Fortress Biotech, Inc.
For the period ended Mar 31, 2026. Filed May 14, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 14, 2026
FBIO$1.85+0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-14.
0001104659-25-111989
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-14.
0001104659-26-061233
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 121 previous paragraphs and 89 current paragraphs.
50 unchanged; 20 reworded; 18 added; 43 removed; 8 previous and 1 current paragraphs rearranged.
Tables are not compared: 92 previous and 80 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (18)
Current report
Revenue Portfolio
Current report
Commercial and Approved Products
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ATX-04 (selective β2-adrenergic agonist for Pompe disease)
Current report
FB-606 (sarcolemmal membrane stabilizer for Duchenne Muscular Dystrophy)
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Other Product Candidates
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AJ201 (Nrf1 and Nrf2 activator, androgen receptor degradation enhancer)
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General Corporate
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For the three months ended March 31, 2026 we generated $15.9 million of net product revenue related to the sale of Journey’s branded and generic products as compared to $13.1 million for the three months ended March 31, 2025. The $2.8 million, or 21%, increase is primarily driven by sales of Emrosi in the first quarter of 2026 of $6.3 million compared to $2.1 million in the first quarter of 2025. Journey launched Emrosi in the first quarter of 2025. This is partially offset by a decrease in sales of Accutane of $0.3 million, the foam franchise products of $0.5 million, and Journey’s legacy products of $0.5 million due to continued competitive pressures.
Current report
Other revenue for the three months ended March 31, 2026 of $0.1 million consists of sales-based royalties recognized by Cyprium related to Sentynl’s net sales of ZYCUBO, and revenue recognized by Journey related to sales-based royalties on Cutia’s net sales of Amzeeq.
Current report
Amortization of acquired intangible assets increased less than $0.1 million, or 6%, to $1.1 million for the three months ended March 31, 2026, from $1.1 million for the three months ended March 31, 2025, driven by the start of amortization on the anti-itch acquired intangible asset during the first quarter of 2026, offset by the completion of amortization on the Accutane intangible asset during the first quarter of 2026.
Current report
R&D expense at Checkpoint decreased $3.8 million, or 100%, due to the deconsolidation of that entity as of May 2025 as a result of its acquisition by Sun Pharma. The increase in R&D expenses of $1.1 million, or 118%, at Mustang is attributed to actions taken in 2025, including $0.7 million in one-time savings from the settlement of aged payables and the $0.4 million gain recognized on the termination of the Worcester facility lease during the first quarter of 2025, which did not recur to similarly offset R&D expense in 2026. The decrease at Fortress in R&D expenses of $0.5 million, or 76%, is primarily related to the decrease in stock-based compensation expense of $0.6 million due to the vesting of grants under the Fortress Biotech, Inc. Long Term Incentive Plan (“LTIP”) in 2025, offset by $0.1 million increase in product development costs. R&D expense at Avenue decreased $0.2 million, or 51%, due to a $0.1 million decrease in personnel-related costs, and a $0.1 million decrease due to one-time costs incurred related to the return of the AJ201 license to AnnJi in 2025.
Current report
The decrease in stock-based compensation of $1.3 million, or 98%, for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 is attributed to the decrease at Checkpoint of $0.7 million, or 100%, due to the deconsolidation of that entity as of May 2025 as a result of its acquisition by Sun Pharma. The decrease in stock compensation at Fortress of $0.6 million, or 99%, is due to vesting of grants under the LTIP in 2025.
Current report
For the three months ended March 31, 2026, the decrease in selling, general and administrative expenses of $9.8 million, or 38%, is primarily attributable to the decrease of $7.4 million, or 100%, at Checkpoint due to the deconsolidation of that entity as of May 2025
Current report
as a result of its acquisition by Sun Pharma. The decrease at Avenue of $1.0 million, or 66%, was primarily due to a decrease of $0.8 million in legal expenses incurred in connection with the AnnJi license termination in 2025 (see Note 8 to the unaudited condensed consolidated financial statements), a $0.1 million decrease in professional fees, and a $0.1 million decrease in personnel-related costs. The decrease at Journey of $0.5 million, or 4%, is due to a reduction in Emrosi launch costs from the prior year quarter. The decrease at Mustang of $0.3 million, or 28%, is primarily attributed to a $0.2 million decrease in non-cash stock-based compensation expenses, primarily related to the equity fee to Fortress, and a $0.1 million decrease in outside service costs, primarily related to financing activity that occurred in the first quarter of 2025. The decrease of $0.6 million, or 13%, at Fortress is due to decreased stock compensation expense related to the vesting of grants under the LTIP in 2025 of $1.5 million offset by an increase of $0.3 million in personnel-related expenses and legal fees incurred at Cyprium of $0.4 million.
