Fortress Biotech Inc

Previous wording

Fortress Biotech, Inc. (“Fortress” or the “Company”) is a biopharmaceutical company focused on acquiring and advancing assets to enhance long-term value for shareholders through product revenue, equity holding and dividend and royalty revenue streams. Fortress works in concert with its extensive network of key opinion leaders to identify and evaluate promising products and product candidates for potential acquisition. The Company has executed such arrangements in partnership with some of the world’s foremost universities, research institutes and pharmaceutical companies, including City of Hope National Medical Center (“COH” or “City of Hope”), Fred Hutchinson Cancer Center, Dana-Farber Cancer Institute, Nationwide Children’s Hospital, Cincinnati Children’s Hospital Medical Center, Columbia University, the University of Pennsylvania, AstraZeneca plc and Dr. Reddy’s Laboratories, Ltd.

Current wording

Fortress Biotech, Inc. (“Fortress” or the “Company”) is a biopharmaceutical company focused on acquiring and advancing assets to enhance long-term value for shareholders through product revenue, equity holding and dividend and royalty revenue streams. Fortress works in concert with its extensive network of key opinion leaders to identify and evaluate promising products and product candidates for potential acquisition. We have executed such arrangements in partnership with some of the world’s foremost universities, research institutes and pharmaceutical companies, including City of Hope National Medical Center (“COH” or “City of Hope”), Fred Hutchinson Cancer Center, Dana-Farber Cancer Institute, Nationwide Children’s Hospital, Columbia University, the University of Pennsylvania, AstraZeneca plc and Dr. Reddy’s Laboratories, Ltd.

Previous wording

Following the exclusive license or other acquisition of the intellectual property underpinning a product or product candidate, Fortress leverages its business, scientific, regulatory, legal and finance expertise to help the partners achieve their goals. Partner and subsidiary companies then assess a broad range of strategic arrangements to accelerate and provide additional funding to support research and development, including joint ventures, partnerships, out-licensings, sales transactions, and public and private financings. To date, four partner companies are publicly-traded, and three subsidiaries have consummated strategic partnerships with industry leaders, including AstraZeneca plc as successor-in-interest to Alexion Pharmaceuticals, Inc. (“AstraZeneca”) and Sentynl Therapeutics, Inc. (“Sentynl”).

Current wording

Following the exclusive license or other acquisition of the intellectual property underpinning a product or product candidate, Fortress leverages its business, scientific, regulatory, legal and finance expertise to help its subsidiaries and partner companies achieve their goals. Partner and subsidiary companies then assess a broad range of strategic arrangements to accelerate and provide additional funding to support research and development, including joint ventures, partnerships, out-licensings, sales transactions, and public and private financings. To date, four partner companies are publicly-traded, and three subsidiaries have consummated strategic partnerships with industry leaders, including AstraZeneca plc as successor-in-interest to Alexion Pharmaceuticals, Inc. (“AstraZeneca”) and Sentynl Therapeutics, Inc. (“Sentynl”).

Previous wording

Our subsidiaries and partner companies that are pursuing development and/or commercialization of biopharmaceutical products and product candidates are: Avenue Therapeutics, Inc. (Nasdaq: ATXI, “Avenue”), Baergic Bio, Inc. (“Baergic,” a subsidiary of Avenue), Cellvation, Inc. (“Cellvation”), Checkpoint Therapeutics, Inc. (Nasdaq: CKPT, “Checkpoint”), Cyprium Therapeutics, Inc. (“Cyprium”), Helocyte, Inc. (“Helocyte”), Journey Medical Corporation (Nasdaq: DERM, “Journey” or “JMC”), Mustang Bio, Inc. (Nasdaq: MBIO, “Mustang”) and Oncogenuity, Inc. (“Oncogenuity”).

