On August 9, 2017 Fortress Biotech, Inc. (NASDAQ: FBIO) ("Fortress"), a biopharmaceutical company dedicated to acquiring, developing and commercializing novel pharmaceutical and biotechnology products, reported financial results and recent corporate highlights for the second quarter ended June 30, 2017 (Press release, Fortress Biotech, AUG 9, 2017, View Source [SID1234520115]). Schedule your 30 min Free 1stOncology Demo!
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Dr. Lindsay A. Rosenwald, Fortress’ Chairman, President and Chief Executive Officer, said, "Fortress and our Fortress subsidiaries achieved important corporate and clinical milestones during the second quarter of 2017. Avenue Therapeutics completed a $38 million initial public offering, and is on track to initiate a Phase 3 clinical trial in the third quarter of IV tramadol in patients undergoing bunionectomy surgery. If approved, IV tramadol will be the only intravenous Schedule IV opioid for use in the United States. Avenue, along with Checkpoint Therapeutics, began trading their common shares on The NASDAQ Capital Market during the last week of June. In addition, Caelum Biosciences announced the dosing of the final patient in a Phase 1b clinical trial of its lead therapy, CAEL-101, in AL amyloidosis, with a data readout expected in the second half of 2017. Mustang Bio licensed three CAR T cell therapies from its research partner City of Hope, expanding its pipeline to five novel CAR T candidates."
Dr. Rosenwald continued, "Our strong business development engine continues to deliver on our goal of acquiring novel pharmaceutical and biotechnology products for development within Fortress and through our Fortress Companies. We look forward to continuing to execute on our business plan and reaching important milestones in the third quarter to add value for our shareholders."
Financial Results:
· As of June 30, 2017, Fortress’ consolidated cash and cash equivalents totaled $144.3 million, compared to $134.0 million at March 31, 2017, and $88.3 million at December 31, 2016, an increase of $10.3 million for the quarter and $56.0 million year-to-date. These totals as of June 30, 2017 exclude short-term investments of $20.0 million, restricted cash of $15.9 million and cash deposits with clearing organizations of $1.0 million.
· Net revenue totaled $50.7 million for the second quarter of 2017 and $95.4 million for the first six months of 2017, compared to $2.2 million for the second quarter of 2016 and $2.9 million for the first six months of 2016. Net total revenue for the second quarter ended June 30, 2017 includes $4.4 million of Fortress revenue and $46.3 million of revenue from National Holdings Corporation ("National"), which Fortress acquired in September 2016, with no revenue attributable to National prior to the acquisition.
· Research and development expenses were $11.7 million for the second quarter of 2017, of which $10.0 million was related to Fortress Companies, and $18.8 million for the first six months of 2017, of which $15.8 million was related to Fortress Companies. This compares to $6.3 million for the second quarter of 2016, of which $4.0 million was related to Fortress Companies, and $14.1 million for the first six months of 2016, of which $9.0 million was related to Fortress Companies. Non-cash stock-based compensation expense included in research and development for the second quarter of 2017 was $2.4 million, compared to $1.1 million for the second quarter of 2016, and $3.2 million for the first six months of 2017, compared to $2.4 million for the first six months of 2016.
· Research and development expenses from license acquisitions totaled $1.8 million for the second quarter of 2017 and $3.1 million for the first six months of 2017, compared to $2.0 million for the second quarter of 2016 and $2.1 million for the first six months of 2016.
· General and administrative expenses were $11.1 million for the second quarter of 2017, of which $7.0 million was related to Fortress Companies, and $21.4 million for the first six months of 2017, of which $12.8 million was related to Fortress Companies. This compares to $8.6 million for the second quarter of 2016, of which $3.7 million was related to Fortress Companies, and $16.6 million for the first six months of 2016, of which $6.6 million was related to Fortress Companies. Non-cash stock-based compensation expenses included in general and administrative expenses were $2.2 million for the second quarter of 2017, compared to $1.9 million for the second quarter of 2016, and $4.3 million for the first six months of 2017, compared to $3.5 million for the first six months of 2016.
· National’s operating expenses totaled $48.4 million for the second quarter of 2017 and $91.5 million for the first six months of 2017, with no expenses attributable to National prior to Fortress’ acquisition of the company in September 2016.
