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What changed in Fortress Biotech, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Fortress Biotech, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+440 added−466 removedSource: 10-K (2026-03-31) vs 10-K (2025-03-31)

Top changes in Fortress Biotech, Inc.'s 2025 10-K

440 paragraphs added · 466 removed · 286 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

89 edited+44 added−66 removed131 unchanged
Biggest changeCommercial Products and Product Candidates Commercial and Approved Products Through our partner company Journey we market the following branded dermatology products approved by the FDA for sale in the United States: ● Emrosi TM (Minocycline Hydrochloride Extended-Release Capsules, 40mg for the treatment of inflammatory lesions of rosacea in adults): approved by the FDA in November 2024, which launched in March 2025; ● Qbrexza®: a medicated cloth towelette for the treatment of primary axillary hyperhidrosis; ● Accutane®: an oral isotretinoin drug for the treatment of severe recalcitrant nodular acne; ● Amzeeq® (minocycline topical foam, 4%): a topical formulation of minocycline for the treatment of inflammatory lesions of non-nodular moderate to severe acne vulgaris in adults and children nine years and older; ● Zilxi® (minocycline topical foam, 1.5%): a topical minocycline treatment for inflammatory lesions of rosacea in adults; ● Exelderm® Cream and Solution: a broad-spectrum antifungal intended for topical use; ● Targadox®: an oral doxycycline drug for adjunctive therapy for severe acne; and ● Luxamend®: a water-based emulsion formulated to provide an optimally moist healing environment for superficial wounds; minor cuts or scrapes; dermal ulcers; donor sites; first- and second-degree burns, including sunburns; and radiation dermatitis. 8 Table of Contents EMROSI (Minocycline Hydrochloride Extended-Release Capsules, 40mg) Journey received approval in November 2024 for Emrosi (also referred to as DFD-29), a 40mg minocycline hydrochloride extended release capsule for oral use indicated to treat inflammatory lesions (papules and pustules) of rosacea in adults.
Biggest changePortfolio Highlights Commercial and Approved Products Through our partner company Journey we market the following branded dermatology products approved by the FDA for sale in the United States: ● Emrosi (Minocycline Hydrochloride Extended-Release Capsules, 40mg for the treatment of inflammatory lesions of rosacea in adults): approved by the FDA in November 2024, which launched in March 2025; ● Qbrexza: a medicated cloth towelette for the treatment of primary axillary hyperhidrosis; ● Accutane: an oral isotretinoin drug for the treatment of severe recalcitrant nodular acne; ● Amzeeq (minocycline topical foam, 4%): a topical formulation of minocycline for the treatment of inflammatory lesions of non-nodular moderate to severe acne vulgaris in adults and children nine years and older; 8 Table of Contents ● Zilxi (minocycline topical foam, 1.5%): a topical minocycline treatment for inflammatory lesions of rosacea in adults; ● Exelderm Cream and Solution: a broad-spectrum antifungal intended for topical use; ● Targadox: an oral doxycycline drug for adjunctive therapy for severe acne; and ● Luxamend: a water-based emulsion formulated to provide an optimally moist healing environment for superficial wounds; minor cuts or scrapes; dermal ulcers; donor sites; first- and second-degree burns, including sunburns; and radiation dermatitis.
In a Phase 1 study, Triplex was observed to be safe, well-tolerated and highly immunogenic when administered to healthy volunteers at multiple dose levels ( ClinicalTrials.gov Identifier: NCT01941056). In a Phase 2 trial, Triplex was observed to be safe, well-tolerated, highly immunogenic and a reduction in CMV events in allogeneic stem cell transplant recipients was observed ( ClinicalTrials.gov Identifier: NCT02506933).
In a Phase 1 study, Triplex was observed to be well-tolerated and highly immunogenic when administered to healthy volunteers at multiple dose levels ( ClinicalTrials.gov Identifier: NCT01941056). In a Phase 2 trial, Triplex was observed to be safe, well-tolerated, highly immunogenic and a reduction in CMV events in allogeneic stem cell transplant recipients was observed ( ClinicalTrials.gov Identifier: NCT02506933).
These preclinical studies aimed to provide a deeper understanding of this combination approach to support the potential benefit of a combination study that will evaluate an oHSV (MB-108) and IL13Rα2-directed CAR-T cells (MB-101). In October 2023, Mustang announced that the FDA had accepted the Investigational New Drug (“IND”) application of MB-109 for the treatment of recurrent GBM and high-grade astrocytoma.
These preclinical studies aimed to provide a deeper understanding of this combination approach to support the potential benefit of a combination study that will evaluate an oHSV (MB-108) and IL13Rα2-directed CAR-T cells (MB-101). In October 2023, Mustang announced that the FDA had accepted its Investigational New Drug (“IND”) application of MB-109 for the treatment of recurrent GBM and high-grade astrocytoma.
Post-Approval Requirements Any pharmaceutical products for which we receive FDA approvals are subject to continuing postmarket regulation by the FDA, including, among other things, record-keeping requirements, reporting of adverse experiences with the product, providing the FDA with updated safety and efficacy information, product sampling and distribution requirements, complying with certain electronic records and signature requirements and complying with FDA promotion and advertising requirements, which include, among others, standards for direct-to-consumer advertising, promoting pharmaceutical products for uses or in patient populations that are not described in the pharmaceutical product’s approved labeling (known as “off-label use”), industry-sponsored scientific and educational activities, and promotional activities involving the internet.
Post-Approval Requirements Any pharmaceutical products for which we receive FDA approvals are subject to continuing post market regulation by the FDA, including, among other things, record-keeping requirements, reporting of adverse experiences with the product, providing the FDA with updated safety and efficacy information, product sampling and distribution requirements, complying with certain electronic records and signature requirements and complying with FDA promotion and advertising requirements, which include, among others, standards for direct-to-consumer advertising, promoting pharmaceutical products for uses or in patient populations that are not described in the pharmaceutical product’s approved labeling (known as “off-label use”), industry-sponsored scientific and educational activities, and promotional activities involving the internet.
The FDA assigned a PDUFA goal date of April 12, 2021 for the resubmitted NDA for IV Tramadol. On June 14, 2021, Avenue announced that the receipt of a second CRL. Avenue submitted a formal dispute resolution request (“FDRR”) with the Office of Neuroscience of the FDA on July 27, 2021.
The FDA assigned a PDUFA goal date of April 12, 2021 for the resubmitted NDA for IV tramadol. On June 14, 2021, Avenue announced the receipt of a second CRL. Avenue submitted a formal dispute resolution request (“FDRR”) with the Office of Neuroscience of the FDA on July 27, 2021.
As a condition of approval, the FDA may require a sponsor of a drug receiving accelerated approval to perform post-marketing studies to verify and describe the predicted effect on irreversible morbidity or mortality or other clinical endpoint and under the Food and Drug Omnibus Reform Act of 2022 (FDORA), the FDA is now permitted to require, as appropriate, that such trials be underway prior to approval or within a specific time period after the date of approval for a product granted accelerated approval.
As a condition of approval, the FDA may require a sponsor of a drug receiving accelerated approval to perform post-marketing studies to verify and describe the predicted effect on irreversible morbidity or mortality or other clinical endpoint and under the Food and Drug Omnibus Reform Act of 2022 (“FDORA”), the FDA is now permitted to require, as appropriate, that such trials be underway prior to approval or within a specific time period after the date of approval for a product granted accelerated approval.
CEVA-D and CEVA-102 Through our subsidiary Cellvation, we are developing CEVA-D, a novel bioreactor device that is designed to enhance the anti-inflammatory potency of bone marrow-derived cells without genetic manipulation, using wall shear stress to suppress tumor necrosis factor-a (“TNF-a”) production by activated immune cells.
CEVA-D and CEVA-102 Through our subsidiary Cellvation, we are developing CEVA-D, a novel bioreactor device that is designed to enhance the anti-inflammatory potency of bone marrow-derived cells without genetic manipulation, using wall shear stress to suppress tumor necrosis factor-a production by activated immune cells.
In such cases, some clinical trials may not be required or may be otherwise limited. A 505(b)(2) application may be submitted for a new chemical entity (NCE), when some part of the data necessary for approval is derived from studies not conducted by or for the applicant and when the applicant has not obtained a right of reference.
In such cases, some clinical trials may not be required or may be otherwise limited. A 505(b)(2) application may be submitted for a new chemical entity (“NCE”), when some part of the data necessary for approval is derived from studies not conducted by or for the applicant and when the applicant has not obtained a right of reference.
In the final part of the public meeting, the Advisory Committee voted yes or no on the following question: “Has the Applicant submitted 15 Table of Contents adequate information to support the position that the benefits of their product outweigh the risks for the management of acute pain severe enough to require an opioid analgesic in an inpatient setting?” The results were 8 yes votes and 14 no votes.
In the final part of the public meeting, the Advisory Committee voted yes or no on the following question: “Has the Applicant submitted adequate information to support the position that the benefits of their product outweigh the risks for the management of acute pain severe enough to require an opioid analgesic in an inpatient setting?” The results were 8 yes votes and 14 no votes.
However, an applicant submitting a full NDA would be required to conduct or obtain a right of reference to all of the preclinical 24 Table of Contents studies and adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness. Orphan drug exclusivity, as described below, may offer a seven-year period of marketing exclusivity, except in certain circumstances.
However, an applicant submitting a full NDA would be required to conduct or obtain a right of reference to all of the preclinical studies and adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness. Orphan drug exclusivity, as described below, may offer a seven-year period of marketing exclusivity, except in certain circumstances.
GBM is the most common brain and central nervous system (“CNS”) cancer, accounting for approximately 52% of malignant primary brain and CNS tumors and approximately 14% of all primary brain and CNS tumors. On average during 12 Table of Contents the years 2017 through 2021, more than 13,000 new cases of GBM were diagnosed per year in the U.S.
GBM is the most common brain and central nervous system (“CNS”) cancer, accounting for approximately 52% of malignant primary brain and CNS tumors and approximately 14% of all primary brain and CNS tumors. On average during the years 2017 through 2021, more than 13,000 new cases of GBM were diagnosed per year in the U.S.
MB-109 (MB-101 (IL13Rα2-targeted CAR T Cell Therapy) + MB-108 (HSV-1 oncolytic virus)) Mustang is developing MB-109, a combination approach of MB-101 and MB-108, as a potential treatment for IL13Rα2+ relapsed or refractory glioblastoma (“GBM”) and anaplastic astrocytoma (“AA”). An attractive novel approach to control glioblastoma is adoptive cellular immunotherapy utilizing CAR T cells.
MB-109 (MB-101 (IL13Rα2-targeted CAR T Cell Therapy) + MB-108 (HSV-1 oncolytic virus)) Mustang is developing MB-109, a combination approach of MB-101 and MB-108, as a potential treatment for IL13Rα2+ relapsed or refractory GBM and anaplastic astrocytoma (“AA”). An attractive novel approach to control GBM is adoptive cellular immunotherapy utilizing CAR T cells.
Due to 13 Table of Contents these properties, OVs have been studied in combination with other treatments to enhance the effectiveness of immunotherapies. Preliminary anti-tumor activity has been observed in clinical studies administering the OV (MB-108) and CAR T cell therapy (MB-101) as single agents; however, the combination has not yet been explored.
Due to these properties, OVs have been studied in combination with other treatments to enhance the effectiveness of immunotherapies. Preliminary anti-tumor activity has been observed in clinical studies administering the OV (MB-108) and CAR T cell therapy (MB-101) as single agents; however, the combination has not yet been explored.
To this end, we require all of our employees, consultants, advisers and other contractors to enter into confidentiality agreements that prohibit the disclosure of confidential information and, where applicable, require disclosure and assignment to us of the ideas, developments, discoveries and inventions important to our business. Competition We operate in highly competitive segments of the biotechnology and biopharmaceutical markets.
To this end, we require all of our employees, consultants, advisers and other contractors to enter into confidentiality agreements that prohibit the disclosure of confidential information and, where applicable, require disclosure and assignment to us of the ideas, developments, discoveries and inventions important to our business. 16 Table of Contents Competition We operate in highly competitive segments of the biotechnology and biopharmaceutical markets.
If so designated, the FDA may expedite the development and review of any subsequent original NDA for a drug that uses or incorporates 22 Table of Contents the platform technology. Designated platform technology status does not ensure that a drug will be developed more quickly or receive FDA approval.
If so designated, the FDA may expedite the development and review of any subsequent original NDA for a drug that uses or incorporates the platform technology. Designated platform technology status does not ensure that a drug will be developed more quickly or receive FDA approval.
As of March 2025, Triplex is currently the subject of multiple, ongoing trials in various clinical settings including: patients undergoing stem cell transplant; adults co-infected with CMV and Anti-Human Immunodeficiency Virus (“HIV”); and in combination with a CAR T cell therapy for adults with non-Hodgkin lymphoma (“NHL”) or acute lumphoblastic leukemia (“ALL”).
As of March 2026, Triplex is currently the subject of multiple, ongoing trials in various clinical settings including: patients undergoing stem cell transplant; adults co-infected with CMV and Anti-Human Immunodeficiency Virus (“HIV”); and in combination with a CAR T cell therapy for adults with non-Hodgkin lymphoma (“NHL”) or acute lymphoblastic leukemia (“ALL”).
Furthermore, fast track designation, priority review, accelerated approval and breakthrough therapy designation, do not change the standards for approval and may not ultimately expedite the development or approval process. Section 505(b)(2) Regulatory Approval Pathway Section 505(b)(2) was added to the Act by the Drug Price Competition and Patent Term Restoration Act of 1984 (Hatch-Waxman Amendments).
Furthermore, fast track designation, priority review, accelerated approval and breakthrough therapy designation, do not change the standards for approval and may not ultimately expedite the development or approval process. Section 505(b)(2) Regulatory Approval Pathway Section 505(b)(2) was added to the Act by the Drug Price Competition and Patent Term Restoration Act of 1984 (the “Hatch-Waxman Amendments”).
BAER-101 (GABA A α2/3 positive allosteric modulator) Through Avenue’s subsidiary Baergic, we are developing BAER-101, a high affinity, selective modulator of the gamma-aminobutyric acid (“GABA”) A, which is a receptor system with differential binding and modulatory properties dependent on the particular GABA A subtype.
