Core Insights - Fortress Biotech, Inc. is under investigation by Holzer & Holzer, LLC for potential non-compliance with federal securities laws following the FDA's issuance of a Complete Response Letter regarding its New Drug Application for CUTX-101, citing cGMP deficiencies at the manufacturing facility [1] Company Summary - Fortress Biotech, Inc. (NASDAQ: FBIO) announced that the FDA issued a Complete Response Letter for CUTX-101, which has led to a decline in the company's stock price [1] - The Complete Response Letter indicates that there were observed deficiencies in current Good Manufacturing Practices (cGMP) at the facility where CUTX-101 is produced [1] Legal Context - Holzer & Holzer, LLC is a law firm that specializes in representing shareholders and investors in securities litigation, including class action and derivative litigation [3] - The firm has a history of recovering significant amounts for shareholders affected by corporate misconduct [3]

Core Insights - Urica Therapeutics has sold dotinurad to Crystalys Therapeutics in 2024, receiving equity and a 3% royalty on future net sales [1][3] - Crystalys has successfully closed a $205 million Series A financing to support Phase 3 clinical trials for dotinurad, a next-generation URAT1 inhibitor for gout treatment [1][2] - Dotinurad has shown robust efficacy and a well-defined safety profile in multiple clinical studies across Asia, leading to its approval in Japan, China, Philippines, and Thailand [2] Company Developments - The financing round for Crystalys was co-led by Novo Holdings, SR One, and Catalys Pacific, with participation from various investors including Perceptive Xontogeny Venture Funds and Lightstone Ventures [1] - Fortress Biotech, the parent company of Urica, aims to expedite dotinurad's development in the U.S. and Europe, potentially benefiting millions of gout patients [3] - Fortress has achieved significant milestones, including the acquisition of Checkpoint Therapeutics by Sun Pharma, which provided approximately $28 million upfront [3] Strategic Positioning - Urica holds a minority equity position in Crystalys and has the right to appoint a board member, enhancing its influence in the development of dotinurad [3] - Fortress Biotech focuses on acquiring and advancing biopharmaceutical assets to enhance long-term shareholder value through product revenue and royalties [4] - The company has established partnerships with leading academic institutions and biopharmaceutical companies to maximize its product opportunities [4]

Core Insights - Premarket trading is showing notable activity with early price movements indicating potential opportunities before the market opens [1] Premarket Gainers - Galaxy Payroll Group Limited (GLXG) increased by 39% to $5.34 - Lithium Americas Corp. (LAC) rose by 31% to $7.52 - Senmiao Technology Limited (AIHS) gained 22% to $2.45 - The AES Corporation (AES) saw a 10% increase to $14.53 - Strive, Inc. (ASST) also increased by 10% to $2.77 - Shoulder Innovations, Inc. (SI) rose by 9% to $13.78 - Top KingWin Ltd (WAI) increased by 8% to $3.80 - Southland Holdings, Inc. (SLND) saw a 7% increase to $4.61 - CaliberCos Inc. (CWD) rose by 6% to $4.75 - Mannatech, Incorporated (MTEX) increased by 5% to $10.53 [3] Premarket Losers - Real Messenger Corporation (RMSG) decreased by 16% to $2.01 - Etoiles Capital Group Co., Ltd (EFTY) fell by 14% to $14.45 - Enanta Pharmaceuticals, Inc. (ENTA) dropped by 13% to $10.41 - CollPlant Biotechnologies Ltd. (CLGN) saw an 11% decrease to $2.39 - Fortress Biotech, Inc. (FBIO) declined by 10% to $3.30 - Uni-Fuels Holdings Limited (UFG) fell by 9% to $7.52 - Alset Inc. (AEI) decreased by 9% to $2.30 - JFB Construction Holdings (JFB) saw a 5% decline to $12.20 - SHF Holdings, Inc. (SHFS) dropped by 5% to $6.80 - Phio Pharmaceuticals Corp. (PHIO) decreased by 5% to $2.34 [4]

Core Viewpoint - Fortress Biotech and its subsidiary Cyprium Therapeutics received a Complete Response Letter from the FDA regarding the New Drug Application for CUTX-101, intended for treating Menkes disease in pediatric patients [1][3]. Group 1: Company Developments - In December 2023, Sentynl Therapeutics assumed full responsibility for the development and commercialization of CUTX-101 from Cyprium [2]. - Sentynl expects to address the FDA's concerns and pursue resubmission of the CUTX-101 NDA promptly [2][3]. - The CRL highlighted cGMP deficiencies at the manufacturing facility, but did not raise concerns regarding the efficacy and safety data of CUTX-101 [3]. Group 2: Financial and Regulatory Aspects - Sentynl will transfer a Rare Pediatric Disease Priority Review Voucher to Cyprium upon approval and Cyprium is