On March 28, 2022 Lucid Diagnostics Inc. (Nasdaq: LUCD) ("Lucid", the "Company") a commercial-stage, cancer prevention medical diagnostics company, and majority-owned subsidiary of PAVmed Inc. (Nasdaq: PAVM, PAVMZ) ("PAVmed"), reported a business update for the company and presented preliminary financial results for the year ended December 2021 (Press release, Lucid Diagnostics, MAR 28, 2022, View Source [SID1234611068]).

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Conference Call and Webcast

A conference call and webcast for today’s business update and fourth quarter and year ended December 31, 2021, financial results will take place at 4:30 PM EDT. To access the conference call, listeners should dial 877-407-0789 toll-free in the U.S. or 201-689-8562 and ask to join the "Lucid Diagnostics Business Update Conference Call". The conference call will be available live via a webcast and for replay at the investor relations section of the Company’s website at www.luciddx.com. Following the conclusion of the conference call, a replay will be available for one week and can be accessed by dialing 844-512-2921 toll-free in the U.S. or 412-317-6671, followed by the PIN number: 13727145.

Business Update Highlights

"I am happy to report that Lucid Diagnostics is firing on all cylinders," said Lishan Aklog, M.D., Lucid’s Chairman and Chief Executive Officer. "Our rapidly growing team is making excellent progress on all fronts and is laying a solid foundation for us to continue driving our long-term growth strategy. This includes EsoGuard commercialization, the rollout of our Lucid Test Center network, expansion of our sales infrastructure and operations, our laboratory operations, and clinical trial work. Our strong balance sheet provides us with the resources to execute on this strategy."

The Company reported solid EsoGuard commercialization progress with excellent traction and robust growth in EsoGuard testing volume. Lucid processed 303 commercial EsoGuard tests in the fourth quarter of 2021, which represents an approximately 50% increase sequentially from the third quarter and a nearly 200% increase annually from the fourth quarter of 2020. This growth has continued into the new year, both in referrals to Lucid Test Centers and tests performed at gastroenterology and foregut surgeon practices.
The Lucid Test Center program has completed its first stage, having advanced from a pilot program in Phoenix, launched in the third quarter of 2021, to a regional Southwest and Pacific Northwest program also covering Denver, Salt Lake City, Las Vegas, Seattle, Portland, and Boise. The Company reported that its experience with the test centers over the past six months has validated the test center model as a key driver of EsoGuard testing volume by simplifying the engagement of its sales reps with primary care physicians. Lucid is now in the process of launching the next stage of its Lucid Test Center program, with accelerated expansion into larger states across the nation. It has hired an experienced Director or Clinical Services who will oversee this expansion. The Company is also continuing the pilot of its EsoGuard Telemedicine Program, operated in partnership with independent third-party telemedicine provider UpScript, which launched in December 2021. It has pursued a direct-to-consumer advertising program on a limited pilot basis in Phoenix.
The Company reported significant expansion of its sales infrastructure and operations during the fourth quarter and recent months. The team, led by its national VP of sales, now consists of three area directors covering the East, Central and West respectively, six market development managers, ten sales representatives, and several sales operations staff. The company expects the overall sales team to double in size and the number of sales reps to triple by the end of the calendar year. The company also reported substantial progress in honing its data and analytics driven sales process and intensive sales training to drive commercial success.
Last month the Company announced that LucidDx Labs, a wholly-owned subsidiary of Lucid, had acquired certain licenses and other related assets from its long time CLIA laboratory partner, Research Dx, which allowed it to operate own new CLIA-certified, CAP-accredited clinical laboratory in Lake Forest, CA. The Laboratory has completed the necessary assay validations to process clinical samples as a Laboratory Developed Test (LDT), completed a College of American Pathologists (CAP) audit, and begun performing EsoGuard testing at the new facility.
In conjunction with it taking over the laboratory and fully controlling the EsoGuard billings and collection process, the Company has been able to upgrade our revenue cycle management provider and simplify the billing and collections process it had to utilize as a partner of a third-party commercial laboratory. It is now in position to start submitting Medicare claims using the effective $1938 Medicare payment rate. The Company continues to wait for Medicare Administrative Contractor Palmetto GBA’s MolDx program to issue a draft local coverage determination (LCD) following an encouraging Contractor Advisory Committee (CAC) meeting in the fall.
The laboratory has been submitting claims to private payors and is encouraged that it has been receiving approximately $1,150 per test representing approximately 60% out-of-network coverage. It reported that is reaching critical threshold of submitted and processed claims in certain locales which will allow it to begin having meaningful conversations with select private payors in these locales on in-network payment and coverage. It is expanding its market access team and collecting the critical clinical utility data to allow it to fully engage in these negotiations.
In March 2022, both the PAVmed and Lucid board of directors approved entering into an intercompany license between PAVmed and Lucid such that Lucid will be granted the rights to commercialize EsoCure for the endoscopic treatment of late esophageal precancer (dysplastic Barrett’s Esophagus), including a royalty arrangement whereby Lucid will pay PAVmed a 5% royalty on all EsoCure sales up to $100 million per calendar year, and 8% above that threshold.
In March 2022, both the PAVmed and Lucid board of directors approved entering into a purchase and sale of the CapNostics, LLC assets, including the EsophaCap non-endoscopic sponge-based esophageal cell collection device, from PAVmed to Lucid as well as transferring the consulting agreement with the principal owner of CapNostics, LLC prior to the purchase by PAVmed on October 5, 2021.
Preliminary Financial Results