BAER-101 (GABA A α2/3 positive allosteric modulator) Through Avenue’s former subsidiary Baergic, we were previously developing BAER-101, a high affinity, selective modulator of the gamma-aminobutyric acid (“GABA”) A, which is a receptor system with differential binding and modulatory properties dependent on the particular GABA A subtype.
The process required by the FDA before a pharmaceutical product may be marketed in the United States generally includes the following: ● completion of preclinical laboratory tests, animal studies and formulation studies according to good laboratory practices (“GLPs”) or other applicable regulations; ● submission to the FDA of an IND, which must be in effect before human clinical trials may begin in the United States; ● performance of adequate and well-controlled human clinical trials according to the FDA’s current good clinical practices (“GCPs”), to establish the safety and efficacy of the proposed pharmaceutical product for its intended use; ● submission to the FDA of an NDA or BLA for a new pharmaceutical product; ● satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities where the pharmaceutical product is produced to assess compliance with the FDA’s current Good Manufacturing Practices (“cGMPs”), to assure that the facilities, methods and controls are adequate to preserve the pharmaceutical product’s identity, strength, quality and purity; ● potential FDA audit of the preclinical and clinical trial sites that generated the data in support of the NDA or BLA; and ● FDA review and approval of the NDA or BLA. 19 Table of Contents The regulatory review and approval process is lengthy, expensive and uncertain.
The process required by the FDA before a pharmaceutical product may be marketed in the United States generally includes the following: ● completion of preclinical laboratory tests, animal studies and formulation studies according to good laboratory practices (“GLPs”) or other applicable regulations; ● submission to the FDA of an IND, which must be in effect before human clinical trials may begin in the United States; ● performance of adequate and well-controlled human clinical trials according to the FDA’s current good clinical practices (“GCPs”), to establish the safety and efficacy of the proposed pharmaceutical product for its intended use; ● submission to the FDA of an NDA or Biologics License Application (“BLA”) for a new pharmaceutical product; ● satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities where the pharmaceutical product is produced to assess compliance with the FDA’s current Good Manufacturing Practices (“cGMPs”), to assure that the facilities, methods and controls are adequate to preserve the pharmaceutical product’s identity, strength, quality and purity; ● potential FDA audit of the preclinical and clinical trial sites that generated the data in support of the NDA or BLA; and ● FDA review and approval of the NDA or BLA.
The trial is funded by a grant from the National Cancer Institute (“NCI”) (ClinicalTrials.gov Identifier: NCT06059391). ​ Helocyte anticipates that its Phase 2 multicenter, double-blind, randomized, placebo-controlled study measuring the safety and effectiveness of Triplex in reducing CMV complications in patients previously infected with CMV and undergoing donor hematopoietic cell transplant to be completed in the second half of 2025 ( ClinicalTrials.gov Identifier: NCT02506933). ​ Additionally, Helocyte is recruiting for a Phase 1/2 trial to study side effects and dosage for Triplex in treating pediatric patients with positive cytomegalovirus who are undergoing donor stem cell transplant ( ClinicalTrials.gov Identifier: NCT03354728). ​ HIV In December 2021, Helocyte announced that a Phase 2 double-blind, randomized, placebo-controlled clinical trial was initiated to evaluate the safety and efficacy of Triplex, a CMV vaccine, in eliciting a CMV-specific immune response and reducing CMV replication in people living with HIV.
The trial is funded by a grant from the National Cancer Institute (“NCI”) (ClinicalTrials.gov Identifier: NCT06059391). ​ Helocyte anticipates that its Phase 2 multicenter, double-blind, randomized, placebo-controlled study measuring the safety and effectiveness of Triplex in reducing CMV complications in patients previously infected with CMV and undergoing donor hematopoietic cell transplant to be completed in the first half of 2026 ( ClinicalTrials.gov Identifier: NCT02506933). ​ Additionally, Helocyte is recruiting for a Phase 1/2 trial to study safety outcomes and dosage for Triplex in treating pediatric patients with positive cytomegalovirus who are undergoing donor stem cell transplant ( ClinicalTrials.gov Identifier: NCT03354728). ​ 10 Table of Contents HIV In December 2021, Helocyte announced that a Phase 2 double-blind, randomized, placebo-controlled clinical trial was initiated to evaluate the safety and efficacy of Triplex, a CMV vaccine, in eliciting a CMV-specific immune response and reducing CMV replication in people living with HIV.
While GBM is a rare disease, with only 3.3 cases per 100,000 persons per year in the U.S., it is quite lethal, with a median survival of only 9 months. Standard of care therapy for patients less than 70 years of age consists of maximal surgical resection, radiation, chemotherapy with temozolomide, and alternating electric field therapy.
While GBM is a rare disease, with only 3.3 cases per 100,000 persons per year in the U.S., it is quite lethal, with a median survival of only 12-15 months. Standard of care therapy for patients less than 70 years of age consists of maximal surgical resection, radiation, chemotherapy with temozolomide, and alternating electric field therapy (“tumor treating fields”).
Triplex (cytomegalovirus (CMV) vaccine) Through our subsidiary Helocyte, we are developing Triplex, a universal recombinant Modified Vaccinia Ankara viral vector vaccine engineered to induce a rapid, robust and durable virus-specific T cell response to three immuno-dominant proteins (UL83 (pp65), UL123 (IE1), and UL122 (IE2)) linked to cytomegalovirus (“CMV”).
Late Stage Product Candidates Triplex (cytomegalovirus vaccine and immunotherapy) Through our subsidiary Helocyte, we are developing Triplex, a universal recombinant Modified Vaccinia Ankara viral vector vaccine engineered to induce a rapid, robust and durable virus-specific T cell response to three immuno-dominant proteins (UL83 (pp65), UL123 (IE1), and UL122 (IE2)) linked to cytomegalovirus (“CMV”).
The NDA holder or patent owner may then initiate a patent infringement lawsuit in response to 23 Table of Contents notice of the Paragraph IV certification.
The NDA holder or patent owner may then initiate a patent infringement lawsuit in response to notice of the Paragraph IV certification.
The NDA was filed under Section 505(b)(2) of the Food Drug and Cosmetic Act (“FDCA”) in January 2024 and was approved in November 2024 by the FDA (NDA 219015). Emrosi has Orange Book-listed patents that extend through January of 2039. In March 2025, Journey announced the commercial launch of Emrosi.
The NDA was filed under Section 505(b)(2) of the Food Drug and Cosmetic Act (“FDCA”) in January 2024 and was approved in November 2024 by the FDA (NDA 219015). Emrosi has Orange Book-listed patents that extend through January of 2039.
In addition, drugs studied for their safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit over existing treatments may receive accelerated approval and may be approved on the basis of adequate and well-controlled clinical trials establishing that the drug has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments.
Products that are eligible for fast track designation are also likely to be considered appropriate to receive a priority review. 20 Table of Contents In addition, drugs studied for their safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit over existing treatments may receive accelerated approval and may be approved on the basis of adequate and well-controlled clinical trials establishing that the drug has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments.
UNLOXCYT (cosibelimab-ipdl) Our partner company Checkpoint received approval in December 2024 for UNLOXCYT, which is the first and only programmed death-ligand 1 blocking antibody to receive FDA marketing approval for the treatment of adults with metastatic cSCC or locally advanced cSCC who are not candidates for curative surgery or curative radiation.
UNLOXCYT (cosibelimab-ipdl) Our former subsidiary Checkpoint received approval in December 2024 for UNLOXCYT, which is the first and only programmed death-ligand 1 blocking antibody to receive FDA marketing approval for the treatment of adults with metastatic cutaneous squamous cell carcinoma (“mcSCC”) or locally advanced CSCC (“lacSCC”) who are not candidates for curative surgery or curative radiation.
Emrosi has shown superiority to Oracea® and placebo on the co-primary endpoints and all secondary endpoints in two Phase 3 studies, including reduction of total lesion count, as well as reduction in erythema compared to placebo in both studies and was well-tolerated. The results from the Phase 3 studies were published in JAMA Dermatology in March 2025.
Emrosi has shown superiority to Oracea and placebo on the co-primary endpoints and all secondary endpoints in two Phase 3 studies, including reduction of total lesion count, as well as reduction in erythema compared to placebo in both studies and was well-tolerated.
Mustang is currently planning a Phase 1 clinical study that will investigate increasing doses of intratumorally administered MB-108 followed by dual intratumoral and intraventricular administration of MB-101 to treat recurrent GBM and high-grade astrocytomas that express IL13Rα2 on the surface of tumor cells.
The Phase 1 clinical study under that IND would investigate increasing doses of intratumorally administered MB-108 followed by dual intratumoral and intraventricular administration of MB-101 to treat recurrent GBM and high-grade astrocytomas that express IL13Rα2 on the surface of tumor cells.
Marketing Exclusivity and Patent Term Extensions Depending upon the timing, duration and specifics of the FDA approval of our drug candidates, some of our U.S. patents may be eligible for limited patent term extension (“PTE”) under the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Amendments.
Marketing Exclusivity and Patent Term Extensions Depending upon the timing, duration and specifics of the FDA approval of our drug candidates, some of our U.S. patents may be eligible for limited patent term extension (“PTE”) under the Hatch-Waxman Amendments.
DEA Regulation The Controlled Substances Act (CSA) imposes various registration, record-keeping and reporting requirements, procurement and manufacturing quotas, labeling and packaging requirements, security controls, prescription and order form requirements and restrictions on prescription refills for certain kinds of pharmaceutical products.
Drug Enforcement Agency (“DEA”) Regulation The Federal Controlled Substances Act of 1970 (“CSA”) imposes various registration, record-keeping and reporting requirements, procurement and manufacturing quotas, labeling and packaging requirements, security controls, prescription and order form requirements and restrictions on prescription refills for certain kinds of pharmaceutical products.
We will also be subject to various federal and state laws targeting fraud and abuse in the healthcare industry. These laws may impact, among other things, our proposed sales, marketing and educational programs. In addition, we may be subject to patient privacy regulation by both the federal government and the states in which we conduct our business.
These laws may impact, among other things, our proposed sales, marketing and educational programs. In addition, we may be subject to patient privacy regulation by both the federal government and the states in which we conduct our business.
We have executed arrangements in partnership with some of the world’s foremost universities, research institutes and pharmaceutical companies, including City of Hope National Medical Center, Fred Hutchinson Cancer Center, Dana-Farber Cancer Institute, Nationwide Children’s Hospital, Columbia University, the University of Pennsylvania, AstraZeneca plc, and Dr. Reddy’s Laboratories, Ltd.
We have executed arrangements in partnership with some of the world’s foremost universities, research institutes and pharmaceutical companies, including City of Hope National Medical Center (“COH” or “City of Hope”), Dana-Farber Cancer Institute, Nationwide Children’s Hospital, Columbia University, the University of Pennsylvania, AstraZeneca plc, Dr. Reddy’s Laboratories, Ltd. (“DRL”), and Sun Pharmaceutical Industries Limited (“Sun Pharma”).
Journey and EMROSI (Minocycline Hydrochloride Extended-Release Capsules, 40mg) In November 2024, we announced that partner company Journey received approval of Emrosi (also referred to as DFD-29), a 40mg minocycline hydrochloride extended release capsule for oral use indicated to treat inflammatory lesions (papules and pustules) of rosacea in adults.
EMROSI (Minocycline Hydrochloride Extended-Release Capsules, 40mg) Journey received approval in November 2024 for Emrosi (also referred to as DFD-29), a 40mg minocycline hydrochloride extended release capsule for oral use indicated to treat inflammatory lesions (papules and pustules) of rosacea in adults. Emrosi is now the lowest approved oral minocycline hydrochloride dose.
Pursuant to a contractual right exercised by Sentynl in October 2023, Cyprium assigned the NDA and certain other assets pertaining to the CUTX-101 program to Sentynl and received $4.5 million in connection with the closing of such transaction. Sentynl is obligated to use commercially reasonable efforts to develop and commercialize CUTX-101, including the funding of the same.
Pursuant to a contractual right exercised by Sentynl in October 2023, Cyprium assigned the NDA and certain other assets pertaining to the CUTX-101 program to Sentynl and received $4.5 million in connection with the closing of such transaction.
Orphan Drugs Under the Orphan Drug Act, special incentives exist for sponsors to develop products for rare diseases or conditions, which are defined to include those diseases or conditions that affect fewer than 200,000 people in the United States. Requests for orphan drug designation must be submitted before the submission of an NDA or BLA.
Orphan Drugs Under the Orphan Drug Act, special incentives exist for sponsors to develop products for rare diseases or conditions, which are defined to include those diseases or conditions that affect fewer than 200,000 people in the United States.
(“Cellvation”), Cyprium Therapeutics, Inc. (“Cyprium”), Helocyte, Inc. (“Helocyte”), Oncogenuity, Inc. (“Oncogenuity”) and Urica Therapeutics, Inc. (“Urica”). As used throughout this filing, the words “we”, “us” and “our” may refer to Fortress individually, to one or more of its subsidiaries and/or partner companies, or to all such entities as a group, as dictated by context.
As used throughout this filing, the words “we”, “us” and “our” may refer to Fortress individually, to one or more of its subsidiaries and/or partner companies, or to all such entities as a group, as dictated by context.
Government Regulation and Product Approval Government authorities in the United States, at the federal, state and local level, and other countries extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, post-approval monitoring and reporting, marketing and export and import of products such as those we are developing.
Generic products generally face intense competition from other generic equivalents (including authorized generics) and therapeutically similar branded or generic products. 17 Table of Contents Government Regulation and Product Approval Government authorities in the United States, at the federal, state and local level, and other countries extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, post-approval monitoring and reporting, marketing and export and import of products such as those we are developing.
Helocyte has an exclusive, worldwide license to Triplex from COH. Information on clinicaltrials.gov does not constitute part of this Annual Report on Form 10-K. Solid organ transplant In May 2024, Helocyte announced that the first patient was dosed in a multi-center, placebo-controlled, randomized Phase 2 study of Triplex for control of CMV in patients undergoing liver transplantation.