eligible for royalties on net sales of CUTX-101, along with up to $129 million in development and sales milestones [4]. - The CUTX-101 NDA was initially granted Priority Review by the FDA, supported by positive clinical efficacy results showing significant improvement in overall survival for Menkes disease patients receiving early treatment [5]. Group 3: Disease Background - Menkes disease is a rare X-linked recessive pediatric condition caused by mutations in the copper transporter ATP7A, with a birth prevalence estimated between 1 in 34,810 and 1 in 8,664 live male births [6]. - The disease is characterized by severe neurological symptoms and high mortality rates in untreated cases, with many patients not surviving past the age of 2-3 years [6]. Group 4: Company Overview - Cyprium Therapeutics focuses on developing therapies for Menkes disease and related disorders, having entered into a Cooperative Research and Development Agreement with the NIH to advance CUTX-101 [7]. - Fortress Biotech is an innovative biopharmaceutical company with a diverse portfolio, including eight marketed products and multiple development programs across various therapeutic areas [8][9].

Company Highlights - Aurinia Pharmaceuticals Inc. (AUPH) has seen solid growth for its product LUPKYNIS, with expected net product sales for 2025 ranging from $250 million to $260 million, up from $216.2 million last year [2][3] - Arrowhead Pharmaceuticals Inc. (ARWR) is preparing for its first commercial launch in 2025, with its lead drug candidate Plozasiran under FDA review, decision expected on November 18, 2025 [4][5] - Beta Bionics Inc. (BBNX) reported a 54% growth in second-quarter net sales, with expectations for full-year 2025 net sales to range between $88 million and $93 million, compared to $65.1 million last year [7][8] - Kiniksa Pharmaceuticals International plc (KNSA) anticipates net product revenue for its drug Arcalyst to be between $625 million and $640 million for 2025, up from $417 million in 2024 [10][11] - Ionis Pharmaceuticals Inc. (IONS) generated net product sales of $19 million in Q2 2025, with a supplemental new drug application expected by year-end [12][14] - Stoke Therapeutics Inc. (STOK) is developing Zorevunersen for Dravet syndrome, with a 52-week high of $24.60 reached recently, representing an 82% gain in less than two months [16][17] - Fortress Biotech Inc. (FBIO) is awaiting an FDA decision on its investigational drug CUTX-101 for Menkes disease, expected on September 30, 2025 [18][21] Stock Performance - AUPH stock increased by 168% over 1.5 years, reaching a 52-week high of $12.87 [3] - ARWR stock gained 65% in less than 9 months, hitting a 52-week high of $31.13 [5] - BBNX stock rose nearly 55% in less than 4 months, reaching a 52-week high of $26.66 [8] - KNSA stock saw a 46% increase in less than four months, touching a 52-week high of $37.34 [11] - IONS stock gained 52% in less than two months, reaching a 52-week high of $64.72 [15] - STOK stock increased by 82% in less than two months, achieving a 52-week high of $24.60 [17] - FBIO stock rose by 61% in less than a month, reaching a 52-week high of $3.97 [21]

Company Overview - Fortress Biotech, Inc. is 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 income [2] - The company has eight marketed prescription pharmaceutical products and multiple programs in development across various therapeutic areas including oncology, dermatology, and rare diseases [2] - Fortress leverages its significant biopharmaceutical industry expertise and network to expand and advance its portfolio of product opportunities [2] Partnerships and Collaborations - Fortress has established partnerships with leading academic research institutions and biopharmaceutical companies, including AstraZeneca, City of Hope, Fred Hutchinson Cancer Center, Nationwide Children's Hospital, Columbia University, Dana Farber Cancer Center, and Sentynl Therapeutics [2] Upcoming Events - Lindsay A. Rosenwald, M.D., Chairman, President, and CEO of Fortress, will present a corporate overview at the H.C. Wainwright 27th Annual Global Investment Conference, with the presentation available for on-demand viewing starting September 5, 2025 [1] - The company will also participate in virtual one-on-one meetings during the conference from September 8-11, 2025 [1]

