Fortress Biotech(FBIO) - 2025 Q1 - Quarterly Report

Financial Performance - For the three months ended March 31, 2025, net revenue was $13.1 million, compared to $13.0 million for the same period in 2024, reflecting a slight increase in revenue [187]. - For Q1 2025, Mustang reported a net revenue of $13.1 million, a 1% increase from $13.0 million in Q1 2024, including $2.0 million from the U.S. launch of Emrosi [206][207]. - The net loss attributable to Fortress decreased by 31% to $10.6 million in Q1 2025 from $15.4 million in Q1 2024 [206]. - Total other income (expense) decreased by $0.1 million, or 3%, from an expense of $2.5 million for the quarter ended March 31, 2024, to an expense of $2.4 million for the quarter ended March 31, 2025 [219]. - Net cash used in operating activities decreased by $5.8 million from $25.4 million for the three months ended March 31, 2024, to $19.6 million for the same period in 2025 [238]. - Net cash provided by financing activities was $27.9 million for the three months ended March 31, 2024, compared to $52.1 million for the same period in 2025, an increase of $24.3 million [241]. Research and Development - CAEL-101 is currently undergoing two global Phase 3 pivotal studies for AL amyloidosis, with topline data expected in the second half of 2025 [195]. - The FDA accepted the NDA for CUTX-101 (copper histidinate for Menkes disease) for priority review, with a target action date of September 30, 2025 [195]. - Triplex, a cytomegalovirus vaccine, is currently in a Phase 2 clinical trial with topline data anticipated in the third quarter of 2025 [190]. - The company is exploring a trial for MB-109 to treat patients with IL13Rα2+ recurrent GBM, potentially starting in Q1 2026 [195]. - Mustang is planning a proof-of-concept Phase 1 clinical trial for MB-106 in autoimmune diseases, potentially starting in Q1 2026 [203]. - Research and development expenses dropped by 84% to $3.9 million in Q1 2025, down from $24.8 million in Q1 2024, largely due to workforce reductions and the closure of the MB-106 clinical trial [212]. Expenses and Cost Management - Operating expenses decreased by 29% to $35.5 million in Q1 2025 from $49.6 million in Q1 2024, primarily due to an 84% reduction in research and development expenses [206]. - Selling, general and administrative expenses increased by 43% to $25.7 million in Q1 2025, driven by a $4.9 million increase at Checkpoint and a $2.1 million increase at Journey [215]. - Cost of goods sold decreased by 20% to $4.8 million in Q1 2025 from $6.0 million in Q1 2024, attributed to a change in product sales mix [208]. - Amortization of acquired intangible assets rose by 31% to $1.1 million in Q1 2025, influenced by the addition of the Emrosi asset [209]. Corporate Actions and Agreements - Checkpoint Therapeutics, Inc. entered into an agreement to be acquired by Sun Pharmaceutical Industries, Inc. for $4.10 per share in cash, with a contingent value right of up to $0.70 per share upon achieving EU approval [190]. - Fortress has established partnerships with leading institutions and companies, including AstraZeneca and Dr. Reddy's Laboratories, to enhance product development [183]. - Mustang executed a 1-for-50 reverse stock split in January 2025 to comply with Nasdaq listing requirements [203]. - Mustang exited its manufacturing facility lease in Worcester, Massachusetts, selling assets to AbbVie for $1.0 million in February 2025 [203]. Cash and Securities - As of March 31, 2025, the company had cash and cash equivalents of $91.3 million, with $19.5 million related to Fortress and private subsidiaries, $33.0 million to Checkpoint, $14.2 million to Mustang, $21.1 million to Journey, and $3.5 million to Avenue [222]. - The company reported an accumulated deficit of $751.5 million as of March 31, 2025, primarily due to R&D expenses and administrative costs [221]. - Net cash provided by investing activities increased by $1.2 million, attributed to Mustang's proceeds from the sale of held-for-sale assets [240]. - 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 its at-the-market offering program during the three months ended March 31, 2025 [226]. - Journey issued and sold approximately 0.8 million shares of common stock for gross proceeds of $4.1 million under its at-the-market offering agreement during the same period [229]. - As of March 31, 2025, approximately $65.7 million of securities remain available for sale through Checkpoint's registration statement [230]. - Mustang closed on an equity offering in February 2025, raising approximately $6.8 million in net proceeds after deducting fees and expenses [234]. Regulatory and Compliance - Fortress is classified as a "smaller reporting company," with market value criteria affecting its reporting obligations [202]. - The company is classified as a "smaller reporting company" and is not required to provide certain market risk disclosures [244]. - There were no material changes in contractual obligations and commitments during the three months ended March 31, 2025 [243].