAAP research and development and general and administrative costs:
About Fortress Biotech
Fortress Biotech, Inc. ("Fortress") is an innovative biopharmaceutical company focused on acquiring, developing and commercializing high-potential marketed and development-stage drugs and drug candidates. The company has nine marketed prescription pharmaceutical products and over 30 programs in development at Fortress, at its majority-owned and majority-controlled partners and subsidiaries and at partners and subsidiaries 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 AstraZeneca plc, City of Hope, Fred Hutchinson Cancer Research Center, St. Jude Children's Research Hospital, Nationwide Children's Hospital and Sentynl Therapeutics, Inc. 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, ability to generate shareholder value, ability of our products to receive necessary approvals, including FDA, ability of our products and therapies to help treat patients 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, including disruptions that may result from hostilities in Europe; 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 or at all; 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, and we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
Jaclyn Jaffe and Bill Begien
Fortress Biotech, Inc.
Media Relations Contact:
FORTRESS BIOTECH, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Balance Sheets
($ in thousands except for share and per share amounts)
| June 30, | December 31, | |||||
| 2022 | 2021 | |||||
| ASSETS | ||||||
| Current assets | ||||||
| Cash and cash equivalents | $ | 248,771 | $ | 305,744 | ||
| Accounts receivable, net | 28,671 | 23,112 | ||||
| Inventory | 16,053 | 9,862 | ||||
| Other receivables - related party | 376 | 678 | ||||
| Prepaid expenses and other current assets | 5,120 | 7,066 | ||||
| Total current assets | 298,991 | 346,462 | ||||
| Property, plant and equipment, net | 14,021 | 15,066 | ||||
| Operating lease right-of-use asset, net | 18,116 | 19,005 | ||||
| Restricted cash | 2,220 | 2,220 | ||||
| Intangible asset, net | 29,440 | 12,552 | ||||
| Other assets | 1,167 | 1,198 | ||||
| Total assets | $ | 363,955 | $ | 396,503 | ||
| LIABILITIES AND STOCKHOLDERS ' EQUITY | ||||||
| Current liabilities | ||||||
| Accounts payable and accrued expenses | $ | 93,540 | $ | 90,660 | ||
| Deferred revenue | 1,457 | 2,611 | ||||
| Income taxes payable | 345 | 345 | ||||
| Operating lease liabilities, short-term | 2,092 | 2,104 | ||||
| Partner company line of credit | - | 812 | ||||
| Partner company installment payments - licenses, short-term, net | 7,487 | 4,510 | ||||
| Total current liabilities | 104,921 | 101,042 | ||||
| Notes payable, long-term, net | 85,611 | 42,937 | ||||
| Operating lease liabilities, long-term | 19,973 | 20,987 | ||||
| Partner company installment payments - licenses, long-term, net | 3,808 | 3,627 | ||||
| Other long-term liabilities | 1,940 | 2,033 | ||||
| Total liabilities | 216,253 | 170,626 | ||||
| Commitments and contingencies | ||||||
| Stockholders ' equity | ||||||
| Cumulative redeemable perpetual preferred stock, $0.001 par value, 15,000,000 authorized, 5,000,000 designated Series A shares, 3,427,138 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively, liquidation value of $25.00 per share | 3 | 3 | ||||
| Common stock, $0.001 par value, 200,000,000 shares authorized, 107,717,647 shares issued and outstanding as of June 30, 2022; 170,000,000 shares authorized, 101,435,505 shares issued and outstanding as of December 31, 2021, respectively | 108 | 101 | ||||
| Additional paid-in-capital | 661,691 | 656,033 | ||||
| Accumulated deficit | (584,579) | (547,463) | ||||
| Total stockholders ' equity attributed to the Company | 77,223 | 108,674 | ||||
| Non-controlling interests | 70,479 | 117,203 | ||||
| Total stockholders ' equity | 147,702 | 225,877 | ||||
| Total liabilities and stockholders ' equity | $ | 363,955 | $ | 396,503 |
FORTRESS BIOTECH, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
($ in thousands except for share and per share amounts)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||
| Revenue | ||||||||||||
| Product revenue, net | $ | 18,235 | $ | 15,288 | $ | 39,031 | $ | 26,007 | ||||
| Collaboration revenue | 577 | 2,400 | 1,154 | 3,200 | ||||||||
| Revenue - related party | 18 | 155 | 70 | 223 | ||||||||
| Other revenue | 56 | - | 2,556 | - | ||||||||
| Net revenue | 18,886 | 17,843 | 42,811 | 29,430 | ||||||||
| Operating expenses | ||||||||||||
| Cost of goods sold - product revenue | 7,633 | 7,484 | 15,836 | 11,392 | ||||||||
| Research and development | 33,130 | 22,831 | 69,852 | 42,859 | ||||||||
| Research and development - licenses acquired | 1 | 11,003 | 1 | 11,129 | ||||||||
| Selling, general and administrative | 29,048 | 19,382 | 55,318 | 36,924 | ||||||||
| Total operating expenses | 69,812 | 60,700 | 141,007 | 102,304 | ||||||||
| Loss from operations | (50,926) | (42,857) | (98,196) | (72,874) | ||||||||
| Other income (expense) | ||||||||||||
| Interest income | 150 | 146 | 292 | 373 | ||||||||
| Interest expense and financing fee | (3,154) | (2,760) | (5,504) | (4,949) | ||||||||
| Change in fair value of investments | - | 25,005 | - | 30,918 | ||||||||
| Change in fair value of derivative liability | - | (3,925) | - | (3,925) | ||||||||
| Total other income (expense) | (3,004) | 18,466 | (5,212) | 22,417 | ||||||||
| Net loss | (53,930) | (24,391) | (103,408) | (50,457) | ||||||||
| Net loss attributable to non-controlling interests | 32,574 | 20,856 | 66,292 | 38,100 | ||||||||
| Net loss attributable to common stockholders | $ | (21,356) | $ | (3,535) | $ | (37,116) | $ | (12,357) | ||||
| Net loss per common share - basic and diluted | $ | (0.61) | $ | (0.30) | $ | (1.18) | $ | (0.62) | ||||
| Net loss per common share attributable to non - controlling interests - basic and diluted | $ | (0.37) | $ | (0.26) | $ | (0.76) | $ | (0.47) | ||||
| Net loss per common share attributable to common stockholders - basic and diluted | $ | (0.24) | $ | (0.04) | $ | (0.42) | $ | (0.15) | ||||
| Weighted average common shares outstanding - basic and diluted | 88,743,457 | 80,962,994 | 87,593,952 | 80,907,671 |