分组1 - Fortress Biotech reported a quarterly loss of $0.46 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.31, representing an earnings surprise of -48.39% [1] - The company posted revenues of $16.41 million for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 13.66%, compared to $14.9 million in the same quarter last year [2] - Fortress Biotech has surpassed consensus revenue estimates two times over the last four quarters [2] 分组2 - The stock has underperformed the market, losing about 4.7% since the beginning of the year, while the S&P 500 gained 10% [3] - The current consensus EPS estimate for the coming quarter is -$0.24 on revenues of $19.88 million, and for the current fiscal year, it is -$1.29 on revenues of $103.09 million [7] - The Zacks Industry Rank for Medical - Biomedical and Genetics is currently in the bottom 41% of over 250 Zacks industries, indicating potential challenges for the sector [8]

PART I. FINANCIAL INFORMATION This section presents the company's unaudited condensed consolidated financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures [Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Item%201.%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The company reported a net income attributable to Fortress of $4.9 million for the six months ended June 30, 2025, a significant improvement from a net loss of $26.4 million in the same period of 2024, primarily driven by a $27.1 million gain from the deconsolidation of its subsidiary, Checkpoint Therapeutics, following its sale to Sun Pharma [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $74,386 | $57,263 | | Total current assets | $110,396 | $90,371 | | Total assets | $159,895 | $144,223 | | **Liabilities & Equity** | | | | Total current liabilities | $57,521 | $71,399 | | Total liabilities | $122,512 | $145,867 | | Total stockholders' equity (deficit) | $37,383 | $(1,644) | - The company's financial position improved significantly, moving from a stockholders' deficit of **$1.6 million** at the end of 2024 to a positive stockholders' equity of **$37.4 million** as of June 30, 2025, mainly due to a reduction in total liabilities and an increase in cash[22](index=22&type=chunk) [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Revenue | $16,413 | $14,896 | $29,552 | $27,926 | | Loss from Operations | $(36,473) | $(27,788) | $(58,790) | $(64,352) | | Gain from deconsolidation of subsidiary | $27,127 | $0 | $27,127 | $0 | | Net Income (Loss) attributable to Fortress | $15,486 | $(10,948) | $4,902 | $(26,365) | | EPS - Diluted | $0.45 | $(0.73) | $0.02 | $(1.76) | - A significant gain of **$27.1 million** from the deconsolidation of a subsidiary (Checkpoint) in Q2 2025 was the primary driver for the company reporting net income attributable to Fortress, compared to a net loss in the prior year period[24](index=24&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=14&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(47,123) | $(47,225) | | Net cash provided by investing activities | $7,251 | $0 | | Net cash provided by financing activities | $56,663 | $42,124 | - Cash from investing activities was positive in H1 2025 due to a **$6.1 million** net cash increase upon the deconsolidation of a subsidiary and **$1.2 million** from the sale of property and equipment[38](index=38&type=chunk) - Financing activities provided **$56.7 million** in cash, primarily from partner companies' equity offerings, options, and warrant exercises, which generated **$54.3 million**[41](index=41&type=chunk) [Notes to Financial Statements](index=16&type=section&id=Notes%20to%20Financial%20Statements) - In May 2025, Fortress's partner company, Checkpoint Therapeutics, was acquired by Sun Pharma, leading Fortress to deconsolidate Checkpoint and record a **$27.1 million** gain on the transaction, with **$25.1 million** in cash proceeds received in June 2025 and eligibility for future royalties and contingent payments[60](index=60&type=chunk)[67](index=67&type=chunk) - On July 5, 2024, the Board of Directors paused the monthly dividend on its 9.375% Series A Cumulative Redeemable Perpetual Preferred Stock, resulting in approximately **$8.0 million** in total undeclared and cumulated dividends in arrears as of June 30, 2025[119](index=119&type=chunk)[120](index=120&type=chunk) - The company's debt primarily consists of the 2024 Oaktree Note (**$30.4M**) and the SWK Term Loan (**$25.0M**), with the Oaktree note including financial covenants such as a minimum liquidity requirement of **$7.0 million** and a minimum net sales test for its subsidiary Journey, all of which the company was in compliance with as of June 30, 2025[92](index=92&type=chunk)[97](index=97&type=chunk)[100](index=100&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=61&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the 10% increase in Q2 2025 net revenue to the successful launch of Journey's product Emrosi, which offset a decline in Accutane sales, while the significant increase in net income was driven by the one-time gain from the sale