Current wording

Our subsidiaries and partner companies that are pursuing development and/or commercialization of biopharmaceutical products and product candidates are: Checkpoint Therapeutics, Inc. (Nasdaq: CKPT, “Checkpoint”), Journey Medical Corporation (Nasdaq: DERM, “Journey” or “JMC”), Mustang Bio, Inc. (Nasdaq: MBIO, “Mustang”), Avenue Therapeutics, Inc. (OTC: ATXI, “Avenue”), Baergic Bio, Inc. (“Baergic,” a subsidiary of Avenue), Cellvation, Inc. (“Cellvation”), Cyprium Therapeutics, Inc. (“Cyprium”), Helocyte, Inc. (“Helocyte”), Oncogenuity, Inc. (“Oncogenuity”) and Urica Therapeutics, Inc. (“Urica”).

Previous wording

Cosibelimab (anti-PD-L1 antibody)

Current wording

UNLOXCYT™ (cosibelimab-ipdl, anti-PD-L1 antibody)

Previous wording

We are a “smaller reporting company,” meaning that either (i) the market value of our shares held by non-affiliates is less than $250 million or (ii) the market value of our shares held by non-affiliates is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our shares held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our shares held by non-affiliates is less than $700 million. As a smaller reporting company, we chose to present only the two most recent fiscal years of audited financial statements in the 2023 Form 10-K, have reduced disclosure obligations regarding executive compensation and certain other matters.

Current wording

We are a “smaller reporting company,” meaning that either (i) the market value of our shares held by non-affiliates is less than $250 million or (ii) the market value of our shares held by non-affiliates is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (x) the market value of our shares held by non-affiliates is less than $250 million or (y) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our shares held by non-affiliates is less than $700 million. As a smaller reporting company, we chose to present only the two most recent fiscal years of audited financial statements in the 2024 Form 10-K, have reduced disclosure obligations regarding executive compensation and utilize certain other accommodations available to smaller reporting companies.

Previous wording

The following table summarizes the Company’s ownership of the issued and outstanding common and preferred shares in certain consolidated Fortress subsidiaries as of the period presented:

Current wording

The following table summarizes the Company’s ownership of the issued and outstanding common and preferred shares in certain consolidated Fortress subsidiaries as of the date indicated:

Previous wording

We incurred $5.3 million and $6.4 million of costs of goods sold in connection with the sale of JMC branded and generic products for the quarters ended September 30, 2024 and 2023, respectively. Cost of goods sold decreased by $1.1 million, or 18% quarter-over-quarter, with the decrease mainly due to$0.6 million in inventory charges recorded in the prior year period and a decrease of $0.2 million in product royalties from the same period in 2023, resulting from lower sales of Accutane and the contractual expiration of the Exelderm product royalty in November 2023.

Current wording

We incurred $4.8 million and $6.0 million of costs of goods sold in connection with the sale of Journey’s branded and generic products for the quarters ended March 31, 2025 and 2024, respectively. Cost of goods sold decreased by $1.2 million, or 20% quarter-over-quarter, related to product sales mix, driven mainly by the decrease in Accutane revenue.

Previous wording

Research and development costs primarily consist of personnel related expenses, including salaries, benefits, travel, and other related expenses, stock-based compensation, payments made to third parties for license and milestone 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.

Current wording

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 wording

For the quarters ended September 30, 2024 and 2023, research and development expenses were approximately $9.4 million and $20.3 million, respectively. The table below provides a summary of research and development by entity, for the periods presented:

Current wording

The table below provides a summary of research and development by entity, for the periods presented:

Previous wording

Note 1: Includes the following subsidiaries: Cellvation, Cyprium, Helocyte, Oncogenuity and Urica.

Current wording

Note 1: Includes Fortress and private subsidiaries primarily funded by Fortress: Cellvation, Cyprium, Helocyte, Oncogenuity and Urica.