Current report
Total other income (expense) increased $152.4 million, or 6,420%, from expense of $2.4 million for the three months ended March 31, 2025 to income of $150.0 million for the three months ended March 31, 2026. As a result of Cyprium’s sale of its PRV in March 2026 for $205 million, Cyprium recorded a gain of approximately $158.9 million (see Note 3 to the unaudited condensed consolidated financial statements), and recognized the fair value increase of the embedded derivative liability of $7.1 million associated with the Cyprium perpetual preferred stock redemption due to the PRV sale. We also recognized an increase in the fair value of Urica’s equity interest in Crystalys of $1.0 million due to Urica’s receipt of additional anti-dilution shares (see Note 3 to the unaudited condensed consolidated financial statements). These gains were partially offset by interest expense and financing fee expenses related to Fortress’
Current report
2026 S-3 replaces the Journey 2022 S-3. Sales under the 2025 Sales Agreement after the effective date are made under the Journey 2026 S-3.
Current report
Net cash provided by operating activities increased $223.4 million from the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. The increase is due to net income of $137.2 million for the three months ended March 31, 2026 as compared to the net loss of $24.7 million for the same period in 2025, and an increase of $58.1 million resulting from changes in operating assets and liabilities led by the increase in accounts payable and accrued expenses of $44.7 million due primarily to the accrual of $41 million owed to the NIH by Cyprium as a result of the PRV sale (see Note 3 to the unaudited condensed consolidated financial statements).
Current report
Pursuant to the sublease agreement, the Company expects to receive approximately $11.9 million in aggregate base rent payments over the term of the sublease. The Company remains primarily liable for the obligations under the original lease.
Removed paragraphs (43)
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Revenue
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sciences institutional investors. Under the Transaction Documents, Urica transferred substantially all intellectual property rights in dotinurad to Crystalys. In return, Crystalys issued to Urica shares of its common stock equal to 35% of Crystalys’ outstanding equity, including certain anti-dilution provisions through the raise of $150 million in equity securities. The Transaction Documents also granted Urica a secured 3% royalty on future net sales of dotinurad.
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MB-106 (CD20-targeted CAR T-cell therapy)
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General Corporate and Other – Public Subsidiaries
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system on March 19, 2025. Avenue currently plans to continue to file its required periodic reports and other filings with the SEC.
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Revenue
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For the three months ended September 30, 2025 we generated $17.0 million of net product revenue related to the sale of Journey’s branded and generic products as compared to $14.6 million for the three months ended September 30, 2024. This includes $4.9 million of net product revenue related to the U.S. commercial launch of Emrosi for the three months ended September 30, 2025, offset by a decrease in Accutane revenue as a result of lower sales volume driven by recent market competition. Other revenue for the three months ended September 30, 2025 consists of revenue recognized by Journey related to the supply of Amzeeq to Cutia.
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Amortization of acquired intangible assets increased by $0.3 million, or 31%, to $1.1 million for the three-month period ended September 30, 2025, from $0.8 million for the three-month period ended September 30, 2024, driven by the addition of the Emrosi acquired intangible asset upon Journey’s payment to DRL of the milestone payment triggered by the FDA’s approval of Emrosi in November 2024.
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The decrease in R&D spending of $9.2 million, or 98%, for the quarter ended September 30, 2025 as compared to the quarter ended September 30, 2024 is primarily a result of the decreased R&D spend at Checkpoint of $6.4 million, or 100%, due to the deconsolidation of that entity as of May 2025 as a result of its acquisition by Sun Pharma, and the $2.2 million, or 95%, decrease at Avenue, which is primarily attributable to a decrease in pre-clinical and clinical development costs for AJ201, prior to its sale to AnnJi in April 2025. Journey’s decrease of $0.6 million, or 66%, is due to costs incurred in the quarter ended September 30, 2024 related to the launch and commercialization of Emrosi. The decrease at Mustang of $0.4 million, or 684%, is due to a $0.3 million decrease in rent expense due to the termination of the Worcester facility lease, and a $0.1 million decrease in personnel costs related to reductions in employee headcount. Mustang continues to negotiate settlements of aged payables, and recognized savings of approximately $0.6 million, which resulted in a credit for research and development expenses during the three months ended September 30, 2025. This credit is not indicative of Mustang’s research and development expenses going forward.
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The decrease in stock-based compensation of $1.1 million, or 88%, in the quarter ended September 30, 2025 as compared to the quarter ended September 30, 2024 is primarily due to the decrease at Checkpoint of $0.5 million, or 100%, due to the deconsolidation of that entity as of May 2025 as a result of its acquisition by Sun Pharma. The decrease at Fortress and private subsidiaries of $0.3 million, or 73%, is due to $0.4 million recognized by Urica in the quarter ended September 30, 2024 related to the vesting of outstanding equity grants as a result of the transaction with Crystalys.
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For the three months ended September 30, 2025, the decrease in selling, general and administrative expenses of $4.6 million, or 21%, is primarily a result of the decreased expense at Checkpoint of $3.4 million, or 100%, due to the deconsolidation of that entity as of May 2025 as a result of its acquisition by Sun Pharma. The decrease at Fortress of $1.2 million, or 23%, is due primarily to decreased stock compensation expense related to the vesting in July of a series of grants made under the Fortress Biotech, Inc. Long Term Incentive Plan.. The increased spend at Journey of $0.7 million, or 6%, is due to the incremental operating activities related to the launch and commercialization of Emrosi.