of Checkpoint, and the company believes its current cash of $74.4 million is sufficient to fund operations for at least the next twelve months [Overview and Recent Events](index=61&type=section&id=Overview%20and%20Recent%20Events) - Fortress's business model focuses on acquiring and advancing biopharmaceutical assets through a network of subsidiary and partner companies[182](index=182&type=chunk) - A key recent event was the acquisition of partner company Checkpoint Therapeutics by Sun Pharma in May 2025, resulting in **$28.0 million** in proceeds to Fortress and future royalty/milestone eligibility[188](index=188&type=chunk) - Subsidiary Journey Medical launched Emrosi in March 2025 for the treatment of rosacea, which is now a key revenue driver[187](index=187&type=chunk) - Subsidiary Cyprium's NDA for CUTX-101 for Menkes disease was accepted for priority review by the FDA with a target action date of September 30, 2025[192](index=192&type=chunk) [Results of Operations](index=70&type=section&id=Results%20of%20Operations) Comparison of Three Months Ended June 30, 2025 and 2024 (in thousands) | Metric | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Revenue | $16,413 | $14,896 | $1,517 | 10% | | R&D Expense | $8,126 | $12,671 | $(4,545) | (36)% | | SG&A Expense | $38,757 | $20,823 | $17,934 | 86% | | Net Income (Loss) to Fortress | $15,486 | $(10,948) | $26,434 | (241)% | - The **10% increase** in Q2 2025 net revenue was driven by **$2.8 million** from the new product Emrosi, which offset a decline in Accutane sales due to market competition[209](index=209&type=chunk) - R&D expenses decreased by **36%** in Q2 2025, primarily due to a **$4.3 million** reduction in spending at Mustang following its 2024 restructuring and a **$1.2 million** decrease at Avenue[216](index=216&type=chunk) - SG&A expenses increased by **86%** in Q2 2025, mainly due to a **$17.7 million** increase at Checkpoint related to transaction costs for the Sun Pharma acquisition and accelerated stock-based compensation[218](index=218&type=chunk) [Liquidity and Capital Resources](index=83&type=section&id=Liquidity%20and%20Capital%20Resources) - As of June 30, 2025, the company had **$74.4 million** in cash and cash equivalents, with **$38.1 million** held by the parent entity and its private subsidiaries[245](index=245&type=chunk) - Management believes current cash is sufficient to fund operations for at least the next twelve months[246](index=246&type=chunk) - The company's ability to use its Form S-3 shelf registration for capital raises is currently suspended because it paused dividend payments on its Series A Preferred Stock in July 2024[247](index=247&type=chunk) - During the first six months of 2025, partner companies raised significant capital: Checkpoint received **~$47.3M** from warrant exercises, Mustang raised **~$7.4M** from an equity offering and ATM sales, and Journey raised **$4.1M** from its ATM program[251](index=251&type=chunk)[252](index=252&type=chunk)[256](index=256&type=chunk) [Quantitative and Qualitative Disclosures About Market Risks](index=89&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risks) As a "smaller reporting company," Fortress Biotech is not required to provide the information for this item - The company is exempt from this disclosure requirement due to its status as a "smaller reporting company"[269](index=269&type=chunk) [Controls and Procedures](index=89&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[270](index=270&type=chunk) - No material changes in internal control over financial reporting occurred during the most recent quarter[271](index=271&type=chunk) PART II. OTHER INFORMATION This section details legal proceedings, risk factors, equity security sales, defaults on senior securities, and other relevant information [Legal Proceedings](index=90&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material developments in legal proceedings for the quarter ended June 30, 2025, noting that it may be subject to routine litigation in the ordinary course of business but does not expect any pending proceedings to have a material adverse effect - There were no reportable events or material developments regarding legal proceedings during the quarter[273](index=273&type=chunk) [Risk Factors](index=90&type=section&id=Item%201A.