On November 14, 2022 Fortress Biotech, Inc. (Nasdaq: FBIO) ("Fortress" or "Company"), an innovative biopharmaceutical company focused on efficiently acquiring, developing and commercializing or monetizing promising therapeutic products and product candidates, reported financial results and recent corporate highlights for the third quarter ended September 30, 2022 (Press release, Fortress Biotech, NOV 14, 2022, View Source [SID1234623987]).

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Lindsay A. Rosenwald, M.D., Fortress’ Chairman, President and Chief Executive Officer, said, "Fortress’ unique business model continues to provide value-creating events for our shareholders with a 17.5% net revenue increase for the first nine months of 2022, compared to the first nine months of 2021. We, along with our partner companies and subsidiaries, are focused on successfully advancing our 20 clinical-stage programs in 31 ongoing clinical trials, including seven1 pivotal clinical trials. Additionally, we have eight marketed dermatology products in our portfolio."

Dr. Rosenwald continued, "Urica Therapeutics initiated a Phase 1 clinical trial of dotinurad, which we are developing for the treatment of gout and possibly other hyperuricemic conditions. Our cell and gene therapy partner company, Mustang Bio, announced that the first patient was treated in its multicenter Phase 1/2 clinical trial to evaluate the safety and efficacy of MB-106, a first-in-class CD20-targeted, autologous CAR T cell therapy for the treatment of relapsed or refractory B-cell non-Hodgkin lymphomas ("B-NHL") and chronic lymphocytic leukemia ("CLL"). Additionally, MB-106 data from the ongoing Phase 1/2 clinical trial underway at Fred Hutchinson Cancer Center ("Fred Hutch") continue to demonstrate a high rate of complete, durable responses and a favorable safety profile across a wide range of hematologic malignancies, including a 100% complete response rate in patients with Waldenstrom macroglobulinemia ("WM"), a rare form of B-NHL, for which we were granted Orphan Drug Designation. MB-106 also shows potential to treat patients in an outpatient setting and provides an option for patients treated previously with CD19-targeted CAR T cell therapy."

Dr. Rosenwald concluded, "Looking ahead, we have several near-term milestones planned including the announcement of early results from the Mustang Bio-sponsored Phase 1/2 clinical trial of MB-106 and Checkpoint Therapeutics’ planned Biologics License Application ("BLA") submission of cosibelimab for both metastatic and locally advanced cutaneous squamous cell carcinoma indications. In the first half of 2023, we anticipate Phase 1 data from the dotinurad clinical trial and topline data from the two DFD-29 Phase 3 clinical trials for the treatment of papulopustular rosacea. In 2023, we also expect the first data publication of

1 Includes two trials at Caelum Biosciences; AstraZeneca’s Alexion acquired Caelum Biosciences, a company founded by Fortress, on 10/5/2021 for up to $500 million, including $150 million upfront and up to $350 million in future contingent milestone payments. Fortress received ~$56.9 million of such upfront amount and is eligible to receive ~42% of the proceeds from all future milestone payments.

Mustang’s novel in vivo CAR T platform technology which has the potential to transform oncology therapy through our collaboration with the Mayo Clinic. Additionally, in 2023, we expect to complete the rolling submission of the New Drug Application ("NDA") for CUTX-101 for the treatment of Menkes disease. We believe this ongoing progress shows the efficiency of Fortress’ model and its ability to advance potentially meaningful treatments while continuing to build long-term value for our shareholders."

Recent Corporate Highlights2:

Marketed Dermatology Products and Product Candidates

● Journey Medical Corporation ("Journey Medical"), a Fortress partner company, currently has eight marketed prescription dermatology products.
● Journey Medical generated total revenue of $57.7 million for the first nine months of 2022, compared to total revenue of $45.6 million for the first nine months of 2021; Journey Medical generated total revenue of $16.1 million in the third quarter of 2022, compared to total revenue of $19.6 million in the third quarter of 2021.
● To date, Journey Medical has achieved 75% enrollment in the Phase 3 clinical program of DFD-29 for the treatment of papulopustular rosacea. Topline data are anticipated in the first half of 2023 with a New Drug Application ("NDA") filing expected in the second half of 2023.
● In August 2022, an additional $5.0 million was drawn from Journey Medical’s term loan facility with East West Bank as part of the operating plan for additional working capital.
● Journey Medical intends to launch an additional prescription product in the coming months.

Cosibelimab (Anti-PD-L1 Antibody for Solid Tumors)

● In July 2022, Checkpoint Therapeutics, Inc. ("Checkpoint") successfully completed two pre-BLA meetings with the FDA (chemistry, manufacturing and controls ("CMC") and clinical/non-clinical). Based upon favorable interactions with the agency, the planned BLA submission by January 2023 will include both the metastatic and locally advanced cutaneous squamous cell carcinoma indications. Checkpoint also reached agreement with the FDA on all key aspects discussed regarding the content of the upcoming BLA submission.
● Cosibelimab was sourced by Fortress and is currently in development at our partner company, Checkpoint.