For the fourth quarter of 2021, EsoGuard related revenues were $0.3 million, while for the year ended December 31, 2021, revenues were $0.5 million. Fourth-quarter and full-year 2021 operating expenses were approximately $11.1 million and $27.3 million, respectively, which include stock-based compensation expenses of $3.2 million and $9.6 million, respectively. GAAP net loss attributable to common stockholders for the fourth quarter and full-year 2021 were approximately $11.3 million and $28.1 million, or $(0.32) and $(1.51) per common share.
As shown below and for the purpose of illustrating the effect of stock-based compensation and other non-cash income and expenses on the Company’s financial results, the Company’s preliminary non-GAAP adjusted loss for the fourth quarter and year ended December 31, 2021, were approximately $7.7 million and $17.8 million or $(0.22) and $(0.96) per common share.
Lucid had cash and cash equivalents of $53.7 million as of December 31, 2021, compared to $0.1 million as of December 31, 2020.
On March 28, 2022, the Company entered into a Common Stock Purchase Agreement (the "Purchase Agreement") with CF Principal Investments LLC ("Cantor"), an affiliate of Cantor Fitzgerald, relating to a committed equity facility (the "Facility"). Pursuant to the Purchase Agreement, the Company has the right to sell to Cantor up to $50.0 million of its common shares (the "Shares"), subject to certain conditions and limitations set forth in the Purchase Agreement. While there are distinct differences, the Facility is structured similarly to a traditional at-the-market equity facility, insofar as it allows the Company to raise primary equity capital on a periodic basis at a price related to the current market price.
Sales of the Shares to Cantor under the Purchase Agreement, and the timing of any sales, will be determined by the Company from time to time at its sole discretion and will depend on a variety of factors, including, among other things, market conditions, the trading price of the Shares and determinations by the Company regarding the use of proceeds of such Shares. Upon the satisfaction of the conditions to Cantor’s obligation to purchase Shares, the Company will have the right, from time to time during the 36-month period after the commencement of the Facility, to direct Cantor to purchase up to a maximum number of Shares on any trading day. The purchase price of the Shares will be 96% of the volume-weighted average price of the Shares on such trading day.
The unaudited financial results for the year ended December 31, 2021, will be filed with the SEC on Form 10-K in the coming days and will be available at www.luciddx.com or www.sec.gov.
Lucid Non-GAAP Measures

To supplement our unaudited financial results presented in accordance with U.S. generally accepted accounting principles (GAAP), management provides certain non-GAAP financial measures of the Company’s financial results. These non-GAAP financial measures include net loss before interest, taxes, depreciation, and amortization (EBITDA), and non-GAAP adjusted loss, which further adjusts EBITDA for stock-based compensation expense and other non-cash income and expenses, if any. The foregoing non-GAAP financial measures of EBITDA and non-GAAP adjusted loss are not recognized terms under U.S. GAAP.
Non-GAAP financial measures are presented with the intent of providing greater transparency to the information used by us in our financial performance analysis and operational decision-making. We believe these non-GAAP financial measures provide meaningful information to assist investors, shareholders, and other readers of our unaudited financial statements in making comparisons to our historical financial results and analyzing the underlying performance of our results of operations. These non-GAAP financial measures are not intended to be, and should not be, a substitute for, considered superior to, considered separately from or as an alternative to, the most directly comparable GAAP financial measures.
Non-GAAP financial measures are provided to enhance readers’ overall understanding of our current financial results and to provide further information for comparative purposes. Management believes the non-GAAP financial measures provide useful information to management and investors by isolating certain expenses, gains, and losses that may not be indicative of our core operating results and business outlook. Specifically, the non-GAAP financial measures include non-GAAP adjusted loss, and its presentation is intended to help the reader understand the effect of the loss on the issuance or modification of convertible securities, the periodic change in fair value of convertible securities, the loss on debt extinguishment, and the corresponding accounting for non-cash charges on financial performance. In addition, management believes non-GAAP financial measures enhance the comparability of results against prior periods.
A reconciliation to the most directly comparable GAAP measure of all non-GAAP financial measures included in this press release for the fourth quarter and year ended December 31, 2021, and 2020 is as follows

About EsoGuard and EsoCheck

Millions of patients with GERD are at risk of developing esophageal precancer and a highly lethal form of esophageal cancer ("EAC"). Over 80% of EAC patients die within five years of diagnosis, making it the second most lethal cancer in the U.S. The mortality rate is high even in those diagnosed with early stage EAC. The U.S. incidence of EAC has increased 500% over the past four decades, while the incidences of other common cancers have declined or remained flat. In nearly all cases, EAC silently progresses until it manifests itself with new symptoms of advanced disease. All EAC is believed to arise from esophageal precancer, which occurs in approximately 5% to 15% of at-risk GERD patients. Early esophageal precancer can be monitored for progression to late esophageal precancer which can be cured with endoscopic esophageal ablation, reliably halting progression to cancer.

Esophageal precancer screening is already recommended by clinical practice guidelines in millions of GERD patients with multiple risk factors, including age over 50 years, male gender, White race, obesity, smoking history, and a family history of esophageal precancer or cancer. Unfortunately, fewer than 10% of those recommended for screening undergo traditional invasive endoscopic screening. The profound tragedy of an EAC diagnosis is that likely death could have been prevented if the at-risk GERD patient had been screened and then undergone surveillance and curative treatment.