· Net loss attributable to common stockholders was $17.4 million, or $0.43 per share, for the second quarter of 2017, compared to a net loss attributable to common stockholders of $12.5 million, or $0.31 per share, for the second quarter of 2016. For the first six months of 2017, net loss was $29.3 million or $0.73 per share, compared to $24.7 million or $0.62 per share in the first six months of 2016.
Recent Fortress Biotech and Fortress Company Highlights:
Fortress Biotech, Inc.
· In June 2017, Ms. Robyn Hunter was named Chief Financial Officer of Fortress. Lucy Lu, M.D., Fortress’ former Chief Financial Officer, was appointed President and Chief Executive Officer of Fortress subsidiary Avenue Therapeutics, Inc.
· As of June 30, 2017, Fortress raised a total of $19.0 million in a Subordinated Note Financing; $15.7 million of the $19.0 million was raised in the second quarter of 2017. National Securities Corporation, a subsidiary of National, acted as the Placement Agent.
Avenue Therapeutics, Inc.
· In May 2017, Avenue received a Notice of Allowance from the U.S. Patent and Trademark Office ("USPTO") for a new patent application (U.S. Application No. 15/163,111) titled "Intravenous Administration of Tramadol." The patent application describes and claims a dosing regimen of intravenous ("IV") 50 mg tramadol that provides certain pharmacokinetic parameters that are similar to those of 100 mg tramadol HCl administered orally every six hours at a steady state. Issuance of the patent (U.S. Patent No. 9,693,949) occurred in July 2017. This patent application falls under Avenue’s licensing agreement with Revogenex Ireland Ltd.
· On June 30, 2017, Avenue completed its initial public offering of 6,325,000 shares of common stock, at a public offering price of $6.00 per share, for a total offering size of $37,950,000, before deducting underwriting discounts and offering expenses. The shares sold include 825,000 that were subject to an underwriters’ overallotment option, which was exercised and closed concurrently with the closing of the initial public offering. Avenue’s common stock began trading on The NASDAQ Capital Market under the ticker symbol "ATXI."
· Also in June 2017, Lucy Lu, M.D., was named President and Chief Executive Officer of Avenue, a position she held on an interim basis since the company’s inception.
Caelum Biosciences, Inc.
· In April 2017, the U.S. Department of Health & Human Services confirmed the transfer of two U.S. Food and Drug Administration ("FDA") Orphan Drug Designations for CAEL-101 from Columbia University ("Columbia") to Caelum. The designations cover use as a therapeutic agent for patients with AL amyloidosis and use as a radio-imaging agent in amyloidosis. Caelum in-licensed CAEL-101 from Columbia in January 2017.
· In May 2017, Columbia dosed the final patient in the Phase 1b trial of CAEL-101 in AL amyloidosis. As of July 2017, all patients completed treatment. Preliminary and full Phase 1b data are expected in the second half of 2017.
· Also in May 2017, Caelum entered a biopharmaceutical manufacturing agreement with Patheon N.V. for process development and current good manufacturing practices (cGMP) production to support Phase 2/3 studies of CAEL-101.
· In June 2017, Columbia filed a provisional patent application with the USPTO pertaining to CAEL-101 that, once converted into a U.S. non-provisional utility application, will provide composition of matter protection effective upon a grant of a U.S. patent. The legal protection offered by a granted U.S. patent will exceed any data exclusivity periods associated with Orphan Drug Designation and/or an original, branded-biologic product approved for marketing in the U.S. Just this month, Columbia filed a second provisional patent application with the USPTO to pursue additional method of treatment claims directed to surprising and positive outcomes observed from the Phase 1b trial of CAEL-101. If granted these new claims provide an additional layer of legal protection for the use of Caelum’s lead product candidate.
Checkpoint Therapeutics, Inc.
· In April 2017, Checkpoint presented preclinical data on CK-101, an epidermal growth factor receptor ("EGFR") inhibitor, and CK-301, an anti-programmed cell death ligand-1 ("PD-L1") antibody, in poster sessions at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) ("AACR") Annual Meeting.
· In June 2017, Checkpoint’s common stock began trading on The NASDAQ Capital Market under the ticker symbol "CKPT."