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 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.

 

On Aug 9th, 2018, the company reported financial results and recent corporate highlights for the second quarter ended June 30, 2018.

 

 

Recent Highlights:

• During the second quarter, Fortress Company subsidiaries reported significant value-driving milestones, including positive Phase 3 data from Avenue Therapeutics’ IV tramadol, which, if approved, would be the only Schedule IV intravenous opioid in the U.S. and could replace highly addictive Schedule II narcotics in many patients with moderate to moderately severe postoperative pain.
• Additionally, Cyprium Therapeutics was granted FDA Fast Track Designation for its CUTX-101 Copper Histidinate injection in patients with Menkes disease, a rare pediatric disease with no FDA-approved treatments.
• Also, during the quarter, Mustang Bio expanded its infrastructure with the launch of a proprietary 27,000 sq. Ft. CAR T cell manufacturing facility that will enable the company to oversee product safety from needle-to-needle and help improve supply chain efficiencies from clinical development into commercialization

 

Near-term Catalysts/Goals for 2H 2018:

Analysts tracking the stock believes that Fortress is at a critical inflection point and the company’ business risk profile is leveraging on a network of a vast number of subsidiaries that focus on different market niches. Also, the company is aggressively building subsidiaries around marketed products and product candidates that create a pipeline providing its shareholders with a well-diversified long-term revenue stream.

As per www.marketbeat.com, The average twelve-month price target is $10.6667, suggesting that the stock has a possible upside of 620.72%. The high price target for FBIO is $11.00, and the low-price target for FBIO is $10.00.

Below are the excerpts of recent analyst rating on the scrip:

source: www.marketbeat.com

 

Unique differentiating factor/business model:

Identify Product Candidates: The company seeks and identify new in-licensing opportunities in all therapeutic areas and all stages of development from:

• Academic centers
• Corporate entities
• Government health organizations
• USA / Worldwide

 

In-License:

1. Often create a subsidiary around product candidates / therapeutic areas
2. Fund and support research and development programs
3. Offer flexibility in deal structuring

 

Subsidiaries’ Relationship to Fortress:

2018 financial Results:

In thousands’

 

• Revenues: Net revenue totaled $63.8 million for the second quarter of 2018, compared to $50.7 million for the second quarter of 2017. Total revenue as of June 30, 2018, includes $6.8 million of Fortress revenue, primarily from the sale of Journey Medical Corporation products, and $57.0 million of revenue from National Holdings Corporation1 (“National Holdings”). Total revenue as of June 30, 2017, included $4.4 million of Fortress revenue and $46.3 million of revenue from National Holdings.
• Profitability:  Net loss attributable to common stockholders was $21.6 million, or $0.50 per share, for the second quarter of 2018, compared to a net loss attributable to common stockholders of $17.4 million, or $0.43 per share, for the second quarter of 2017. For the first six months of 2018, net loss was $42.6 million or $0.99 per share, compared to $29.3 million or $0.73 per share in the first six months of 2017.
• Liquidity and financial flexibility: As of June 30, 2018, Fortress’ consolidated cash, cash equivalents, short-term investments (certificates of deposit), cash deposits with clearing organizations and restricted cash totaled $151.8 million, compared to $168.3 million as of December 31, 2017, a decrease of $16.5 million year-to-date.

 

Next earning date (tentative) – Fortress Biotech is scheduled to release their next quarterly earnings announcement on Thursday, November 8th, 2018.

 

Potential Milestones for 2019 and 2020

Key risk factors and potential stock drivers:

• Any adversities related to the future guidance might adversely impact the overall investor sentiments.
• The Company’ product candidates and certain of its subsidiaries’ product candidates are at an early stage of development and may not be successfully developed or commercialized.
• Any time/cost overruns and or suspensions or delays in the completion of clinical testing could result in increased costs and delay or prevent its or certain of its subsidiaries’ ability to complete development of that product or generate product revenues.
• Extensive industry regulation has had and will continue to have, an impact on FBIO’ business in the area of cost of goods, especially its product development, manufacturing, and distribution capabilities.
• The manufacturing and distribution of pharmaceutical products is a competitive industry.  Therefore, risk related to competition would continue to impinge the business profile of FBIO.  Some of the competitors for FBIO includes Corium International (CORI), AVEO Pharmaceuticals (AVEO), Synlogic (SYBX), Catalyst Pharmaceuticals (CPRX)

 

Stock Chart:

Comments:

• On Tuesday, September 25^th, 2018, FBIO was at $1.46, on volume of 80K shares exchanging hands. Market capitalization is $80.42 million. The current RSI is at 30.75
• In the past 52 weeks, shares of FBIO have traded as low as $1.41 and as high as $5.54
• At $1.46, shares of FBIO are trading below its 50-day moving average (MA) at $1.99 and below its 200-day moving average (MA) at $3.40
• The present support and resistance levels for the stock are at $1.33 & $1.73 respectively.

 

 

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