The only missing element for a viable esophageal cancer prevention program has been the lack of a widespread screening tool that can detect esophageal precancer. Lucid believes EsoGuard and EsoCheck are the missing element and constitute the first and only commercially available test capable of serving as a widespread screening tool to prevent esophageal cancer deaths through the early detection of esophageal precancer in at-risk GERD patients.

EsoGuard is a bisulfite-converted NGS DNA assay performed on surface esophageal cells collected with EsoCheck which quantifies methylation at 31 sites on two genes, Vimentin (VIM) and Cyclin A1 (CCNA1). The assay was evaluated in a 408-patient, multicenter, case-control study published in Science Translational Medicine and showed greater than 90% sensitivity and specificity at detecting esophageal precancer and cancer.

EsoCheck is an FDA 510(k) and CE Mark cleared noninvasive swallowable balloon capsule catheter device capable of sampling surface esophageal cells in a less than five-minute office procedure. It consists of a vitamin pill-sized rigid plastic capsule tethered to a thin silicone catheter from which a soft silicone balloon with textured ridges emerges to gently swab surface esophageal cells. When vacuum suction is applied, the balloon and sampled cells are pulled into the capsule, protecting them from contamination and dilution by cells outside of the targeted region during device withdrawal. Lucid believes this proprietary Collect+Protect technology makes EsoCheck the only noninvasive esophageal cell collection device capable of such anatomically targeted and protected sampling. The sample is sent by overnight express mail to Lucid’s third-party CLIA-certified laboratory partner for EsoGuard testing.

On March 28, 2022 Can-Fite BioPharma Ltd. (NYSE American: CANF) (TASE: CFBI), a biotechnology company advancing a pipeline of proprietary small molecule drugs that address inflammatory, cancer and liver diseases, reported the Company’s CEO, Dr. Pnina Fishman, will deliver a presentation titled "Piclidenoson for the Treatment of Psoriasis: Clinical Development and Mechanism of Drug Action" at the 3rd Annual Dermatology Drug Development Summit to leading European pharma and biotech industry stakeholders on April 6, 2022 at 4:30 pm in Frankfurt, Germany (Press release, Can-Fite BioPharma, MAR 28, 2022, View Source [SID1234611067]). The summit takes place April 6-7, 2022 and will focus on transformational new dermatological therapeutics being brought to market through collaboration.

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Can-Fite completed enrollment in its Phase III Comfort study for the treatment of moderate-to-severe plaque psoriasis with 400 patients enrolled across 30 sites in Europe, Israel, and Canada. Topline data are expected in Q2 2022.

Piclidenoson has been out-licensed for the indication of psoriasis to distribution partners in Canada, China, Korea, and numerous countries in Eastern and Western Europe. Can-Fite has received approximately $20 million in upfront and milestone payments from out-licensing deals of its drug pipeline to date.

"We look forward to presenting Piclidenoson as a potentially safe and effective treatment for psoriasis to Europe’s dermatology thought leaders and potential collaborators in Frankfurt. Through Can-Fite’s agreements with Gebro Pharma and EwoPharma, Piclidenoson will have strong distribution and marketing channels, upon approval, in many European countries," Dr. Fishman stated. "Distribution rights for Piclidenoson are still available for some of the largest markets in Europe and we believe Dermatology Drug Development Summit, with its focus on collaboration, is a great venue to explore additional out-licensing partnerships."

On March 28, 2022 ATCC, the world’s premier biological materials management and standards organization, reported that it has been awarded a two-year task order, with a ceiling value of $5.6 million, by the National Cancer Institute (NCI) (Press release, American Type Culture Collection (ATCC), MAR 28, 2022, View Source [SID1234611066]). This task order is part of the Company’s existing Indefinite Delivery/Indefinite Quantity (IDIQ) contract with NCI to support the Division of Cancer Epidemiology and Genetics (DCEG) Molecular Epidemiology Assay Support (MEAS) program.

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According to the DCEG website, its mission is to "discover the causes of cancer and inform the means for prevention by conducting transdisciplinary epidemiological and genetic research." DCEG investigators rely on contract services to provide technical support for specimen collection, receipt and processing, and assistance identifying laboratories to perform state-of-the-art testing using high-quality biological specimens collected from clinical and field sites. The MEAS program provides support services for clinical studies on the genetic and other cellular events that influence the onset of different types of cancer.

"At ATCC, we are committed to supporting members of the clinical research community by providing them with the highest quality biomaterials for cancer research," said Raymond H. Cypess, D.V.M., Ph.D., chairman and CEO of ATCC. "We know how important this is when they are designing studies to discover cancer’s genetic and environmental determinants and innovative approaches to cancer prevention. Scientific research is critical for unlocking incredible breakthroughs in global health."

Under the contract, ATCC may coordinate receipt of specimens from clinical and field sites, process fresh samples within 24 hours, and perform a broad range of state-of-the-art molecular assays to characterize the models as required. ATCC may also provide support services for the procurement, storage, and shipment of specimens to and from international and domestic specimen sites and prepare specimens for transport to testing laboratories by aliquoting, labeling, and batching, as needed.

"Through our expertise in providing standard reagents, functional testing, and biorepository operations and management, ATCC continues to support cancer research through DCEG’s clinical studies," said Joseph Leonelli, Ph.D., Senior Vice President of ATCC Federal Solutions. "We look forward to our continued relationship with NCI through the MEAS program."