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Total other income (expense) increased $20.2 million, or 446%, from expense of $4.5 million for the quarter ended September 30, 2024 to income of $15.7 million for the quarter ended September 30, 2025. The increase is due to an increase in the fair value of Urica’s equity interest in Crystalys of $15.1 million and the reversal of the liability associated with Urica’s repurchase obligation of $2.6 million during the three months ended September 30, 2025 (see Note 3 to the unaudited condensed consolidated financial statements). The decrease in interest expense and financing fee of $3.5 million, or 56%, for the quarter ended September 30, 2025 as compared to the quarter ended September 30, 2024 is attributable to a loss on extinguishment of debt of $3.6 million recognized in the quarter ended September 30, 2024 related to the Company’s extinguishment of the 2020 Oaktree Note.
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Comparison of Nine Months Ended September 30, 2025 and 2024
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For the nine months ended September 30, 2025 we generated $45.2 million of net revenue related to the sale of Journey’s branded and generic products as compared to $42.5 million for the nine months ended September 30, 2024. The nine months of 2025 includes $9.7 million of net product revenue related to the U.S. commercial launch of Emrosi, offset by a decrease in Accutane revenue as a result of lower sales volume driven by recent market competition. Other revenue for the nine months ended September 30, 2025 consists of revenue recognized by Avenue related to the AnnJi license termination and program transfer of $1.4 million and revenue recognized by Journey related to the supply of Amzeeq to Cutia for $0.6 million.
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We incurred $15.5 million and $16.2 million of costs of goods sold in connection with the sale of Journey’s branded and generic products for the nine months ended September 30, 2025 and 2024, respectively. Cost of goods sold decreased by $0.7 million, or 4%, year-over-year, related to product sales mix, driven mainly by the decrease in Accutane revenue, which has a higher cost to Journey than Emrosi, as well as lower inventory obsolescence costs in the nine month period ended September 30, 2025.
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Amortization of acquired intangible assets
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Amortization of acquired intangible assets increased by $0.8 million, or 31%, to $3.2 million for the nine-month period ended September 30, 2025, from $2.4 million for the nine-month period ended September 30, 2024, driven by the addition of the Emrosi acquired intangible asset upon Journey’s payment to DRL of the milestone payment triggered by the FDA’s approval of Emrosi in November 2024.
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Research and Development Expenses
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Note 2: Checkpoint expenses are for the five-month period ending May 2025, due to the deconsolidation of Checkpoint as of May 2025 related to the Sun Pharma transaction (see Note 3 to the unaudited condensed consolidated financial statements).
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For the nine months ended September 30, 2025, the decrease in R&D expenses of $34.7 million, or 74%, is attributable to a decrease of $9.4 million, or 115%, at Mustang attributed to actions taken in 2024, including the reduction in the workforce, closing the MB-106 clinical trial, and the termination of Mustang’s transaction with uBriGene. These activities resulted in decreased expenses of $3.2 million related to the termination of the transaction with uBriGene and the repurchase of the assets, a $2.4 million decrease in expenses related to outside services, including assay development costs; a $1.4 million reduction in clinical trial related costs, a $1.3 million decrease in sponsored research and license related expenses, a $0.7 million decrease in consulting expenses; a $0.6 million decrease in depreciation expense; offset slightly by a $1.3 million increase in personnel-related costs due to stock compensation expense credits and reversal of accrued bonus due to the April 2024 reduction in workforce, and the $0.4 million gain recognized on the termination of the Worcester facility lease. Additionally Mustang recognized savings of approximately $1.4 million on the settlement of aged payables, which resulted in a credit to research and development expenses during the nine months ended September 30, 2025. This credit is not indicative of Mustang’s research and development expense going forward. Journey R&D expense decreased $9.3 million, or 97%, due to the Emrosi pre-approval expenses, milestones and fees incurred in the nine months ended September 30, 2024. R&D expense at Checkpoint decreased $8.6 million, or 44%, due to the deconsolidation of that entity as of May 2025 as a result of its acquisition by Sun Pharma. R&D expense at Avenue decreased $5.3 million, or 87%, due to a $5.0 million decrease in pre-clinical and clinical development costs for AJ201 prior to entering into the termination agreement with AnnJi, a $0.1 million decrease in IV tramadol supply costs, and a $0.2 million decrease in personnel-related costs. The decrease at Fortress in R&D expenses of $2.1 million, or 57%, is primarily related to the transition of the dotinurad development program at Urica to Crystalys in July 2024.
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Note 2: Checkpoint expenses are for the five-month period ending May 2025, due to the deconsolidation of Checkpoint as of May 2025 related to the Sun Pharma transaction (see Note 3 to the unaudited condensed consolidated financial statements).
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The increase in stock-based compensation of $3.3 million, or 112%, for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024 is primarily attributed to the increase at Checkpoint of $3.2 million, or 194%, due to the vesting of all outstanding equity awards from the change of control that occurred with the sale to Sun Pharma. Stock compensation expense at Mustang reflects the expense credits due to forfeited grants from the reduction in workforce that occurred in April 2024. The decrease in stock compensation at Journey of $0.5 million, or 100%, is due to employee grants becoming fully vested in the prior year.
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Selling, General and Administrative Expenses
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Note 2: Checkpoint expenses are for the five-month period ending May 2025, due to the deconsolidation of Checkpoint as of May 2025 related to the Sun Pharma transaction (see Note 3 to the unaudited condensed consolidated financial statements).
