On November 14, 2024 Fortress Biotech, Inc. (Nasdaq: FBIO) ("Fortress"), an innovative biopharmaceutical company focused on acquiring and advancing assets to enhance long-term value for shareholders through product revenue, equity holdings and dividend and royalty revenue, reported financial results and recent corporate highlights for the third quarter ended September 30, 2024 (Press release, Fortress Biotech, NOV 14, 2024, View Source [SID1234648398]).
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Lindsay A. Rosenwald, M.D., Fortress’ Chairman, President and Chief Executive Officer, said, "We are thrilled to have received U.S. Food and Drug Administration ("FDA") approval for Emrosi, a potential best-in-class treatment for inflammatory lesions of rosacea in adults, which is a tremendous milestone for Fortress and our partner company, Journey Medical Corporation ("Journey Medical"). This marks the first FDA approval across the Fortress portfolio, and demonstrates our ability to successfully in-license a clinical stage program and develop it through commercialization. We could achieve up to two more U.S. FDA approvals in the next nine months, and our next anticipated PDUFA goal date is December 28, 2024, for cosibelimab, an anti-PD-L1 antibody, for the treatment of metastatic or locally advanced cutaneous squamous cell carcinoma ("cSCC"). We have an exciting late-stage pipeline with many upcoming value creation opportunities, and we are focused on attaining our long-term strategy of building shareholder value, while bringing innovative treatment options to patients with unmet medical needs."
Recent Corporate Highlights1:
Regulatory Updates
● In November 2024, the FDA approved Emrosi (Minocycline Hydrochloride Extended-Release Capsules, 40mg), also known as DFD-29. Emrosi has the potential to be the new treatment paradigm for the millions of patients suffering from inflammatory lesions of rosacea. The treatment is expected to launch late in the first quarter or early in the second quarter of 2025 by our partner company, Journey Medical (Nasdaq: DERM).
● In July 2024, the FDA accepted the Biologics License Application ("BLA") resubmission for cosibelimab, our investigational anti-PD-L1 antibody, as a treatment for patients with metastatic or locally advanced cSCC who are not candidates for curative surgery or radiation and set a PDUFA goal date of December 28, 2024. Cosibelimab is currently in development at our partner company, Checkpoint Therapeutics (Nasdaq: CKPT) ("Checkpoint").
● In December 2023, we completed the asset transfer of CUTX-101 (copper histidinate for Menkes disease) to Sentynl Therapeutics ("Sentynl"), a wholly owned subsidiary of Zydus Lifesciences Ltd. Sentynl completed the rolling submission of the New Drug Application for CUTX-101 in the fourth quarter of 2024. Cyprium Therapeutics ("Cyprium"), our subsidiary company that developed CUTX-101, will retain 100% ownership over any FDA priority review voucher that may be issued at NDA approval for CUTX-101.
Clinical Updates
● In October 2024, clinical data were presented at the 44th Fall Clinical Dermatology Conference assessing the dermal and systemic pharmacokinetics of Emrosi versus oral doxycycline 40 mg capsules (Oracea) in healthy subjects. With its extended-release formulation, Emrosi provides higher dermal concentration than doxycycline from day 1 onward at a similar dose, expected to translate into a clinically meaningful impact for treating patients with rosacea, and as demonstrated in Emrosi’s Phase 3 clinical trials.
● In September 2024, we presented longer-term data from our pivotal trial of cosibelimab in locally advanced and metastatic cSCC during the European Society for Medical Oncology ("ESMO") Congress 2024. The longer-term results for cosibelimab demonstrate a deepening of response over time, with higher objective response and complete response rates than initially observed at the primary analyses.
Other Updates
● In July 2024, we announced a collaboration to explore the combined therapeutic potential of cosibelimab with GC Cell’s Immuncell-LC, an innovative autologous Cytokine Induced Killer ("CIK") T cell therapy composed of cytotoxic T lymphocytes and natural killer T cells.