On March 28, 2022 Ankyra Therapeutics, a company developing cancer therapies based on tumor localized immune potentiating agents, reported that the Board of Directors has appointed Howard L. Kaufman, MD as Chief Executive Officer effective March 22, 2022 (Press release, Ankyra Therapeutics, MAR 28, 2022, View Source [SID1234611065]). He will be the first CEO for the company and previously served as the Chief Medical Officer at Ankyra. Co-founder Tillman Gerngross, PhD will remain as Chairman of the Board at Ankyra Therapeutics.

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Dr. Kaufman has had numerous leadership roles in healthcare and biotechnology in his 20-year professional career. Among his many accomplishments include approvals of Amgen’s Talimogene laherparepvec, the first oncolytic virus approved by the FDA for the treatment of cancer, and EMD Serono’s avelumab, an anti-PD-L1 monoclonal antibody, the first drug approved by the FDA for the treatment of Merkel cell carcinoma. Prior to joining Ankyra as Chief Medical Officer, Dr. Kaufman served as Chief Medical Officer at Replimune, Inc. and Head of Research & Development at Immuneering Corp. Prior to joining industry he had an exemplary academic career and was the Associate Director of the Herbert Irving Cancer Center at Columbia University in New York City, Associate Dean and Cancer Center Director at Rush University in Chicago and was a tenured Professor at Rutgers University in New Jersey. He has also served as President of the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) and has published over 500 peer-reviewed manuscripts and book chapters. He currently holds clinical appointments at the Massachusetts General Hospital and Massachusetts Eye & Ear Infirmary in Boston and has an academic appointment at Harvard Medical School. Dr. Kaufman has been driven by his passion to find new treatments for patients with cancer and has enjoyed mentoring early career physicians and scientists to focus on cancer immunotherapy.

"I am honored to be leading Ankyra at this exciting time in their development," Dr. Kaufman said. He went on to add that, "The anchored immunotherapy platform being developed at Ankyra provides a novel, yet simple, solution for delivering therapeutically effective doses of immunotherapy agents to cancers while avoiding systemic toxicity. Ankyra has assembled one of the most experienced and productive teams in the business and is well positioned to benefit from the many academic collaborations already established." Kaufman also went on to say that, "We will place a high priority on getting our lead drug into the clinic while also broadening the Ankyra pipeline in order to extend the impact of anchored immunotherapy to as many cancer patients as possible."

"Dr. Kaufman is a well-respected expert in immunotherapy, and in his CMO role at Ankyra, he has positioned the company for rapid translation of our lead compound into the clinic. Since joining Ankyra, he has also established several key academic and pharmaceutical partnerships that have accelerated our development efforts," stated Dr. Tillman Gerngross, Co-founder, and Chairman of the Board of Directors at Ankyra Therapeutics.

On March 28, 2022 Fortress Biotech, Inc. (NASDAQ: FBIO) ("Fortress"), 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 full-year ended December 31, 2021 (Press release, Fortress Biotech, MAR 28, 2022, View Source [SID1234611064]).

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Lindsay A. Rosenwald, M.D., Fortress’ Chairman, President and Chief Executive Officer, said, "Fortress and its partner companies had an exceptional year in 2021, generating a record-setting annual net revenue of $68.8 million, representing more than 50% growth over 2020. We also began to realize the value of our monetization strategy when AstraZeneca acquired Caelum Biosciences ("Caelum"), a company founded by Fortress, during the fourth quarter of 2021, when we received a $56.9 million payment for our investment in Caelum. Fortress has the potential to receive up to an additional approximately $155 million in future milestone payments from the transaction, which includes proceeds from the release of escrow funds. Our subsidiary Cyprium Therapeutics ("Cyprium") executed an agreement with Sentynl Therapeutics to commit development funding for and contingently acquire Cyprium’s proprietary rights to CUTX-101, its Copper Histidinate product candidate for the treatment of Menkes disease, upon FDA approval. Also of note, Journey Medical Corporation ("Journey Medical") completed its $30.6 million initial public offering ("IPO"), net of discounts and other offering costs, launched Accutane (isotretinoin), acquired Qbrexza (glycopyrronium) from Dermira, Inc. and entered into a collaboration agreement with Dr. Reddy’s Laboratories Ltd. to develop and commercialize DFD-29 (minocycline modified release capsules 40 mg) for the treatment of rosacea."

Dr. Rosenwald continued, "Looking ahead in 2022, we anticipate continued progress and growth from our nine marketed prescription pharmaceutical products and over 30 product candidates in development. We have 30 ongoing clinical trials, including four product candidates in seven2 ongoing pivotal clinical trials. We expect the rolling submission of the New Drug Application ("NDA") for CUTX-101 to be complete in mid-2022. After announcing positive top-line results from the registration-enabling study of cosibelimab in metastatic cutaneous squamous cell carcinoma ("cSCC") in January, our partner company Checkpoint Therapeutics, Inc. ("Checkpoint") intends to submit a Biologics License Application ("BLA") for cosibelimab in 2022, followed thereafter by a Marketing Authorization Application submission in Europe. Mustang Bio, Inc. ("Mustang Bio"), another one of our partner companies, plans to initiate a multicenter Phase 1/2 clinical trial investigating the safety and efficacy of MB-106, a CD20-targeted, autologous CAR T cell therapy for relapsed or refractory B-cell non-Hodgkin lymphomas ("B-NHL") and chronic lymphocytic leukemia ("CLL") in the first half of 2022. Mustang Bio also plans to enroll the first patient in a pivotal multicenter Phase 2 clinical trial to evaluate MB-107, a lentiviral gene therapy for the treatment of infants under the age of two with X-linked severe combined immunodeficiency ("XSCID") in the second half of 2022. This ongoing advancement showcases the ability of Fortress’ business model to generate value for our shareholders and develop innovative therapies to help patients with unmet needs across multiple disease areas."