MB-106 (CD20-targeted CAR T Cell Therapy)

● In October 2022, we announced that the first patient was treated in Mustang Bio, Inc.’s ("Mustang Bio") multicenter, open-label, non-randomized Phase 1/2 clinical trial evaluating the safety and efficacy of MB-106, Mustang Bio’s first-in-class CD20-targeted, autologous CAR T cell therapy for the treatment of relapsed or refractory B-NHL and CLL.
● Also in October 2022, we announced that results from the WM cohort and other interim data from the ongoing Phase 1/2 clinical trial of MB-106 at Fred Hutch were presented at the 11th International Workshop for Waldenstrom’s Macroglobulinemia that took place in Madrid, Spain. Mustang Bio’s MB-106 program was granted Orphan Drug Designation by the FDA for WM, and Mustang plans to treat additional WM patients in the Mustang Bio-sponsored Phase 1 portion of its multicenter trial in order to potentially support an accelerated Phase 2 strategy for this indication.
● Additionally, in October 2022, we shared interim data from 28 patients treated in the initial, ongoing Phase 1/2 investigator-sponsored clinical trial at Fred Hutch. These data continue to support MB-106 as a viable CAR T cell therapy for B-NHLs and CLL. An overall response rate of 96% and complete
2 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.

response ("CR") rate of 75% were observed in a wide range of hematologic malignancies including follicular lymphoma, CLL, diffuse large B-cell lymphoma and WM. Twelve patients have experienced CR for more than 12 months (10 ongoing), including four patients with CR for more than two years and the longest patient with CR at 33 months. Six patients with initial partial response ("PR") at 28 days post-treatment improved to CR, presumably due to the demonstrated persistence of CAR T cells in these patients, and all remain in ongoing CR. All three patients previously treated with CD19 CAR T cell therapy responded to treatment with MB-106. A favorable safety profile for MB-106 as an outpatient therapy remains with no cytokine release syndrome or immune effector cell-associated neurotoxicity syndrome ≥ Grade 3.
● MB-106 continues to generate compelling safety and efficacy data and the CD20 CAR T’s product profile is favorable compared to the approved autologous CAR Ts, which are generating an annualized run rate of $3 billion in net sales, based on reported sales in the third quarter of 2022.
● Early results from the Mustang Bio-sponsored multicenter MB-106 trial are expected to be announced later this quarter.
● MB-106 was sourced by Fortress and is currently in development at our partner company, Mustang Bio.

CUTX-101 (Copper Histidinate for Menkes disease)

● In December 2021, Cyprium Therapeutics, Inc. ("Cyprium") initiated the rolling submission of an NDA to the FDA for CUTX-101. The rolling submission of the NDA for CUTX-101 is ongoing and is expected to be completed in 2023.
● Cyprium is currently in a dispute with its contract manufacturing organization (the "CMO"), regarding the CMO’s attempt to terminate a Master Services Agreement (together with related work orders, the "MSA") between Cyprium and the CMO. Cyprium believes the CMO’s grounds for purporting to terminate the MSA are without merit and is currently availing itself of all appropriate legal remedies in efforts to ensure that the CMO abides by its obligations under the MSA and/or to pursue monetary damages claims against the CMO. To that end, Cyprium obtained a temporary restraining order in August 2022 and a preliminary injunction in September 2022 from a court in New York State; the injunction enjoined the CMO from terminating the MSA and prohibited the CMO from further attempts to terminate the MSA during the pendency of dispute resolution procedures.
● CUTX-101 was sourced by Fortress and is currently in development at our subsidiary company, Cyprium.

IV Tramadol

● In September 2022, Avenue Therapeutics, Inc. ("Avenue") received the official meeting minutes from the FDA regarding a meeting conducted on August 9, 2022, for IV Tramadol. At the meeting, Avenue presented a study design for a single safety clinical trial that Avenue believes could address the concerns regarding risks related to opioid stacking. The FDA stated that the proposed study design appears reasonable and agreed on various study design aspects with the expectation that additional feedback would be provided to Avenue upon review of a more detailed study protocol. Avenue intends to incorporate the FDA’s suggestions from the meeting minutes and submit a detailed study protocol that could form the basis for the submission of a complete response to the second Complete Response Letter for IV Tramadol.
● IV Tramadol was sourced by Fortress and is currently in development at our partner company, Avenue.
Triplex (Cytomegalovirus ("CMV") Vaccine)

● In August 2022, we announced that Triplex received a grant from the National Institute of Allergy and Infectious Diseases of the National Institutes of Health that could provide over $20 million in non-dilutive funding. This competitive award will fund a multi-center, placebo-controlled, randomized Phase 2 study of Triplex for control of CMV in patients undergoing liver transplantation. The company believes this data set could ultimately be used to support approval of Triplex in this setting.
● Triplex is currently the subject of five ongoing trials, funded by non-dilutive sources, in various clinical settings including: CMV control in stem cell and solid organ transplantation; the treatment of HIV; and in combination with a CAR T cell therapy for the treatment of NHL.
● Triplex was sourced by Fortress and is currently in development at our subsidiary company, Helocyte, Inc.
Dotinurad (Urate Transporter (URAT1) Inhibitor)

● In June 2022, we initiated a Phase 1 clinical trial to evaluate dotinurad in healthy volunteers in the United States. Dotinurad is in development for the treatment of gout. We anticipate topline data from the Phase 1 trial in early 2023.
● Dotinurad (URECE tablet) was approved in Japan in 2020 as a once-daily oral therapy for gout and hyperuricemia. Dotinurad was efficacious and well-tolerated in more than 500 Japanese patients treated for up to 58 weeks in Phase 3 clinical trials. The clinical program supporting approval included over 1,000 patients.
● In October 2022, our subsidiary company, Urica Therapeutics, Inc. ("Urica") strengthened its leadership team by appointing Jay D. Kranzler, M.D., Ph.D. as Chairman and Chief Executive Officer, and Vibeke Strand, M.D., MACR, FACP, Adjunct Clinical Professor, Division of Immunology/Rheumatology, Stanford University, to Urica’s Board of Directors.
● Dotinurad was sourced by Fortress and is currently in development at Urica.