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For the nine months ended September 30, 2025, the increase in selling, general and administrative expenses of $20.8 million, or 34%, is primarily attributable to an increase of $19.2 million, or 239%, at Checkpoint due primarily to an increase in increased stock compensation expense of $7.5 million related to the vesting of all outstanding equity awards due to the change of control that occurred with the sale to Sun Pharma, an increase in legal fees of $4.3 million and an increase of $9.5 million in other costs, which includes costs related to the transaction with Sun Pharma, such as fees to financial advisors. The increase at Journey of $4.4 million, or 14%, is due to the costs incurred related to the launch and commercialization of Emrosi. The decrease at Mustang of $1.4 million, or 32%, is due to a $0.4 million decrease inpersonnel costs, a $0.5 million decrease in legal and patent protection expenses, a $0.4 million decrease in consulting expenses, and a $0.3 million decrease across various other general and administrative expenses, offset by a $0.2 million increase innon-cash stock-based compensation expenses, consisting primarily of the equity fee paid to Fortress.
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Note 2: Checkpoint expenses are for the five-month period ending May 2025, due to the deconsolidation of Checkpoint as of May 2025 related to the Sun Pharma transaction (see Note 3 to the unaudited condensed consolidated financial statements).
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The increase in stock-based compensation of $6.6 million, or 49%, for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024 is primarily attributed to the increase at Checkpoint of $7.5 million, or 400%, due to the vesting of all outstanding equity awards from the change of control that occurred with the sale to Sun Pharma, partially offset by the decrease at Fortress of $1.0 million, or 15%, due to the vesting in July 2025 of a series of grants made under the Fortress Biotech, Inc. Long Term Incentive Plan.
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Asset Impairment
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For the nine months ended September 30, 2024, we incurred impairment charges of $2.6 million attributable to Mustang’s assessment of the recoverability of its asset group consisting of leasehold improvements and associated right-of-use asset. No impairment was recorded in the nine months ended September 30, 2025.
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Other income (expense)
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During the nine months ended September 30, 2025, the Company issued and sold approximately 0.5 million shares at an average price of $1.94 per share for gross proceeds of approximately $1.0 million under the Company’s at-the-market offering program.
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Checkpoint
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In January 2025, Checkpoint received approximately $2.1 million from the exercise of warrants for the issuance of 740,000 shares of common stock with an exercise price of $2.84 per share.
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In March 2025, Checkpoint received approximately $36.0 million from the exercise of warrants for the issuance of 21,691,003 shares of common stock with an average exercise price of $1.66 per share.
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In April 2025, Checkpoint received approximately $9.2 million from the exercise of warrants for the issuance of 3,256,269 shares of common stock with an average exercise price of $2.82 per share.
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On May 31, 2024, Mustang entered into an At-the-Market Offering Agreement (the “Mustang ATM”) relating to the sale of shares of common stock pursuant to the Mustang 2024 S-3. During the nine months ended September 30, 2025, Mustang issued and sold approximately 54,000 shares through the Mustang ATM for net proceeds of approximately $0.6 million.
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In February 2025, Mustang closed on an equity offering of (i) 495,000 shares of its common stock, par value $0.0001 per share (the “Shares”), (ii) pre-funded warrants to purchase up to an aggregate of 2,162,807 shares of common stock (the “Pre-Funded Warrant Shares), (iii) Series C-1 warrants (the “Series C-1 Warrants”) to purchase up to 2,657,807 shares of common stock, and (iv) Series C-2 warrants (the “Series C-2 Warrants”)to purchase up to 2,657,807 shares of common stock. Each Share or Pre-Funded Warrant was sold together with one Series C-1 Warrant to purchase one share of common stock and one Series C-2 Warrant to purchase one share of common stock. The combined public offering price for each Share and accompanying Warrants was $3.01, and the combined public offering price for each Pre-Funded Warrant and accompanying Warrants was $3.0099. The Pre-Funded Warrants had an exercise price of $0.0001 per share, were exercisable immediately upon issuance and expired when exercised in full. Each Warrant has an exercise price of $3.01 per share and became exercisable beginning on the effective date of stockholder approval of the issuance of the Warrant Shares (the “Warrant Stockholder Approval”). The Series C-1 Warrants expire five years from the date of stockholder approval and the Series C-2 Warrants expire twenty-four months from the date of stock holder approval. The warrants contain customary anti-dilution adjustments to the exercise price, including share splits, share dividends, rights offerings and pro rata distributions. The net proceeds of the offering, after deducting the fees and expenses of the placement agent in the transaction, and other offering expenses payable by Mustang, but excluding the net proceeds from the exercise of the Warrants, was approximately $6.8 million.
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In July 2025, the remaining approximately 0.5 million of the Pre-Funded Warrants and approximately 2.4 million of the Series C-2 Warrants were exercised. In connection with these exercises, Mustang received approximately $7.1 million in proceeds and issued approximately 2.9 million shares of its common stock. As of September 30, 2025, all of the Series C-1 Warrants and 284,452 of the Series C-2 Warrants remain outstanding.