2021 and Recent Corporate Highlights3:

Marketed Dermatology Products and Product Candidates

Journey Medical currently has nine prescription dermatology products. In 2021 and early 2022, Journey Medical acquired and launched four prescription dermatology products including Accutane, Qbrexza, Amzeeq and Zilxi, and two product candidates, DFD-29 and FCD105.
Our products generated net revenues of $63.1 million for full-year 2021, compared to full-year 2020 net revenues of $44.5 million, representing growth of 42%.
In March 2022, Journey Medical dosed the first patient in the Phase 3 clinical program of DFD-29 for the treatment of papulopustular rosacea. Topline data is anticipated in the first quarter of 2023 with an NDA filing expected in the second half of 2023.
In February 2022, Journey Medical received notice from its exclusive licensing partner in Japan, Maruho Co., Ltd. ("Maruho"), that Japan’s Ministry of Health, Labor and Welfare ("MHLW") approved Rapifort Wipes 2.5% (glycopyrronium tosylate hydrate) for the treatment of primary axillary hyperhidrosis. This approval triggered a milestone payment of $10 million to Journey Medical, of which $7.5 million will be paid to Dermira, Inc. ("Dermira"), a wholly owned subsidiary of Eli Lilly and Company, pursuant to the terms of the Asset Purchase Agreement between Journey Medical and Dermira, with net proceeds of $2.5 million to Journey Medical.
In November 2021, Journey Medical completed its IPO of common stock of 3,520,000 shares at a public offering price of $10.00 per share, for net proceeds of $30.6 million, after deducting underwriting discounts and offering expenses. All of the shares of common stock were offered by Journey Medical.
In July 2021, Journey Medical completed its final private placements under the 8% Cumulative Convertible Class A Preferred Stock Offering (the "Preferred Offering"), issuing an aggregate of 758,680 preferred shares at a price of $25.00 per share, raising approximately $19.0 million in gross proceeds and, after deducting commissions, fees and expenses, receiving approximately $17.0 million in net proceeds. These shares converted into Journey Medical common stock upon the IPO.
On April 1, 2021, Journey Medical entered into an agreement with East West Bank ("EWB") in which EWB provided a $7.5 million working capital line of credit. In January 2022, Journey Medical expanded the borrowing capacity of the EWB credit agreement to $30.0 million, which includes an increase to the working capital line of credit to $10.0 million and a $20.0 million term loan.
We intend to launch an additional prescription product this year in the first half of 2022.
CUTX-101 (Copper Histidinate for Menkes disease)

In February 2021, our subsidiary Cyprium signed a Development and Asset Purchase Agreement with Sentynl Therapeutics, a wholly owned subsidiary of Zydus Lifesciences Ltd., for CUTX-101 for the treatment of Menkes disease. Under the terms of the agreement, Cyprium received $8 million upfront to fund the development of CUTX-101 and could receive up to $12 million in regulatory milestone payments related to the NDA submission and approval process and is eligible to receive sales milestones plus royalties. Royalties start from mid-single digits, scaling up to 25% on sales exceeding $100 million annually. Cyprium will retain 100% ownership over any FDA priority review voucher that may be issued at NDA approval for CUTX-101. Cyprium is responsible for the development of CUTX-101 through approval of the NDA by the FDA, and Sentynl will be responsible for commercialization of CUTX-101, as well as progressing newborn screening activities.
In October 2021, we announced positive results from an efficacy and safety analysis of data integrated from two completed pivotal studies in patients with Menkes disease treated with CUTX-101, copper histidinate (CuHis). These data were presented as a virtual poster at the 2021 American Academy of Pediatrics National Conference & Exhibition. Overall, a 79% reduction in risk of death was observed in patients treated within four weeks of birth compared with an untreated historical control cohort of patients and median overall survival (OS) was 177.1 and 16.1 months, respectively, with a hazard ratio (HR) of (95% CI) = 0.208 (0.094, 0.463) p<0.0001. A 75% reduction in the risk of death was also observed in patients treated after four weeks of birth compared with untreated historical control subjects and median OS was 62.4 and 17.6 months, respectively; HR (95% CI) = 0.253 (0.119, 0.537); p<0.0001.
In December 2021, we initiated the rolling submission of an NDA to the U.S. Food and Drug Administration ("FDA") for CUTX-101. We intend to complete the rolling submission of the NDA for CUTX-101 in mid-2022.
In March 2022, Cyprium announced positive data on CUTX-101 were presented as a "Top-Rated Abstract" and Poster at the 2022 American College of Medical Genetics and Genomics Clinical Genetics Meeting. The abstract can be viewed here.
CUTX-101 was sourced by Fortress and is currently in development at Cyprium.
CAEL-101 (Light Chain Fibril-reactive Monoclonal Antibody for AL Amyloidosis)