CAEL-101 (Light Chain Fibril-reactive Monoclonal Antibody for AL Amyloidosis)

● On October 5, 2021, AstraZeneca plc acquired Caelum Biosciences, Inc. ("Caelum") for an upfront payment of approximately $150 million paid to Caelum shareholders, of which approximately $56.9 million was paid to Fortress, net of Fortress’ $6.4 million portion of the $15 million, 24-month escrow holdback amount and other miscellaneous transaction expenses. The agreement also provides for additional potential payments to Caelum shareholders totaling up to $350 million, payable upon the achievement of regulatory and commercial milestones. Fortress is eligible to receive 42.4% of all potential milestone payments, which together with the upfront payment, would total up to approximately $212 million.
● There are two ongoing Phase 3 studies of CAEL-101 for AL amyloidosis. (ClinicalTrials.gov identifiers: NCT04512235 and NCT04504825).
● CAEL-101 was sourced by Fortress and was developed by Caelum (founded by Fortress) until its acquisition by AstraZeneca in October 2021.

MB-110 (Lentiviral Gene Therapy for RAG1 Severe Combined Immunodeficiency (RAG1-SCID))

● In July 2022, we announced that the first patient successfully received LV-RAG1 ex vivo lentiviral gene therapy to treat recombinase-activating gene-1 ("RAG1") severe combined immunodeficiency ("RAG1-SCID") in an ongoing Phase 1/2 multicenter clinical trial taking place in Europe. LV-RAG1 is exclusively licensed by Mustang Bio for the development of MB-110, a first-in-class ex vivo lentiviral gene therapy for the treatment of RAG1-SCID.
● MB-110 was sourced by Fortress and is currently in development at our partner company, Mustang Bio.

General Corporate:

● In July 2022, we announced that David Jin, who has served as Vice President of Corporate Development since May 2020, was also appointed as Chief Financial Officer effective August 16, 2022.
● In September 2022, Avenue effected a 1-for-15 reverse stock split to bring the company in compliance with the minimum bid price listing requirements of The Nasdaq Capital Market.
● In October 2022, Avenue closed a $12 million underwritten public offering. Avenue received net proceeds of approximately $10.4 million at closing after deducting underwriting discounts and commissions and other expenses of the offering.
● Fortress’ Board of Directors declared the regular monthly dividend of $0.1953125 per share of the Company’s 9.375% Series A Cumulative Redeemable Perpetual Preferred Stock (the "Series A Preferred Stock") for the months of October, November and December 2022. The dividend will be payable on the last day of each month (October 31, November 30 and December 31) to holders of record as of the close of business on the fifteenth of that same month (October 15, November 15, December 15). Dividends will be paid in cash. Going forward, future notifications related to dividends for the Series A Preferred Stock will be disclosed on the Fortress website in the Investors section on the FBIOP Announcements page under Resources, View Source In addition, investors will also be able to find Form 8937s related to FBIOP on the same page.
● On October 31, 2022, Fortress received a letter from the Listing Qualifications Staff of Nasdaq indicating that the bid price of the Company’s common stock had closed below $1.00 per share for 30 consecutive business days and, as a result, Fortress is not in compliance with Nasdaq minimum bid price requirement. Nasdaq’s notice has no immediate effect on the listing of the common stock on Nasdaq. The Company intends to closely monitor the closing bid price of the Common Stock and consider all available options to remedy the bid price deficiency, but no decision regarding any action has yet been made.
● In November 2022, Avenue announced the completion of the acquisition of Baergic Bio, Inc. from Fortress, pursuant to a Share Contribution Agreement.
● Also in November 2022, holders of a majority of the voting power of the capital stock of Checkpoint approved a 1-for-10 reverse stock split of Checkpoint’s common stock. Checkpoint expects its common shares will begin trading on a split-adjusted basis on The Nasdaq Capital Market in December 2022. The Board of Directors determined the 1-for-10 ratio to be appropriate in order to improve the marketability and liquidity of Checkpoint’s common stock and to remain in compliance with all of Nasdaq’s continued listing requirements.

Financial Results:

To assist our stockholders in understanding our company, we have prepared non-GAAP financial results for the three months ended September 30, 2022 and 2021. These results 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 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.