%20Risk%20Factors) The company outlines extensive risks associated with its business, including the early stage of most product candidates, the inherent uncertainty of drug development and regulatory approval, a history of operating losses, reliance on debt financing with restrictive covenants, and the impact of paused preferred stock dividends on capital raising [Risks Inherent in Drug Development](index=90&type=section&id=Risks%20Inherent%20in%20Drug%20Development) - Most product candidates are in early development stages, requiring substantial capital and facing a high risk of failure in clinical trials or during regulatory review[276](index=276&type=chunk) - The drug development process is subject to extensive and costly regulation by the FDA and other authorities, which can cause significant delays or prevent approval[279](index=279&type=chunk) - The company faces intense competition from larger pharmaceutical companies with greater resources, which could render its product candidates obsolete or noncompetitive[290](index=290&type=chunk)[291](index=291&type=chunk) [Risks Pertaining to Financing Activities](index=101&type=section&id=Risks%20Pertaining%20to%20the%20Need%20for%20and%20Impact%20of%20Existing%20and%20Additional%20Financing%20Activities) - The company has a history of operating losses, with an accumulated deficit of **$736.0 million** as of June 30, 2025, and expects losses to continue[310](index=310&type=chunk) - The company relies on debt financing, and its credit agreement with Oaktree contains restrictive covenants that limit operational flexibility and require it to meet certain financial targets, such as minimum liquidity and sales levels for Journey[308](index=308&type=chunk)[309](index=309&type=chunk) - The company has paused dividend payments on its Series A Preferred Stock, which makes it currently ineligible to use the more efficient Form S-3 for raising capital, potentially increasing future financing costs and complexity[323](index=323&type=chunk)[324](index=324&type=chunk)[325](index=325&type=chunk) [Risks Pertaining to Revenue Stream from Journey Medical](index=107&type=section&id=Risks%20Pertaining%20to%20Our%20Existing%20Revenue%20Stream%20from%20Journey%20Medical%20Corporation) - The company's operating income is primarily derived from the sale of dermatology products through its partner company, Journey, and any setbacks with these products could significantly harm financial results[328](index=328&type=chunk) - A significant portion of Journey's product sales come from products without patent protection (e.g., Accutane, Targadox), making them vulnerable to generic competition, which could erode revenue and margins[330](index=330&type=chunk)[331](index=331&type=chunk) - Sales are dependent on favorable reimbursement from third-party payors and inclusion in managed care formularies, and failure to secure or maintain adequate coverage could negatively impact product utilization[336](index=336&type=chunk)[337](index=337&type=chunk) [Risks Pertaining to Business Strategy and Structure](index=113&type=section&id=Risks%20Pertaining%20to%20our%20Business%20Strategy%2C%20Structure%20and%20Organization) - The business strategy involves collaborations and divestitures, such as the recent sale of Checkpoint, which can reduce the company's size and future opportunities in certain therapeutic areas[351](index=351&type=chunk)[352](index=352&type=chunk) - The company acts as a guarantor and indemnitor for certain obligations of its subsidiaries, which could require substantial payments and create financial risk for the parent company[357](index=357&type=chunk)[358](index=358&type=chunk) - Certain officers and directors serve in similar roles at partner companies and related parties, creating potential conflicts of interest regarding corporate opportunities and transactions[362](index=362&type=chunk) [Risks Pertaining to Reliance on Third Parties](index=120&type=section&id=Risks%20Pertaining%20to%20Reliance%20on%20Third%20Parties) - The company relies heavily on third-party manufacturers for both clinical and commercial product supply, and any manufacturing failures, delays, or compliance issues (e.g., with cGMP) could severely disrupt operations[374](index=374&type=chunk)[375](index=375&type=chunk) - Clinical trials are conducted by third-party contract research organizations (CROs), and poor performance by these CROs could delay development programs and jeopardize regulatory approval[382](index=382&type=chunk)[383](index=383&type=chunk) - The company's business model depends on strategic collaborations, and the failure to establish or maintain these relationships on favorable terms could limit revenue and drug development[389](index=389&type=chunk) [Risks Pertaining to Intellectual Property](index=126&type=section&id=Risks%20Pertaining%20to%20Intellectual%20Property%20and%20Potential%20Disputes%20with%20Licensors%20Thereof) - Success depends on obtaining and maintaining patent protection, but the patent process is uncertain, and issued patents may be challenged, invalidated, or circumvented