Helocyte has an exclusive, worldwide license to Triplex from COH. Solid organ transplant In May 2024, Helocyte announced that the first patient was dosed in a multi-center, placebo-controlled, randomized Phase 2 study of Triplex for control of CMV in patients undergoing liver transplantation.
Patent and Trademark Office (“USPTO”) proceedings, if a generic company launches a competing product “at risk,” or when the regulatory or licensed exclusivity for our products (if applicable) expires or is otherwise lost, we may face generic competition as a result.
When patents covering certain of our products (if applicable) expire or are successfully challenged through litigation or in U.S. Patent and Trademark Office (“USPTO”) proceedings, if a generic company launches a competing product “at risk,” or when the regulatory or licensed exclusivity for our products (if applicable) expires or is otherwise lost, we may face generic competition as a result.
We are unable to predict what these changes may look like in the future. International Regulation In addition to regulations in the United States, there are a variety of foreign regulations governing clinical trials, pricing and reimbursement, and commercial sales and distribution of any product candidates.
International Regulation In addition to regulations in the United States, there are a variety of foreign regulations governing clinical trials, pricing and reimbursement, and commercial sales and distribution of any product candidates.
MB-106 (CD20-targeted CAR T cell therapy) Mustang is currently developing MB-106 in a collaboration with Fred Hutchinson Cancer Center (“Fred Hutch”), a CD20-targeted, 3rd generation autologous CAR T-cell therapy, for patients with relapsed or refractory B-cell non-Hodgkin lymphomas (“NHL”), chronic lymphocytic leukemia (“CLL”), and autoimmune diseases.
Other Product Candidates MB-106 (CD20-targeted CAR T cell therapy) Mustang was previously developing MB-106 in a collaboration with Fred Hutchinson Cancer Center (“Fred Hutch”), a CD20-targeted, 3rd generation autologous CAR T-cell therapy, for patients with relapsed or refractory B-cell NHL, chronic lymphocytic leukemia, and autoimmune diseases.
In addition to federal scheduling, some drugs may be subject to state-controlled substance regulation and thus more extensive requirements than those determined by the DEA and FDA. 25 Table of Contents Other Healthcare Laws and Compliance Requirements In the United States, our activities are potentially subject to regulation by various federal, state and local authorities in addition to the FDA, including the Centers for Medicare and Medicaid Services (formerly the Health Care Financing Administration), other divisions of the United States Department of Health and Human Services (e.g., the Office of Inspector General), the United States Department of Justice, the DEA and individual United States Attorney offices within the Department of Justice, and state and local governments.
Other Healthcare Laws and Compliance Requirements In the United States, our activities are potentially subject to regulation by various federal, state and local authorities in addition to the FDA, including the Centers for Medicare and Medicaid Services (formerly the Health Care Financing Administration), other divisions of the United States Department of Health and Human Services (e.g., the Office of Inspector General), the United States Department of Justice, the DEA and individual United States Attorney offices within the Department of Justice, and state and local governments. 24 Table of Contents We will also be subject to various federal and state laws targeting fraud and abuse in the healthcare industry.
Emrosi is now the lowest approved oral minocycline hydrochloride dose. It was developed using Multiple Unit Pellet System technology, which combines Immediate Release (25%) and Extended Release (75%) Minocycline pellets for uniform drug release.
It was developed using Multiple Unit Pellet System technology, which combines Immediate Release (25%) and Extended Release (75%) Minocycline pellets for uniform drug release.
AJ201 is currently being studied in a Phase 1b/2a multicenter, randomized, double-blind clinical trial at six clinical sites across the U.S. for the treatment of spinal and bulbar muscular atrophy (“SBMA”), also known as Kennedy’s Disease ( ClinicalTrials.gov Identifier: NCT05517603). Enrollment was completed in January 2024. Information on clinicaltrials.gov does not constitute part of this Annual Report on Form 10-K.
AJ201 (Nrf1 and Nrf2 activator, androgen receptor degradation enhancer) AJ201 is currently being studied in a Phase 1b/2a multicenter, randomized, double-blind clinical trial at six clinical sites across the U.S. for the treatment of spinal and bulbar muscular atrophy (“SBMA”), also known as Kennedy’s Disease ( ClinicalTrials.gov Identifier: NCT05517603). Enrollment was completed in January 2024.
The study is funded by a $11.3 million grant from the California Institute of Regenerative Medicine (CIRM) in addition to other non-dilutive sources ( ClinicalTrials.gov Identifier: NCT06252402 ). 11 Table of Contents Oncology Helocyte is currently recruiting for two Phase 1 trials in combination with autologous CMV-specific CD19 CAR T cell therapy for adults with intermediate or high grade B-lineage NHL, and in settings following stem cell transplant in patients with high grade B-cell NHL ( ClinicalTrials.gov Identifiers: NCT05801913 and NCT05432635). ​ Additionally, a trial has been initiated for a Phase 1 trial in combination with an allogeneic anti-CD19-CAR CMV-specific T cell therapy for patients with high-risk ALL after matched related donor hematopoietic stem cell transplant ( ClinicalTrials.gov Identifier: NCT06735690). ​ CAEL-101 (monoclonal antibody for AL amyloidosis) Our former subsidiary Caelum, in collaboration with AstraZeneca plc (“AstraZeneca”), is working to develop a novel, first-in-class monoclonal antibody called CAEL-101 for the treatment of amyloid light chain (“AL”) amyloidosis.
Oncology Helocyte is currently recruiting for two Phase 1 trials in combination with autologous CMV-specific CD19 CAR T cell therapy for adults with intermediate or high grade B-lineage NHL, and in settings following stem cell transplant in patients with high grade B-cell NHL ( ClinicalTrials.gov Identifiers: NCT05801913 and NCT05432635). ​ Additionally, a trial has been initiated for a Phase 1 trial in combination with an allogeneic anti-CD19-CAR CMV-specific T cell therapy for patients with high-risk ALL after matched related donor hematopoietic stem cell transplant ( ClinicalTrials.gov Identifier: NCT06735690). ​ CAEL-101 (light chain fibril-reactive monoclonal antibody for AL amyloidosis) Our former subsidiary Caelum, in collaboration with AstraZeneca, is developing a novel, potentially first-in-class monoclonal antibody called CAEL-101 (also known as anselamimab) for the treatment of amyloid light chain (“AL”) amyloidosis.
It was in-licensed from Nationwide Children’s Hospital, and the University of Alabama at Birmingham (“UAB”) is evaluating the safety of this oncolytic virus in patients with recurrent glioblastoma in an ongoing Phase 1 trial ( ClinicalTrials.gov Identifier: NCT03657576). Information on clinicaltrials.gov does not constitute part of this Annual Report on Form 10-K.
It was in-licensed from Nationwide Children’s Hospital, and the University of Alabama at Birmingham is evaluating the safety of this oncolytic virus in patients with recurrent GBM in an ongoing Phase 1 trial ( ClinicalTrials.gov Identifier: NCT03657576).
To successfully compete for business with managed care and pharmacy benefits management organizations, we must often demonstrate that our products offer not only medical benefits, but also cost advantages as compared with other forms of care. Generic products generally face intense competition from other generic equivalents (including authorized generics) and therapeutically similar branded or generic products.
To successfully compete for business with managed care and pharmacy benefits management organizations, we must often demonstrate that our products offer not only medical benefits, but also cost advantages as compared with other forms of care.
United States Review and Approval Process The data and results generated from product development, preclinical studies and clinical trials, along with descriptions of the manufacturing process, analytical tests conducted on the chemistry of the pharmaceutical product, proposed labeling and other required information are submitted to the FDA as part of an NDA or BLA submission before the product can be marketed and sold.
Additionally, appropriate packaging must be selected, tested and stability studies must be conducted to demonstrate that the pharmaceutical product candidate does not undergo unacceptable deterioration over its shelf life. 19 Table of Contents United States Review and Approval Process The data and results generated from product development, preclinical studies and clinical trials, along with descriptions of the manufacturing process, analytical tests conducted on the chemistry of the pharmaceutical product, proposed labeling and other required information are submitted to the FDA as part of an NDA or BLA submission before the product can be marketed and sold.
Having optimized MB-101 dose, schedule, route of administration and T cell selection in a completed Phase 1 trial, ongoing COH sponsored studies include: ● MB-101 with or without nivolumab and ipilimumab in treating patients with recurrent or refractory glioblastoma (currently enrolling patients; ClinicalTrials.gov Identifier: NCT04003649); ● MB-101 in treating patients with recurrent or refractory glioblastoma with a substantial component of leptomeningeal disease (currently enrolling patients; ClinicalTrials.gov Identifier: NCT04661384); and ● MB-101 in treating children with recurrent or refractory IL13Rα2 positive brain tumors (currently enrolling patients; ClinicalTrials.gov Identifier: NCT04510051) sponsored by COH.
Having optimized MB-101 dose, schedule, route of administration and T cell selection in a completed Phase 1 trial, ongoing COH sponsored studies include: ● MB-101 with or without nivolumab and ipilimumab in treating patients with recurrent or refractory GBM (currently enrolling patients; ClinicalTrials.gov Identifier: NCT04003649); ● MB-101 in treating patients with recurrent or refractory GBM with a substantial component of leptomeningeal disease (active, not recruiting; ClinicalTrials.gov Identifier: NCT04661384); and ● MB-101 in treating children with recurrent or refractory IL13Rα2 positive brain tumors (currently enrolling patients; ClinicalTrials.gov Identifier: NCT04510051) sponsored by COH. 12 Table of Contents The final planned MB-101 trial will be in combination with the herpes simplex virus type 1 (“HSV-1”) oncolytic virus (MB-108) in treating patients with recurrent or refractory GBM and anaplastic astrocytoma.
The trial is being conducted by the AIDS Clinical Trials Group and is funded by the National Institute of Allergy and Infectious Disease, part of the National Institutes of Health ( ClinicalTrials.gov Identifier: NCT05099965).
The Phase 2 trial is fully enrolled with topline data anticipated in the first half of 2026. The trial is being conducted by the AIDS Clinical Trials Group and is funded by the National Institute of Allergy and Infectious Disease, part of the National Institutes of Health ( ClinicalTrials.gov Identifier: NCT05099965).
In November 2024, Mustang announced that the FDA granted Orphan Drug Designation to Mustang for MB-108 for the treatment of malignant glioma.
In November 2024, Mustang announced that the FDA granted Orphan Drug Designation to Mustang for MB-108 for the treatment of malignant glioma. In July 2025, Mustang announced that the FDA granted Orphan Drug Designation to Mustang for MB-101 for the treatment of recurrent diffuse and anaplastic astrocytoma (astrocytomas) and GBM.
Kaler, M.D., M.P.H., to fund the completion of preclinical studies, manufacturing, and preparation of an IND application for a first-in-human clinical trial. 16 Table of Contents AVTS-001 Gene Therapy In April 2023, we announced the execution of an asset purchase agreement, pursuant to which 4D Molecular Therapeutics (“4DMT”) acquired Aevitas’ proprietary rights to its short-form human complement factor H (“sCFH”) asset for the treatment of complement-mediated diseases.
AVTS-001 Gene Therapy In April 2023, we announced the execution of an asset purchase agreement, pursuant to which 4D Molecular Therapeutics (“4DMT”) acquired Aevitas’ proprietary rights to its short-form human complement factor H (“sCFH”) asset for the treatment of complement-mediated diseases.
(“AstraZeneca”) and Sentynl Therapeutics, Inc. (“Sentynl”). Our subsidiary and partner companies that are pursuing development and/or commercialization of biopharmaceutical products and product candidates are: Checkpoint Therapeutics, Inc. (Nasdaq: CKPT, “Checkpoint”), Journey Medical Corporation (Nasdaq: DERM, “Journey” or “JMC”), Mustang Bio, Inc. (Nasdaq: MBIO, “Mustang”), Avenue Therapeutics, Inc. (OTC: ATXI, “Avenue”), Baergic Bio, Inc. (“Baergic,” a subsidiary of Avenue), Cellvation, Inc.
Our subsidiary and partner companies that are pursuing development and/or commercialization of biopharmaceutical products and product candidates are: Journey Medical Corporation (Nasdaq: DERM, “Journey” or “JMC”), Mustang Bio, Inc. (Nasdaq: MBIO, “Mustang”), Avenue Therapeutics, Inc. (OTC: ATXI, “Avenue”), Cellvation, Inc. (“Cellvation”), Cyprium Therapeutics, Inc. (“Cyprium”), Helocyte, Inc. (“Helocyte”), Oncogenuity, Inc. (“Oncogenuity”) and Urica Therapeutics, Inc. (“Urica”). Checkpoint Therapeutics, Inc.
Additionally, Cyprium remains eligible to receive up to $129 million in aggregate development and sales milestones under the Agreement , and royalties on net sales of CUTX-101 as follows: (i) 3% of annual net sales up to $75 million; (ii) 8.75% of annual net sales between $75 million and $100 million; and (iii) 12.5% of annual net sales in excess of $100 million.
Cyprium is eligible to receive up to $128 million in aggregate sales milestones from Sentynl, as well as royalties on net sales of ZYCUBO as follows: (i) 3% of annual net sales up to $75 million; (ii) 8.75% of annual net sales between $75 million and $100 million; and (iii) 12.5% of annual net sales in excess of $100 million.
AJ201 has been granted Orphan Drug Designation by the FDA for the indications of SBMA, Huntington’s Disease, and Spinocerebellar Ataxia.
AJ201 has been granted Orphan Drug Designation by the FDA for the indications of SBMA, Huntington’s Disease, and Spinocerebellar Ataxia. 15 Table of Contents AJ201 is owned by AnnJi Pharmaceutical Co. Ltd. (“AnnJi”).
The principal purpose of our equity incentive plan is to attract, retain, and motivate selected employees, consultants, and directors through the granting of share-based compensation awards and cash-based bonus awards.
Our human capital management objectives include, as applicable, identifying, recruiting, retaining, incentivizing, and integrating our new and existing employees. The principal purpose of our equity incentive plan is to attract, retain, and motivate selected employees, consultants, and directors through the granting of share-based compensation awards and cash-based bonus awards.
If a product that has an orphan drug designation is the first such product to receive FDA approval for the disease for which it has such designation, the product is entitled to orphan product exclusivity for that use.
