Full Press Release Details
Biotech Reports Third Quarter 2017 Financial Results and Recent Corporate Highlights
New York, NY - November 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 third quarter ended September 30, 2017.
Dr. Lindsay A. Rosenwald, Fortress'
Chairman, President and Chief Executive Officer, said, "Fortress enjoyed strong third quarter performance, beginning with
the formation of a new gene therapy subsidiary company, Aevitas Therapeutics. Fortress' other subsidiaries also continued
to achieve important corporate and clinical milestones during the quarter. Avenue dosed the first patient in its pivotal Phase
3 study of IV tramadol for the management of moderate to moderately severe pain in patients following bunionectomy surgery. Additionally,
Checkpoint dosed the first patient in its Phase 1 clinical study evaluating the safety and tolerability of its anti-PD-L1 antibody,
CK-301, in selected recurrent or metastatic cancers. The FDA also granted Orphan Drug Designation to Checkpoint's third-generation
EGFR inhibitor, CK-101, for the treatment of EGFR mutation-positive NSCLC. Mustang Bio has continued to make meaningful progress
throughout the quarter, with its common stock commencing trading on the NASDAQ Global Market, and the licensing of a CD20 CAR T
cell therapy from the Fred Hutchinson Cancer Research Center, expanding its pipeline to six novel CAR T candidates."
Dr. Rosenwald continued, "We look
forward to oral data presentations on both Mustang Bio's and Caelum Biosciences' clinical programs at the 59th American
Society of Hematology Annual Meeting in December, and plan to continue delivering on meaningful milestones for the remainder of
Recent Fortress Biotech and Fortress
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
| September 30, | December 31, | |||||||
| 2017 | 2016 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 110,536 | $ | 88,294 | ||||
| Accounts receivable | 5,582 | 1,830 | ||||||
| Short-term investment (certificate of deposit) | 44,088 | - | ||||||
| Cash deposits with clearing organizations | 1,040 | 1,030 | ||||||
| Receivables from broker-dealers and clearing organizations | 8,282 | 3,357 | ||||||
| Forgivable loans receivable | 1,269 | 1,712 | ||||||
| Securities owned, at fair value | 1,595 | 2,357 | ||||||
| Inventory | 318 | 203 | ||||||
| Other receivables - related party | 638 | 1,790 | ||||||
| Prepaid expenses and other current assets | 10,739 | 9,061 | ||||||
| Total current assets | 184,087 | 109,634 | ||||||
| Property and equipment, net | 8,221 | 7,376 | ||||||
| Restricted cash | 16,886 | 15,860 | ||||||
| Long-term investments, at fair value | 923 | 1,414 | ||||||
| Intangible asset - license | 15,983 | 17,408 | ||||||
| Goodwill | 18,645 | 18,645 | ||||||
| Other assets | 346 | 394 | ||||||
| Total assets | $ | 245,091 | $ | 170,731 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued expenses | $ | 31,978 | $ | 23,871 | ||||
| Accrued expense - related party | 88 | - | ||||||
| Accrued commissions and payroll payable | 11,255 | 11,940 | ||||||
| Deferred clearing and marketing credits | 838 | 995 | ||||||
| Deferred product revenue | 680 | - | ||||||
| Securities sold, not yet purchased, at fair value | - | 298 | ||||||
| Interest payable | 161 | 88 | ||||||
| Interest payable - related party | 497 | 77 | ||||||
| Notes payable, short-term (net of debt discount of $1,277 and $0 at September 30, 2017 and December 31, 2016, respectively) | 8,223 | 1,000 | ||||||
| Subsidiary convertible note, short-term, at fair value | 4,733 | 1,031 | ||||||
| Contingent consideration payable | 637 | 424 | ||||||
| Warrants issued in 2017 and issuable in 2016 - National | 8,832 | 14,359 | ||||||
| Contingently issuable liabilities | - | 1,682 | ||||||
| Derivative warrant liability | 313 | 481 | ||||||
| Other current liabilities | 193 | 319 | ||||||
| Total current liabilities | 68,428 | 56,565 | ||||||
| Notes payable, long-term (net of debt discount of $2,550 and $2,009 at September 30, 2017 and December 31, 2016, respectively) | 40,734 | 22,528 | ||||||
| Subsidiary convertible note, long-term, at fair value | 9,928 | 3,656 | ||||||
| Other long-term liabilities | 4,736 | 5,014 | ||||||
| Total liabilities | 123,826 | 87,763 |
INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
($ in thousands except for
share and per share amounts)
| 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, 2017 and December 31, 2016, respectively | - | - | ||||||