On October 5, 2021, AstraZeneca plc as successor-in-interest to Alexion Pharmaceuticals, Inc. ("Alexion") acquired 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 the $6.4 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, totaling up to approximately $212 million.
There are two ongoing Phase 3 studies of CAEL-101 for AL amyloidosis. (ClinicalTrials.gov Identifiers: NCT04512235 and NCT04504825)
In December 2021, CAEL-101 data were presented at the American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting ("ASH2021"). Abstracts can be viewed online through the ASH (Free ASH Whitepaper)2021 website here.
In June 2021, Caelum announced that CAEL-101 clinical data were presented at the European Hematology Association (EHA) (Free EHA Whitepaper) 2021 Virtual Congress ("EHA2021"). The data, presented in two e-posters, demonstrates the safety and tolerability profile of CAEL-101 to further support the dose selection for the ongoing Phase 3 study, and suggest possible cardiac and renal response.
Also in June 2021, the FDA granted Fast Track designation to CAEL-101 for the treatment of light chain AL amyloidosis.
CAEL-101 was sourced by Fortress and was developed by Caelum until Caelum was acquired by AstraZeneca.
Cosibelimab (formerly CK-301, an anti-PD-L1 antibody)

In December 2021, we announced the initiation of the CONTERNO study, a global, randomized Phase 3 trial of cosibelimab in combination with pemetrexed and platinum chemotherapy for the first-line treatment of patients with non-squamous non-small cell lung cancer.
In January 2022, we announced positive topline results from our registration-enabling clinical trial evaluating the safety and efficacy of our anti-PD-L1 antibody, cosibelimab, administered as a fixed dose of 800 mg every two weeks in patients with metastatic cSCC. The study met its primary endpoint, with cosibelimab demonstrating a confirmed objective response rate of 47.4% (95% CI: 36.0, 59.1) based on independent central review of 78 patients enrolled in the metastatic cSCC cohort using Response Evaluation Criteria in Solid Tumors version 1.1 criteria. Checkpoint intends to submit a BLA for cosibelimab in 2022, followed by a Marketing Authorization Application submission in Europe and other territories worldwide. With a potentially favorable safety profile versus anti-PD-1 therapy and a plan to commercialize at a substantially lower price, we believe cosibelimab has the potential to be a market disruptive product in the $30 billion and growing PD-(L)1 class.
Cosibelimab was sourced by Fortress and is currently in development at our partner company, Checkpoint.
Olafertinib (formerly CK-101, a third-generation epidermal growth factor receptor ("EGFR") inhibitor)

During the second quarter of 2021, we had productive interactions with the FDA regarding Checkpoint’s ongoing development program for olafertinib (formerly CK-101), our third-generation EGFR inhibitor being evaluated by our partner in an ongoing double-blind, randomized Phase 3 study in China.
Olafertinib was sourced by Fortress and is currently in development at our partner company, Checkpoint.
MB-106 (CD20-targeted CAR T Cell Therapy)

In May 2021, we announced that the FDA approved Mustang Bio‘s Investigational New Drug ("IND") application to initiate a multicenter Phase 1/2 clinical trial investigating the safety and efficacy of MB-106, a CD20-targeted, autologous CAR T cell therapy for relapsed or refractory B-NHL and CLL. We intend to dose the first patient in that trial in the first half of 2022.
In June 2021, we announced that MB-106 CD20-targeted CAR T data were presented at EHA (Free EHA Whitepaper)2021. Dr. Mazyar Shadman of Fred Hutchinson Cancer Research Center presented updated interim data from the ongoing Phase 1/2 clinical trial for B-NHL and CLL, which showed a favorable safety profile and compelling clinical activity, with a 93% overall response rate and 67% complete response rate in patients treated with the modified cell manufacturing process.
Also in June 2021, we hosted a key opinion leader webinar featuring a presentation from Dr. Shadman, who discussed interim results from the ongoing Phase 1/2 clinical trial investigating the safety and efficacy of MB-106 CD20-targeted CAR T for B-NHL and CLL.
In November 2021, we announced that Mustang Bio was awarded a grant of approximately $2 million from the National Cancer Institute of the National Institutes of Health. This two-year award will partially fund the Mustang Bio-sponsored multicenter trial to assess the safety, tolerability and efficacy of MB-106, a CD20-targeted, autologous CAR T cell therapy for patients with relapsed or refractory B- NHL or CLL.
In December 2021, we announced that MB-106 data were presented at ASH (Free ASH Whitepaper)2021. Dr. Mazyar Shadman of Fred Hutchinson Cancer Research Center presented updated interim data showing a 95% overall response rate, 65% complete response rate and favorable safety profile from the ongoing Phase 1/2 clinical trial for B-NHL and CLL. A copy of the poster can be viewed online here.
Also in December 2021, we hosted a key opinion leader webinar featuring a presentation from Dr. Shadman, who discussed interim results from the ongoing Phase 1/2 clinical trial investigating the safety and efficacy of MB-106 CD20-targeted CAR T for B-NHL and CLL. A replay of the webinar can be found here.
In January 2022, we announced that interim Phase 1/2 data on MB-106, a CD20-targeted, autologous CAR T cell therapy for patients with relapsed or refractory B-cell NHL and CLL, were selected for a poster presentation at the 2022 Tandem Meetings I Transplantation & Cellular Therapy Meetings of the American Society of Transplantation and Cellular Therapy and Center for International Blood & Marrow Transplant Research, rescheduled to take place April 23-26, 2022, in Salt Lake City, Utah. A copy of the abstract can be viewed on the meeting website here.
MB-106 was sourced by Fortress and is currently in development at our partner company, Mustang Bio.
Dotinurad (Urate Transporter (URAT1) Inhibitor)