● Also in July 2024, our majority owned and controlled subsidiary company, Urica Therapeutics ("Urica"), entered into an asset purchase agreement, royalty agreement and related agreements with Crystalys Therapeutics ("Crystalys"). Urica transferred rights to dotinurad, its URAT1 inhibitor product candidate in development for the treatment of gout, and related intellectual property, licenses and agreements to Crystalys. In return, Crystalys issued to Urica shares of its common stock equal to 35% of Crystalys’ outstanding equity and granted Urica a securitized 3% royalty on future net sales of dotinurad.
Commercial Product Updates
● Journey Medical’s net product revenues for the third quarter ended September 30, 2024 were $14.6 million, compared to net product revenues of $14.9 million for the second quarter ended June 30, 2024.
General Corporate:
● In July 2024, Checkpoint raised $12 million in a registered direct offering priced at-the-market under Nasdaq rules.
● In July 2024, Fortress’ Board of Directors paused the payment of dividends on the Company’s 9.375% Series A Cumulative Redeemable Perpetual Preferred Stock (the "Series A Preferred Stock") until further notice. The Company believes pausing the dividend is in the best interest of the Company and its stakeholders to maintain financial flexibility ahead of potentially significant inflection points. Dividends on the Series A Preferred Stock accrue in accordance with their terms; the pausing of these dividends will defer approximately $0.7 million in cash dividend payments each month. The Board intends to revisit its decision regarding the monthly dividend regularly and will assess the profitability and cash flow of the Company to determine whether and when the suspension should be lifted.
● Also in July 2024, Fortress reduced its total debt by entering into a new loan agreement maturing in July 2027 with funds managed by Oaktree Capital Management, L.P. ("Oaktree"), a leading global investment firm. The Company received an initial tranche of $35 million and is eligible to draw an additional $15 million with Oaktree’s consent. In connection with the new loan agreement, the Company repaid its prior term loan with Oaktree of $50 million resulting in an outstanding debt reduction of approximately $15 million of debt excluding accrued interest and prepayment fees.
● In September 2024, Fortress raised $8 million in a registered direct offering and concurrent private placements.
● In October 2024, Mustang Bio raised $4 million in gross proceeds from the exercise of existing warrants.
● In November 2024, Checkpoint received $9.2 million in gross proceeds through the exercise of existing warrants.
Financial Results:
● As of September 30, 2024, Fortress’ consolidated cash and cash equivalents totaled $58.9 million, compared to $76.2 million as of June 30, 2024, and compared to $80.9 million as of December 31, 2023, a decrease of $17.3 million during the quarter and a decrease of $22.0 million year-to-date.
● Fortress’ consolidated cash and cash equivalents, totaling $58.9 million as of September 30, 2024, includes $25.6 million attributable to Fortress and the private subsidiaries, $2.6 million attributable to Avenue, $4.7 million attributable to Checkpoint, $3.5 million attributable to Mustang Bio and $22.5 million attributable to Journey Medical.
o Fortress’ consolidated cash and cash equivalents totaled $80.9 million as of December 31, 2023, which included $40.6 million attributable to Fortress and private subsidiaries, $1.8 million attributable to Avenue, $4.9 million attributable to Checkpoint, $6.2 million attributable to Mustang Bio and $27.4 million attributable to Journey Medical.
● Fortress’ consolidated net revenue totaled $14.6 million for the third quarter ended September 30, 2024, all of which was generated from our marketed dermatology products. This compares to consolidated revenue totaling $34.8 million for the third quarter of 2023, which included $15.3 million in revenue generated from our marketed dermatology products and an upfront license agreement payment of $19 million.
● Consolidated research and development expenses including license acquisitions totaled $9.4 million for the third quarter ended September 30, 2024, compared to $20.3 million for the third quarter ended September 30, 2023.
● Consolidated selling, general and administrative costs were $22.0 million for the third quarter ended September 30, 2024, compared to $21.7 million for the third quarter ended September 30, 2023.
● Consolidated net loss attributable to common stockholders was $(15.0) million, or $(0.76) per share, for the third quarter ended September 30, 2024, compared to net loss attributable to common stockholders of $(7.1) million, or $(0.94) per share for the third quarter ended September 30, 2023.