● As of September 30, 2022, Fortress’ consolidated cash, cash equivalents and restricted cash totaled $210.6 million3, compared to $251.0 million4 as of June 30, 2022 and $308.0 million as of December 31, 2021, a decrease of $40.4 million during the prior quarter and a decrease of $97.4 million year-to-date.
● On a GAAP basis, Fortress’ net revenue totaled $16.5 million for the third quarter of 2022, which included $16.0 million in net revenue generated from our marketed dermatology products. This compares to net revenue totaling $21.1 million for the third quarter of 2021, which included $19.6 million in net revenue generated from our marketed dermatology products.
● On a GAAP basis, consolidated research and development expenses including license acquisitions were $29.9 million for the third quarter of 2022, compared to $28.1 million for the third quarter of 2021. On a non-GAAP basis, Fortress research and development expenses were $2.7 million for the third quarter of 2022, compared to $3.0 million for third quarter of 2021.
● On a GAAP basis, consolidated selling, general and administrative expenses were $30.1 million for the third quarter of 2022, compared to $22.2 million for the third quarter of 2021. On a non-GAAP basis, Fortress selling, general and administrative expenses were $9.2 million, for the third quarter of 2022, compared to $6.9 million for the third quarter of 2021.
● On a GAAP basis, consolidated net loss attributable to common stockholders was $(22.5) million, or $(0.25) per share, for the third quarter of 2022, compared to consolidated net loss attributable to common stockholders of $(20.8) million, or $(0.26) per share for the third quarter of 2021.
● Fortress’ non-GAAP loss attributable to common stockholders was $(7.4) million, or $(0.08) per share, for the third quarter of 2022, compared to Fortress’ non-GAAP income attributable to common stockholders of $48.7 million, or $0.60 per share, for the third quarter of 2021.

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 third 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

3 At September 30, 2022, we had cash and cash equivalents of $208.4 million, of which $61.2 million relates to Fortress and the private partner companies, primarily funded by Fortress, $20.5 million relates to Checkpoint, $91.4 million relates to Mustang Bio, $34.9 million relates to Journey Medical, and $0.2 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.

4 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.

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.

1.Results for the three and nine months ended September 30, 2021 have been adjusted to present Journey Medical separately as a public entity.
2.Avenue net loss for the three months ended September 30, 2022 and 2021 of $0.6 million and $0.9 million, respectively, net of non-controlling interest of $0.4 million and $0.7 million, respectively. Avenue net loss for the nine months ended September 30, 2022 and 2021 of $4.1 million and $2.8 million, respectively, net of non-controlling interest of $3.0 million and $2.2 million, respectively.
3.Checkpoint net loss of $10.6 million net of non-controlling interest of $8.6 million, Fortress management services agreement ("MSA") fee of $0.1 million, and Fortress financing fee of approximately $26,000 for the three months ended September 30, 2022; and net loss of $11.3 million net of non-controlling interest of $9.0 million, Fortress MSA fee of $0.1 million, and Fortress financing fee of approximately $39,000 for the three months ended September 30, 2021; net loss of $41.6 million net of non-controlling interest of $33.6 million, Fortress MSA fee of $0.4 million, and Fortress financing fee of $0.2 million for the nine months ended September 30, 2022; and net loss of $26.9 million net of non-controlling interest of $20.6 million, Fortress MSA fee of $0.4 million, and Fortress financing fee of $0.9 million for the nine months ended September 30, 2021.
4.Journey Medical net loss for the three months ended September 30, 2022 of $10.1 million net of non-controlling interest of $4.1 million and tax benefit recognized on a stand-alone basis of $10,000; and net loss for the three months ended September 30, 2021 of $10.6 million, net non-controlling interest of approximately $1.2 million and tax benefit recognized on a stand-alone basis of $3.4 million; and net loss of $19.0 million net of non-controlling interest of $7.4 million and tax expense recognized on a stand-alone
basis of $50,000 for the 9 months ended September 30, 2022, and net loss of $22.2 million net non-controlling interest of $2.3 million and tax benefit recognized on a stand-alone basis of $6.7 million for the nine months ended September 30, 2021.
5.Mustang Bio net loss of $19.0 million net of non-controlling interest of $16.4 million, Fortress MSA fee of $0.3 million and Fortress financing fee of $18,000 for the three months ended September 30, 2022; and net loss of $17.0 million net of non-controlling interest of $13.7 million, Fortress MSA fee of $0.1 million and Fortress financing fee of $0.1 million for the three months ended September 30, 2021; and net loss of $57.9 million net of non-controlling interest of $49.9 million, Fortress MSA fee of $0.8 million and Fortress financing fee of $0.9 million for the nine months ended September 30, 2022; and net loss of $46.3 million net of non-controlling interest of $35.8 million, Fortress financing fee of $0.4 million and Fortress financing fee of $1.7 million for the nine month period ended September 30, 2021.
6.On October 5, 2021, AstraZeneca plc (acquiror of Alexion) purchased 100% of our partner company Caelum Biosciences, Inc. ("Caelum") for approximately $150 million upfront and up to $350 million in contingent regulatory and sales milestone payments.

1.Results for the three and nine months ended September 30, 2021 have been adjusted to present Journey Medical separately as a public entity.

2.Includes Research and development expense and Research and development – licenses acquired expense for the periods presented.

3.Excludes $0.1 million of Fortress MSA expense for the three months ended September 30, 2022 and 2021; $0.4 million of Fortress MSA expense for the nine months ended September 30, 2022, and $0.2 million of Fortress MSA for the nine months ended September 30, 2021.