Previous wording

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 research and development expenses. For the three months ended September 30, 2024 and 2023, selling, general and administrative expenses were $22.0 million and $21.7 million, respectively. The table below provides a summary by entity of selling, general and administrative expenses for the periods presented:

Current wording

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 wording

For the three months ended September 30, 2024, the increase in selling, general and administrative expenses of $0.3 million, or 1%, is primarily attributable to an increase of $2.8 million at Journey due to increased selling and marketing expenses as it prepares for the Emrosi launch, and an increase of $1.1 million at Checkpoint due to an increase in stock-based compensation of $0.7 million due to new employee grants, and an increase in professional fees of $0.4 million. The decrease of $1.4 million at Fortress is related to cost-reduction and optimization efforts, and the decrease in “Other” is primarily attributable to a reduction in general and administrative expenses at Cyprium of $1.2 million. The decrease at Mustang of $0.7 million is due to the workforce reduction that took place in April 2024.

Current wording

For the three months ended March 31, 2025, the increase in selling, general and administrative expenses of $7.7 million, or 43%, is primarily attributable to an increase of $4.9 million at Checkpoint due to primarily to an increase in legal and accounting fees of $2.5 million and an increase of $1.5 million for costs related to the pending transaction with Sun Pharma, including fees to financial advisors, and an increase in stock-based compensation of $1.1 million, and to an increase of $2.1 million at Journey due to incremental operating activities related to the launch and commercialization of Emrosi.

Previous wording

Note 1: Includes the following subsidiaries: Cellvation, Cyprium, Helocyte, Oncogenuity and Urica.

Current wording

Note 1: Includes Fortress and private subsidiaries primarily funded by Fortress: Cellvation, Cyprium, Helocyte, Oncogenuity and Urica.

Previous wording

Total other income (expense) decreased $7.7 million, or 243%, from income of $3.2 million for the quarter ended September 30, 2023 to expense of $4.5 million for the quarter ended September 30, 2024, primarily due to the increase of $3.7 million in interest expense and financing fees related to the Oaktree debt paid off by Fortress in 2024 resulting in a loss on extinguishment of debt of $3.6 million, and the $4.5 million increase in the gain on a decrease in fair value of the warrant liabilities, comprised of warrants issued by Checkpoint and Avenue.

Current wording

Total other income (expense) decreased $0.1 million, or 3%, from expense of $2.5 million for the quarter ended March 31, 2024 to expense of $2.4 million for the quarter ended March 31, 2025, primarily due to the decrease in the loss on common stock warrant liabilities of $0.6 million, partially offset by the decrease in interest income of $0.3 million and an increase in interest expense and financing fees of $0.2 million.

Previous wording

We fund our operations through cash on hand, the sale of equity and debt securities, from the sales of subsidiaries/partner companies, and from the proceeds resulting from the exercise of warrants and stock options. At September 30, 2024, we had cash and cash equivalents of $58.9 million, of which $25.6 million relates to Fortress and private subsidiaries primarily funded by Fortress, $4.7 million relates to Checkpoint, $3.5 million relates to Mustang, $22.5 million relates to Journey, and $2.6 million relates to Avenue. Restricted cash at September 30, 2024 was $2.1 million, of which $1.2 million relates to Fortress, $0.4 million relates to Mustang, and $0.5 million relates to Cyprium.

Current wording

We fund our operations through cash on hand, the sale of debt, third-party financings, and the sale of subsidiaries and partner companies. securities. At March 31, 2025, we had cash and cash equivalents of $91.3 million, of which $19.5 million relates to Fortress and private subsidiaries primarily funded by Fortress, $33.0 million relates to Checkpoint, $14.2 million relates to Mustang, $21.1 million relates to Journey, and $3.5 million relates to Avenue. Restricted cash at March 31, 2025 was $1.2 million, which relates to certain office leases held by Fortress.