Requests for orphan drug designation must be submitted before the submission of an NDA or BLA. 22 Table of Contents If a product that has an orphan drug designation is the first such product to receive FDA approval for the disease for which it has such designation, the product is entitled to orphan product exclusivity for that use.
This foreign regulatory approval process, however, involves risks similar or identical to the risks associated with FDA approval discussed above, and therefore there are no guarantees that any company will be able to obtain the appropriate marketing authorization for any product in any particular country.
This foreign regulatory approval process, however, involves risks similar or identical to the risks associated with FDA approval discussed above, and therefore there are no guarantees that any company will be able to obtain the appropriate marketing authorization for any product in any particular country. 26 Table of Contents Employees and Human Capital Management As of December 31, 2025, we had 78 full-time employees at Fortress and our subsidiaries and partner companies.
The FDA also may require Phase 4 testing, risk minimization action plans and surveillance to monitor the effects of an approved product or place conditions on an approval that could restrict the distribution or use of the product. 21 Table of Contents Special FDA Expedited Review and Approval Programs The FDA has various programs, including fast track designation, accelerated approval, priority review and breakthrough therapy designation, that are intended to expedite or simplify the process for the development and FDA review of drugs that are intended for the treatment of serious or life-threatening diseases or conditions and demonstrate the potential to address unmet medical needs.
Special FDA Expedited Review and Approval Programs The FDA has various programs, including fast track designation, accelerated approval, priority review and breakthrough therapy designation, that are intended to expedite or simplify the process for the development and FDA review of drugs that are intended for the treatment of serious or life-threatening diseases or conditions and demonstrate the potential to address unmet medical needs.
Under the 505(b)(2) regulatory approval pathway, the applicant may reduce some of the burdens of developing a full clinical program by relying on investigations not conducted by the applicant and for which the applicant has not obtained a right of reference, such as prior investigations involving the listed drug.
Approval or submission of a 505(b)(2) application, like those for abbreviated new drugs, or ANDAs, may be delayed because of patent and/or exclusivity rights that apply to the previously approved drug. 21 Table of Contents Under the 505(b)(2) regulatory approval pathway, the applicant may reduce some of the burdens of developing a full clinical program by relying on investigations not conducted by the applicant and for which the applicant has not obtained a right of reference, such as prior investigations involving the listed drug.
Accordingly, we cannot be certain that submission of an IND will automatically result in the FDA allowing clinical trials to begin, or that, once begun, issues will not arise that causes such clinical trial to be suspended or terminated.
Accordingly, we cannot be certain that submission of an IND will automatically result in the FDA allowing clinical trials to begin, or that, once begun, issues will not arise that causes such clinical trial to be suspended or terminated. 18 Table of Contents Clinical trials involve the administration of the pharmaceutical product candidate to healthy volunteers or patients under the supervision of qualified investigators, generally physicians not employed by the sponsor.
Pharmaceutical Coverage, Pricing and Reimbursement In the United States and markets in other countries, sales of any products for which we receive regulatory approval for commercial sale will depend in part on the availability of reimbursement from third-party payors, including government health administrative authorities, managed care providers, private health insurers and other organizations.
Many states have adopted laws similar to the federal Anti-Kickback Statute, some of which apply to the referral of patients for healthcare items or services reimbursed by any source, not only the Medicare and Medicaid programs. 25 Table of Contents Pharmaceutical Coverage, Pricing and Reimbursement In the United States and markets in other countries, sales of any products for which we receive regulatory approval for commercial sale will depend in part on the availability of reimbursement from third-party payors, including government health administrative authorities, managed care providers, private health insurers and other organizations.
Late Stage Product Candidates CUTX-101 (copper histidinate injection for Menkes disease) Our subsidiary Cyprium was previously developing CUTX-101, a copper histidinate injection for the treatment of Menkes disease.
ZYCUBO (copper histidinate injection for Menkes disease, also referred to as CUTX-101) Our subsidiary Cyprium was previously developing CUTX-101, a copper histidinate injection for the treatment of Menkes disease in pediatric patients.
The Transaction Documents also granted Urica a secured 3% royalty on future net sales of dotinurad to be paid by Crystalys, and a right to receive nominal cash reimbursement payments for certain clinical and development costs incurred by Urica related to dotinurad.
The Transaction Documents also granted Urica a secured 3% royalty on future net sales of dotinurad to be paid by Crystalys.
Partner and subsidiary companies then assess a broad range of strategic arrangements to accelerate and provide additional funding to support research and development, including joint ventures, partnerships, out-licensings, sales transactions, and public and private financings. To date, four partner companies are publicly-traded, and three subsidiaries have consummated strategic partnerships with industry leaders AstraZeneca plc as successor-in-interest to Alexion Pharmaceuticals, Inc.
Partner and subsidiary companies then assess a broad range of strategic arrangements to accelerate and provide additional funding to support research and development, including joint ventures, partnerships, out-licensings, sales transactions, and public and private financings.
Preclinical Product Candidates AAV-ATP7A Gene Therapy Through our subsidiary Cyprium, we are developing adeno-associated virus (“AAV”)-based gene therapy (“AAV-ATP7A”) for the treatment of Menkes disease. Cyprium entered into a license agreement with Eunice Kennedy Shriver National Institute of Child Health and Human Development to acquire the global rights to develop and commercialize AAV-ATP7A gene therapy.
Cyprium entered into a license agreement with Eunice Kennedy Shriver National Institute of Child Health and Human Development to acquire the global rights to develop and commercialize AAV-ATP7A gene therapy.
This six month exclusivity, which runs from the end of other exclusivity protection or patent term, may be granted based on the voluntary completion of a pediatric trial in accordance with an FDA issued “Written Request” for such a trial, provided that at the time pediatric exclusivity is granted there is not less than nine months of term remaining.
This six month exclusivity, which runs from the end of other exclusivity protection or patent term, may be granted based on the voluntary completion of a pediatric trial in accordance with an FDA issued “Written Request” for such a trial, provided that at the time pediatric exclusivity is granted there is not less than nine months of term remaining. 23 Table of Contents Pediatric Information Under the Pediatric Research Equity Act (“PREA”), NDAs and BLAs or supplements to NDAs and BLAs must contain data to assess the safety and effectiveness of the treatment for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the treatment is safe and effective.
Mustang is currently exploring with COH to conduct an investigator-sponsored single-institution trial under the COH IND to treat patients with IL13Rα2+ recurrent GBM and high-grade astrocytoma with MB-109 that could potentially be initiated in the fourth quarter of 2025.
Mustang is currently exploring with COH to conduct an investigator-sponsored single-institution trial under the COH IND to treat patients with IL13Rα2+ recurrent GBM and high-grade astrocytoma with MB-109 that could potentially be initiated in the second quarter of 2026. 13 Table of Contents IV Tramadol Our partner company Avenue is developing an intravenous formulation of tramadol (“IV tramadol”), a schedule IV opioid for the treatment of post-operative acute pain.
Oncogenuity is seeking to optimize lead candidates targeting genetically driven cancers, including KRAS G12D, and other genetic disorders. 17 Table of Contents Intellectual Property Generally Our goal is to obtain, maintain and enforce patent protection for our product candidates, formulations, processes, methods and any other proprietary technologies, preserve our trade secrets, and operate without infringing on the proprietary rights of other parties, both in the United States and in other countries.
Avenue expects to receive approximately 74% of all future payments and royalties payable under the Baergic Agreement. ​ Intellectual Property Generally Our goal is to obtain, maintain and enforce patent protection for our product candidates, formulations, processes, methods and any other proprietary technologies, preserve our trade secrets, and operate without infringing on the proprietary rights of other parties, both in the United States and in other countries.
These studies are used to gain additional experience from the treatment of patients in the intended therapeutic indication and may be required by the FDA after it has been approved, and is on the market, as an ongoing condition of approval. 20 Table of Contents Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA and written IND safety reports must be submitted to the FDA and the investigators for serious and unexpected adverse events or any finding from tests in laboratory animals that suggests a significant risk for human subjects.
Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA and written IND safety reports must be submitted to the FDA and the investigators for serious and unexpected adverse events or any finding from tests in laboratory animals that suggests a significant risk for human subjects.
In addition, the ACA provides that the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act or the civil monetary penalties statute. 26 Table of Contents Many states have adopted laws similar to the federal Anti-Kickback Statute, some of which apply to the referral of patients for healthcare items or services reimbursed by any source, not only the Medicare and Medicaid programs.
In addition, the ACA provides that the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act or the civil monetary penalties statute.
AAV-ATP7A gene therapy has demonstrated the ability to rescue neurological phenotypes and improve survival when coadministered with copper histidinate injections in a mouse model of Menkes disease and has been granted Orphan Drug Designation by the FDA.
AAV-ATP7A gene therapy has demonstrated the ability to rescue neurological phenotypes and improve survival when coadministered with copper histidinate injections in a mouse model of Menkes disease and has been granted Orphan Drug Designation by the FDA. 14 Table of Contents In March 2024, Cyprium announced a $4.1 million grant from the National Institute of Neurological Disorders and Stroke of the NIH was awarded to the Research Institute at Nationwide Children’s Hospital and Principal Investigator, Stephen G.
The agreement also provides for additional potential payments to Caelum shareholders totaling up to $295 million, payable upon the achievement of regulatory and commercial milestones. Fortress is eligible to receive 42.4% of all possible potential milestone payments, which together with the upfront payment, would total up to approximately $182 million.
In October 2021, AstraZeneca acquired Caelum for an upfront payment of $135 million paid to Caelum shareholders, of which approximately $56.9 million was paid to Fortress. The agreement also provides for additional potential payments to Caelum shareholders totaling up to $295 million, payable upon the achievement of regulatory and commercial milestones.
Prior to the agreement with 4DMT, Aevitas licensed the sCFH asset from the University of Pennsylvania and also collaborated with University of Massachusetts Medical to optimize AAV constructs. CK-103 (BET Inhibitor) Checkpoint is currently developing CK-103, a novel, selective and potent small molecule inhibitor of bromodomain and extra-terminal (“BET”) bromodomains.
Prior to the agreement with 4DMT, Aevitas licensed the sCFH asset from the University of Pennsylvania and also collaborated with University of Massachusetts Medical to optimize AAV constructs.
(“Sentynl”), as well as royalties on net sales of CUTX-101 as follows: (i) 3% of annual net sales up to $75 million; (ii) 8.75% of annual net sales between $75 million and $100 million; and (iii) 12.5% of annual net sales in excess of $100 million.
Sentynl is obligated to use commercially reasonable efforts to develop and commercialize CUTX-101, including the funding of the same. 9 Table of Contents Cyprium is eligible to receive up to $128 million in aggregate sales milestones from Sentynl, as well as royalties on net sales of ZYCUBO as follows: (i) 3% of annual net sales up to $75 million; (ii) 8.75% of annual net sales between $75 million and $100 million; and (iii) 12.5% of annual net sales in excess of $100 million.
CAEL-101 is designed to improve organ function by reducing or eliminating amyloid deposits in the tissues and organs of patients with AL amyloidosis.
CAEL-101 is designed to improve organ function by reducing or eliminating amyloid deposits in the tissues and organs of patients with AL amyloidosis. CAEL-101 is currently in two Phase 3 trials for Mayo Stage IIIa and May Stage IIIb AL amyloidosis and additional information on those trials can be found at ClinicalTrials.gov using identifiers: NCT04512235 and NCT04504825.
IV Tramadol Our partner company Avenue is developing an intravenous formulation of tramadol (“IV tramadol”), a schedule IV opioid for the treatment of post-operative acute pain. Avenue completed two Phase 3 efficacy studies in 2018 and 2019 and announced that both had met their primary endpoints and all key secondary endpoints.
Avenue completed two Phase 3 efficacy studies in 2018 and 2019 and announced that both had met their primary endpoints and all key secondary endpoints.
Our major competitors in dermatology, including Galderma Laboratories, Almirall, Ortho-Dermatologics, Mayne Pharmaceuticals, Sun Pharma, Leo Pharma, and Arcutis Biotherapeutics, among others, vary depending on therapeutic and product category, dosage strength and drug-delivery systems, among other factors. 18 Table of Contents Generic Competition Our partner company Journey faces increased competition from manufacturers of generic pharmaceutical products, who may submit applications to FDA seeking to market generic versions of Journey’s products.
Accordingly, we face pressure to continually seek out technological innovations and to market our products effectively. Our major competitors in dermatology, including Galderma Laboratories, Almirall, Leo Pharma, Mayne Pharma, Botanix Pharmaceuticals, and Ortho Dermatologics, among others, vary depending on therapeutic and product category, dosage strength and drug-delivery systems, among other factors.
The applicant may rely upon published literature and/or the FDA’s findings of safety and effectiveness for an approved drug already on the market. Approval or submission of a 505(b)(2) application, like those for abbreviated new drugs, or ANDAs, may be delayed because of patent and/or exclusivity rights that apply to the previously approved drug.
The applicant may rely upon published literature and/or the FDA’s findings of safety and effectiveness for an approved drug already on the market.
This front-line regimen has remained relatively unchanged for the last 20 years due to the failure of novel therapies to improve survival, and there is no standard of care whatsoever for recurrent GBM. Immunotherapy approaches targeting brain tumors offer promise over conventional treatments.
Since the approval of temozolomide for frontline GBM treatment in 2005, tumor treating fields is the only novel therapy that has improved survival in this indication, and there is no standard of care whatsoever for recurrent GBM. Immunotherapy approaches targeting brain tumors offer promise over conventional treatments.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition, the Oaktree Agreement contains certain financial covenants, including, (i) a requirement that we maintain a minimum liquidity of $7.0 million, which may be reduced or increased as described in the Oaktree Agreement, and (ii) that product net sales of Journey meet a consolidated minimum net sales amount of $50.0 million on a trailing 12-month basis, tested quarterly, which may be reduced or increased as described in the Oaktree Agreement (the “Minimum Net Sales Test”), subject to certain exclusions.