4.Excludes $0.1 million of Fortress MSA expense and $26,000 Fortress financing fee for the three months ended September 30, 2022; and $0.1 million of Fortress MSA expense and $39,000 Fortress financing fee for the three months ended September 30, 2021; and excludes $0.4 million Fortress MSA expense and $0.2 million Fortress financing fee for the nine months ended September 30, 2022, and $0.4 million Fortress MSA expense and $0.9 million Fortress financing fee for the nine months ended September 30, 2021.

5.Excludes $0.1 million of Fortress MSA expense and $18,000 Fortress financing fee for the three months ended September 30, 2022; and $0.1 million of Fortress MSA expense and $0.1 million Fortress financing fee for the three months ended September 30, 2021; and excludes $0.4 million of Fortress MSA expense
and $0.9 million Fortress financing fee for the nine months ended September 30, 2022; and $0.2 million of Fortress MSA expense and $1.7 million Fortress financing fee for the nine months ended September 30, 2021.

On November 14, 2022 Lantheus Holdings, Inc. ("Lantheus") (NASDAQ: LNTH), a company committed to improving patient outcomes through diagnostics, radiotherapeutics and artificial intelligence solutions that enable clinicians to Find, Fight and Follow disease, and POINT Biopharma Global Inc. ("POINT") (NASDAQ: PNT), a company accelerating the discovery, development and global access to life-changing radiopharmaceuticals, reported a set of strategic collaboration agreements in which Lantheus will license exclusive worldwide rights1 to POINT’s PNT2002 and PNT2003 product candidates (Press release, Point Biopharma, NOV 14, 2022, View Source [SID1234623986]).

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Upon consummation of the agreements, in exchange for the exclusive worldwide rights1, Lantheus will pay a total of $260 million in upfront payments between the two agreements to POINT, with the potential for additional milestone payments of approximately $1.8 billion between the two products based on U.S. Food and Drug Administration (FDA) approval and net sales and commercial milestones. Additionally, Lantheus will pay POINT royalties on net sales, beyond certain financial thresholds and subject to conditions, of 20% for PNT2002 and 15% for PNT2003. Additional terms of the agreements are summarized below and a website with more information about the collaboration is accessible at www.strategiccollaboration.net.

The agreements expand Lantheus’ radiopharmaceutical portfolio with two late-stage therapeutic candidates and, with PNT2002, broadens Lantheus’ prostate cancer franchise. For POINT, the agreement pairs PNT2002 and PNT2003 with an ideal commercialization partner, and offsets launch and marketing risks, while still maintaining the value and independence of POINT’s next generation radioligand platform. Lantheus expects the agreements to drive long-term, sustainable revenue and free cash flow growth and be accretive to its Adjusted Earnings Per Share (Adjusted EPS) shortly following commercialization of PNT2002.

Under the agreements, POINT will fund and complete its Phase 3 SPLASH trial for PNT2002, following which Lantheus will file the New Drug Application (NDA) in collaboration with POINT. For PNT2003, POINT will facilitate completion of the ongoing University Health Network (UHN)-sponsored ongoing OZM-067 study in Canada, while Lantheus will prepare and submit the regulatory filings in the U.S. Upon consummation of the agreements, the companies will form joint steering committees to oversee the clinical studies, regulatory filings, manufacturing and commercial readiness for both PNT2002 and PNT2003. POINT will develop commercial production capacity and manufacture clinical and commercial supply for both PNT2002 and PNT2003. Lantheus has the rights to commercialize both assets post regulatory approval.

"These exclusive license agreements and collaborations leverage the complementary strengths of both companies in radiopharmaceutical oncology and enhance the potential impact that these compelling therapeutic candidates could provide to patients," said Mary Anne Heino, President and CEO of Lantheus. "Lantheus has extensive radioisotope supply chain and distribution experience, recognized leadership in radiopharmaceuticals and prostate cancer, a well-established commercial infrastructure, and longstanding relationships across relevant healthcare stakeholders and hospitals. Our company is uniquely positioned to unlock the significant commercial potential of these two product candidates, which we believe will enhance the long-term revenue and earnings growth potential of Lantheus. We look forward to working with the talented POINT team as we advance our purpose to Find, Fight and Follow disease to deliver better patient outcomes."

"Lantheus is a demonstrated commercial leader in the field of radiopharmaceuticals. Their experience with these complex products and established footprint in commercializing PYLARIFY and AZEDRA makes them an ideal collaborator for these programs," said Joe McCann, Ph.D., CEO of POINT Biopharma. "This collaboration also immediately unlocks value for POINT, reduces the need for dilutive fundraising, and enables us to focus on our pipeline of next generation radioligands, which could be transformative for the field of precision oncology. We are excited to continue developing and scaling our manufacturing capabilities to support the PNT2002 and PNT2003 launches and continue development of PNT2004, our pan-cancer FAP-α program, which is currently in Phase 1, and PNT2001, our actinium-225 next-generation PSMA program which is expected to begin Phase 1 in 2023. We founded POINT to accelerate the discovery, development, and global access to life-changing radiopharmaceuticals, and with this collaboration, POINT is now better positioned than ever to execute on our mission."