In May 2021, we announced an exclusive license agreement with Fuji Yakuhin Co. Ltd. to develop Dotinurad in North America and Europe. Dotinurad is a potential best-in-class urate transporter (URAT1) inhibitor for gout and possibly other hyperuricemic indications including chronic kidney disease (CKD) and heart failure. 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. Over 1,000 Japanese patients have been treated safely with this drug.
In December 2021, we filed an IND with the FDA. We expect to initiate a Phase 1 clinical trial to evaluate Dotinurad for the treatment of gout in the first half of 2022.
Dotinurad was sourced by Fortress and is currently in development at our subsidiary company, UR1 Therapeutics.
MB-107 and MB-207 (Lentiviral Gene Therapies for XSCID)

In February 2021, we announced encouraging MB-107 and MB-207 clinical updates from our XSCID investigator-IND trials, as well as additional consistent safety and efficacy data.
In August 2021, we announced that the European Medicines Agency ("EMA") granted Priority Medicines ("PRIME") designation to MB-107, a lentiviral gene therapy for the treatment of XSCID in newly diagnosed infants, also known as bubble boy disease.
In the second half of 2022, we expect to enroll the first patient in a pivotal multicenter Phase 2 clinical trial under Mustang Bio’s IND to evaluate MB-107, a lentiviral gene therapy for the treatment of infants under the age of two with XSCID.
Mustang Bio filed an IND application in December 2021 for its pivotal multicenter Phase 2 clinical trial of MB-207, a lentiviral gene therapy for the treatment of patients with XSCID who have been previously treated with a hematopoietic stem cell transplantation ("HSCT") and for whom re-treatment is indicated. The trial is currently on hold pending CMC clearance from the FDA, and based on feedback from the Agency, Mustang Bio expects to enroll the first patient in a pivotal multicenter Phase 2 clinical trial in the first quarter of 2023.
MB-107 and MB-207 were sourced by Fortress and are currently in development at our partner company, Mustang Bio.
Triplex (Cytomegalovirus ("CMV") vaccine)

In December 2021, we announced that a Phase 2 double-blind, randomized, placebo-controlled clinical trial was initiated to evaluate the safety and efficacy of Triplex, a cytomegalovirus ("CMV") vaccine, in eliciting a CMV-specific immune response and reducing CMV replication in people living with HIV. The trial is being conducted by the AIDS Clinical Trials Group and is funded by the National Institute of Allergy and Infectious Disease, part of the National Institutes of Health.
Triplex was sourced by Fortress and is currently in development at our subsidiary company, Helocyte, Inc.
MB-101 (IL13Rα2-targeted CAR T Cell Therapy)

In May 2021, we announced that the first patient was dosed at City of Hope in a clinical trial to establish the safety and feasibility of administering MB-101 (autologous IL13Rα2-directed CAR T cells) to patients with leptomeningeal brain tumors (e.g., glioblastoma, ependymoma or medulloblastoma).
In October 2021, Christine Brown, Ph.D., Deputy Director, T Cell Therapeutics Research Laboratory Professor, Departments of Hematology & Hematopoietic Cell Transplantation and Immuno-Oncology and The Heritage Provider Network Professor in Immunotherapy at City of Hope, presented updated Phase 1 clinical data regarding MB-101 (IL13Rα2‐targeted CAR T cells) for the treatment of glioblastoma at two scientific conferences, the First Annual Conference on CNS Clinical Trials, co-sponsored by the Society for Neuro-Oncology and American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper), and the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Virtual Special Conference: Brain Cancer.
MB-101 was sourced by Fortress and is currently in development at our partner company, Mustang Bio.
MB-105 (PSCA-targeted CAR T Cell Therapy)

In February 2022, Phase 1 data on MB-105, a PSCA-targeted CAR T cell therapy administered systemically to patients with PSCA-positive metastatic castration-resistant prostate cancer ("mCRPC"), were presented by City of Hope at the 2022 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Genitourinary Cancers Symposium. The data results indicated that PSCA-CAR T-cell therapy is feasible in patients with mCRPC with dose limiting toxicity of cystitis and show preliminary anti-tumor effect at a dose of 100 million cells plus lymphodepletion. It was concluded that escalation up to the next dose level of 300 million cells can proceed in the trial.
MB-105 was sourced by Fortress and is currently in development at our partner company, Mustang Bio.
MB-109 (MB-101 (IL13Rα2-targeted CAR T Cell Therapy) + MB-108 oncolytic virus)

In March 2022, we announced that an abstract reporting on Phase 1 trials being conducted at the University of Alabama at Birmingham (UAB) and City of Hope of Mustang Bio’s exclusively licensed oncolytic viral and CAR T-cell therapies for the treatment of patients with glioblastoma (GBM) was selected as a late-breaking poster presentation at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting 2022, taking place April 8 – 13, 2022, in New Orleans, Louisiana. The abstract will also be published in the online Proceedings of the AACR (Free AACR Whitepaper).
Novel CAR T Technology

In August 2021, we announced an exclusive license agreement with Mayo Clinic for a novel technology to create in vivo CAR T cells that may be able to transform the administration of CAR T therapies and has the potential to be used as an off-the-shelf therapy.
The novel CAR T technology was sourced by Fortress and is currently in development at our partner company, Mustang Bio.
Ex Vivo Lentiviral Gene Therapy for RAG1 Severe Combined Immunodeficiency ("RAG1-SCID")

In November 2021, we announced the execution of an exclusive license agreement with Leiden University Medical Centre for a first-in-class ex vivo lentiviral gene therapy for the treatment of RAG1-SCID.
The ex vivo lentiviral gene therapy was sourced by Fortress and is currently in development at Mustang Bio.
Financial Results:

To assist our stockholders in understanding our company, we have prepared non-GAAP financial results for the three months and twelve months ended December 31, 2021 and 2020. These results exclude the operations of our four public partner companies: Avenue Therapeutics, Inc. ("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.