Previous wording

We will require additional financing to fully develop and prepare regulatory filings and obtain regulatory approvals for our existing and new product candidates, fund operating losses, and, if deemed appropriate, establish or secure through third parties manufacturing for our potential products, and sales and marketing capabilities. We have funded our operations to date primarily through the sale of equity and debt securities. At September 30, 2024, we had cash and cash equivalents of $58.9 million, of which $25.6 million relates to Fortress and private subsidiaries primarily funded by Fortress, $4.7 million relates to Checkpoint, $3.5 million relates to Mustang, $22.5 million relates to Journey, and $2.6 million relates to Avenue. We believe that our current cash and cash equivalents are sufficient to fund operations for at least the next 12 months. Our failure to raise capital as and when needed would have a material adverse impact on our financial condition and our ability to pursue our business strategies. We may seek funds through equity or debt financings, joint venture or similar development collaborations, the sales of subsidiaries/partner companies, royalty financings, or through other sources of financing; the rising interest rate environment may cause the Company to pay more interest on its various debt instruments, which could lead to higher operating expenses.

Current wording

We may require significant additional financing to fully develop and prepare regulatory filings and obtain regulatory approvals for our existing and new product candidates, fund operating losses, and, if deemed appropriate, establish or secure through third parties manufacturing for our potential products, and sales and marketing capabilities. We have funded our operations to date primarily through the sale of equity and debt securities. We believe that our current cash and cash equivalents is sufficient to fund operations for at least the next twelve months. Our failure to raise capital as and when needed would have a material adverse impact on our financial condition and our ability to pursue our business strategies. We may seek funds through equity or debt financings, joint venture or similar development collaborations, the sale of partner companies, royalty financings, or through other sources of financing. See “Item 1A. Risk Factors—Risks Pertaining to the Need for and Impact of Existing and Additional Financing Activities.”

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, 2024, $43.5 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.

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, 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 no longer 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.

Previous wording

During the nine months ended September 30, 2024, the Company issued and sold approximately 1.8 million shares at an average price of $1.95 per share for gross proceeds of $3.5 million under the Company’s at-the-market offering program.

Current wording

During the three months ended March 31, 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.

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 has entered into the Sales Agreement relating to shares of the Journey’s common stock. In accordance with the terms of the 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, 2024, Journey issued and sold approximately 0.3 million shares of common stock at for gross proceeds of $1.7 million under the Journey ATM. In connection with these sales, Journey paid aggregate fees of approximately $46,000. At September 30, 2024, 3.8 million shares remain available for issuance under the Journey 2022 S-3.

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. 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 three months ended March 31, 2025, Journey issued and sold approximately 0.8 million shares of common stock for gross proceeds of $4.1 million under the Journey ATM Sales Agreement. At March 31, 2025, 1.8 million shares remain available for issuance under the Journey ATM Sales Agreement.

Previous wording

In March 2023, Checkpoint filed shelf registration statement (File No. 333-270843) on Form S-3 (the “Checkpoint 2023 S-3”), which was declared effective May 5, 2023. Under the Checkpoint 2023 S-3, Checkpoint may sell up to a total of $150 million of its securities. As of September 30, 2024, approximately $65.7 million of the securities remains available for sale through the Checkpoint 2023 S-3.

Current wording

In March 2023, Checkpoint filed a registration statement on Form S-3 (File No. 333-270843), which was declared effective May 5, 2023 (the “Checkpoint 2023 S-3”). Under the Checkpoint 2023 S-3, Checkpoint may sell up to a total of $150 million of its securities. As of March 31, 2025, approximately $65.7 million of the securities remain available for sale through the Checkpoint 2023 S-3.

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, 2024, approximately $36.3 million of the Mustang 2024 S-3 remains available for sales of securities, subject to the General Instruction I.B.6 to Form S-3. The ability of Mustang to register new offers and sales of securities under the Mustang 2024 S-3 expires on June 12, 2027.

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, 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.

Previous wording

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. Under the Mustang ATM, Mustang pays the sales agents for the program a commission rate of 3.0% of the gross proceeds from the sale of any shares of common stock. During the nine months ended September 30, 2024, Mustang issued approximately 2.7 million shares through the Mustang ATM for net proceeds of approximately $1.2 million.

