Full Press Release Details
Fortress Biotech Reports Second Quarter 2023
Financial Results and Recent Corporate Highlights
Total net revenue was $17.4 million in the
second quarter of 2023, a 40% increase from $12.4 million in the first quarter of 2023
Positive topline results from two Phase 3
clinical trials evaluating DFD-29 demonstrated achievement of co-primary and all secondary endpoints versus placebo and Oracea (doxycycline)
with no significant safety issues
Fortress is advancing several late-stage
clinical assets with two NDA submissions anticipated in the second half of 2023 for DFD-29 and CUTX-101
Cosibelimab longer-term results demonstrated
substantial increases in complete response rates in advanced cutaneous squamous cell carcinoma
PDUFA goal date of January 3, 2024, set by
FDA for cosibelimab to treat metastatic or locally advanced cutaneous squamous cell carcinoma
Miami, FL - August 14, 2023 -
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, 2023.
Lindsay A. Rosenwald, M.D., Fortress' Chairman,
President and Chief Executive Officer, said, "Fortress, along with our partner companies and subsidiaries, demonstrated meaningful
progress in the second quarter of 2023 and subsequent months, including:
| o | Positive topline results from our two Phase 3 DFD-29 clinical trials for papulopustular rosacea; | |
| o | Positive data from our Phase 1/2 single center clinical trial of our CAR T cell therapy, MB-106, to treat a wide range of hematologic malignancies; |
Dr. Rosenwald continued, "With an
expanding portfolio of marketed dermatology products, more than 25 drug candidates across our partner companies, and the potential
for multiple FDA approvals over the next two years, we believe that our business is well-positioned for continued growth. Our
strategy is focused on targeting exciting clinical-stage medicines with proof-of-concept data in areas of unmet
need. Fortress and our partner companies are poised to achieve our collective objective of providing new treatment options to
patients in need, while creating significant long-term value for our shareholders through our equity interests and
Recent Corporate Highlights1:
Marketed Dermatology Products and Product Candidates
Cosibelimab (Anti PD-L1 antibody)
1 The development programs depicted
in this press release include product candidates in development at Fortress, at Fortress' private subsidiaries (referred to herein
as "subsidiaries"), at Fortress' public subsidiaries (referred to herein as "partner companies") and at
entities with which one of the foregoing parties has a significant business relationship, such as an exclusive license or an ongoing
product-related payment obligation (such entities referred to herein as "partners"). The words "we", "us"
and "our" may refer to Fortress individually, to one or more of our subsidiaries and/or partner companies, or to all such
entities as a group, as dictated by context.
Dotinurad (Urate Transporter (URAT1) Inhibitor)
MB-106 (CD20-targeted CAR T Cell Therapy)
CUTX-101 (Copper Histidinate for Menkes disease)
CAEL-101 (Light Chain Fibril-reactive Monoclonal
Antibody for AL Amyloidosis)
2 Information on clinicaltrials.gov
does not constitute part of this release.
Triplex (Cytomegalovirus ("CMV")
3 M. Zanovello et al., Unexpected
frequency of the pathogenic ARCAG repeat 2 expansion in the general population. Brain, in press (2023).