by competitors[395](index=395&type=chunk)[398](index=398&type=chunk) - The majority of the company's intellectual property is in-licensed from third parties, and disputes with licensors or failure to meet license obligations (e.g., diligence, payments) could lead to termination of these critical agreements[412](index=412&type=chunk)[413](index=413&type=chunk) - The company may be sued for infringing on the intellectual property rights of others, which could be costly and time-consuming and could result in being forced to obtain licenses or cease commercialization[409](index=409&type=chunk) [Risks Pertaining to Commercialization](index=134&type=section&id=Risks%20Pertaining%20to%20the%20Commercialization%20of%20Product%20Candidates%2C%20if%20Approved) - Even if approved, products may not achieve broad market acceptance among physicians, patients, and payors, which would limit revenue potential[417](index=417&type=chunk) - The company faces significant product liability exposure from the use of its products in clinical trials and commercial sales, and a successful claim could result in substantial liabilities exceeding insurance coverage[420](index=420&type=chunk)[421](index=421&type=chunk) - Approved products remain subject to ongoing regulatory requirements, and failure to comply could result in restrictions, withdrawal from the market, or other penalties[423](index=423&type=chunk) [Risks Pertaining to Legislation and Regulation](index=139&type=section&id=Risks%20Pertaining%20to%20Legislation%20and%20Regulation%20Affecting%20the%20Biopharmaceutical%20and%20Other%20Industries) - The company is subject to complex healthcare laws, including anti-kickback and false claims statutes, and violations can lead to criminal sanctions, civil penalties, and exclusion from government healthcare programs[427](index=427&type=chunk)[428](index=428&type=chunk) - Healthcare reform measures, such as the Inflation Reduction Act (IRA), could lead to increased pricing pressure, more rigorous coverage criteria, and reduced reimbursement for products[343](index=343&type=chunk)[345](index=345&type=chunk) - Changes in funding or staffing at the FDA and other government agencies could delay the review and approval of new products, negatively impacting the business[458](index=458&type=chunk) [General and Other Risks](index=143&type=section&id=General%20and%20Other%20Risks) - The business is vulnerable to cybersecurity attacks and system failures, which could disrupt operations and lead to the loss of confidential information, as exemplified by a past incident at Journey that resulted in a **$9.5 million** fraudulent wire transfer[433](index=433&type=chunk)[435](index=435&type=chunk) - The company has previously failed to meet Nasdaq's minimum bid price requirement, and future non-compliance with listing standards could result in the delisting of its securities, reducing market liquidity[468](index=468&type=chunk) - The company's ability to use its net operating loss carryforwards (NOLs) to offset future taxable income may be limited if it undergoes an "ownership change" as defined under Section 382 of the Internal Revenue Code[452](index=452&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=154&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[471](index=471&type=chunk) [Defaults Upon Senior Securities](index=154&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company announced on July 5, 2024, that its Board of Directors decided to pause the monthly dividend on its 9.375% Series A Cumulative Redeemable Perpetual Preferred Stock, with dividends continuing to accrue, and as of June 30, 2025, total undeclared dividends in arrears were approximately $8.0 million - On July 5, 2024, the company paused the monthly dividend payment on its Series A Preferred Stock[472](index=472&type=chunk) - As of June 30, 2025, the cumulative undeclared dividends amounted to approximately **$8.0 million**[474](index=474&type=chunk) [Other Information](index=156&type=section&id=Item%205.%20Other%20Information) During the quarter, none of the company's directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading plan during the quarter[476](index=476&type=chunk) [Exhibits](index=156&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents and certifications required by the Sarbanes-Oxley Act