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Avenue
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In December 2021, Avenue filed a shelf registration statement (File No. 333-261520) on Form S-3 (the “Avenue 2021 S-3”), which was declared effective on December 10, 2021. Avenue filed a replacement shelf registration on Form S-3 on December 4, 2024 (the "Avenue Replacement Shelf"), which has not yet become effective under the Securities Act of 1933, as amended. However, effective as of July 18, 2025, Avenue was formally delisted from Nasdaq with Nasdaq's filing on that date of a Form 25 with the SEC; Avenue is therefore ineligible to use Form S-3 and unable to use the Avenue 2021 S-3 or the Avenue Replacement Shelf.
Showing the first 40 of 43 passages. Open the source sections for the rest.
Reworded paragraphs (20)
Previous wording
Our subsidiaries and partner companies that are pursuing development and/or commercialization of biopharmaceutical products and product candidates are: Journey Medical Corporation (Nasdaq: DERM, “Journey” or “JMC”), Mustang Bio, Inc. (Nasdaq: MBIO, “Mustang”), Avenue Therapeutics, Inc. (OTC: ATXI, “Avenue”), Cellvation, Inc. (“Cellvation”), Cyprium Therapeutics, Inc. (“Cyprium”), Helocyte, Inc. (“Helocyte”), Oncogenuity, Inc. (“Oncogenuity”) and Urica Therapeutics, Inc. (“Urica”). Checkpoint Therapeutics, Inc. (“Checkpoint”), previously a partner company of ours, was acquired by Sun Pharma in May 2025. Baergic Bio, Inc. (“Baergic”), previously a subsidiary of Avenue, was acquired by Axsome in November 2025.
Current wording
Our subsidiaries and partner companies that are pursuing development and/or commercialization of biopharmaceutical products and product candidates are: Journey Medical Corporation (Nasdaq: DERM, “Journey”), Mustang Bio, Inc. (Nasdaq: MBIO, “Mustang”), Avenue Therapeutics, Inc. (OTCID: ATXI, “Avenue”), Cellvation, Inc. (“Cellvation”), Cyprium Therapeutics, Inc. (“Cyprium”), Helocyte, Inc. (“Helocyte”), LemmaTx, Inc. (“LemmaTx”), Oncogenuity, Inc. (“Oncogenuity”) and Urica Therapeutics, Inc. (“Urica”). Checkpoint Therapeutics, Inc. (“Checkpoint”), previously a partner company of ours, was acquired by Sun Pharma in May 2025. Baergic Bio, Inc. (“Baergic”), previously a subsidiary of Avenue, was acquired by Axsome in November 2025.
Previous wording
Emrosi(Minocycline Hydrochloride Extended-Release Capsules, 40mg, also known as DFD-29, for the treatment of rosacea)
Current wording
Emrosi(Minocycline Hydrochloride Modified Release Capsules, 40 mg, also known as DFD-29, for the treatment of rosacea)
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CUTX-101 (copper histidinate for Menkes disease)
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ZYCUBO (copper histidinate for Menkes disease, formerly known as CUTX-101)
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For a discussion of our critical accounting estimates, see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K, which was filed with the United States Securities and Exchange Commission (“SEC”) on March 31, 2025 (the “2024 Form 10-K”). There were no material changes in our critical accounting estimates or accounting policies from December 31, 2024 other than the addition of the “Investment in Equity Securities” policy.
Current wording
For a discussion of our critical accounting estimates, see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K, which was filed with the United States Securities and Exchange Commission (“SEC”) on March 31, 2026 (the “2025 Form 10-K”). There were no material changes in our critical accounting estimates or accounting policies from December 31, 2025.
Previous wording
The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Company’s consolidated financial statements include the results of the Company’s subsidiaries for which it has voting control but does not own 100% of the outstanding equity of the subsidiaries. For consolidated entities where the Company owns less than 100% of the subsidiary, but retains voting control, the Company records net loss attributable to non-controlling interests in its consolidated statements of operations and presents non-controlling interests as a component of stockholders’ equity on its consolidated balance sheets. All intercompany income and/or expense items are eliminated entirely in consolidation prior to the allocation of net gain/loss attributable to non-controlling interest, which is based on ownership interests as calculated quarterly for each subsidiary.
Current wording
The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America. The Company’s consolidated financial statements include the results of the Company’s subsidiaries for which it has voting control but does not own 100% of the outstanding equity of the subsidiaries. For consolidated entities where the Company owns less than 100% of the subsidiary, but retains voting control, the Company records net income (loss) attributable to non-controlling interests in its consolidated statements of operations and presents non-controlling interests as a component of stockholders’ equity on its consolidated balance sheets. All intercompany income and/or expense items are eliminated entirely in consolidation prior to the allocation of net gain/loss attributable to non-controlling interest, which is based on ownership interests as calculated quarterly for each subsidiary.
Previous wording
We incurred $5.8 million and $4.5 million of costs of goods sold in connection with the sale of Journey’s branded and generic products for the quarters ended September 30, 2025 and 2024, respectively. Cost of goods sold increased by $1.3 million, or 29% quarter-over-quarter, due to an increase in product-related cost of goods, including royalties, related to the incremental revenue from Emrosi.
