Fortress Biotech, Inc. (NASDAQ: FBIO) is a biopharmaceutical company dedicated to acquiring, developing, and commercializing novel pharmaceutical and biotechnology products. Fortress develops and commercializes products both within Fortress and through certain subsidiary companies, also known as Fortress Companies.
On November 9th, the company announced results for the quarter ended September 30, 2017, reporting revenue of $46.9 million for the third quarter of 2017 and $142.3 million for the first nine months of 2017, compared to $1.0 million for the third quarter of 2016 and $3.9 million for the first nine months of 2016.
Fortress had a robust third quarter performance, beginning with the formation of a new gene therapy subsidiary company, Aevitas Therapeutics. Fortress’ other subsidiaries also continued to achieve critical corporate and clinical milestones during the quarter.
Avenue dosed the first patient in its pivotal Phase 3 study of IV tramadol for the management of moderate to moderately severe pain in patients following bunionectomy surgery. Additionally, Checkpoint dosed the first patient in its Phase 1 clinical study evaluating the safety and tolerability of its anti-PD-L1 antibody, CK-301, in selected recurrent or metastatic cancers.
The FDA also granted Orphan Drug Designation to Checkpoint’s third-generation EGFR inhibitor, CK- 101, for the treatment of EGFR mutation-positive NSCLC. Mustang Bio has continued to make meaningful progress throughout the quarter, with its common stock commencing trading on the NASDAQ Global Market, and the licensing of a CD20 CAR T cell therapy from the Fred Hutchinson Cancer Research Centre, expanding its pipeline to six novel CAR T candidates.
The management is looking forward to oral data presentations on both Mustang Bio’s and Caelum Biosciences’ clinical programs at the 59th American Society of Hematology Annual Meeting in December, and plan to continue delivering on meaningful milestones for the remainder of the year.
With these developments, FBIO has become an attractive option among small caps biotech plays. The upcoming presentations results/developments are likely to be the near-term catalysts for the stock. The stock currently has an average rating of “BUY” and a consensus price target of $9.00. Considering present valuation, FBIO is at a favorable risk-reward position.
About the company: Fortress Biotech, Inc. (“Fortress”) is a biopharmaceutical company dedicated to acquiring, developing, and commercializing novel pharmaceutical and biotechnology products. Fortress develops and commercializes products both within Fortress and through certain of its subsidiary companies, also known as Fortress Companies. In addition to its internal development programs, Fortress leverages its biopharmaceutical business expertise and drug development capabilities and provides funding and management services to help the Fortress Companies achieve their goals.
Subsidiaries’ Relationship to Fortress:
- Targadox (doxycyline tablets): Severe acne
- Ceracade (skin emulsion): Atopic and various types of dermatitis
- Luxamend (wound cream): Wounds from superficial to full thickness and 1st and 2nd-degree burns
Recent Fortress Biotech and Fortress Company Highlights:
Fortress Biotech, Inc.
- In November 2017, Fortress announced the public offering of one million shares of its 9.375% Series A Cumulative Redeemable Perpetual Preferred Stock at a price of $25.00 per share, with expected gross proceeds to Fortress of $25 million.
- In July 2017, Fortress formed a new subsidiary company, Aevitas Therapeutics, Inc. (“Aevitas”), to develop novel gene therapy approaches for complement-mediated diseases. The proprietary technology, licensed from a leading university, uses adeno-associated virus (AAV)-based gene therapy to restore lasting production of functional complement regulatory proteins, providing a potentially curative treatment.
Avenue Therapeutics, Inc.
- In September 2017, Avenue announced that the first patient had been dosed in the pivotal Phase 3 clinical trial of intravenous (IV) tramadol for the management of moderate to moderately severe pain in patients following bunionectomy surgery.
Caelum Biosciences, Inc.
