Product revenue for the first six months of 2020 increased 50% year-over-year to $21.4 million
Agreement executed with Columbia University to develop novel oligonucleotide platform for the treatment of genetically driven cancers, including KRAS-driven cancers, and coronavirusesNEW YORK, Aug. 10, 2020 (GLOBE NEWSWIRE) — Fortress Biotech, Inc. (NASDAQ: FBIO) (“Fortress”), an innovative revenue-generating company focused on acquiring, developing and commercializing or monetizing promising biopharmaceutical products and product candidates cost-effectively, today announced financial results and recent corporate highlights for the second quarter ended June 30, 2020.Lindsay A. Rosenwald, M.D., Fortress’ Chairman, President and Chief Executive Officer, said, “Fortress has continued to efficiently and effectively execute on its growth objectives due to our unique business model. We are proud to have generated total net revenue of $21.4 million from our five marketed pharmaceutical products in the first half of 2020, a year-over-year increase of 50%, despite this unprecedented time. Moreover, during the second quarter, we acquired a broad platform technology from Columbia University to effectively deliver novel, proprietary oligonucleotides for the treatment of genetically driven cancers, with an initial target of KRAS-driven cancers. We are also exploring the potential of the platform to treat novel coronaviruses, such as COVID-19.”Dr. Rosenwald continued, “Additionally, we continue to work with our partner companies to steadily build and advance our growing portfolio of commercial and development-stage product candidates. Our goal is to increase intrinsic value for our shareholders. In the second half of 2020, we look forward to a multitude of key inflection points, including: additional data from our registration-enabling clinical trial of cosibelimab in patients with metastatic cutaneous squamous cell carcinoma (“mCSCC”), the PDUFA date for IV tramadol in October and initiating the rolling submission of the New Drug Application (“NDA”) to the U.S. Food and Drug Administration (“FDA”) for CUTX-101 for the treatment of Menkes disease. We also anticipate the potential launch of four more registration-enabling clinical trials this year, two CAEL-101 pivotal trials for AL amyloidosis and two MB-107 and MB-207 lentiviral gene therapy clinical trials for newly diagnosed infants and previously transplanted patients with X-linked severe combined immunodeficiency (“XSCID”).” Financial Results:
To assist our stockholders in understanding our company, we have prepared non-GAAP financial results for the three months and six months ended June 30, 2020 and 2019. These results exclude the operations of our three public partner companies: Avenue Therapeutics, Inc. (“Avenue”), Checkpoint Therapeutics, Inc. (“Checkpoint”) and Mustang Bio, Inc. (“Mustang”), as well as any one-time, non-recurring, non-cash transactions, such as the gain of $18.4 million we recorded in the first quarter of 2019 resulting from the de-consolidation of Caelum Biosciences, Inc. (“Caelum”). The goal in providing these non-GAAP financial metrics is to highlight the financial results of Fortress’ core operations, which are comprised of our commercial-stage business, 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 Form 10-Q filed with the Securities and Exchange Commission (“SEC”) on August 10, 2020, the Company, in this press release, has included certain non-GAAP measurements. The non-GAAP loss attributable to common stockholders is defined by the Company as GAAP net loss attributable to common stockholders, less net losses from our public partner companies Avenue, Checkpoint, and Mustang, as well as 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, and depreciation.Management believes 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 results. 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:
Avenue net loss from their external SEC report for the three months ended June 30, 2020 and 2019 of $1.9 million and $7.0 million, respectively, net of non-controlling interest of $1.4 million and $5.2 million, respectively. Avenue net loss from their external SEC report for the six months ended June 30, 2020 and 2019 of $3.1 million and $18.3 million, respectively, net of non-controlling interest of $2.4 million and $13.2 million, respectively.Checkpoint net loss from their external SEC report of $4.6 million net of non-controlling interest of $3.4 million, MSA fee to Fortress of $0.1 million and financing fee to Fortress of $0.1 million for the three months ended June 30, 2020; and net loss of $4.8 million net of non-controlling interest of $3.1 million, MSA fee to Fortress of $0.1 million and financing fee to Fortress of $0.1 million for the three months ended June 30, 2019. Checkpoint net loss from their external SEC report of $7.9 million net of non-controlling interest of $5.8 million, MSA fee to Fortress of $0.3 million and financing fee to Fortress of $0.1 million for the six months ended June 30, 2020; and net loss of $10.7 million net of non-controlling interest of $7.1 million, MSA fee to Fortress of $0.3 million and financing fee to Fortress of $0.1 million for the six months ended June 30, 2019.Mustang net loss from their external SEC report of $14.6 million net of non-controlling interest of $9.7 million, MSA fee to Fortress of $0.1 million and financing fee to Fortress of $1.0 million for the three months ended June 30, 2020; and net loss of $10.4 million net of non-controlling interest of $5.8 million, MSA fee to Fortress of $0.1 million and financing fee to Fortress of $1.3 million for the three months ended June 30, 2019. Mustang net loss from their external SEC report of $26.5 million net of non-controlling interest of $17.7 million, MSA fee to Fortress of $0.3 million and financing fee to Fortress of $1.1 million for the six months ended June 30, 2020; and net loss of $20.0 million net of non-controlling interest of $11.3 million, MSA fee to Fortress of $0.3 million and financing fee to Fortress of $1.7 million for the six months ended June 30, 2019.Caelum’s one-time gain from de-consolidation recorded in January 2019.Reconciliation to non-GAAP research and development and general and administrative costs:
Excludes $62,500 and $62,500 of Fortress MSA expense for the three months ended June 30, 2020 and 2019, respectively, and $0.1 million and $0.1 million for the six months ended June 30, 2020 and 2019, respectively.
Excludes $0.1 million of Fortress MSA expense and $0.1 million Fortress financing fee for the three months ended June 30, 2020; and $0.1 million of Fortress MSA expense and $0.1 million Fortress financing fee for the three months ended June 30, 2019. Excludes $0.3 million of Fortress MSA expense and $0.1 million Fortress financing fee for the six months ended June 30, 2020; and $0.3 million of Fortress MSA expense and $0.1 million Fortress financing fee for the six months ended June 30, 2019.
Excludes $62,500 of Fortress MSA expense and $1.0 million Fortress financing fee for the three months ended June 30, 2020; and $62,500 of Fortress MSA expense and $1.3 million Fortress financing fee for the three months ended June 30, 2019. Excludes $0.3 million of Fortress MSA expense and $1.1 million Fortress financing fee for the six months ended June 30, 2020; and $0.3 million of Fortress MSA expense and $1.7 million Fortress financing fee for the six months ended June 30, 2019.About Fortress Biotech
Fortress Biotech, Inc. (“Fortress”) is an innovative biopharmaceutical company that was recently ranked number 10 in Deloitte’s 2019 Technology Fast 500™, an annual ranking of the fastest-growing North American companies in the technology, media, telecommunications, life sciences and energy tech sectors, based on percentage of fiscal year revenue growth over a three-year period. Fortress is focused on acquiring, developing and commercializing high-potential marketed and development-stage drugs and drug candidates. The company has five marketed prescription pharmaceutical products and over 25 programs in development at Fortress, at its majority-owned and majority-controlled partners and at partners 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 Alexion Pharmaceuticals, Inc., AstraZeneca, City of Hope, Fred Hutchinson Cancer Research Center, InvaGen Pharmaceuticals Inc. (a subsidiary of Cipla Limited), St. Jude Children’s Research Hospital and Nationwide Children’s Hospital. 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 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; 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. The information contained herein is intended to be reviewed in its totality, and any stipulations, conditions or provisos that apply to a given piece of information in one part of this press release should be read as applying mutatis mutandis to every other instance of such information appearing herein.Company Contacts:
Jaclyn Jaffe and William Begien
Fortress Biotech, Inc.
(781) 652-4500
ir@fortressbiotech.comInvestor Relations Contact:
Daniel Ferry
LifeSci Advisors, LLC
(617) 430-7576
daniel@lifesciadvisors.comMedia Relations Contact:
Tony Plohoros
6 Degrees
(908) 591-2839
tplohoros@6degreespr.com
1 Includes product candidates in development at Fortress, majority-owned and controlled partners and partners 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 and partners, as dictated by context.
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