Current wording
We incurred $6.2 million and $4.8 million of costs of goods sold in connection with the sale of Journey’s branded and generic products for the three months ended March 31, 2026 and 2025, respectively. Cost of goods sold increased by $1.4 million, or 30%, related to product sales mix, driven primarily by a $1.3 million non-cash charge related to inventory acquired in the 2021 Qbrexza asset acquisition as well as an increase in royalty expense driven by the incremental net revenue recognized for Emrosi during the first quarter of 2026 as compared to the first quarter of 2025.
Previous wording
The table below provides a summary of research and development by entity, for the periods presented:
Current wording
For the three months ended March 31, 2026 and 2025, R&D expenses were approximately $0.5 million and $3.9 million, respectively, a decrease of $3.4 million, or 86%. The table below provides a summary of research and development by entity, for the periods presented:
Previous wording
The decrease in stock-based compensation of $2.3 million, or 43%, for the quarter ended September 30, 2025 as compared to the quarter ended September 30, 2024 is primarily due to the decrease at Checkpoint of $1.1 million, or 100%, due to the deconsolidation of that entity as of May 2025 as a result of its acquisition by Sun Pharma. The decrease at Fortress of $1.5 million, or 59%, is related to the vesting in July of a series of grants made under the Fortress Biotech, Inc. Long Term Incentive Plan.
Current wording
The decrease in stock-based compensation of $3.2 million, or 65%, for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 is primarily attributed to the decrease at Checkpoint of $1.3 million, or 100%, due to the deconsolidation of that entity as of May 2025 as a result of its acquisition by Sun Pharma, and the decrease at Fortress of $1.5 million, or 69%, due to the vesting of grants under the LTIP in 2025.
Previous wording
Total other income (expense) increased $46.1 million, or 538%, from expense of $8.0 million for the nine months ended September 30, 2024 to income of $35.2 million for the nine months ended September 30, 2025. As a result of the merger of Checkpoint with Sun Pharma, we deconsolidated Checkpoint in May 2025, and recognized a gain from deconsolidation of approximately $27.1 million during the nine months ended September 30, 2025 (see Note 3 to the unaudited condensed consolidated financial statements). We also recognized an increase in the fair value of Urica’s equity interest in Crystalys of $15.1 million and reversed the liability associated with the repurchase obligation of $2.6 million during the nine months ended September 30, 2025 (see Note 3 to the unaudited condensed consolidated financial statements). These gains were partially offset by interest expense and financing fee expenses related to Fortress’ debt outstanding with Oaktree and Journey’s debt outstanding with SWK. The $2.9 million, or 26%, decrease in interest expense and financing fees is attributable to a loss on extinguishment of debt of $3.6 million recognized in the nine months ended September 30, 2024 related to the Company’s extinguishment of the 2020 Oaktree Note in 2024 offset by an increase of $0.4 million in interest and fees recognized in the nine months ended September 30, 2025 associated with the additional payments made to Oaktree for the Checkpoint monetization event.
Current wording
debt outstanding with Oaktree and Journey’s debt outstanding with SWK Funding LLC. The $0.6 million, or 20%, increase in interest expense and financing fees is attributable to an additional payment made to Oaktree for the Cyprium PRV sale monetization event.
Previous wording
At September 30, 2025, we had an accumulated deficit of $730.1 million, primarily as a result of R&D expenses, purchases of in-process research and development and selling, general and administrative expenses.
Current wording
At March 31, 2026, we had an accumulated deficit of $623.7 million, primarily as a result of R&D expenses, and selling, general and administrative expenses.
Previous wording
We fund our operations through cash on hand, the sale of debt and equity securities, third-party financings, out-licensing of drug product and drug product candidates and the sale of subsidiaries and partner companies. At September 30, 2025, we had cash and cash equivalents of $86.2 million, of which $38.6 million relates to Fortress and private subsidiaries primarily funded by Fortress, $19.0 million relates to Mustang, $24.9 million relates to Journey, and $3.7 million relates to Avenue. Restricted cash at September 30, 2025, was $1.2 million, which relates to certain office leases held by Fortress.
Current wording
We fund our operations through cash on hand, the sale of debt and equity securities, third-party financings, out-licensing of drug product and drug product candidates and the sale of subsidiaries and partner companies. At March 31, 2026, we had cash and cash equivalents of $255.8 million, of which $209.9 million relates to Fortress and private subsidiaries primarily funded by Fortress, $16.3 million relates to Mustang, $27.2 million relates to Journey, and $2.4 million relates to Avenue. Restricted cash at March 31, 2026, was $1.2 million, which relates to pledges to secure letters of credit in connection with certain office leases held by Fortress.
Previous wording
On May 17, 2024, the Company filed a shelf registration statement (File No. 333-279516) on Form S-3, which was declared effective on May 30, 2024 (the “2024 Shelf”). As of September 30, 2025, $42.1 million of securities were available for sale under the 2024 Shelf, subject to General Instruction I.B.6. of Form S-3, known as the “baby shelf rules,” which limit the number of securities that can be sold under registration statements on Form S-3. However, on July 5, 2024, the board of directors paused the payment of dividends on our Series A Preferred Stock until further notices. As a result, the Company is not currently eligible to use Form S-3 and has lost the ability to use the 2024 Shelf. The Company will regain eligibility to use the 2024 Shelf on the date it files its Annual Report on Form 10-K, so long as it has: (i) by that date, paid all accrued but unpaid dividends at that time and (ii) timely paid all dividends accruing since the end of the fiscal year to which such Form 10-K relates.