The collaboration diversifies Lantheus’ portfolio with two radiotherapeutic agents that could improve the way cancer is treated:

PNT2002 is a PSMA-targeted 177Lu-based radiopharmaceutical therapy for metastatic castration-resistant prostate cancer (mCRPC) and combines a PSMA-targeted ligand, PSMA-I&T, with the beta-emitting radioisotope no-carrier-added 177Lu. Every year in the United States 70,000 men are eligible for treatment for mCRPC.2 PNT2002 is currently in its Phase 3 study designed to evaluate superiority to the standard of care in mCRPC pre-chemotherapy patients who have failed one androgen receptor pathway inhibitor.
PNT2003 is a somatostatin receptor (SSTR) targeted radioligand therapy with no-carrier-added 177Lu, in development for gastroenteropancreatic neuroendocrine tumors (GEP-NETs). SSTRs are seen as ideal targets for NET therapy and somatostatin analogs (SSAs) have been developed with anti-secretory and anti-proliferative effects for NET therapy, and randomized clinical trials with somatostatin analogs have demonstrated efficacy. PNT2003 is currently in a Phase 3 trial.
Additional Terms of the Agreements
Lantheus will fund the all-cash license of exclusive worldwide rights, excluding certain territories1, for PNT2002 and PNT2003 with cash on Lantheus’ balance sheet and committed financing. The milestone-based structure under the agreements allows Lantheus to maintain its attractive financial profile and creates the opportunity to generate strong free cash flow.

In exchange for Lantheus receiving exclusive worldwide rights, excluding certain territories, for PNT2002, POINT will receive a $250 million upfront payment, an additional payment up to $250 million upon U.S. regulatory approval, and, once certain return on investment financial thresholds have been achieved and other conditions met, royalties of 20% on net sales, as well as the potential for up to an additional $1.3 billion in various net sales milestone payments. For PNT2003, POINT will receive a $10 million upfront payment, up to an additional $30 million upon U.S. regulatory approval, royalties of 15% on net sales, as well as the potential for up to an additional $275 million in various net sales milestone payments. For additional information, please refer to Lantheus’ and POINT’s SEC filings related to the agreements.

The PNT2002 and PNT2003 license agreements are subject to Hart-Scott-Rodino antitrust clearance and customary closing conditions, which are expected to be satisfied in the first half of 2023. More information about the agreements is accessible online at www.strategiccollaboration.net.

SVB Securities served as financial advisor to Lantheus.

On November 14, 2022 Exscientia plc (Nasdaq: EXAI) and The University of Texas MD Anderson Cancer Center reported a strategic collaboration to align the patient-centric artificial intelligence (AI) capabilities of Exscientia with the drug discovery and development expertise of MD Anderson in order to advance novel small-molecule oncology therapies (Press release, Exscientia, NOV 14, 2022, View Source [SID1234623985]).

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The research collaboration will utilise Exscientia’s precision medicine platform to identify novel anti-cancer, cell-intrinsic small-molecule compounds based on jointly identified therapeutic targets. Promising candidates will advance for further development with the team at MD Anderson’s Therapeutics Discovery division. The collaborators anticipate that successful target discovery programs may be advanced into proof-of-concept clinical trials at MD Anderson.

"We are driven to develop the next generation of oncology treatments that can offer meaningful benefits and improve the lives of our patients," said Philip Jones, Ph.D., vice president of Therapeutics Discovery and head of the Institute for Applied Cancer Science (IACS) at MD Anderson. "This collaboration is built upon Exscientia’s AI-driven precision medicine platform, the strength of MD Anderson’s drug discovery and development engine, and the expertise of our clinical research teams. Our ultimate goal is to decrease the time we spend in drug development and accelerate novel targeted therapies into the clinic."

Exscientia will collaborate with the team at IACS, a drug discovery engine focused on developing novel small-molecule therapeutics. IACS is a core component of MD Anderson’s Therapeutics Discovery division, an integrated team of researchers, physicians and drug development experts working to advance impactful new therapies.

"We are tremendously proud to work alongside MD Anderson to harness our AI-driven platform toward the discovery of next-generation cancer treatments. Artificial intelligence has opened up new possibilities in cancer research, enabling us to use deep learning multi-omics within our precision medicine platform to test potential drug candidates in Exscientia’s patient tissue models," said Professor Andrew Hopkins, D.Phil., founder and Chief Executive Officer of Exscientia. "Further, our platform holds the potential to stratify patients even in the early discovery stage, allowing us to efficiently design drug candidates that are most likely to be impactful for people with cancer."

Under the agreement terms, Exscientia and MD Anderson will jointly contribute to and support each program designated to move forward.

On November 14, 2022 Exicure, Inc. (Nasdaq: XCUR), an early-stage biotechnology company historically focused on developing nucleic acid therapies targeting ribonucleic acid against validated targets, reported financial results for the quarter ended September 30, 2022 and provided an update on its business strategy and corporate progress (Press release, Exicure, NOV 14, 2022, View Source [SID1234623984]).