| Common stock, $.001 par value, 100,000,000 shares authorized, 50,584,937 and 48,932,023 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively | 51 | 49 | ||||||
| Common stock issuable, 86,272 and 0 shares as of September 30, 2017 and December 31, 2016, respectively | 353 | - | ||||||
| Additional paid-in-capital | 338,254 | 283,697 | ||||||
| Accumulated deficit | (301,714 | ) | (245,251 | ) | ||||
| Total stockholders' equity attributed to the Company | 36,944 | 38,495 | ||||||
| Non-controlling interests | 84,321 | 44,473 | ||||||
| Total stockholders' equity | 121,265 | 82,968 | ||||||
| Total liabilities and stockholders' equity | $ | 245,091 | $ | 170,731 |
FORTRESS BIOTECH, INC. AND SUBSIDIARIES
Condensed Consolidated Statement of Operations
($ in thousands except for share and
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Revenue | ||||||||||||||||
| Fortress | ||||||||||||||||
| Product revenue, net | $ | 2,170 | $ | 429 | $ | 8,309 | $ | 1,793 | ||||||||
| Revenue - from a related party | 350 | 546 | 1,393 | 2,072 | ||||||||||||
| Net Fortress revenue | 2,520 | 975 | 9,702 | 3,865 | ||||||||||||
| National | ||||||||||||||||
| Commissions | 24,881 | - | 73,380 | - | ||||||||||||
| Net dealer inventory gains | 1,789 | - | 6,666 | - | ||||||||||||
| Investment banking | 8,942 | - | 26,595 | - | ||||||||||||
| Investment advisory | 3,605 | - | 10,480 | - | ||||||||||||
| Interest and dividends | 674 | - | 2,065 | - | ||||||||||||
| Transfer fees and clearing services | 1,649 | - | 5,834 | - | ||||||||||||
| Tax preparation and accounting | 2,527 | - | 6,527 | - | ||||||||||||
| Other | 299 | - | 1,016 | - | ||||||||||||
| Total National revenue | 44,366 | - | 132,563 | - | ||||||||||||
| Net revenue | 46,886 | 975 | 142,265 | 3,865 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Fortress | ||||||||||||||||
| Cost of goods sold - product revenue | 505 | 41 | 1,852 | 365 | ||||||||||||
| Research and development | 15,890 | 7,316 | 34,683 | 21,416 | ||||||||||||
| Research and development - licenses acquired | 300 | 1,000 | 3,394 | 3,143 | ||||||||||||
| General and administrative | 15,104 | 8,864 | 36,490 | 25,414 | ||||||||||||
| Total Fortress operating expenses | 31,799 | 17,221 | 76,419 | 50,338 | ||||||||||||
| National | ||||||||||||||||
| Commissions, compensation and fees | 39,963 | - | 118,983 | - | ||||||||||||
| Clearing fees | 470 | - | 1,826 | - | ||||||||||||
| Communications | 690 | - | 2,094 | - | ||||||||||||
| Occupancy | 972 | - | 2,916 | - | ||||||||||||
| Licenses and registration | 391 | - | 1,223 | - | ||||||||||||
| Professional fees | 1,082 | - | 3,336 | - | ||||||||||||
| Interest | 5 | - | 13 | - | ||||||||||||
| Depreciation and amortization | 507 | - | 1,513 | - | ||||||||||||
| Other administrative expenses | 3,610 | - | 7,315 | - | ||||||||||||
| Total National operating expenses | 47,690 | - | 139,219 | - | ||||||||||||
| Total operating expenses | 79,489 | 17,221 | 215,638 | 50,338 | ||||||||||||
| Loss from operations | (32,603 | ) | (16,246 | ) | (73,373 | ) | (46,473 | ) | ||||||||
| Other income (expenses) | ||||||||||||||||
| Interest income | 204 | 89 | 530 | 241 | ||||||||||||
| Interest expense and financing fee | (3,220 | ) | (689 | ) | (5,298 | ) | (1,838 | ) | ||||||||
| Change in fair value of derivative liabilities | (639 | ) | (16 | ) | 5,155 | (105 | ) | |||||||||
| Change in fair value of subsidiary convertible note | (74 | ) | (13 | ) | (359 | ) | (13 | ) | ||||||||
| Change in fair value of investments | 270 | (81 | ) | (241 | ) | (1,800 | ) | |||||||||
| Other expenses | (245 | ) | - | (232 | ) | - | ||||||||||
| Total other income (expenses) | (3,704 | ) | (710 | ) | (445 | ) | (3,515 | ) | ||||||||
| Net loss | (36,307 | ) | (16,956 | ) | (73,818 | ) | (49,988 | ) |
FORTRESS BIOTECH, INC. AND SUBSIDIARIES
Condensed Consolidated Statement of Operations
($ in thousands except for share and
| Less: net loss attributable to non-controlling interests | 9,191 | 3,975 | 17,355 | 12,324 | ||||||||||||
| Net loss attributable to common stockholders | $ | (27,116 | ) | $ | (12,981 | ) | $ | (56,463 | ) | $ | (37,664 | ) | ||||
| Basic and diluted net loss per common share | $ | (0.67 | ) | $ | (0.32 | ) | $ | (1.39 | ) | $ | (0.94 | ) | ||||
| Weighted average common shares outstanding-basic and diluted | 40,724,115 | 40,128,475 | 40,547,364 | 39,885,685 |