Current wording
On May 17, 2024, the Company filed a shelf registration statement (File No. 333-279516) on Form S-3, which was declared effective on May 30, 2024 (the “2024 Shelf”). As of March 31, 2026, $42.1 million of securities were available for sale under the 2024 Shelf, subject to General Instruction I.B.6. of Form S-3, known as the “baby shelf rules,” which limit the number of securities that can be sold under registration statements on Form S-3. However, on July 5, 2024, the board of directors paused the payment of dividends on our Series A Preferred Stock until further notice. As a result, the Company is not currently eligible to use Form S-3 and has lost the ability to use the 2024 Shelf. The Company will regain eligibility to use the 2024 Shelf on the date it files its next Annual Report on Form 10-K, so long as it has: (i) by that date, paid all accrued but unpaid dividends at that time and (ii) timely paid all dividends accruing since the end of the fiscal year to which such Form 10-K relates.
Previous wording
Because the Company is not currently eligible to use Form S-3 due to the failure to pay dividends on the Series A Preferred Stock, on April 1, 2025 the Company filed a post-effective amendment to certain prior Form S-3 registration statements to continue the registration of:
Current wording
Because the Company is not currently eligible to use Form S-3 due to the failure to pay dividends on the Series A Preferred Stock, on April 1, 2025 the Company filed a post-effective amendment to certain prior Form S-3 registration statements to continue the registration of the offer and sale of shares underlying certain previously issued warrants. This post-effective amendment was declared effective by the SEC on April 2, 2025.
Previous wording
On December 30, 2022, Journey filed a shelf registration statement on Form S-3 (File No. 333-269079) (the “Journey 2022 S-3”), which was declared effective on January 26, 2023. The Journey 2022 S-3 covers the offering, issuance and sale by Journey of up to an aggregate of $150.0 million of Journey’s common stock, preferred stock, debt securities, warrants, and units. In connection with the Journey 2022 S-3, Journey entered into a sales agreement relating to the sale of shares of Journey’s common stock in an at-the-market offering (the “Journey ATM Sales Agreement”). In accordance with the terms of the Journey ATM Sales Agreement, Journey may offer and sell up to 4,900,000 shares of its common stock, par value $0.0001 per share, from time to time. For the nine months ended September 30, 2025, Journey issued and sold approximately 1.8 million shares of common stock for net proceeds of $10.9 million under the Journey ATM Sales Agreement.
Current wording
On December 30, 2022, Journey filed a shelf registration statement on Form S-3 (File No. 333-269079) (the “Journey 2022 S-3”), which was declared effective on January 26, 2023. The Journey 2022 S-3 covers the offering, issuance and sale by Journey of up to an aggregate of $150.0 million of Journey’s common stock, preferred stock, debt securities, warrants, and units.
Previous wording
In August 2025, Journey executed a new At Market Issuance Sales Agreement (the “Journey 2025 ATM Sales Agreement”) with B. Riley Securities, Inc. and Lake Street Capital Markets, LLC (each, an “Agent” and together, the “Agents”). In accordance with the terms of the Sales Agreement, Journey may offer and sell up to 3,750,000 shares of common stock, from time to time through or to the Agents, each acting as sales agent or principal. Journey has not yet issued any shares under the Journey 2025 ATM Sales Agreement.
Current wording
In August 2025, Journey entered into a new At Market Issuance Sales Agreement (the “Journey 2025 ATM Sales Agreement”) with B. Riley Securities, Inc. and Lake Street Capital Markets, LLC (each, an “Agent” and together, the “Agents”). In accordance with the terms of the Journey 2025 ATM Sales Agreement, Journey may offer and sell up to 3,750,000 shares of common stock, from time to time through or to the Agents, each acting as sales agent or principal.
Previous wording
On May 31, 2024, Mustang filed a shelf registration statement on Form S-3 (File No. 333-279891) (the “Mustang 2024 S-3”), which was declared effective on June 12, 2024. Under the Mustang 2024 S-3, Mustang may sell up to a total of $40.0 million of its securities. As of September 30, 2025, approximately $34.2 million under the Mustang 2024 S-3 remains available for sales of securities, subject to General Instruction I.B.6. of Form S-3.
Current wording
On May 31, 2024, Mustang filed a shelf registration statement on Form S-3 (File No. 333-279891) (the “Mustang 2024 S-3”), which was declared effective on June 12, 2024. Under the Mustang 2024 S-3, Mustang may sell up to a total of $40.0 million of its securities. As of March 31, 2026, approximately $34.2 million under the Mustang 2024 S-3 remains available for sales of securities, subject to General Instruction I.B.6. of Form S-3, known as the “baby shelf rules,” which limit the amount of securities it can sell under its registration statements on Form S-3 in any 12-month period.
Previous wording
Net cash provided by investing activities for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024 increased by $10.1 million, due to the net cash increase of $9.0 million related to the sale of Checkpoint to Sun Pharma, and Mustang’s $1.2 million proceeds from the sale of its held-for-sale assets related to the exit of its manufacturing facility.
