On March 28, 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 full-year ended December 31, 2023 (Press release, Fortress Biotech, MAR 28, 2024, View Source [SID1234641562]).
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Lindsay A. Rosenwald, M.D., Fortress’ Chairman, President and Chief Executive Officer, said, "In 2023, we built a significant amount of momentum to position our Company to achieve multiple milestones in 2024. We also generated record consolidated net revenues of $84.5 million in 2023, the majority of which came from the sales and milestone payments from our dermatology and rare disease businesses."
Dr. Rosenwald continued, "We are pleased that the U.S. Food and Drug Administration ("FDA") accepted the New Drug Application ("NDA") filing for DFD-29 earlier this month and look forward to the Prescription Drug User Fee Act ("PDUFA") goal date of November 4, 2024. Across our portfolio, we could receive up to four NDA and Biologics License Application ("BLA") regulatory approvals over the next 18 months, while we continue to advance our 25 development stage programs in 2024."
2023 and Recent Corporate Highlights:
Regulatory Milestones and Updates
· In January 2024, we submitted an NDA to the FDA seeking approval for DFD-29 (Minocycline Hydrochloride Modified Release Capsules, 40 mg) for the treatment of inflammatory lesions and erythema of rosacea in adults. In March 2024, the FDA accepted the NDA and has set a PDUFA goal date of November 4, 2024. If approved, DFD-29 has the potential to become the only oral, systemic therapy to address both inflammatory lesions and erythema (redness) from rosacea, as demonstrated in clinical trials. DFD-29 is currently in development at our partner company, Journey Medical Corporation (Nasdaq: DERM) ("Journey Medical").
1 The development programs depicted in this press release include product candidates in development at Fortress, at Fortress’ private subsidiaries (referred to herein as "subsidiaries"), at Fortress’ public subsidiaries (referred to herein as "partner companies") and at entities with whom one of the foregoing parties has a significant business relationship, such as an exclusive license or an ongoing product-related payment obligation (such entities referred to herein as "partners"). The words "we", "us" and "our" may refer to Fortress individually, to one or more of our subsidiaries and/or partner companies, or to all such entities as a group, as dictated by context.
· We submitted a BLA to the FDA for cosibelimab, our investigational anti-PD-L1 antibody, as a treatment for patients with metastatic or locally advanced cutaneous squamous cell carcinoma who are not candidates for curative surgery or radiation, in January 2023. In December 2023, the FDA issued a complete response letter ("CRL") for the cosibelimab BLA. The CRL only cited findings that arose during a multi-sponsor inspection of a third-party contract manufacturing organization as approvability issues to address in a resubmission. The CRL did not state any concerns about the clinical data package, safety or labeling for the approvability of cosibelimab. We believe we can address the feedback in a resubmission to enable marketing approval in 2024. We also secured additional U.S. patent protection for cosibelimab through at least May 2038. Cosibelimab is currently in development at our partner company, Checkpoint Therapeutics, Inc. (Nasdaq: CKPT) ("Checkpoint").
· Based on its public statements, AstraZeneca plc ("AstraZeneca") has estimated that it expects the FDA to accept its BLA submission of CAEL-101 (anselamimab) to treat AL amyloidosis for review in 2025. In 2021, AstraZeneca acquired Caelum Biosciences, Inc. (founded by Fortress) for an upfront payment of approximately $150 million paid to Caelum shareholders, of which approximately $56.9 million was paid to Fortress. The agreement also provides for additional potential payments to Caelum shareholders, including approximately $148 million to Fortress, payable upon the achievement of regulatory and commercial milestones.
· In December 2023, we completed the asset transfer of CUTX-101 (copper histidinate for Menkes disease) to Sentynl, a wholly owned subsidiary of Zydus Lifesciences Ltd. The CUTX-101 rolling NDA submission is ongoing and is expected to be completed by Sentynl in 2024. Cyprium Therapeutics, Inc. ("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.
· In October 2023, we announced that the FDA accepted our Investigational New Drug application to initiate a Phase 1 open-label, multicenter clinical trial to assess the safety, tolerability and efficacy of MB-109, a novel combination of MB-101 (IL13Rα2-targeted CAR-T cell therapy) and MB-108 (HSV-1 oncolytic virus), for the treatment of IL13Rα2+ recurrent GBM and high-grade astrocytoma. MB-109 is currently in development at our partner company, Mustang Bio, Inc. (Nasdaq: MBIO) ("Mustang Bio").