Biggest changeIn addition, the New Oaktree Agreement contains certain financial covenants, including, (i) a requirement that we maintain a minimum liquidity of $7.0 million, which may be reduced or increased as described in the New Oaktree Agreement, and (ii) that product net sales of Journey meet a consolidated minimum net sales amount of $60.0 million as of the last day of the fiscal quarter ending December 31, 2025, $65.0 million as of the last day of the fiscal quarter ending March 31, 2026, $70.0 million as of the last day of the fiscal quarter ending June 30, 2026, $75.0 million as of the last day of the fiscal quarter ending September 30, 2026, and $80.0 million as of the fiscal quarter ending December 31, 2026 and the last day of each fiscal quarter thereafter (the “Minimum Net Sales Test”), subject to certain exclusions.
If any of our product candidates causes unacceptable adverse safety events in clinical trials, we may not be able to obtain regulatory approval or commercialize such product, if approved, preventing us from generating revenue from such products’ sale.
If any of our product candidates causes unacceptable adverse safety events in clinical trials, we may not be able to obtain regulatory approval or commercialize such product candidates, if approved, preventing us from generating revenue from such products’ sale.
The types of disputes that may arise between us and the third parties from whom we license intellectual property include, but are not necessarily limited to: ● the scope of rights granted under such license agreements and other interpretation-related issues; ● the extent to which our technologies and processes infringe on intellectual property of the licensor that is not subject to such license agreements; ● the scope and interpretation of the representations and warranties made to us by our licensors, including those pertaining to the licensors’ right title and interest in the licensed technology and the licensors’ right to grant the licenses contemplated by such agreements; ● the sublicensing of patent and other rights under our license agreements and/or collaborative development relationships, and the rights and obligations associated with such sublicensing, including whether or not a given transaction constitutes a sublicense under such license agreement; ● the diligence and development obligations under license agreements (which may include specific diligence milestones) and what activities or achievements satisfy those diligence obligations; ● whether or not the milestones associated with certain milestone payment obligations have been achieved or satisfied; ● the applicability or scope of indemnification claims or obligations under such license agreements; ● the permissibility and advisability of, and strategy regarding, the pursuit of potential third-party infringers of the intellectual property that is the subject of such license agreements; 53 Table of Contents ● the calculation of royalty, milestone, sublicense revenue and other payment obligations under such license agreements; ● the extent to which rights, if any, are retained by licensors under such license agreements; ● whether or not a material breach has occurred under such license agreements and the extent to which such breach, if deemed to have occurred, is or can be cured within applicable cure periods, if any; ● disputes regarding patent filing and prosecution decisions, as well as payment obligations regarding past and ongoing patent expenses; ● intellectual property rights resulting from the joint creation or use of intellectual property (including improvements made to licensed intellectual property) by our and our partners’ licensors and us and our partners; and ● the priority of invention of patented technology.
The types of disputes that may arise between us and the third parties from whom we license intellectual property include, but are not necessarily limited to: ● the scope of rights granted under such license agreements and other interpretation-related issues; ● the extent to which our technologies and processes infringe on intellectual property of the licensor that is not subject to such license agreements; 56 Table of Contents ● the scope and interpretation of the representations and warranties made to us by our licensors, including those pertaining to the licensors’ right title and interest in the licensed technology and the licensors’ right to grant the licenses contemplated by such agreements; ● the sublicensing of patent and other rights under our license agreements and/or collaborative development relationships, and the rights and obligations associated with such sublicensing, including whether or not a given transaction constitutes a sublicense under such license agreement; ● the diligence and development obligations under license agreements (which may include specific diligence milestones) and what activities or achievements satisfy those diligence obligations; ● whether or not the milestones associated with certain milestone payment obligations have been achieved or satisfied; ● the applicability or scope of indemnification claims or obligations under such license agreements; ● the permissibility and advisability of, and strategy regarding, the pursuit of potential third-party infringers of the intellectual property that is the subject of such license agreements; ● the calculation of royalty, milestone, sublicense revenue and other payment obligations under such license agreements; ● the extent to which rights, if any, are retained by licensors under such license agreements; ● whether or not a material breach has occurred under such license agreements and the extent to which such breach, if deemed to have occurred, is or can be cured within applicable cure periods, if any; ● disputes regarding patent filing and prosecution decisions, as well as payment obligations regarding past and ongoing patent expenses; ● intellectual property rights resulting from the joint creation or use of intellectual property (including improvements made to licensed intellectual property) by our and our partners’ licensors and us and our partners; and ● the priority of invention of patented technology.
On September 19, 2024, the United Stated District Court Southern District of New York through the United States Marshalls notified the Company that it has recovered and would be returning to the Company a portion of the misappropriated cash, and in December of 2024 Journey received $4.6 million in connection with the recovery of funds related to the cybersecurity incident. ​ In addition, the loss or corruption of, or other damage to, clinical trial data from completed or future clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data.
On September 19, 2024, the United States District Court Southern District of New York through the United States Marshalls notified the Company that it has recovered and would be returning to the Company a portion of the misappropriated cash, and in December of 2024 Journey received $4.6 million in connection with the recovery of funds related to the cybersecurity incident. ​ In addition, the loss or corruption of, or other damage to, clinical trial data from completed or future clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data.
The applicable federal, state and foreign healthcare laws and regulations that may affect our ability to operate include, but are not necessarily limited to: ● the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under federal and state healthcare programs, such as Medicare and Medicaid; ● federal civil and criminal false claims laws and civil monetary penalty laws, including the federal False Claims Act, which impose criminal and civil penalties, including civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; ● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their respective implementing regulations, which impose obligations on covered healthcare providers, health plans, and healthcare clearinghouses, as well as their business associates that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; ● the federal Open Payments program, which requires manufacturers of certain drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare & Medicaid Services, or CMS, information related to “payments or other transfers of value” made to “covered recipients,” which include physicians (defined to include doctors, dentists, optometrists, podiatrists, chiropractors, physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, certified nurse-midwives and teaching hospitals) and applicable manufacturers.
The applicable federal, state and foreign healthcare laws and regulations that may affect our ability to operate include, but are not necessarily limited to: ● the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under federal and state healthcare programs, such as Medicare and Medicaid; 61 Table of Contents ● federal civil and criminal false claims laws and civil monetary penalty laws, including the federal False Claims Act, which impose criminal and civil penalties, including civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; ● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their respective implementing regulations, which impose obligations on covered healthcare providers, health plans, and healthcare clearinghouses, as well as their business associates that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; ● the federal Open Payments program, which requires manufacturers of certain drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare & Medicaid Services, or CMS, information related to “payments or other transfers of value” made to “covered recipients,” which include physicians (defined to include doctors, dentists, optometrists, podiatrists, chiropractors, physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, certified nurse-midwives and teaching hospitals) and applicable manufacturers.
You should consider carefully the risks and uncertainties described below, together with all of the other information in this Annual Report on Form 10-K including the consolidated financial statements and the related notes, as well as the risks, uncertainties and other information set forth in the reports and other materials filed or furnished by our partner companies Avenue, Checkpoint, Journey and Mustang with the SEC, before deciding to invest in our Securities.
You should consider carefully the risks and uncertainties described below, together with all of the other information in this Annual Report on Form 10-K including the Consolidated Financial Statements and the related notes, as well as the risks, uncertainties and other information set forth in the reports and other materials filed or furnished by our partner companies Avenue, Journey and Mustang with the SEC, before deciding to invest in our Securities.
The stock prices of our securities may experience substantial volatility as a result of a number of factors, including, but not necessarily limited to: ● announcements we make regarding our current product candidates, acquisition of potential new product candidates and companies and/or in-licensing through multiple partners/affiliates; ● sales or potential sales of substantial amounts of our Common Stock; ● issuance of debt or other securities; ● our delay or failure in initiating or completing pre-clinical or clinical trials or unsatisfactory results of any of these trials; ● announcements about us or about our competitors, including clinical trial results, regulatory approvals or new product introductions; ● developments concerning our licensors and/or product manufacturers; ● litigation and other developments relating to our patents or other proprietary rights or those of our competitors; ● conditions in the pharmaceutical or biotechnology industries; 62 Table of Contents ● governmental regulation and legislation; ● unstable regional political and economic conditions; ● variations in our anticipated or actual operating results; and ● change in securities analysts’ estimates of our performance, or our failure to meet analysts’ expectations.
The stock prices of our securities may experience substantial volatility as a result of a number of factors, including, but not necessarily limited to: ● announcements we make regarding our current product candidates, acquisition of potential new product candidates and companies and/or in-licensing through multiple partners/affiliates; ● sales or potential sales of substantial amounts of our Common Stock; ● issuance of debt or other securities; 66 Table of Contents ● our delay or failure in initiating or completing pre-clinical or clinical trials or unsatisfactory results of any of these trials; ● announcements about us or about our competitors, including clinical trial results, regulatory approvals or new product introductions; ● developments concerning our licensors and/or product manufacturers; ● litigation and other developments relating to our patents or other proprietary rights or those of our competitors; ● conditions in the pharmaceutical or biotechnology industries; ● governmental regulation and legislation; ● unstable regional political and economic conditions; ● variations in our anticipated or actual operating results; and ● change in securities analysts’ estimates of our performance, or our failure to meet analysts’ expectations.
Later discovery of previously unknown problems with products, manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in actions such as: ● restrictions on product manufacturing, distribution or use; 56 Table of Contents ● restrictions on the labeling or marketing of a product; ● requirements to conduct post-marketing studies or clinical trials; ● warning letters, untitled letters, or Form 483s; ● recalls or other withdrawal of the products from the market; ● refusal to approve pending applications or supplements to approved applications that we submit; ● fines; ● suspension or withdrawal of marketing or regulatory approvals; ● refusal to permit the import or export of products; ● product seizure or detentions; ● injunctions or the imposition of civil or criminal penalties; and ● adverse publicity.
Later discovery of previously unknown problems with products, manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in actions such as: ● restrictions on product manufacturing, distribution or use; ● restrictions on the labeling or marketing of a product; ● requirements to conduct post-marketing studies or clinical trials; ● warning letters, untitled letters, or Form 483s; ● recalls or other withdrawal of the products from the market; ● refusal to approve pending applications or supplements to approved applications that we submit; ● fines; ● suspension or withdrawal of marketing or regulatory approvals; ● refusal to permit the import or export of products; ● product seizure or detentions; 60 Table of Contents ● injunctions or the imposition of civil or criminal penalties; and ● adverse publicity.
The commencement or resumption of clinical trials can be delayed for a variety of reasons, including, but not necessarily limited to, delays in: ● obtaining regulatory approval to commence or resume a clinical trial; ● identifying, recruiting and training suitable clinical investigators; 29 Table of Contents ● reaching and maintaining agreements on acceptable terms with CROs and trial sites, the terms of which may be subject to extensive negotiation and modification from time to time and may vary significantly among different CROs and trial sites; ● obtaining sufficient quantities of a product candidate for use in clinical trials; ● obtaining IRB or ethics committee approval to conduct a clinical trial at a prospective site; ● developing and validating companion diagnostics on a timely basis, if required; ● adding new clinical sites once a trial has begun; ● the death, disability, departure or other change to the principal investigator or other staff overseeing the clinical trial at a given site; ● identifying, recruiting and enrolling patients to participate in a clinical trial; or ● retaining patients who participate in a clinical trial and replacing those who may withdraw due to adverse events from the therapy, insufficient efficacy, fatigue with the clinical trial process, personal issues, or other reasons.
The commencement or resumption of clinical trials can be delayed for a variety of reasons, including, but not necessarily limited to, delays in: ● obtaining regulatory approval to commence or resume a clinical trial; ● identifying, recruiting and training suitable clinical investigators; ● reaching and maintaining agreements on acceptable terms with CROs and trial sites, the terms of which may be subject to extensive negotiation and modification from time to time and may vary significantly among different CROs and trial sites; ● obtaining sufficient quantities of a product candidate for use in clinical trials; ● obtaining IRB or ethics committee approval to conduct a clinical trial at a prospective site; ● developing and validating companion diagnostics on a timely basis, if required; ● adding new clinical sites once a trial has begun; ● the death, disability, departure or other change to the principal investigator or other staff overseeing the clinical trial at a given site; ● identifying, recruiting and enrolling patients to participate in a clinical trial; or ● retaining patients who participate in a clinical trial and replacing those who may withdraw due to adverse events from the therapy, insufficient efficacy, fatigue with the clinical trial process, personal issues, or other reasons.
If any of the following risks or the risks included in the public filings of Avenue, Checkpoint, Journey or Mustang were to materialize, our business, financial condition, results of operations, and future growth prospects could be materially and adversely affected.
If any of the following risks or the risks included in the public filings of Avenue, Journey or Mustang were to materialize, our business, financial condition, results of operations, and future growth prospects could be materially and adversely affected.
The breach of any other such provisions (even, potentially, in an immaterial manner) could result in an event of default under the Oaktree Agreement, the announcement and impact of which could have a negative impact on the trading prices of our securities.
The breach of any other such provisions (even, potentially, in an immaterial manner) could result in an event of default under the New Oaktree Agreement, the announcement and impact of which could have a negative impact on the trading prices of our securities.
Especially as pertains liability and indemnification provisions, because of the frequent disparities in negotiating leverage, we are often compelled to agree to low caps on counterparty liability and/or indemnification language that could result in outsized liability to us in situations where we have zero or relatively little culpability. 46 Table of Contents New environmental laws or regulations in the various jurisdictions in which we operate may also impose additional requirements that impact the way our products and product candidates are manufactured or packaged.
Especially as pertains liability and indemnification provisions, because of the frequent disparities in negotiating leverage, we are often compelled to agree to low caps on counterparty liability and/or indemnification language that could result in outsized liability to us in situations where we have zero or relatively little culpability. 49 Table of Contents New environmental laws or regulations in the various jurisdictions in which we operate may also impose additional requirements that impact the way our products and product candidates are manufactured or packaged.
If a third party claims that we or any of our licensors, suppliers or collaborators infringe the third party’s intellectual property rights, we may have to, among other things: ● obtain additional licenses, which may not be available on commercially reasonable terms, if at all; ● abandon an infringing product candidate or redesign products or processes to avoid infringement, which may demand substantial funds, time and resources and which may result in inferior or less desirable processes and/or products; ● pay substantial damages, including the possibility of treble damages and attorneys’ fees, if a court decides that the product or proprietary technology at issue infringes on or violates the third party’s rights; ● pay substantial royalties, fees and/or grant cross-licenses to our product candidates; and/or ● defend litigation or administrative proceedings which may be costly regardless of outcome, and which could result in a substantial diversion of financial and management resources.