As of December 31, 2021, Fortress’ consolidated cash, cash equivalents and restricted cash totaled $308.0 million, compared to $254.4 million as of September 30, 2021, and $235.0 million as of December 31, 2020, an increase of $53.6 million for the fourth quarter and an increase of $73.0 million for the full year.
On a GAAP basis, Fortress’ net revenue totaled $68.8 million for the full year ended December 31, 2021, which included $63.1 million in net revenue generated from our marketed dermatology products. This compares to net revenue totaling $45.6 million for the full year ended 2020, which included $44.5 million in net revenue generated from our marketed dermatology products.
On a GAAP basis, consolidated research and development expenses including license acquisitions totaled $128.9 million for the full year ended December 31, 2021, compared to $64.1 million for the full year ended December 31, 2020. On a non-GAAP basis, research and development costs including research and development license acquisitions totaled $18.0 million for the full year ended December 31, 2021, compared to $10.0 million for the full year ended December 31, 2020.
On a GAAP basis, consolidated selling, general and administrative costs were $86.8 million for the full year ended December 31, 2021, compared to $61.2 million for the full year ended December 31, 2020. On a non-GAAP basis, selling, general and administrative expenses were $28.6 million for the full year ended December 31, 2021, compared to $23.4 for the full year ended December 31, 2020.
On a GAAP basis, consolidated net loss attributable to common stockholders was $(64.7) million, or $(0.79) per share, for the full year ended December 31, 2021, compared to net loss attributable to common stockholders of $(46.5) million, or $(0.65) per share for the full year ended December 31, 2020.
Fortress’ non-GAAP income attributable to common stockholders was $25.5 million, or $0.31 per share basic and $0.25 per share diluted, for the full year ended December 31, 2021, compared to Fortress’ non-GAAP loss attributable to common stockholders of $(30.8) million, or $(0.43) per share basic and diluted, for the full year ended December 31, 2020.
Use of Non-GAAP Measures:
In addition to the GAAP financial measures as presented in our Form 10-K filed with the Securities and Exchange Commission ("SEC") on March 28, 2022, 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 costs, defined as GAAP research and development costs, less research and development costs of our public partner companies and non-GAAP selling, general and administrative costs, defined as GAAP selling, general and administrative costs, 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 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.

Results for the year ended December 31, 2020 have been adjusted to remove Journey Medical as a public entity due to its IPO in November, 2021.
Avenue net loss for the years ended December 31, 2021 and 2020 of $3.7 million and $5.2 million, respectively, net of non-controlling interest of $2.9 million and $4.0 million, respectively.
Checkpoint net loss for the year ended December 31, 2021 of $56.7 million net of non-controlling interest of $39.2 million, Master Services Agreement ("MSA") fee to Fortress of $0.5 million, financing fee and payment-in-kind ("PIK") dividend to Fortress of $1.0 million and $6.6 million, respectively; and net loss for the year ended December 31, 2020 of $23.1 million net of non-controlling interest of $13.3 million, MSA fee to Fortress of $0.5 million, financing fee and PIK dividend to Fortress of $0.9 million and $4.6 million, respectively.
Journey Medical net loss for the year ended December 31, 2021 of $44.0 million net of non-controlling interest of $5.7 million and tax expense recognized on a stand-alone basis of $1.6 million; and net income for the year ended December 31, 2020 of $5.3 million, net non-controlling interest of $0.5 million and stand-alone tax expense of $1.9 million.
Mustang net loss of $66.4 million net of non-controlling interest of $48.5 million, MSA fee to Fortress of $0.5 million and financing fee and PIK dividend to Fortress of $1.9 million and $4.2 million, respectively, for the year ended December 31, 2021; and net loss of $60.0 million net of non-controlling interest of $36.4 million, MSA fee to Fortress of $0.5 million and financing fee and PIK dividend to Fortress of $2.4 million and $7.6 million, respectively, for the year ended December 31, 2020.
Proceeds received from AstraZeneca plc acquisition of Caelum Biosciences, Inc. in October 2021.Includes Research and development expense and Research and development – licenses acquired expense for the years ended December 31, 2021 and 2020, respectively.
Excludes $6.6 million and $4.6 million of PIK dividend payable to Fortress for the year ended December 31, 2021 and 2020, respectively.
Excludes $0.3 million of Fortress MSA expense and $4.2 million PIK dividend payable to Fortress for the year ended December 31, 2021; and excludes $0.3 million of Fortress MSA expense and $7.6 million PIK dividend payable to Fortress for the year ended December 31, 2020.
Includes Selling, general and administrative expenses and wire transfer fraud loss for the year ended December 31, 2021.
Excludes $0.5 million of Fortress MSA expense and $1.0 million Fortress financing fee for the year ended December 31, 2021; and $0.5 million of Fortress MSA expense and $0.9 million Fortress financing fee for the year ended December 31, 2020.
Excludes $0.3 million of Fortress MSA expense and $1.9 million Fortress financing fee for the year ended December 31, 2021; and $0.3 million of Fortress MSA expense and $2.4 million Fortress financing fee for the year ended December 31, 2020.