Commercial Product Updates
· In September 2023, our partner company, Journey Medical, entered into an exclusive license agreement with Maruho Co., Ltd. ("Maruho"), a Japanese company specializing in dermatology as well as Journey Medical’s exclusive licensing partner that developed and is commercializing Qbrexza (Rapifort) in Japan. Under the terms of a new license agreement, Journey Medical received a $19 million nonrefundable upfront payment and granted Maruho an exclusive license to develop and commercialize Qbrexza (glycopyrronium tosylate hydrate) for the treatment of hyperhidrosis in South Korea, Taiwan, Hong Kong, Macau, Thailand, Indonesia, Malaysia, Philippines, Singapore, Vietnam, Brunei, Cambodia, Myanmar and Laos (the "Territory"). Maruho is responsible for all development and commercialization costs for the program throughout the Territory.
· Journey Medical’s total net revenues for the year ended December 31, 2023, were $79.2 million, an increase of $5.5 million, or 7%, compared to total net revenues of $73.7 million for 2022.
· Journey Medical’s total product net revenues were $59.7 million for the year ended December 31, 2023, compared to total product net revenues of $71.0 million for the year ended December 31, 2022.
General Corporate:
· Throughout 2023 and in January 2024, Fortress raised total gross proceeds of approximately $34.9 million in registered direct offerings priced at-the-market under Nasdaq rules and in a public offering.
· In October 2023, Fortress effected a 1-for-15 reverse stock split of its issued and outstanding common stock to bring the Company into compliance with Nasdaq’s minimum bid price requirement for continued listing.
· In April 2023, we announced the execution of an asset purchase agreement for 4D Molecular Therapeutics ("4DMT") to acquire proprietary rights to our short-form human complement factor H asset for the treatment of complement-mediated diseases. Under the terms of the agreement, 4DMT will make cash payments totaling up to ~$140 million in potential late-stage development, regulatory and sales milestones. A range of single-digit royalties on net sales are also payable. Our short-form human complement factor H asset was in development at our subsidiary company, Aevitas Therapeutics, Inc. ("Aevitas"), prior to the asset purchase agreement with 4DMT.
Financial Results:
· As of December 31, 2023, Fortress’ consolidated cash, cash equivalents and restricted cash totaled $83.4 million, compared to $74.7 million as of September 30, 2023, and $181.0 million as of December 31, 2022, an increase of $8.7 million for the fourth quarter and a decrease of $97.6 million for the full year.
· Fortress’ consolidated cash, cash equivalents and restricted cash, totaling $83.4 million as of December 31, 2023, includes $42.2 million attributable to Fortress and private subsidiaries, $1.8 million attributable to Avenue, $4.9 million attributable to Checkpoint, $7.0 million attributable to Mustang Bio and $27.4 million attributable to Journey Medical.
· Subsequent to the end of the fourth quarter, in January 2024, Fortress raised approximately $11.0 million in gross proceeds in a registered direct offering, Checkpoint raised approximately $14.0 million in gross proceeds in a registered direct offering and Avenue raised approximately $5.0 million in gross proceeds from warrant exercise transactions.
· Fortress’ consolidated net revenue totaled $84.5 million for the full year ended December 31, 2023, which included $59.7 million in net revenue generated from our marketed dermatology products. This compares to consolidated net revenue totaling $75.7 million for the full year ended 2022, which included $71.0 million in net revenue generated from our marketed dermatology products.
· Consolidated research and development expenses including license acquisitions totaled $106.1 million for the full year ended December 31, 2023, compared to $134.9 million for the full year ended December 31, 2022.
· Consolidated selling, general and administrative costs were $94.1 million for the full year ended December 31, 2023, compared to $113.7 million for the full year ended December 31, 2022.
· Consolidated net loss attributable to common stockholders was $(68.7) million, or $(8.47) per share, for the full year ended December 31, 2023, compared to net loss attributable to common stockholders of $(94.6) million, or $(15.97) per share for the full year ended December 31, 2022.