If a third party claims that we or any of our licensors, suppliers or collaborators infringe the third party’s intellectual property rights, we may have to, among other things: ● obtain additional licenses, which may not be available on commercially reasonable terms, if at all; 55 Table of Contents ● abandon an infringing product candidate or redesign products or processes to avoid infringement, which may demand substantial funds, time and resources and which may result in inferior or less desirable processes and/or products; ● pay substantial damages, including the possibility of treble damages and attorneys’ fees, if a court decides that the product or proprietary technology at issue infringes on or violates the third party’s rights; ● pay substantial royalties, fees and/or grant cross-licenses to our product candidates; and/or ● defend litigation or administrative proceedings which may be costly regardless of outcome, and which could result in a substantial diversion of financial and management resources.
The Oaktree Agreement contains customary affirmative and negative covenants, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness, and dividends and other distributions, subject to certain exceptions.
The New Oaktree Agreement contains customary affirmative and negative covenants, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness, and dividends and other distributions, subject to certain exceptions.
Future in-licenses or acquisitions, however, may entail numerous operational and financial risks, including, but not necessarily limited to: ● exposure to unknown liabilities; ● disruption of our business and diversion of our management’s time and attention to develop acquired products or technologies; ● difficulty or inability to secure financing to fund development activities for such acquired or in-licensed technologies in the current economic environment; ● incurrence of substantial debt or dilutive issuances of securities to pay for acquisitions; ● higher than expected acquisition and integration costs; ● increased amortization expenses; ● difficulty and cost in combining the operations and personnel of any acquired businesses with our operations and personnel; ● impairment of relationships with key suppliers or customers of any acquired businesses due to changes in management and ownership; and ● inability to retain key employees of any acquired businesses.
Future in-licenses or acquisitions, however, may entail numerous operational and financial risks, including, but not necessarily limited to: ● exposure to unknown liabilities; ● disruption of our business and diversion of our management’s time and attention to develop acquired products or technologies; ● difficulty or inability to secure financing to fund development activities for such acquired or in-licensed technologies in the current economic environment; ● incurrence of substantial debt or dilutive issuances of securities to pay for acquisitions; ● higher than expected acquisition and integration costs; ● increased amortization expenses; ● difficulty and cost in combining the operations and personnel of any acquired businesses with our operations and personnel; ● impairment of relationships with key suppliers or customers of any acquired businesses due to changes in management and ownership; and 46 Table of Contents ● inability to retain key employees of any acquired businesses.
Fluctuations in interest rates may negatively impact the rate of return that we realize on the investment securities that we hold. ​ We customarily invest a significant portion of our cash in Insured Cash Sweeps (“ICS”) and/or Certificate of Deposit Account Registry Service (“CDARS”) accounts, each of which bear interest income to us that fluctuates according to adjustments in the target federal funds rate effected by the U.S.
Fluctuations in interest rates may negatively impact the rate of return that we realize on the investment securities that we hold. ​ We customarily invest a significant portion of our cash in Insured Cash Sweeps (“ICS”) and/or Certificate of Deposit Account Registry Service (“CDARS”) accounts, each of which bears interest income to us that fluctuates according to adjustments in the target federal funds rate effected by the U.S.
In addition, the Company is also required to (i) raise common equity, or receive in monetizations or distributions, by the end of each calendar year prior to the maturity date, in an aggregate amount equal to the greater of $20 million or 50% of an amount set forth in an annual budget delivered to the lenders and (ii) maintain a specified minimum equity stake in Journey.
In addition, the Company is also required to (i) raise common equity, or receive in proceeds from monetizations or distributions, by the end of each calendar year prior to the maturity date, in an aggregate amount equal to the greater of $20 million or 50% of an amount set forth in an annual budget delivered to the lenders and (ii) maintain a specified minimum equity stake in Journey.
Our losses have had, and are expected to continue to have, an adverse impact on our working capital, total assets and stockholders’ equity. 34 Table of Contents Because of the numerous risks and uncertainties associated with developing pharmaceutical products, we are unable to predict the timing or amount of increased expenses or when or if, we will be able to achieve profitability.
Our losses have had, and are expected to continue to have, an adverse impact on our working capital, total assets and stockholders’ equity. 36 Table of Contents Because of the numerous risks and uncertainties associated with developing pharmaceutical products, we are unable to predict the timing or amount of increased expenses or when or if, we will be able to achieve profitability.
We also cannot predict the extent to which FDA and SEC regulations, policies, and decisions may become subject to increasing legal challenges, delays, and changes. ​ 59 Table of Contents General and Other Risks Our business and operations would suffer in the event of computer system failures, cyber-attacks, or deficiencies in our or third parties’ cybersecurity.
We also cannot predict the extent to which FDA and SEC regulations, policies, and decisions may become subject to increasing legal challenges, delays, and changes. 63 Table of Contents General and Other Risks Our business and operations would suffer in the event of computer system failures, cyber-attacks, or deficiencies in our or third parties’ cybersecurity.
Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an 63 Table of Contents “ownership change” (generally defined as a greater than 50-percentage- point cumulative change (by value) in the equity ownership of certain stockholders over a rolling three-year period), the corporation’s ability to use all of its pre-change NOLs and other pre-change tax attributes to offset its post-change taxable income or taxes may be limited.
Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change” (generally defined as a greater than 50-percentage- point cumulative change (by value) in the equity ownership of certain stockholders over a rolling three-year period), the corporation’s ability to use all of its pre-change NOLs and other pre-change tax attributes to offset its post-change taxable income or taxes may be limited.
The degree of market acceptance of any approved products would depend on a number of factors, including, but not necessarily limited to: ● the efficacy and safety as demonstrated in clinical trials; ● the timing of market introduction of such products as well as competitive products; ● the clinical indications for which the product is approved; ● acceptance by physicians, major operators of hospitals and clinics and patients of the product as a safe and effective treatment; ● the potential and perceived advantages of such products over alternative treatments; ● the safety of such products in a broader patient group (i.e., based on actual use); 54 Table of Contents ● the availability, cost and benefits of treatment, in relation to alternative treatments; ● the availability of adequate reimbursement and pricing by third parties and government authorities; ● changes in regulatory requirements by government authorities for such products; ● the product labeling or product insert required by the FDA or regulatory authority in other countries, including any contradictions, warnings, drug interactions, or other precautions; ● changes in the standard of care for the targeted indications for our product candidate or future product candidates, which could reduce the marketing impact of any labeling or marketing claims that we could make following FDA approval; ● relative convenience and ease of administration; ● the prevalence and severity of side effects and adverse events; ● the effectiveness of our sales and marketing efforts; and ● unfavorable publicity relating to the product.
The degree of market acceptance of any approved products would depend on a number of factors, including, but not necessarily limited to: ● the efficacy and safety as demonstrated in clinical trials; ● the timing of market introduction of such products as well as competitive products; ● the clinical indications for which the product is approved; ● acceptance by physicians, major operators of hospitals and clinics and patients of the product as a safe and effective treatment; ● the potential and perceived advantages of such products over alternative treatments; ● the safety of such products in a broader patient group (i.e., based on actual use); ● the availability, cost and benefits of treatment, in relation to alternative treatments; ● the availability of adequate reimbursement and pricing by third parties and government authorities; ● changes in regulatory requirements by government authorities for such products; ● the product labeling or product insert required by the FDA or regulatory authority in other countries, including any contradictions, warnings, drug interactions, or other precautions; ● changes in the standard of care for the targeted indications for our product candidates or future product candidates, which could reduce the marketing impact of any labeling or marketing claims that we could make following FDA approval; ● relative convenience and ease of administration; ● the prevalence and severity of adverse events; ● the effectiveness of our sales and marketing efforts; and ● unfavorable publicity relating to the product.
We would expect either of these alternatives to be a more expensive method of raising additional capital and more dilutive to our stockholders relative to using a Form S-3 shelf registration statement. ​ Risks Pertaining to Our Existing Revenue Stream from Journey Medical Corporation Future revenue based on sales of our dermatology products, Qbrexza, Accutane, Amzeeq, Zilxi, Targadox, Exelderm, Luxamend and Emrosi, may be lower than expected or lower than in previous periods.
We would expect either of these alternatives to be a more expensive method of raising additional capital and may be more dilutive to our stockholders relative to using a Form S-3 shelf registration statement. 40 Table of Contents Risks Pertaining to Our Existing Revenue Stream from Journey Medical Corporation Future revenue based on sales of our dermatology products, Qbrexza, Accutane, Amzeeq, Zilxi, Targadox, Exelderm, Luxamend and Emrosi, may be lower than expected or lower than in previous periods.
Specifically, the anti- bribery provisions of the FCPA prohibit the willful use of the mails or any means of instrumentality of interstate commerce corruptly in furtherance of any offer, payment, promise to pay, or authorization of the payment of money or anything of value to any person, while knowing that all or a portion of such money or thing 58 Table of Contents of value will be offered, given or promised, directly or indirectly, to a foreign official to influence the foreign official in his or her official capacity, induce the foreign official to do or omit to do an act in violation of his or her lawful duty, or to secure any improper advantage in order to assist in obtaining or retaining business for or with, or directing business to, any person; enforcement actions may be brought by the Department of Justice or the SEC; legislation has expanded the SEC’s power to seek disgorgement in all FCPA cases filed in federal court and extended the statute of limitations in SEC enforcement actions in intent-based claims, such as those under the FCPA, from five years to ten years; and ● analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
Specifically, the anti- bribery provisions of the FCPA prohibit the willful use of the mails or any means of instrumentality of interstate commerce corruptly in furtherance of any offer, payment, promise to pay, or authorization of the payment of money or anything of value to any person, while knowing that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to a foreign official to influence the foreign official in his or her official capacity, induce the foreign official to do or omit to do an act in violation of his or her lawful duty, or to secure any improper advantage in order to assist in obtaining or retaining business for or with, or directing business to, any person; enforcement actions may be brought by the Department of Justice or the SEC; legislation has expanded the SEC’s power to seek disgorgement in all FCPA cases filed in federal court and extended the statute of limitations in SEC enforcement actions in intent-based claims, such as those under the FCPA, from five years to ten years; and ● analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts. 62 Table of Contents Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations may involve substantial costs.
While physicians may prescribe drugs for uses that are not described in the product’s label or that differ from those tested in clinical studies and approved by the regulatory authorities (“off label uses”), our ability to promote the products is limited to those indications that are specifically approved by the FDA.
While physicians may prescribe drugs for uses that are not described in the product’s label or that differ from those tested in clinical studies and approved by the regulatory authorities, our ability to promote the products is limited to those indications that are specifically approved by the FDA.
The FDA and other regulatory agencies may delay, limit or refuse approval of a product candidate for many reasons, including, but not limited to: ● disagreement with the trial design or implementation of our clinical trials, including proper use of clinical trial methods and methods of data analysis; ● an inability to establish sufficient data and information to demonstrate that a product candidate is safe and/or effective for an indication; ● the FDA’s rejection of clinical data from trials conducted by individual investigators or in countries where the standard of care is potentially different from that of the United States; ● the FDA’s determination that clinical trial results do not meet the statistical significance levels required for approval; ● a disagreement by the applicable regulator regarding the interpretation of preclinical study or trial data; ● determination by the FDA that our manufacturing processes or facilities or those of third-party manufacturers with which we or our collaborators contract for clinical supplies or plan to contract for commercial supplies, do not satisfactorily comply with cGMPs; or ● a change to the FDA’s approval policies or interpretation of regulations rendering our clinical data, product characteristics, or benefit-risk profile insufficient or unfavorable for approval.
The FDA and other regulatory agencies may delay, limit or refuse approval of a product candidate for many reasons, including, but not limited to: ● disagreement with the trial design or implementation of our clinical trials, including proper use of clinical trial methods and methods of data analysis; ● an inability to establish sufficient data and information to demonstrate that a product candidate is safe and/or effective for an indication; ● the FDA’s rejection of clinical data from trials conducted by individual investigators or in countries where the standard of care is potentially different from that of the United States; ● the FDA’s determination that clinical trial results do not meet the statistical significance levels required for approval; ● a disagreement by the applicable regulator regarding the interpretation of preclinical study or trial data; ● determination by the FDA that our manufacturing processes or facilities or those of third-party manufacturers with which we or our collaborators contract for clinical supplies or plan to contract for commercial supplies, do not satisfactorily comply with cGMPs; or ● a change to the FDA’s approval policies or interpretation of regulations rendering our clinical data, product characteristics, or benefit-risk profile insufficient or unfavorable for approval, including changes that may be taken by the current presidential administration.
The FOMC recently lowered the target federal funds rate and is anticipated by some to effect further decreases over the coming weeks and months, actions which have decreased, and could further decrease the amount of interest income that we generate on our ICS, CDARS, and other short-term cash equivalent investment securities that we may hold. ​ 66 Table of Contents Item 1B.
The FOMC recently lowered the target federal funds rate and is anticipated by some to effect further decreases over the coming weeks and months, actions which have decreased, and could further decrease, the amount of interest income that we generate on our ICS, CDARS, and other short-term cash equivalent investment securities that we may hold. ​ Item 1B.
Adverse events in our clinical 31 Table of Contents trials, even if not ultimately attributable to our product candidates, and the resulting publicity, could lead to increased governmental regulation, unfavorable public perception, potential regulatory delays in the testing or approval of our potential product candidates, stricter labeling requirements for those product candidates that do obtain approval and/or a decrease in demand for any such product candidates.
Adverse events in our clinical trials, even if not ultimately attributable to our product candidates, and the resulting publicity, could lead to increased governmental regulation, unfavorable public perception, potential regulatory delays in the testing or approval of our potential product candidates, stricter labeling requirements for those product candidates that do obtain approval and/or a decrease in demand for any such product candidates.
If any of our or our licensors’ trade secrets were to be disclosed to or independently developed by a competitor, our competitive positions would be harmed. 50 Table of Contents The patent prosecution process is expensive and time-consuming, and we may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner.
