Fortress Biotech(US:FBIO)2025-11-14 13:46Financial Performance - For the three months ended September 30, 2025, net revenue was $17.6 million, up from $14.6 million for the same period in 2024, primarily driven by the sale of Journey's marketed products [217]. - For the nine months ended September 30, 2025, net revenue reached $47.2 million, compared to $42.6 million in 2024, indicating a year-over-year increase of approximately 12.9% [217]. - For the three months ended September 30, 2025, net revenue increased by 21% to $17.6 million compared to $14.6 million in the same period of 2024 [239]. - Product revenue, net for the same period was $17.0 million, up 16% from $14.6 million, driven by a $4.9 million contribution from the U.S. commercial launch of Emrosi [240]. - Net revenue for the nine months ended September 30, 2025, was $47.2 million, an 11% increase from $42.6 million in the same period of 2024 [259]. - Product revenue for the nine months ended September 30, 2025, was $45.2 million, a 6% increase from $42.5 million in the same period of 2024 [259]. - The company reported a net income of $5.9 million for Q3 2025, a turnaround from a net loss of $12.9 million in Q3 2024 [239]. - The net loss attributable to Fortress for the nine months ended September 30, 2025, was $10.8 million, a significant improvement from a loss of $39.2 million in the same period of 2024 [259]. Expenses and Cost Management - Operating expenses decreased by 33% to $24.4 million in Q3 2025 from $36.7 million in Q3 2024, primarily due to a significant reduction in research and development expenses [239]. - Research and development expenses plummeted by 98% to $208,000 in Q3 2025 from $9.4 million in Q3 2024 [244]. - Selling, general and administrative expenses decreased by $4.6 million, or 21%, to $17.4 million for the quarter ended September 30, 2025, largely due to Checkpoint's deconsolidation [254]. - Total operating expenses for the nine months ended September 30, 2025, decreased by $16.5 million, or 13%, to $112.6 million compared to $129.1 million in the same period of 2024 [259]. - Total research and development expenses decreased by $34.7 million, or 74%, to $12.3 million for the nine months ended September 30, 2025, with significant reductions across multiple entities [267]. - Selling, general and administrative expenses increased by $20.8 million, or 34%, totaling $81.7 million for the nine months ended September 30, 2025, largely due to a significant rise at Checkpoint [271]. Financing and Cash Flow - The company may require significant additional financing to develop existing and new product candidates, fund operating losses, and establish manufacturing and marketing capabilities [280]. - The company reported a net cash increase of $28.6 million for the nine months ended September 30, 2025, compared to a decrease of $22.4 million in the same period of 2024 [300]. - Net cash used in operating activities decreased by $14.1 million from the nine months ended September 30, 2024, primarily due to a decrease in net loss and changes in operating assets and liabilities [301]. - Net cash provided by financing activities increased by $26.9 million to $44.8 million for the nine months ended September 30, 2024, compared to $71.7 million for the same period in 2025 [303]. - The increase in financing activities was driven by a $24.5 million rise in proceeds from partner companies' equity offerings and warrant exercises, despite a $17.5 million decrease in proceeds from the issuance of common stock [303]. Strategic Developments - In July 2025, Journey announced that 65% of the 187 million commercial lives in the U.S. now have pharmacy benefit coverage for Emrosi [217]. - Fortress received $28.0 million from the acquisition of Checkpoint by Sun Pharma, along with eligibility for a 2.5% royalty on net sales of UNLOXCYT [217]. - Triplex is currently in a Phase 2 clinical trial with topline data anticipated in early 2026, focusing on CMV-specific immune response in HIV co-infected adults [217]. - In October 2025, Urica announced a $205 million Series A financing to support global Phase 3 clinical studies evaluating dotinurad for gout treatment [222]. - Fortress is eligible to receive up to $129 million in aggregate development and sales milestones for CUTX-101, along with royalties on net sales ranging from 3% to 12.5% [222]. - The FDA approved Emrosi for the treatment of inflammatory lesions of rosacea in November 2024, with the product launched in March 2025 [217]. - AstraZeneca's acquisition of Caelum Biosciences included potential milestone payments totaling up to $295 million, with Fortress eligible for 42.4% of these payments [222]. - The company has established strategic partnerships with leading institutions and pharmaceutical companies to enhance its product pipeline and market reach [208]. Other Financial Metrics - Interest income increased by $147,000, or 25%, to $736,000 for the quarter ended September 30, 2025 [258]. - Interest expense decreased by $3.5 million, or 56%, to $2.7 million for the quarter ended September 30, 2025, compared to $6.2 million in the same quarter of 2024 [258]. - Cost of goods sold increased by 29% to $5.8 million in Q3 2025, up from $4.5 million in Q3 2024, due to higher product-related costs [241]. - Other income increased by $20.2 million, or 446%, from a loss of $4.5 million in Q3 2024 to income of $15.7 million in Q3 2025, driven by a $15.1 million increase in the fair value of Urica's equity interest in Crystalys [258]. - Amortization of acquired intangible assets increased by $0.8 million, or 31%, to $3.2 million for the nine months ended September 30, 2025, driven by the addition of the Emrosi acquired intangible asset [262]. - Stock-based compensation expense in research and development increased by $3.3 million, or 112%, totaling $6.2 million for the nine months ended September 30, 2025, primarily due to an increase at Checkpoint [270]. - Stock-based compensation expense in selling, general and administrative increased by $6.6 million, or 49%, totaling $20.0 million for the nine months ended September 30, 2025, driven by Checkpoint's change of control [274]. - Total other income increased by $46.1 million, or 538%, resulting in income of $38.1 million for the nine months ended September 30, 2025, primarily due to a gain from the deconsolidation of Checkpoint [276]. - Interest income decreased by $309, or 14%, to $1.8 million for the nine months ended September 30, 2025 [276]. - Interest expense decreased by $2.9 million, or 26%, totaling $8.1 million for the nine months ended September 30, 2025, due to prior debt extinguishment [276]. Company Status and Obligations - As of September 30, 2025, the company reported an accumulated deficit of $730.1 million, primarily due to R&D expenses and administrative costs [278]. - The company had cash and cash equivalents of $86.2 million, with $38.6 million related to Fortress and private subsidiaries, $19.0 million to Mustang, $24.9 million to Journey, and $3.7 million to Avenue [279]. - The company has approximately $34.2 million available for sales of securities under the Mustang 2024 S-3 registration statement as of September 30, 2025 [289]. - There were no material changes in contractual obligations and commitments, including lease obligations, for the nine months ended September 30, 2025 [305]. - The company does not have minimum purchase commitments in its contracts with licensors, CROs, and CMOs, which are generally terminable upon written notice [304]. - Payments due upon termination may include fees for services provided or expenses incurred, including non-cancelable obligations [304]. - The company is classified as a "smaller reporting company" and is not required to provide certain market risk disclosures [306].