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Corporate Update

•As previously reported, on September 26, 2022, the Company announced its commitment to a plan to wind down the Company’s existing preclinical programs, including the development of its SCN9A program, to suspend all of its research and development activities, including suspension of all partnered programs, and to implement a reduction in force where the Company reduced approximately 66% of its then-existing workforce, as well as other cost-cutting measures (collectively, the "Plan"). The purpose of the Plan was to decrease expenses, thereby, extending the Company’s cash runway, and enable the Company to maintain a streamlined organization to support key corporate functions while it continues to actively pursue strategic alternatives to maximize stockholder value.

•The reduction in force announced on September 26, 2022 is now substantially complete.

•The Company continues to actively pursue out-license opportunities for its clinical asset, cavrotolimod, as well as for its preclinical candidates, including the SCN9A program for neuropathic pain, and to pursue all strategic alternatives with the goal of maximizing stockholder value.

•As also previously reported, on September 26, 2022, the Company entered into a securities purchase agreement with CBI USA, Inc. ("CBI USA"), pursuant to which it agreed to issue and sell to CBI USA in a private placement an aggregate of 3,400,000 shares of Exicure’s common stock, par value $0.0001 per share, at a purchase price of $1.60 per share (the "Private Placement").

◦The Private Placement is expected to close in the fourth quarter of 2022, subject to the satisfaction of certain closing conditions, including the Company’s stockholders voting in favor of the Private Placement. On November 10, 2022, the Company has filed and mailed its definitive proxy statement in connection with the special meeting to be held on December 15, 2022 at which the Company’s stockholders will be asked to vote on approval of the Private Placement.
◦Immediately following the closing of the Private Placement, CBI USA will hold approximately 50.4% of the shares of the Company’s common stock. The Company expects to receive aggregate gross proceeds from the Private Placement of approximately $5.4 million, before deducting estimated offering expenses payable by Exicure.

"We look forward to the possibility of working with CBI USA to potentially pursue strategic transactions," commented Matthias Schroff, Ph.D., Chief Executive Officer of Exicure. "While awaiting shareholder approval of the private placement transaction with CBI USA, Exicure continues to explore strategic alternatives for its existing clinical and preclinical programs to maximize stockholder value."
1

Third Quarter 2022 Financial Results

Cash Position: Cash, cash equivalents and short-term investments, and restricted cash were $16.8 million as of September 30, 2022, as compared to $48.3 million as of December 31, 2021. The Company expects that its existing cash and cash equivalents (which excludes expected proceeds from the Private Placement as the Private Placement has not closed) will enable it to fund its current operations into the second quarter of 2023.

Revenue: Revenue was $2.0 million for the quarter ended September 30, 2022, reflecting an increase of $5.7 million from revenue of $(3.7) million for the quarter ended September 30, 2021. The increase in collaboration revenue of $5.7 million is mostly due to an increase in revenue related to the Company’s collaboration with AbbVie, Inc. ("AbbVie") of $5.1 million, as well as an increase in revenue related to the Company’s collaboration with Ipsen Biopharm Limited of $0.6 million. Revenue recognized under the Company’s collaboration with AbbVie for the three months ended September 30, 2021 reflected the cumulative catchup adjustment (reduction) of revenue of $(4.5) million in connection with the change in estimate that resulted from a change in workplan during the third quarter of 2021.

Research and Development (R&D) Expense: Research and development expenses were $4.8 million for the quarter ended September 30, 2022, as compared to $16.5 million for the quarter ended September 30, 2021. The decrease in R&D expense for the three months ended September 30, 2022 of approximately $11.7 million reflects fewer clinical, preclinical, and discovery program activities and a reduction in headcount resulting from the strategic restructuring activities and discontinuation of cavrotolimod program that were announced in December 2021.

General and Administrative (G&A) Expense: General and administrative expenses were $2.4 million for the quarter ended September 30, 2022, as compared to $2.9 million for the quarter ended September 30, 2021. The decrease in G&A expense of approximately $0.5 million for the three months ended September 30, 2022 was mostly due lower compensation and related costs in connection with a lower headcount during the period resulting from the restructuring activities that were announced in December 2021 and lower accrued bonus expense in the current year period resulting from the reduction of the estimated 2022 bonus liability, as well as lower accounting costs. These lower costs in the current year period were partially offset by higher legal, consultant, and advisory costs incurred.

Net Loss: The Company had a net loss of $5.2 million for the quarter ended September 30, 2022, as compared to a net loss of $23.5 million for the quarter ended September 30, 2021. The decrease in net loss was primarily driven by lower R&D expense and higher non-cash revenue during the period.

Going Concern: Given the Company’s current cash position, operating plans and forecasted negative cash flows from operating activities over the next twelve months, management believes there is substantial doubt regarding the Company’s ability to continue as a going concern within one year after the date that its unaudited condensed consolidated financial statements for the quarter ended September 30, 2022 are issued. The Company will require substantial additional financing to address the Company’s working capital and other financing needs to pursue its business strategy. There is a significant likelihood that, without the consummation of the Private Placement, the Company will need to seek bankruptcy protection in the near term, which may result in its stockholders receiving no or very little value in respect of their shares of the Company’s common stock.