[Executive Summary](index=1&type=section&id=Executive%20Summary) Fortress Biotech reported significant progress in Q2 2025, highlighted by the monetization of its subsidiary **Checkpoint Therapeutics** for approximately **$28 million** upfront, the FDA's **priority review** of **CUTX-101** for **Menkes disease** with a **PDUFA goal date** of **September 30, 2025**, and the commercial launch of **Emrosi™** for rosacea - Fortress's subsidiary, **Checkpoint Therapeutics**, was acquired by **Sun Pharma**, providing Fortress with approximately **$28 million** at closing[1](index=1&type=chunk)[4](index=4&type=chunk) - The acquisition deal includes potential future payments, including up to an additional **$4.8 million** under a contingent value right (CVR) and a **2.5% royalty** on future net sales of **UNLOXCYT™**[1](index=1&type=chunk)[6](index=6&type=chunk) - The FDA accepted the New Drug Application for **CUTX-101** to treat **Menkes disease** for **priority review**, with a **PDUFA goal date** of **September 30, 2025**[1](index=1&type=chunk)[3](index=3&type=chunk) - The commercial launch of **Emrosi™** for treating inflammatory lesions of rosacea in adults has been initiated[2](index=2&type=chunk)[3](index=3&type=chunk) [Recent Corporate Highlights](index=1&type=section&id=Recent%20Corporate%20Highlights) The company executed on key strategic initiatives, including the successful sale of **Checkpoint Therapeutics**, securing regulatory milestones like FDA **priority review** for **CUTX-101** and **Orphan Drug Designation** for **MB-101**, and advancing commercial efforts for **Emrosi™** with expanded payer coverage [Monetization Updates](index=1&type=section&id=Monetization%20Updates) Fortress monetized its investment in **Checkpoint Therapeutics** through an acquisition by **Sun Pharma**, providing immediate non-dilutive capital of approximately **$28 million** with potential future revenue streams from a CVR and royalties on **UNLOXCYT™** sales Checkpoint Therapeutics Acquisition Terms | Component | Value | | :--- | :--- | | Upfront Payment | ~$28 million | | Contingent Value Right (CVR) | Up to $4.8 million | | Royalty | 2.5% on future net sales of UNLOXCYT™ | [Regulatory Updates](index=3&type=section&id=Regulatory%20Updates) The company achieved positive regulatory developments, including FDA **priority review** for **CUTX-101** for **Menkes disease** with a **PDUFA goal date** of **September 30, 2025**, and **Orphan Drug Designation** for **MB-101** for high-grade gliomas - The FDA accepted the NDA for **CUTX-101** (copper histidinate for **Menkes disease**) for **priority review**, with a **PDUFA goal date** of **September 30, 2025**. Fortress's subsidiary, Cyprium Therapeutics, will retain **100% ownership** of any FDA Priority Review Voucher that may be issued upon approval[12](index=12&type=chunk) - In **July 2025**, the FDA granted **Orphan Drug Designation** to **Mustang** for **MB-101** (IL13Ra2-targeted CAR T-cells) for the treatment of recurrent diffuse and anaplastic astrocytoma and glioblastoma[12](index=12&type=chunk) [Commercial Product Updates](index=3&type=section&id=Commercial%20Product%20Updates) **Journey Medical's** net product revenue remained stable at **$15.0 million** year-over-year, with **Emrosi™** achieving significant payer coverage expansion to over **100 million commercial lives** by **July 2025** - **Journey Medical's** net product revenues for Q2 **2025** were **$15.0 million**, compared to **$14.9 million** for Q2 **2024**[12](index=12&type=chunk) - The full commercial launch for **Emrosi™** began on **April 7, 2025**, following initial distribution in late **March 2025**[12](index=12&type=chunk) - Payer access for **Emrosi™** expanded significantly, covering over **100 million commercial lives** in the U.S. as of **July 2025**, up from **54 million** in **May 2025**[12](index=12&type=chunk) [Clinical Updates](index=3&type=section&id=Clinical%20Updates) **AstraZeneca's Phase III CARES** program for anselamimab in **AL amyloidosis** patients did not meet its primary endpoint, though it showed **clinically meaningful improvement** in a prespecified subgroup - **AstraZeneca's Phase III trial** for anselamimab (formerly CAEL-101) did not achieve statistical significance for its primary endpoint in treating **AL amyloidosis** patients[12](index=12&type=chunk) - Despite missing the primary endpoint, the drug demonstrated **clinically meaningful improvement** in a prespecified subgroup and was well-tolerated, with **AstraZeneca** planning to share the full data with health authorities[12](index=12&type=chunk) [General Corporate Updates](index=3&type=section&id=General%20Corporate) Fortress's partner company, **Journey Medical**, was added to the **Russell 2000® Index** and **Russell 3000® Index** in **June 2025**, enhancing its investment community visibility - **Journey Medical** was added to the small-cap **Russell 2000® Index** and the broad-market **Russell 3000® Index**, effective after market close on **June 27, 2025**[10](index=10&type=chunk) [Financial