If any of our or our licensors’ trade secrets were to be disclosed to or independently developed by a competitor, our competitive positions would be harmed. The patent prosecution process is expensive and time-consuming, and we may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner.
Additionally, while we may 40 Table of Contents seek approval of our product candidates in combination with each other, there can be no guarantee that we will obtain coverage and reimbursement for any of our products together, or that such reimbursement will incentivize the use of our products in combination with each other as opposed to in combination with other agents which may be priced more favorably to the medical community.
Additionally, while we may seek approval of our product candidates in combination with each other, there can be no guarantee that we will obtain coverage and reimbursement for any of our products together, or that such reimbursement will incentivize the use of our products in combination with each other as opposed to in combination with other agents which may be priced more favorably to the medical community.
As a result, our business, operations, and financial condition could be materially harmed. 45 Table of Contents Risks Pertaining to Reliance on Third Parties We rely predominantly on third parties to manufacture the majority of our preclinical and clinical pharmaceutical supplies, and we expect to continue to rely heavily on such third parties and other contractors to produce commercial supplies of our product candidates and products, if approved.
As a result, our business, operations, and financial condition could be materially harmed. 48 Table of Contents Risks Pertaining to Reliance on Third Parties We rely predominantly on third parties to manufacture the majority of our preclinical and clinical pharmaceutical supplies, and we expect to rely heavily on such third parties and other contractors to produce commercial supplies of our product candidates and products, if approved.
Our 51 Table of Contents competitors may be able to circumvent our owned or licensed patents by developing similar or alternative technologies or products in a non-infringing manner. We also may rely on the regulatory period of market exclusivity for any of our biologic product candidates that are successfully developed and approved for commercialization.
Our competitors may be able to circumvent our owned or licensed patents by developing similar or alternative technologies or products in a non-infringing manner. We also may rely on the regulatory period of market exclusivity for any of our biologic product candidates that are successfully developed and approved for commercialization.
Any claims we assert against accused infringers 52 Table of Contents could provoke these parties to assert counterclaims against us alleging invalidity of our or our licensors’ patents or that we infringe their patents; or provoke those parties to petition the PTO to institute inter partes review against the asserted patents, which may lead to a finding that all or some of the claims of the patent are invalid.
Any claims we assert against accused infringers could provoke these parties to assert counterclaims against us alleging invalidity of our or our licensors’ patents or that we infringe their patents; or provoke those parties to petition the PTO to institute inter partes review against the asserted patents, which may lead to a finding that all or some of the claims of the patent are invalid.
Alternatively, even if a product candidate is approved for marketing, future adverse events could lead to the withdrawal of such product from the market. Suspensions or delays in the completion of clinical testing could result in increased costs and/or delay or prevent our ability to complete development of that product candidate or generate product revenues.
Alternatively, even if a product candidate is approved for marketing, future adverse events could lead to the withdrawal of such product from the market. 30 Table of Contents Suspensions or delays in the completion of clinical testing could result in increased costs and/or delay or prevent our ability to complete development of that product candidate or generate product revenues.
Provisions of our certificate of incorporation, our bylaws and Delaware law may have the effect of deterring unsolicited takeovers and/or delaying or preventing a change in control of our Company or changes in our management, including 65 Table of Contents transactions in which our stockholders might otherwise receive a premium for their shares over then-current market prices.
Provisions of our certificate of incorporation, our bylaws and Delaware law may have the effect of deterring unsolicited takeovers and/or delaying or preventing a change in control of our Company or changes in our management, including transactions in which our stockholders might otherwise receive a premium for their shares over then-current market prices.
Also, a significant portion of Journey’s sales derive from products that are without patent protection and/or are or may become subject to third party generic competition; the 38 Table of Contents introduction of new competitor products, or increased market share of existing competitor products, could have a significant adverse effect on our operating income.
Also, a significant portion of Journey’s sales derive from products that are without patent protection and/or are or may become subject to third party generic competition; the introduction of new competitor products, or increased market share of existing competitor products, could have a significant adverse effect on our operating income.
These current or future laws and regulations may impair our research, development or production efforts. Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions. The use of artificial intelligence in the healthcare industry and challenges with properly managing its use could adversely affect our business.
These current or future laws and regulations may impair our research, development or production efforts. Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions. 68 Table of Contents The use of artificial intelligence in the healthcare industry and challenges with properly managing its use could adversely affect our business.
A decline in the value of our company could also cause you to lose all or part of your investment. To fund our operations and service our debt securities, which may be deemed to include our Series A Preferred Stock, we will be required to generate a significant amount of cash.
A decline in the value of our company could also cause you to lose all or part of your investment. 37 Table of Contents To fund our operations and service our debt securities, which may be deemed to include our Series A Preferred Stock, we will be required to generate a significant amount of cash.
In addition, our efforts to educate the medical community and third-party payors on the benefits of our product candidates may require significant resources and may never be successful . Even if approved, any product candidates that we may develop and market may be later withdrawn from the market or subject to promotional limitations.
In addition, our efforts to educate the medical community and third-party payors on the benefits of our product candidates may require significant resources and may never be successful . 58 Table of Contents Even if approved, any product candidates that we may develop and market may be later withdrawn from the market or subject to promotional limitations.
Any of these scenarios could impact the commercial prospects for one or more of our current or future product candidates. The extensive regulation to which our product candidates are subject may be costly and time consuming, cause anticipated or unanticipated delays, and/or prevent the receipt of the required approvals for commercialization.
Any of these scenarios could impact the commercial prospects for one or more of our current or future product candidates. 28 Table of Contents The extensive regulation to which our product candidates are subject may be costly and time consuming, cause anticipated or unanticipated delays, and/or prevent the receipt of the required approvals for commercialization.
The research and clinical development, testing, manufacturing, labeling, storage, record-keeping, advertising, promotion, import, export, marketing and distribution of any product candidate, including our product candidates, is subject to 28 Table of Contents extensive regulation by the FDA in the United States and by comparable health authorities in foreign markets.
The research and clinical development, testing, manufacturing, labeling, storage, record-keeping, advertising, promotion, import, export, marketing and distribution of any product candidate, including our product candidates, is subject to extensive regulation by the FDA in the United States and by comparable health authorities in foreign markets.
Accordingly, we cannot predict the breadth of claims that may be allowed and remain enforceable in our patents or in those licensed from a third party. Recent patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents.
Accordingly, we cannot predict the breadth of claims that may be allowed and remain enforceable in our patents or in those licensed from a third party. 54 Table of Contents Recent patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents.
We may not be able to establish or maintain arrangements with third parties on commercially reasonable terms, or at all. 39 Table of Contents If our products are not included in managed care organizations’ formularies or coverage by other organizations, our products’ utilization and market shares may be negatively impacted, which could have a material adverse effect on our business and financial condition.
We may not be able to establish or maintain arrangements with third parties on commercially reasonable terms, or at all. If our products are not included in managed care organizations’ formularies or coverage by other organizations, our products’ utilization and market shares may be negatively impacted, which could have a material adverse effect on our business and financial condition.
On occasion, large judgments have been awarded in class action lawsuits based on drugs that had unanticipated side effects. A successful product liability claim or series of claims brought against us could cause our stock price to fall and, if judgments exceed our insurance coverage, could decrease our cash and adversely affect our business.
On occasion, large judgments have been awarded in class action lawsuits based on drugs that had unanticipated adverse events. A successful product liability claim or series of claims brought against us could cause our stock price to fall and, if judgments exceed our insurance coverage, could decrease our cash and adversely affect our business.
Compared to us, many of our potential competitors have substantially greater: ● capital resources; ● development resources, including personnel and technology; ● clinical trial experience; ● regulatory experience; ● expertise in prosecution of intellectual property rights; and ● manufacturing, distribution and sales and marketing capabilities.
Compared to us, many of our potential competitors have substantially greater: ● capital resources; ● development resources, including personnel and technology; ● clinical trial experience; ● regulatory experience; 31 Table of Contents ● expertise in prosecution of intellectual property rights; and ● manufacturing, distribution and sales and marketing capabilities.
To date, we have engaged primarily in intellectual property acquisitions, and evaluative and R&D activities and have not generated any revenues from product sales (except through Journey). We have incurred significant net losses since our inception. As of December 31, 2024 and 2023, we had an accumulated deficit of approximately $740.9 million and $694.9 million, respectively.
To date, we have engaged primarily in intellectual property acquisitions, and evaluative and R&D activities and have not generated any revenues from product sales (except through Journey). We have incurred significant net losses since our inception. As of December 31, 2025 and 2024, we had an accumulated deficit of approximately $734.1 million and $740.9 million, respectively.
Controlled substances are subject to state, federal and foreign laws and regulations regarding their manufacture, use, sale, importation, exportation and distribution. Controlled substances are regulated under the Federal Controlled Substances Act of 1970 (“CSA”) and regulations of the DEA. IV tramadol, under development by our partner company Avenue, will be subject to these regulations.
Controlled substances are subject to state, federal and foreign laws and regulations regarding their manufacture, use, sale, importation, exportation and distribution. Controlled substances are regulated under the CSA and regulations of the DEA. IV tramadol, under development by our partner company Avenue, will be subject to these regulations.
If we do not generate sufficient cash flow to satisfy our debt obligations, 35 Table of Contents we may have to undertake alternative financing plans, such as refinancing or restructuring our debt, selling assets, reducing or delaying capital investments or seeking to raise additional capital.
If we do not generate sufficient cash flow to satisfy our debt obligations, we may have to undertake alternative financing plans, such as refinancing or restructuring our debt, selling assets, reducing or delaying capital investments or seeking to raise additional capital.
We borrowed $35.0 million under the Oaktree Agreement on the date of the agreement and are eligible to draw up to an additional $15.0 million with the lenders’ consent.
We borrowed $35.0 million under the 2024 Oaktree Agreement on the date of the agreement (the “2024 Oaktree Note”) and are eligible to draw up to an additional $15.0 million with the lenders’ consent.
In addition, principal investigators for our clinical trials 47 Table of Contents may serve as scientific advisers or consultants to us from time to time and receive cash and/or equity compensation in connection with such services.
In addition, principal investigators for our clinical trials may serve as scientific advisers or consultants to us from time to time and receive cash and/or equity compensation in connection with such services.
Further, a clinical trial may be modified, suspended or terminated by us, an IRB, an ethics committee or a data safety monitoring committee overseeing the clinical trial, any clinical trial site with respect to that site, or the FDA or other regulatory authorities, due to a number of factors, including, but not necessarily limited to: ● failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols; ● inspection of the clinical trial operations or clinical trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold; ● stopping rules contained in the protocol; ● unforeseen safety or chemistry, manufacturing and control issues, or other determination that the clinical trial presents unacceptable health risks; and ● lack of adequate funding to continue the clinical trial. 30 Table of Contents Regulatory requirements and guidance may change, and we may need to amend clinical trial protocols to reflect these changes.
Further, a clinical trial may be modified, suspended or terminated by us, an IRB, an ethics committee or a data safety monitoring committee overseeing the clinical trial, any clinical trial site with respect to that site, or the FDA or other regulatory authorities, due to a number of factors, including, but not necessarily limited to: ● failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols; ● inspection of the clinical trial operations or clinical trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold; ● stopping rules contained in the protocol; ● unforeseen safety or chemistry, manufacturing and control issues, or other determination that the clinical trial presents unacceptable health risks; and ● lack of adequate funding to continue the clinical trial.
Four of our marketed products, Qbrexza, Amzeeq, Zilxi, and Emrosi, for which we recently received FDA approval, currently have patent protection. Four of our marketed products, Accutane, Targadox, Luxamend and Exelderm, do not have patent protection or otherwise are not eligible for patent protection. Accutane currently competes in the Isotretinoin market with five other therapeutically equivalent A/B rated products.
Four of our marketed products, Qbrexza, Amzeeq, Zilxi, and Emrosi, currently have patent protection. Four of our marketed products, Accutane, Targadox, Luxamend and Exelderm, do not have patent protection or otherwise are not eligible for patent protection. Accutane currently competes in the Isotretinoin market with five other therapeutically equivalent A/B rated products.
Regardless of merit or eventual outcome, liability claims may result in: ● withdrawal of clinical trial participants; 55 Table of Contents ● suspension or termination of clinical trial sites or entire trial programs; ● decreased demand for any product candidates or products that we may develop, license or acquire; ● initiation of investigations by regulators; ● impairment of our business reputation; ● costs of related litigation; ● substantial monetary awards to patients or other claimants; ● loss of revenues; ● reduced resources of our management to pursue our business strategy; and ● the ability to commercialize our product candidate or future product candidates.
Regardless of merit or eventual outcome, liability claims may result in: ● withdrawal of clinical trial participants; ● suspension or termination of clinical trial sites or entire trial programs; ● decreased demand for any product candidates or products that we may develop, license or acquire; ● initiation of investigations by regulators; ● impairment of our business reputation; ● costs of related litigation; ● substantial monetary awards to patients or other claimants; ● loss of revenues; ● reduced resources of our management to pursue our business strategy; and ● the ability to commercialize our product candidates or future product candidates. 59 Table of Contents We will obtain limited product liability insurance coverage for all of our upcoming clinical trials.
Our ability to successfully commercialize our products, or any product candidate for which we receive marketing authorization, will depend in part on the extent to which coverage and reimbursement for these products and related treatments will be available from government health administration authorities, private health insurers and other organizations.
Our ability to successfully commercialize any product candidate that receives marketing authorization depends in part on the extent to which coverage and reimbursement for these products and related treatments will be available from government health administration authorities, private health insurers and other organizations.
With the new presidential administration in the U.S., additional and higher tariffs and sanctions may be imposed on goods imported from China and other countries which could increase the cost of goods needed to commercialize our products and continue development of our current and any future product candidates.
Under the current presidential administration in the U.S., additional and higher tariffs and sanctions have been imposed on goods imported from China and other countries which could increase the cost of goods needed to commercialize our products and continue development of our current and any future product candidates.
Further, our current credit arrangement with Oaktree restricts our and certain of our subsidiaries’ and partner companies’ abilities to take certain actions. At December 31, 2024, the total amount of debt outstanding, net of the debt discount, was $58.0 million.