On November 14, 2022 Evaxion Biotech A/S (NASDAQ: EVAX) ("Evaxion" or the "Company), a clinical-stage biotechnology company specializing in the development of AI-driven immunotherapies, reported its third quarter 2022 financial results and provided an operational and business update (Press release, Evaxion Biotech, NOV 14, 2022, View Source [SID1234623983]).

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Per Norlén, CEO of Evaxion, said: "Evaxion continues to advance its drug development pipeline, reaching an important milestone in the third quarter with the enrollment of the first patient in our global Phase 2b clinical trial of EVX-01, our personalized cancer immunotherapy for the treatment of patients with metastatic melanoma. Going forward, we intend to further increase our focus on our clinical lead oncology assets within personalized cancer immunotherapy."

Operational and Business Highlights in the Third Quarter of 2022

Enrolled the first patient in the global Phase 2b clinical trial of EVX-01 for the treatment of melanoma.
In the Company’s first Phase 2b clinical trial, Evaxion is evaluating the efficacy and safety of EVX-01 in adults with metastatic melanoma. The trial is being conducted globally at clinical sites across the US, Europe, and Australia in collaboration with Merck & Co., Inc. Patients enrolled in the Phase 2b clinical trial will receive standard-of-care treatment along with KEYTRUDA in combination with EVX-01. Evaxion is responsible for the conduct of the trial, and Merck will supply the required KEYTRUDA. The Company anticipates interim topline data readout in the second half of 2023.

Announced an increased strategic focus on clinical lead oncology assets and partnering. Evaxion intends to further increase its focus on its clinical lead oncology product candidates, EVX-01 and EVX-02/03, to bring them to clinical proof of concept followed by out-licensing. Additionally, the Company plans preclinical partnering of its early-stage programs under its infectious disease platforms. This was announced by the Company’s new Chief Executive Officer, Per Norlén, who emphasized the importance of prioritizing the Company’s activities in the current market. As previously announced by the Company, the EVX-01 program recently started to enroll patients in the global Phase 2b trial in metastatic melanoma. At the same time, the Phase 1/2a trial of the DNA-based EVX-02 is progressing as planned, with data readout currently expected by mid-2023. The next-generation DNA vaccine, EVX-03, builds on EVX-02 and holds the potential for even stronger results due to an integrated mechanism that boosts the immune system. The Company plans to submit a regulatory filing of EVX-03, following EVX-02 data, which may allow Evaxion to advance EVX-03 faster to clinical proof of concept. Regarding the Company’s early programs for infectious diseases, such as our Staphylococcus aureus vaccine, the Company aims to develop these in partnerships rather than bringing them into clinical development by itself.

Announced NIH Grant for Research Collaboration with UMass Chan Medical School to develop EVX-B2 gonorrhea vaccine product candidate. Evaxion announced a discovery project (EVX-B2) to create a gonorrhea vaccine based on the Company’s artificial intelligence (AI) platform, EDEN. Chief Scientific Officer at Evaxion, Birgitte Rønø, states that the scientific collaboration with UMass Chan and the grant from NIH further reinforces Evaxion’s capabilities within AI-based vaccine design and allow the Company to fast-track the development of a gonorrhea vaccine candidate.

A published peer-reviewed article in Future Oncology on Phase 2b trial design for EVX-01. Evaxion published an article in Future Oncology focusing on the Phase 2b trial design of EVX-01. This trial is designed so that the patients may continue treatment with Evaxion’s immunotherapy, even if the standard-of-care treatment changes. With this new and innovative trial design, Evaxion expands the patients’ otherwise limited treatment opportunities.

Events after the Reporting Period

Per Norlén, M.D., PhD. succeeded Lars Wegner, M.D., as Chief Executive Officer
Dr. Norlén is a board-certified physician and associate professor in clinical pharmacology with more than 20 years in the biotech sector. The last 12 years have been in executive leadership roles. He brings a wealth of experience from being CEO of listed drug development companies. He has a proven business development track record, including major out-licensing deals with biotech and Pharma.

Expected Milestones in the Fourth Quarter of 2022

Selection of the first viral candidate from our RAVEN platform.
Expected Milestones in the First Half of 2023

Clinical readout of Phase 1/2a clinical study to evaluate EVX-02 in patients with resectable melanoma.
Third Quarter 2022 Financial Results

Cash position: As of September 30, 2022, cash and cash equivalents were $17.9 million compared to $32.2 million as of December 31, 2021. The decrease in cash and cash equivalents during the first nine months of 2022 was primarily attributable to an increase in our operating expenses for the first nine months of 2022, partially offset by the proceeds received from the first tranche of our loan from the European Investment Bank.
Research and Development expenses were $4.1 million for the three months that ended September 30, 2022, compared to $4.4 million for the same period in 2021. The decrease was primarily due to lower external costs related to clinical trials.
General and Administrative expenses were $2.0 million for the three months ending September 30, 2022, compared to $1.5 million for the same period in 2021. The increase was primarily due to an increase in fees associated with the expansion of our business as a listed company.
Net loss was $5.7 million for the three months ended September 30, 2022, or ($0.24) loss per basic and diluted share as compared to $5.3 million, or ($0.27) loss per basic and diluted share for the three months ended September 30, 2021.
Guidance

We expect our existing cash and cash equivalents, will be sufficient to fund our operating expenses and capital expenditure requirements into mid-2023.