Results](index=3&type=section&id=Financial%20Results) Fortress reported a significant turnaround to a net income of **$13.4 million** for Q2 2025, driven by a **$27.1 million** gain from **Checkpoint** deconsolidation, with consolidated net revenue reaching **$16.4 million** and cash growing to **$74.4 million** Q2 2025 vs Q2 2024 Key Financials | Metric | Q2 2025 ($M) | Q2 2024 ($M) | Change | | :--- | :--- | :--- | :--- | | Consolidated Net Revenue | 16.4 | 14.9 | +10.1% | | R&D Expenses | 8.1 | 12.7 | -36.2% | | SG&A Costs | 38.8 | 20.8 | +86.5% | | Net Income (Loss) to Common Stockholders | 13.4 | (13.3) | Turnaround | | EPS (basic) ($) | 0.50 | (0.73) | Turnaround | Consolidated Cash Position | Date | Consolidated Cash & Equivalents ($M) | | :--- | :--- | | June 30, 2025 | 74.4 | | December 31, 2024 | 57.3 | - The turnaround to net income was primarily driven by a **$27.1 million** gain from the deconsolidation of the **Checkpoint** subsidiary following its acquisition by **Sun Pharma**[20](index=20&type=chunk) [Consolidated Financial Statements](index=8&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements detail the company's financial position as of **June 30, 2025**, and performance for the three and six months then ended, showing increased total assets and a shift from stockholders' deficit to equity due to the **Checkpoint** transaction [Condensed Consolidated Balance Sheets](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) As of **June 30, 2025**, Fortress reported total assets of **$159.9 million** and total liabilities of **$122.5 million**, resulting in total stockholders' equity of **$37.4 million**, a significant improvement from a **$1.6 million** deficit at year-end **2024** Balance Sheet Summary ($ in thousands) | Metric | June 30, 2025 (Thousands $) | Dec 31, 2024 (Thousands $) | | :--- | :--- | :--- | | Cash and cash equivalents | 74,386 | 57,263 | | Total Assets | 159,895 | 144,223 | | Total Liabilities | 122,512 | 145,867 | | Total Stockholders' Equity (Deficit) | 37,383 | (1,644) | [Condensed Consolidated Statements of Operations](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2025, Fortress reported net revenue of **$16.4 million** and net income of **$13.4 million** (**$0.50** per basic share), a significant improvement from a **$13.3 million** net loss in Q2 2024, primarily due to a **$27.1 million** gain from subsidiary deconsolidation Statement of Operations Summary (Three Months Ended June 30, $ in thousands) | Metric | 2025 (Thousands $) | 2024 (Thousands $) | | :--- | :--- | :--- | | Net Revenue | 16,413 | 14,896 | | Loss from Operations | (36,473) | (27,788) | | Gain from deconsolidation of subsidiary | 27,127 | 0 | | Net Income (Loss) to Common Stockholders | 13,355 | (13,339) | | EPS - basic ($) | 0.50 | (0.73) |

Core Insights - Fortress Biotech, Inc. achieved significant milestones in Q2 2025, including the acquisition of its subsidiary Checkpoint Therapeutics by Sun Pharma, which provided approximately $28 million upfront and potential additional payments [2][3] - The FDA accepted the New Drug Application for CUTX-101 for Menkes disease, with a PDUFA goal date set for September 30, 2025 [2][6] - Journey Medical launched Emrosi™ for treating inflammatory lesions of rosacea, with commercial uptake expanding to cover 65% of U.S. commercial lives [2][5] Financial Performance - Fortress reported consolidated net revenue of $16.4 million for Q2 2025, an increase from $14.9 million in Q2 2024, primarily driven by dermatology product sales [11][18] - Consolidated cash and cash equivalents rose to $74.4 million as of June 30, 2025, up from $57.3 million at the end of 2024 [11][16] - The company recorded a net income attributable to common stockholders of $13.4 million, or $0.50 per share basic, compared to a net loss of $(13.3) million in the same quarter of the previous year [11][18] Regulatory Developments - The FDA granted Orphan Drug Designation to Mustang Bio for MB-101, enhancing the potential of the combination strategy with MB-108 for treating high-grade gliomas [6][12] - The NDA submission for CUTX-101 is under priority review, with expectations for a Priority Review Voucher upon approval [2][6] Commercial Updates - Journey Medical's Emrosi™ has seen expanded payer access, now covering over 100 million commercial lives in the U.S., up from 54 million in May 2025 [10][12] - The commercial launch of Emrosi™ began on April 7, 2025, following initial distribution and prescription filling [10][12] Corporate Developments - Fortress Biotech's subsidiary Journey Medical was added to the small-cap Russell 2000 Index and the broad-market Russell 3000 Index as of June 27, 2025 [8]