Current wording
Net cash provided by investing activities for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 decreased by $1.2 million, due to Mustang’s $1.2 million proceeds from the sale of its held-for-sale assets related to the exit of its manufacturing facility in the prior-year quarter.
Previous wording
Net cash provided by financing activities was $44.8 million for the nine months ended September 30, 2024, compared to $71.7 million of net cash provided by financing activities for the nine months ended September 30, 2025, an increase of $26.9 million. The increase is attributable to an increase in proceeds from partner companies’ equity offerings and warrant exercises of $24.5 million and the decrease in the payments made to Oaktree of $45.5 million, partially offset by decreased proceeds from the issuance of common stock for equity offerings of the Company in the current period of $17.5 million and the decrease in proceeds from long-term debt of $33.8 million.
Current wording
Net cash provided by financing activities was $52.1 million for the three months ended March 31, 2025, compared to net cash used in financing activities of $27.4 million for the three months ended March 31, 2026, a decrease of $79.5 million. The decrease is attributable to a decrease in proceeds from partner companies’ equity offerings and option and warrant exercises of $52.0 million, an increase in the payments made to Oaktree of $14.5 million, and an increase of $14.2 million in payments made for the redemption of partner company preferred shares, and a decrease in proceeds from ATM offerings of $1.0 million.
Previous wording
We enter into contracts in the normal course of business with licensors, contract research organizations (CROs), contract manufacturing organizations (CMOs) and other third parties for the procurement of various products and services, including without limitation biopharmaceutical development, biologic assay development, commercialization, clinical and preclinical development, clinical trials management, pharmacovigilance and manufacturing and supply. These contracts typically do not contain minimum purchase commitments (although they may) and are generally terminable by us upon written notice. Payments due upon termination or cancelation/delay consist of payments for services provided or expenses incurred, including non-cancelable obligations of our service providers, up to the date of cancellation; in certain cases, our contractual arrangements with CROs and CMOs include cancelation and/or delay fees and penalties.
Current wording
We enter into contracts in the normal course of business with licensors, contract research organizations (“CROs”), contract manufacturing organizations (“CMOs”) and other third parties for the procurement of various products and services, including without limitation biopharmaceutical development, biologic assay development, commercialization, clinical and preclinical development, clinical trials management, pharmacovigilance and manufacturing and supply. These contracts typically do not contain minimum purchase commitments (although they may) and are generally terminable by us for convenience. Payments due upon termination or cancelation/delay consist of payments for services provided or expenses incurred, including non-cancelable obligations of our service providers, up to the date of cancellation; in certain cases, our contractual arrangements with CROs and CMOs include cancelation and/or delay fees and penalties.
Previous wording
During the nine months ended September 30, 2025, there were no material changes in our contractual obligations and commitments, including our lease obligations, as described in our 2024 Form 10-K.
Current wording
During the three months ended March 31, 2026, there were no material changes in our contractual obligations and commitments, except our lease obligation, as described in our 2025 Form 10-K. On February 10, 2026, the Company became party to a sublease agreement with a third party to sublease all of its leased office space in New York, NY, consisting of approximately 23,000 square feet, under its existing lease with Sage Realty Corporation (the “Landlord”). The Company obtained the Landlord’s consent to the sublease, and the sublease commenced on March 15, 2026. The sublease expires on August 31, 2031.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
On January 15, 2026, Journey filed a shelf registration statement on Form S-3 (File No. 333-292758) (the “Journey 2026 S-3”), which was declared effective by the SEC on January 21, 2026. This shelf registration statement covers the offering, issuance and sale by Journey of up to an aggregate of $150.0 million of its common stock, preferred stock, debt securities, warrants, and units. The Journey
Rearranged previous paragraphs (8)
Previous report — wording carried elsewhere
Cost of Goods Sold– (excluding amortization of acquired intangible assets)
Previous report — wording carried elsewhere
Research and development (“R&D”) costs primarily consist of personnel related expenses, including salaries, benefits, travel, and other related expenses, stock-based compensation, payments made to third parties for upfront and milestone license fees, costs related to in-licensed products and technology, payments made to third party contract research organizations for preclinical and clinical studies, investigative sites for clinical trials, consultants, the cost of acquiring and manufacturing clinical trial materials, costs associated with regulatory filings and patents, laboratory costs and other supplies.
Previous report — wording carried elsewhere
The table below provides a summary of research and development by entity, for the periods presented:
Previous report — wording carried elsewhere
The table below provides a summary by entity of noncash, stock-based compensation expense included in R&D expense for the periods presented:
Previous report — wording carried elsewhere
Selling, general and administrative expenses consist principally of personnel-related costs, costs required to support the marketing and sales of our commercialized products, professional fees for legal, consulting, audit and tax services, rent and other general operating expenses not otherwise included in R&D expenses.
Previous report — wording carried elsewhere
The table below provides a summary by entity of selling, general and administrative expenses for the periods presented:
Previous report — wording carried elsewhere
The table below provides a summary by entity of noncash, stock-based compensation expense included in selling, general and administrative expense for the periods presented:
Previous report — wording carried elsewhere
This post-effective amendment was declared effective by the SEC on April 2, 2025.