Full Press Release Details
Fortress Biotech Reports Third Quarter
2016 Financial Results and Recent Corporate Highlights
New York, NY - November 9, 2016
- Fortress Biotech, Inc. (NASDAQ: FBIO) ("Fortress"), a biopharmaceutical company dedicated to acquiring,
developing and commercializing novel pharmaceutical and biotechnology products, today announced its financial results and recent
corporate highlights for the quarter ended September 30, 2016.
Dr. Lindsay A. Rosenwald, Chairman, President
and CEO of Fortress, said, "We recently launched our seventh Fortress Company, Cellvation, based on compelling science from
The University of Texas Health Science Center at Houston in traumatic brain injury, an area of great unmet need, including two
Phase 2 cell therapy programs. In addition, the clinical oncology pipeline of our Fortress Companies continues to grow, with the
initiation of Checkpoint's Phase 1/2 study of its EGFR inhibitor CK-101. In September, Fortress, through its subsidiary
FBIO Acquisition, Inc., closed its tender offer for shares of National Holdings Corporation. We believe that as Fortress and National
leverage their synergies, growth opportunities will be created for both companies."
Recent Fortress and Fortress Company
Fortress Biotech, Inc.
Checkpoint Therapeutics, Inc.
Journey Medical Corporation (JMC)
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 of its subsidiary companies, also known
as Fortress Companies. Additionally, Fortress recently acquired a controlling interest in National Holdings Corporation (NASDAQ:
NHLD), a diversified independent brokerage company (together with its subsidiaries, "NHLD"). 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
licensings, 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. Such statements include, but are not limited to, any statements relating to our growth strategy, potential acquisitions,
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 related to our growth strategy; our ability to continue to commercialize products; our ability to identify, acquire,
close and integrate product candidates and companies successfully and on a timely basis; our need for substantial additional funds;
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; our dependence on
third-party suppliers; our ability to attract, integrate, and retain key personnel; the early stage of products under development;
government regulation; patent and intellectual property matters; competition; and 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.
Lucy Lu, MD, Executive Vice President
& Chief Financial Officer
Fortress Biotech, Inc.
FORTRESS BIOTECH, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
($ in thousands except for share and
| September 30, | December 31, | |||||||
| 2016 | 2015 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 82,537 | $ | 98,182 | ||||
| Accounts receivable | 5,007 | - | ||||||
| Cash deposits with clearing organizations | 1,030 | - | ||||||
| Receivables from broker-dealers and clearing organizations | 1,607 | - | ||||||
| Securities owned, at fair value | 2,178 | - | ||||||
| Inventory | 123 | - | ||||||
| Other receivables - related party | 1,545 | 156 | ||||||
| Prepaid expenses and other current assets | 4,556 | 1,599 | ||||||
| Total current assets | 98,583 | 99,937 | ||||||
| Property and equipment, net | 6,957 | 309 | ||||||
| Restricted cash | 15,859 | 14,586 | ||||||
| Long-term investments, at fair value | 685 | 2,485 | ||||||
| Intangible assets, net | 1,550 | 1,250 | ||||||
| Goodwill | 21,739 | - | ||||||
| Other assets | 48 | 43 | ||||||
| Total assets | $ | 145,421 | $ | 118,610 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued expenses | $ | 21,831 | $ | 10,438 | ||||
| Accrued commissions and payroll payable | 14,029 | - | ||||||
| Deferred clearing and marketing credits | 1,007 | - | ||||||
| Interest payable | 68 | 27 | ||||||
| Derivative warrant liability | 951 | 114 | ||||||
| Other current liabilities | 707 | - | ||||||
| Total current liabilities | 38,593 | 10,579 | ||||||
| Notes payable, long-term (net of debt discount of $2,764 and $835 at September 30, 2016 and December 31, 2015, respectively) | 24,373 | 23,174 | ||||||
| Subsidiary convertible note, at fair value | 3,031 | - | ||||||
| Other long-term liabilities | 4,583 | 584 | ||||||
| Total liabilities | 70,580 | 34,337 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' equity | ||||||||
| Convertible Preferred stock, $.001 par value, 129,767 Series C shares authorized, 0 shares issued and outstanding as of September 30, 2016 and December 31, 2015, respectively | - | - | ||||||
| Common Stock, $.001 par value, 100,000,000 shares authorized, 48,875,087 and 47,147,032 shares issued and outstanding as of September 30, 2016 and December 31, 2015, respectively | 49 | 47 | ||||||
| Additional paid-in-capital | 264,397 | 246,955 | ||||||
| Accumulated deficit | (227,820 | ) | (190,156 | ) | ||||
| Total stockholders' equity attributed to the Company | 36,626 | 56,846 | ||||||
| Non-controlling interests | 38,215 | 27,427 | ||||||
| Total stockholders' equity | 74,841 | 84,273 | ||||||
| Total liabilities and stockholders' equity | $ | 145,421 | $ | 118,610 |
FORTRESS BIOTECH, INC. AND SUBSIDIARIES
Condensed Consolidated Statement of
($ in thousands except for share and
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Revenue | ||||||||||||||||
| Product revenue, net | $ | 429 | $ | - | $ | 1,793 | $ | - | ||||||||
| Revenue - from a related party | 546 | 25 | 2,072 | 525 | ||||||||||||
| Total revenue | 975 | 25 | 3,865 | 525 | ||||||||||||
| Cost of goods sold - product revenue | 41 | - | 365 | - | ||||||||||||
| Gross margin | 934 | 25 | 3,500 | 525 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Research and development | 7,316 | 9,073 | 21,416 | 13,172 | ||||||||||||
| Research and development - licenses acquired | 1,000 | 1,895 | 3,143 | 10,882 | ||||||||||||
| General and administrative | 8,864 | 7,129 | 25,414 | 14,376 | ||||||||||||
| Total operating expenses | 17,180 | 18,097 | 49,973 | 38,430 | ||||||||||||
| Loss from operations | (16,246 | ) | (18,072 | ) | (46,473 | ) | (37,905 | ) | ||||||||
| Other income (expenses) | ||||||||||||||||
| Interest income | 89 | 39 | 241 | 195 | ||||||||||||
| Interest expense and financing fees | (689 | ) | (350 | ) | (1,838 | ) | (1,033 | ) | ||||||||
| Change in fair value of derivative liabilities | (16 | ) | - | (105 | ) | - | ||||||||||
| Change in fair value of subsidiary convertible note | (13 | ) | - | (13 | ) | - | ||||||||||
| Change in fair value of investments | (81 | ) | (1,472 | ) | (1,800 | ) | (65 | ) | ||||||||
| Total other expenses | (710 | ) | (1,783 | ) | (3,515 | ) | (903 | ) | ||||||||
| Net loss | (16,956 | ) | (19,855 | ) | (49,988 | ) | (38,808 | ) | ||||||||
| Less: net loss attributable to non-controlling interests | 3,975 | 1,694 | 12,324 | 2,416 | ||||||||||||
| Net loss attributable to common stockholders | $ | (12,981 | ) | $ | (18,161 | ) | $ | (37,664 | ) | $ | (36,392 | ) | ||||
| Basic and diluted net loss per common share | $ | (0.32 | ) | $ | (0.46 | ) | $ | (0.94 | ) | $ | (0.93 | ) | ||||
| Weighted average common shares outstanding-basic and diluted | 40,128,475 | 39,412,056 | 39,885,685 | 39,038,522 |