In vivo CAR T Platform Technology
To assist our stockholders in understanding our
company, we have prepared non-GAAP financial metrics for the three months ended June 30, 2023 and 2022. These metrics exclude the operations
of our four public partner companies: 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 comprise 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 filings with the Securities and Exchange Commission ("SEC"), including our Form 10-Q to be filed on
August 14, 2023, 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"). 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 debt discount, changes in fair value of derivative liability, loss
on deconsolidation of subsidiary and depreciation expense. The Company also provides non-GAAP research and development costs,
defined as GAAP research and development costs, less research and development costs of our public partner companies and non-GAAP
selling, general and administrative costs, defined as GAAP selling, general and administrative costs, 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) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net loss attributable to common stockholders 1 | $ | (26,784 | ) | $ | (23,364 | ) | $ | (50,329 | ) | $ | (41,132 | ) | ||||
| Net loss attributable to common stockholders - Avenue 2 | (339 | ) | (354 | ) | (1,361 | ) | (889 | ) | ||||||||
| Net loss attributable to common stockholders - Checkpoint 3 | (2,441 | ) | (2,596 | ) | (4,208 | ) | (5,520 | ) | ||||||||
| Net loss attributable to common stockholders - Journey Medical 4 | (4,662 | ) | (4,747 | ) | (10,395 | ) | (5,564 | ) | ||||||||
| Net loss attributable to common stockholders - Mustang Bio 5 | (3,276 | ) | (1,374 | ) | (6,550 | ) | (3,916 | ) | ||||||||
| Non-GAAP loss attributable to common stockholders | $ | (16,066 | ) | $ | (14,293 | ) | $ | (27,815 | ) | $ | (25,243 | ) | ||||
| Stock based compensation | 2,705 | 2,884 | 5,574 | 5,665 | ||||||||||||
| Non-cash interest | 391 | 4 | 836 | 8 | ||||||||||||
| Amortization of debt discount | 970 | 404 | 1,454 | 761 | ||||||||||||
| Depreciation | 92 | 98 | 185 | 198 | ||||||||||||
| Change in fair value of warrant liabilities | 512 | - | (6,166 | ) | - | |||||||||||
| Loss on deconsolidation of Aevitas | 3,369 | - | 3,369 | - | ||||||||||||
| Fortress non-GAAP loss attributable to common stockholders | $ | (8,027 | ) | $ | (10,903 | ) | $ | (22,563 | ) | $ | (18,611 | ) | ||||
| Per common share - basic and diluted: | ||||||||||||||||
| Net loss attributable to common stockholders (GAAP) | $ | (0.24 | ) | $ | (0.26 | ) | $ | (0.47 | ) | $ | (0.47 | ) | ||||
| Non-GAAP net loss attributable to common stockholders | $ | (0.15 | ) | $ | (0.16 | ) | $ | (0.26 | ) | $ | (0.29 | ) | ||||
| Fortress non-GAAP loss attributable to common stockholders | $ | (0.07 | ) | $ | (0.12 | ) | $ | (0.21 | ) | $ | (0.21 | ) | ||||
| Weighted average common shares outstanding - basic and diluted | 110,659,985 | 88,743,457 | 106,297,241 | 87,593,952 |
Reconciliation to non-GAAP research and development
costs and non-GAAP selling, general and administrative costs:
| For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||
| ($ in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Research and development 1 | $ | 32,141 | $ | 33,131 | $ | 71,647 | $ | 69,853 | ||||||||
| Less: | ||||||||||||||||
| Research and development - Avenue 2 | 2,965 | 151 | 8,347 | 1,959 | ||||||||||||
| Research and development - Checkpoint | 13,945 | 12,053 | 29,771 | 26,723 | ||||||||||||
| Research and development - Journey Medical | 1,774 | 2,609 | 3,807 | 3,875 | ||||||||||||
| Research and development - Mustang Bio 3 | 10,773 | 15,039 | 24,711 | 31,203 | ||||||||||||
| Non-GAAP research and development costs | $ | 2,684 | $ | 3,279 | $ | 5,011 | $ | 6,093 | ||||||||
| Selling, general and administrative | $ | 24,439 | $ | 29,048 | $ | 49,780 | $ | 55,318 | ||||||||
| Less: | ||||||||||||||||
| General and administrative - Avenue 4 | 761 | 454 | 1,683 | 1,509 | ||||||||||||
| General and administrative - Checkpoint 5 | 1,753 | 1,987 | 3,764 | 3,909 | ||||||||||||
| Selling, general and administrative - Journey Medical | 12,141 | 15,191 | 25,433 | 29,906 | ||||||||||||
| General and administrative - Mustang Bio 6 | 2,993 | 2,876 | 5,251 | 5,278 | ||||||||||||
| Non-GAAP selling, general and administrative costs | $ | 6,791 | $ | 8,540 | $ | 13,649 | $ | 14,716 |
About Fortress Biotech
Fortress Biotech, Inc. ("Fortress")
is an innovative biopharmaceutical company focused on efficiently acquiring, developing and commercializing or monetizing promising therapeutic
products and product candidates. The company has eight marketed prescription pharmaceutical products and over 25 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, City of Hope, Fred Hutchinson Cancer Center, St.
Jude Children's Research Hospital, Nationwide Children's Hospital and Sentynl. 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