- In November 2017, Caelum announced that Columbia University would present the final analysis of CAEL-101 (11-1F4) Phase 1a/1b data for the treatment of relapsed or refractory amyloid light chain “AL” amyloidosis during an oral session at the 59th American Society of Hematology (ASH) Annual Meeting in December 2017.
- During the third quarter of 2017, Caelum completed a third-party Convertible Note financing. In connection with this financing, Caelum raised $9.9 million.
- In November 2017, Cellvation announced that the U.S. Food and Drug Administration (FDA) granted CEVA101 (autologous bone marrow-derived stem cells) Regenerative Medicine Advanced Therapy (“RMAT”) designation for the treatment of traumatic brain injury (“TBI”). Under terms of the RMAT designation, the FDA will help facilitate the program’s expedited development and review, and will provide guidance on generating the evidence needed to support approval of CEVA101 for TBI.
Checkpoint Therapeutics, Inc.
- In October 2017, Checkpoint announced that the first patient had been dosed in Phase 1 clinical study evaluating the safety and tolerability of its anti-PD-L1 antibody, CK-301, in checkpoint therapy-naïve patients with selected recurrent or metastatic cancers.
- In September 2017, Checkpoint announced that the U.S. Food and Drug Administration (FDA) granted Orphan Drug Designation to CK-101 (also known as RX518), the Company’s third-generation epidermal growth-factor receptor (EGFR) inhibitor, for the treatment of EGFR mutation-positive non-small cell lung cancer (NSCLC).
Mustang Bio, Inc.
- In November 2017, Mustang announced that its research and development partner, City of Hope (“COH”), will present initial Phase 1 data for MB-102 (CD123 CAR) in acute myeloid leukemia (AML) and blastic plasmacytoid dendritic cell neoplasm (BPDCN) during an oral session at the ASH Annual Meeting.
Latest Quarter Financial position:
- Liquidity and financial flexibility: As of September 30, 2017, Fortress’ consolidated cash, cash equivalents and short-term investments totaled $154.6 million, compared to $88.3 million at December 31, 2016, an increase of $66.3 million year-to-date.
- Net revenue totaled $46.9 million for the third quarter of 2017 and $142.3 million for the first nine months of 2017, compared to $1.0 million for the third quarter of 2016 and $3.9 million for the first nine months of 2016. Net total revenue for the third quarter ending September 30, 2017, includes $2.5 million of Fortress revenue and $44.4 million of revenue from National Holdings Corporation (“National”), which Fortress acquired in September 2016, with no revenue attributable to National before the acquisition.
- Net loss attributable to common stockholders was $27.1 million, or $0.67 per share, for the third quarter of 2017, compared to a net loss attributable to common stockholders of $13.0 million, or $0.32 per share, for the third quarter of 2016.
Key risk factors and potential stock drivers:
- The favorable outcome of the upcoming catalysts (as mentioned above) is expected to provide a boost to the stock to retain its momentum. Any adversities related with the same could upset the stock performance significantly.
- FBIO presently has net level losses. Therefore, any crunch in its liquidity and financial flexibility will further impact its business & financial profile.
- The company’s near-term stock movement is also dependent on its upcoming quarterly result, any significant adversities/lower than expected guidance could adversely affect the investor sentiments.
- Biotech space is a high-risk sector due to uncertainties associated with the novel drug development. Therefore, favorable outcome of the upcoming catalyst is necessary for the stock to retain its momentum. Any adversities related to the same could impinge the stock performance significantly.
- On Monday, November 27th, 2017, FBIO closed at $4.01 (down by -1.23%) on an average volume of 92,654.00 exchanging hands. Market capitalization is $203.13 million. The current RSI is 51.72
- In the past 52 weeks, shares of FBIO have traded as low as $1.88 and as high as $5.13
- At $4.01, shares of FBIO are trading below its 50-day moving average (MA) at $4.17 and below its 200-day moving average (MA) at $4.04
- The present support and resistance levels for the stock are at $3.87 & $4.17 respectively.
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