Fortress Biotech(FBIO) - 2023 Q4 - Annual Results

Executive Summary Fortress Biotech achieved record $84.5 million net revenue in 2023, anticipating up to four regulatory decisions, including DFD-29's NDA acceptance, by November 2024 2023 Performance and Strategic Outlook Fortress Biotech achieved record $84.5 million net revenue in 2023, with up to four regulatory decisions, including DFD-29's NDA acceptance, expected by November 2024 - Record consolidated net revenue of $84.5 million for full-year 2023[1][2] - Up to four regulatory decisions (NDAs/BLAs) expected in the next 18 months[1][2] - FDA accepted NDA filing for DFD-29 (rosacea treatment) with PDUFA goal date of November 4, 2024[1][2] Company Information Fortress Biotech is a biopharmaceutical company focused on acquiring and advancing assets across oncology, rare diseases, and gene therapy About Fortress Biotech Fortress Biotech acquires and advances assets to generate shareholder value, managing seven marketed products and over 25 development programs in oncology, rare diseases, and gene therapy - Core Business: Acquiring and advancing assets to generate product, equity, dividend, and royalty revenue for shareholders[8] - Portfolio Scope: Seven marketed prescription products and over 25 development programs in oncology, rare diseases, and gene therapy[8] - Operational Strategy: Streamlined operating structure, leveraging biopharmaceutical expertise and network, with partnerships including AstraZeneca and City of Hope[8] 2023 and Recent Corporate Highlights This section details Fortress Biotech's recent regulatory milestones, corporate developments, and financial activities in 2023 and early 2024 Regulatory Milestones and Updates Fortress submitted DFD-29's NDA for rosacea in Jan 2024, accepted by FDA in March with a PDUFA goal date of November 4, 2024 - DFD-29 NDA Submission & Acceptance: Submitted Jan 2024, accepted March 2024, for rosacea treatment[3] - PDUFA Goal Date: November 4, 2024, for DFD-29[3] - Market Potential: DFD-29 could be the only oral, systemic therapy for both inflammatory lesions and erythema of rosacea[3] General Corporate Developments Key developments include a CRL for cosibelimab, anticipated CAEL-101 BLA in 2025, CUTX-101 asset transfer, Qbrexza licensing, and 2023 fundraising - Cosibelimab BLA: FDA issued CRL in Dec 2023 due to third-party manufacturing findings; resubmission expected for 2024 marketing approval[6] - CAEL-101 (AstraZeneca): BLA submission anticipated in 2025, with potential for approximately $148 million in milestone payments to Fortress[6] - CUTX-101: Asset transfer to Sentynl completed in Dec 2023; Cyprium Therapeutics retains 100% ownership of any FDA priority review voucher[6] - MB-109: FDA accepted Investigational New Drug application for a Phase 1 clinical trial for recurrent GBM and high-grade astrocytoma[6] - Journey Medical - Qbrexza Licensing: Entered exclusive license agreement with Maruho for hyperhidrosis treatment in South Korea and other Asian territories, receiving a $19 million nonrefundable upfront payment[6] Journey Medical Net Revenues (YoY) | Metric | 2023 (Millions) | 2022 (Millions) | Change (%) | | :-------------------- | :-------------- | :-------------- | :--------- | | Total Net Revenues | $79.2 | $73.7 | +7% | | Total Product Net Revenues | $59.7 | $71.0 | -15.9% | - Fortress Fundraising: Raised approximately $34.9 million in gross proceeds through registered direct offerings and a public offering in 2023 and Jan 2024[6] - Reverse Stock Split: Effected a 1-for-15 reverse stock split in October 2023 to meet Nasdaq's minimum bid price requirement[6] - 4DMT Asset Purchase: Agreement for short-form human complement factor H asset, with potential payments up to ~$140 million in late-stage development, regulatory, and sales milestones, plus single-digit royalties[6] Financial Review This section provides a detailed analysis of Fortress Biotech's financial performance, including revenues, expenses, and balance sheet changes for 2023 Summary of Key Financials Fortress Biotech reported $84.5 million net revenue in 2023, an 11.6% increase, with reduced operating expenses and an improved net loss of $(68.7) million Consolidated Cash, Cash Equivalents and Restricted Cash | Date | Amount (Millions) | Change (YoY) | Change (QoQ) | | :---------------- | :---------------- | :----------- | :----------- | | Dec 31, 2023 | $83.4 | -$97.6M | +$8.7M | | Sep 30, 2023 | $74.7 | - | - | | Dec 31, 2022 | $181.0 | - | - | Consolidated Net Revenue (YoY) | Metric | 2023 (Millions) | 2022 (Millions) | Change (%) | | :-------------------- | :-------------- | :-------------- | :--------- | | Total Net Revenue | $84.5 | $75.7 | +11.6% | | Net Revenue from Marketed Dermatology Products | $59.7 | $71.0 | -15.9% | Consolidated Operating Expenses (YoY) | Metric | 2023 (Millions) | 2022 (Millions) | Change (%) | | :-------------------- | :-------------- | :-------------- | :--------- | | R&D Expenses (incl. licenses) | $106.1 | $134.9 | -21.3% | | SG&A Costs | $94.1 | $113.7 | -17.2% | Consolidated Net Loss Attributable to Common Stockholders (YoY) | Metric | 2023 (Millions) | 2022 (Millions) | Change (%) | | :-------------------- | :-------------- | :-------------- | :--------- | | Net Loss | $(68.7) | $(94.6) | +27.4% | | Net Loss Per Share | $(8.47) | $(15.97) | +47.0% | - Subsequent Fundraising (Jan 2024): Fortress raised ~$11.0 million, Checkpoint ~$14.0 million, and Avenue ~$5.0 million in gross proceeds[9] Consolidated Balance Sheets Total assets decreased to $167.5 million as of December 31, 2023, driven by reduced cash, with total stockholders' equity declining to $1.6 million Balance Sheet Highlights (Dec 31, 2023 vs Dec 31, 2022) | Metric | 2023 (Thousands) | 2022 (Thousands) | Change (Thousands) | Change (%) | | :-------------------------------- | :--------------- | :--------------- | :----------------- | :--------- | | Cash and cash equivalents | $80,927 | $178,266 | $(97,339) | -54.6% | | Total current assets | $117,022 | $230,432 | $(113,410) | -49.2% | | Total assets | $167,526 | $294,301 | $(126,775) | -43.1% | | Total current liabilities | $84,908 | $127,715 | $(42,807) | -33.5% | | Total liabilities | $165,939 | $244,276 | $(78,337) | -32.1% | | Total stockholders' equity (deficit) | $1,587 | $50,025 | $(48,438) | -96.8% | Consolidated Statements of Operations Net revenue increased 11.6% to $84.5 million in 2023, driven by collaboration and other revenues, with operating expenses decreasing by 18.8% Revenue Breakdown (2023 vs 2022) | Revenue Type | 2023 (Thousands) | 2022 (Thousands) | Change (Thousands) | Change (%) | | :-------------------- | :--------------- | :--------------- | :----------------- | :--------- | | Product revenue, net | $59,662 | $70,995 | $(11,333) | -15.9% | | Collaboration revenue | $5,229 | $1,882 | $3,347 | +177.8% | | Other revenue | $19,519 | $2,674 | $16,845 | +630.0% | | Net revenue | $84,513 | $75,743 | $8,770 | +11.6% | Operating Expenses (2023 vs 2022) | Expense Type | 2023 (Thousands) | 2022 (Thousands) | Change (Thousands) | Change (%) | | :-------------------------------- | :--------------- | :--------------- | :----------------- | :--------- | | Cost of goods sold - product revenue | $26,660 | $30,775 | $(4,115) | -13.4% | | Research and development | $101,747 | $134,199 | $(32,452) | -24.2% | | Research and development - licenses acquired | $4,324 | $677 | $3,647 | +538.7% | | Selling, general and administrative | $94,124 | $113,656 | $(19,532) | -17.2% | | Total operating expenses | $226,855 | $279,307 | $(52,452) | -18.8% | Net Loss Attributable to Common Stockholders (2023 vs 2022) | Metric | 2023 (Thousands) | 2022 (Thousands) | Change (Thousands) | Change (%) | | :-------------------------------- | :--------------- | :--------------- | :----------------- | :--------- | | Net loss attributable to common stockholders | $(68,669) | $(94,607) | $25,938 | +27.4% | | Net loss per common share - basic and diluted | $(8.47) | $(15.97) | $7.50 | +47.0% | | Weighted average common shares outstanding | 8,110,906 | 5,924,967 | 2,185,939 | +36.9% | Legal and Contact Information This section outlines the company's forward-looking statement disclaimer and provides essential contact information for investor and media relations Forward-Looking Statements All non-historical statements are forward-looking, subject to risks in growth, financing, development, and regulatory approval, with no obligation to update - Nature of Statements: Non-historical statements are forward-looking, subject to risks and uncertainties[10] - Risk Factors: Include growth strategy, financing, product development, regulatory approval, commercialization, manufacturing, intellectual property, and competition[10] - Disclaimer: Company disclaims obligation to update forward-looking statements, except as required by law[10] Company Contact Information This section provides contact details for Fortress Biotech's investor relations and media relations - Company Contact: Jaclyn Jaffe, Fortress Biotech, Inc., (781) 652-4500, ir@fortressbiotech.com[11] - Media Relations Contact: Tony Plohoros, 6 Degrees, (908) 591-2839, tplohoros@6degreespr.com[11]