Current wording

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 three months ended March 31, 2025, Mustang issued and sold approximately 54,000 shares through the Mustang ATM for net proceeds of approximately $0.6 million.

Previous wording

In May 2024, Avenue entered into an At-the-Market Offering Agreement (the “Avenue ATM”) with H.C. Wainwright & Co. LLC ("Wainwright") under which Avenue may offer and sell, from time to time at its sole discretion, up to $3,850,000 of shares of its common stock, par value $0.0001 per share (the "Shares"), through or to Wainwright. The offer and sale of the Shares will be made pursuant to a base prospectus forming a part of the 2021 Avenue S-3, and the related prospectus supplement dated May 10, 2024. During the nine months ended September 30, 2024, Avenue issued 245,617 shares through the Avenue ATM for net proceeds of $0.9 million.

Current wording

In May 2024, Avenue entered into an At-the-Market Offering Agreement (the “Avenue ATM”) under which Avenue may offer and sell, from time to time at its sole discretion, up to $3.9 million of shares of its common stock. The offers and sales of the shares are made pursuant the Avenue 2021 S-3, and the related prospectus supplement dated May 10, 2024. During the three months ended March 31, 2025, Avenue issued 0.9 million shares through the Avenue ATM for net proceeds of $2.1 million. Avenue is no longer able to utilize the Avenue ATM as a result of the suspension of its stock from trading on the Nasdaq.

Previous wording

Net cash used in operating activities decreased $26.0 million from the nine months ended September 30, 2023, as compared to the nine months ended September 30, 2024. The decrease is due to the decrease of $30.6 million in net loss, the $11.1 million decrease in the expense associated with subsidiaries/partner companies’ warrant liabilities, and the $8.0 million decrease resulting from changes in operating assets and liabilities, offset in part by the $3.1 million change in the expense for research and development – licenses acquired, $4.1 million change in the expense for loss from deconsolidation and dissolution of subsidiaries, and $3.1 million for Journey’s asset impairment loss in the prior period.

Current wording

Net cash used in operating activities decreased $5.8 million from the three months ended March 31, 2024, as compared to the three months ended March 31, 2025. The decrease is due to the decrease of $14.3 million in net loss offset by the $8.4 million decrease resulting from changes in operating assets and liabilities.

Previous wording

Net cash used in financing activities was $10.9 million for the nine months ended September 30, 2023, compared to $44.8 million of net cash provided by financing activities for the nine months ended September 30, 2024, an increase of $55.7 million. The increase is attributable to the funds used in the prior period to pay off partner companies’ long-term debt of $50.4 million and JMC’s line of credit of $30.9 million, offset by loan proceeds of $38.7 million, proceeds from partner companies’ sale of stock, options and warrants of $37.1 million in the current period.

Current wording

Net cash provided by financing activities was $27.9 million for the three months ended March 31, 2024, compared to $52.1 million of net cash provided by financing activities for the three months ended March 31, 2025, an increase of $24.3 million. The increase is attributable to proceeds from partner companies’ equity offerings and warrant exercises, partially offset by decreased proceeds from the issuance of common stock for equity offerings of the Company in the current period.

Previous wording

During the nine months ended September 30, 2024, there were no material changes in our contractual obligations and commitments, including our lease obligations, as described in our 2023 Form 10-K with the exception of the long-term debt. On July 25, 2024, Fortress entered into the $50.0 million senior secured credit agreement with a maturity date of July 25, 2027 with Oaktree Fund Administration, LLC (the “New Oaktree Agreement”). The Company borrowed $35.0 million under the New Oaktree Agreement on the Closing Date (the “2024 Oaktree Note”) and is eligible to draw up to an additional $15.0 million at the lenders’ discretion to support future business development activities. The 2024 Oaktree Note replaces the previous note made to the Oaktree in 2020, with respect to which the remaining $50.0 million balance on the prior note was repaid in full.

Current wording

During the three months ended March 31, 2025, there were no material changes in our contractual obligations and commitments, including our lease obligations, as described in our 2024 Form 10-K.