Further, our current credit arrangement with Oaktree restricts our and certain of our subsidiaries’ and partner companies’ abilities to take certain actions. At December 31, 2025, the total amount of debt outstanding, net of the debt discount, was $52.4 million.
During the years ended December 31, 2024 and 2023, we incurred R&D expenses of approximately $56.6 million and $101.7 million, respectively. We expect to continue to spend significant amounts on our growth strategy.
During the years ended December 31, 2025 and 2024, we incurred R&D expenses of approximately $11.9 million and $56.6 million, respectively. We expect to continue to spend significant amounts on our growth strategy.
If we or any of our clinical research organizations fail to comply with applicable GCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may refuse to accept such data, or require us to perform additional clinical trials before approving our marketing applications.
If we or any third party on which we rely fail to comply with applicable GCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may refuse to accept such data, or require us to perform additional clinical trials before approving our marketing applications.
Because we have paused dividend payments on our Series A Preferred Stock, we are currently ineligible to file new short-form registration statements on Form S-3, which may impair our ability to raise capital on terms favorable to us, in a timely manner or at all. ​ Form S-3 permits eligible issuers to conduct registered offerings using a short-form registration statement that allows the issuer to incorporate by reference its past and future filings and reports made under the Exchange Act.
We cannot assure you that we will have sufficient cash or “surplus” to resume payment of the cash dividends on the Series A Preferred Stock in a timely manner, or at all. 39 Table of Contents Because we have paused dividend payments on our Series A Preferred Stock, we are currently ineligible to file new short-form registration statements on Form S-3, which may impair our ability to raise capital on terms favorable to us, in a timely manner or at all. ​ Form S-3 permits eligible issuers to conduct registered offerings using a short-form registration statement that allows the issuer to incorporate by reference its past and future filings and reports made under the Exchange Act.
Our discussions with potential collaborators may not lead to the establishment of collaborations on favorable terms, if at all. Potential collaborators may reject collaboration proposals based upon their assessment of our financial, regulatory or intellectual property positions.
Establishing strategic collaborations is difficult and time-consuming. Our discussions with potential collaborators may not lead to the establishment of collaborations on favorable terms, if at all. Potential collaborators may reject collaboration proposals based upon their assessment of our financial, regulatory or intellectual property positions.
Moreover, insurance coverage is becoming increasingly expensive, and, in the future, we may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses due to liability.
However, our insurance coverage may not reimburse us or may not be sufficient to reimburse us for any expenses or losses we may suffer. Moreover, insurance coverage is becoming increasingly expensive, and, in the future, we may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses due to liability.
For example, we raised an aggregate of approximately $36.6 million in net proceeds in fiscal years 2023 and 2024 and $1.0 million in net proceeds in fiscal 2025 to date through the sale of shares of our common stock and other securities in offerings made under a Form S-3 “shelf” registration statement.
For example, we raised an aggregate of approximately $36.6 million in net proceeds in fiscal years 2023 and 2024 and $1.0 million in net proceeds through the sale of shares of our Common Stock in offerings made under a Form S-3 “shelf” registration statement and $2.6 million from warrant exercises in fiscal year 2025.
In the United States, the Affordable Care Act was intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add transparency requirements for the healthcare and health insurance industries, impose new taxes and fees on the healthcare industry and impose additional health policy reforms.
In the United States, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (the “Affordable Care Act”), was intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add transparency requirements for the healthcare and health insurance industries, impose new taxes and fees on the health industry and impose additional health policy reforms.
The regulatory authority may also require the label to contain warnings, contraindications, or precautions that limit the commercialization of the product. In addition, the Drug Enforcement Agency (“DEA”), or foreign equivalent, may schedule one or more of our product candidates under the Controlled Substances Act, or its foreign equivalent, which could impede such product’s commercial viability.
The regulatory authority may also require the label to contain warnings, contraindications, or precautions that limit the commercialization of the product. In addition, the DEA, or foreign equivalent, may schedule one or more of our product candidates under the CSA, or its foreign equivalent, which could impede such product’s commercial viability.
For instance, the United States or other countries may impose sanctions that restrict doing business in the effected countries and increased military conflict may affect third-party vendors and cause delays. This risk may be magnified in the case of the conflict between Russia and Ukraine.
For instance, the United States or other countries may impose sanctions that restrict doing business in the affected countries and increased military conflict may affect third-party vendors and cause delays. This risk may be magnified in the case of the recent and ongoing military conflicts between the United States and Iran, Israel and Hamas and Hezbollah and Russia and Ukraine.
Acquisitions of, joint ventures with and investments in other companies involve numerous risks, including, but not necessarily limited to: ● risk of entering new markets in which we have little to no experience; ● diversion of financial and managerial resources from existing operations; ● successfully negotiating a proposed acquisition or investment timely and at a price or on terms and conditions favorable to us; ● the impact of regulatory reviews on a proposed acquisition or investment; ● the outcome of any legal proceedings that may be instituted with respect to the proposed acquisitions or investment; ● with respect to an acquisition, difficulties in integrating operations, technologies, services and personnel; and ● potential inability to maintain relationships with customers of the companies we may acquire or invest in. 44 Table of Contents If we fail to properly evaluate potential acquisitions, joint ventures or other transaction opportunities, we might not achieve the anticipated benefits of any such transaction, we might incur higher costs than anticipated, and management resources and attention might be diverted from other necessary or valuable activities.
Acquisitions of, joint ventures with and investments in other companies involve numerous risks, including, but not necessarily limited to: ● risk of entering new markets in which we have little to no experience; ● diversion of financial and managerial resources from existing operations; ● successfully negotiating a proposed acquisition or investment timely and at a price or on terms and conditions favorable to us; 47 Table of Contents ● the impact of regulatory reviews on a proposed acquisition or investment; ● the outcome of any legal proceedings that may be instituted with respect to the proposed acquisitions or investment; ● with respect to an acquisition, difficulties in integrating operations, technologies, services and personnel; and ● potential inability to maintain relationships with customers of the companies we may acquire or invest in.
Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations may involve substantial costs. It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations.
It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations.
This includes Russia’s February 2022 invasion of Ukraine, the conflict between Israel and the Hamas and Hezbollah extremist groups, attacks by armed groups on cargo ships in the Red Sea, and tensions across the Taiwan Strait.
This includes Russia’s February 2022 invasion of Ukraine, military conflict in the Middle East, attacks by armed groups on cargo ships in the Red Sea, and tensions across the Taiwan Strait.
Any of the aforementioned circumstances may also impede our employees’ and consultants’ abilities to provide services in-person and/or in a timely manner; hinder our ability to raise funds to finance our operations on favorable terms or at all; and trigger effectiveness of “force majeure” clauses under agreements with respect to which we receive goods and services, or under which we are obligated to achieve developmental milestones on certain timeframes.
Any significant losses that are not recoverable under our insurance policies could seriously impair our business, financial condition and prospects. 67 Table of Contents Any of the aforementioned circumstances may also impede our employees’ and consultants’ abilities to provide services in-person and/or in a timely manner; hinder our ability to raise funds to finance our operations on favorable terms or at all; and trigger effectiveness of “force majeure” clauses under agreements with respect to which we receive goods and services, or under which we are obligated to achieve developmental milestones on certain timeframes.
We continue to generate operating losses in all periods including losses from operations of approximately $110.4 million and $142.3 million for the years ended December 31, 2024 and 2023, respectively. At December 31, 2024, we had an accumulated deficit of approximately $740.9 million.
We continue to generate operating losses in all periods including losses from operations of approximately $70.2 million and $110.4 million for the years ended December 31, 2025 and 2024, respectively. At December 31, 2025, we had an accumulated deficit of approximately $734.1 million.
The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel, ability to accept the payment of user fees, and statutory, regulatory, and policy changes. Average review times at the agency have fluctuated in recent years as a result.
The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel, ability to accept the payment of user fees, and statutory, regulatory, and policy changes.
If we fail to comply with the continuing listing standards of Nasdaq, our common stock could be delisted from the exchange. We have previously failed to satisfy certain continued listing rules of the Nasdaq, including rules requiring that the minimum trading price of our Common Stock not close below $1.00 per share for 30 consecutive business days.
We have previously failed to satisfy certain continued listing rules of the Nasdaq, including rules requiring that the minimum trading price of our Common Stock not close below $1.00 per share for 30 consecutive business days.
Any such change may require us to resubmit clinical trial protocols to IRBs, which may in turn impact a clinical trial’s cost, timing, and likelihood of success.
Regulatory requirements and guidance may change, and we may need to amend clinical trial protocols to reflect these changes. Any such change may require us to resubmit clinical trial protocols to IRBs, which may in turn impact a clinical trial’s cost, timing, and likelihood of success.
We may be unable to build a successful brand identity for a new trademark in a timely manner or at all, which would limit our ability to commercialize our product candidates. 57 Table of Contents Risks Pertaining to Legislation and Regulation Affecting the Biopharmaceutical and Other Industries Our current and future relationships with customers and third-party payors in the United States and elsewhere may be subject, directly or indirectly, to applicable anti-kickback, fraud and abuse, false claims, transparency, health information privacy and security and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm, administrative burdens and diminished profits and future earnings.
Risks Pertaining to Legislation and Regulation Affecting the Biopharmaceutical and Other Industries Our current and future relationships with customers and third-party payors in the United States and elsewhere may be subject, directly or indirectly, to applicable anti-kickback, fraud and abuse, false claims, transparency, health information privacy and security and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm, administrative burdens and diminished profits and future earnings.
In addition, U.S. patent laws may change, which could prevent or limit us from filing patent applications or patent claims to protect products and/or technologies or limit the exclusivity periods that are available to patent holders, as well as affect the validity, enforceability, or scope of issued patents.
In addition, U.S. patent laws may change, which could prevent or limit us from filing patent applications or patent claims to protect products and/or technologies or limit the exclusivity periods that are available to patent holders, as well as affect the validity, enforceability, or scope of issued patents. 53 Table of Contents We and our licensors also rely on trade secrets and proprietary know-how to protect product candidates.
Any collaboration or divestiture we pursue, whether we are able to complete it or not, may be complex, time consuming and expensive, may divert from management’s attention, may have a negative impact on our customer relationships, cause us to incur costs associated with maintaining the business of the targeted collaboration or divestiture during the transaction process and also to incur costs of closing and disposing the affected business or transferring the operations of the business to other facilities.
In addition, our ability to identify, enter into and/or consummate collaborations and/or divestitures may be limited by competition we face from other companies in pursuing similar transactions in the biotechnology and pharmaceutical industries. 45 Table of Contents Any collaboration or divestiture we pursue, whether we are able to complete it or not, may be complex, time consuming and expensive, may divert from management’s attention, may have a negative impact on our customer relationships, cause us to incur costs associated with maintaining the business of the targeted collaboration or divestiture during the transaction process and also to incur costs of closing and disposing the affected business or transferring the operations of the business to other facilities.
There is no guarantee that any CROs, investigators or other third parties upon which we rely for administration and conduct of our clinical trials will devote adequate time and resources to such trials or perform as contractually required.
These CROs, investigators, and other third parties will and do play a significant role in the conduct of our trials and the subsequent collection and analysis of data from the clinical trials. 50 Table of Contents There is no guarantee that any CROs, investigators or other third parties upon which we rely for administration and conduct of our clinical trials will devote adequate time and resources to such trials or perform as contractually required.
Our ability to obtain additional funding when needed, changes to our operating plans, our existing and anticipated working capital needs, the acceleration or modification of our planned R&D activities, expenditures, acquisitions and growth strategy, increased expenses or other events may affect our need for additional capital in the future and require us to seek additional funding sooner or on different terms than anticipated.
Until such time, if ever, as we can generate a sufficient amount of product revenue and achieve profitability, we expect to seek to finance potential cash needs. 38 Table of Contents Our ability to obtain additional funding when needed, changes to our operating plans, our existing and anticipated working capital needs, the acceleration or modification of our planned R&D activities, expenditures, acquisitions and growth strategy, increased expenses or other events may affect our need for additional capital in the future and require us to seek additional funding sooner or on different terms than anticipated.
In addition, even if we are able to utilize the Section 505(b)(2) regulatory pathway, there is no guarantee this would ultimately lead to faster product development or earlier approval. 33 Table of Contents Moreover, even if our product candidates are approved under Section 505(b)(2), the approval may be subject to limitations on the indicated uses for which the products may be marketed or to other conditions of approval, or may contain requirements for costly post-marketing testing and surveillance to monitor the safety or efficacy of the products.
Moreover, even if our product candidates are approved under Section 505(b)(2), the approval may be subject to limitations on the indicated uses for which the products may be marketed or to other conditions of approval, or may contain requirements for costly post-marketing testing and surveillance to monitor the safety or efficacy of the products.
In addition, if such transactions are not completed for any reason, the market price of our Common Stock may reflect a market assumption that such transactions will occur, and a failure to complete such transactions could result in a negative perception by the market of us generally and a decline in the market price of our Securities. 42 Table of Contents We act, and are likely to continue acting, as guarantor and/or indemnitor of the obligations, actions or inactions of certain of our subsidiaries and partner companies.
In addition, if such transactions are not completed for any reason, the market price of our Common Stock may reflect a market assumption that such transactions will occur, and a failure to complete such transactions could result in a negative perception by the market of us generally and a decline in the market price of our Securities.
The terms of our existing debt arrangements, including that with Oaktree, have and will continue to inhibit our and our subsidiaries’ abilities to raise capital. 36 Table of Contents We may be unable to generate returns for our investors if our partner companies and subsidiaries, several of which have limited or no operating history, have no commercialized revenue generating products or, if not yet profitable, cannot obtain additional third-party financing.
We may be unable to generate returns for our investors if our partner companies and subsidiaries, several of which have limited or no operating history, have no commercialized revenue generating products or, if not yet profitable, cannot obtain additional third-party financing.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe, and our third parties, have deployed managed detection and response services to monitor our technology infrastructure and information systems for possible threats. Our technology management strategy also includes ongoing security training and education for employees regarding threats, including their role and responsibility in detecting and responding to such threats.
Biggest changeWe, and our third parties, have deployed managed detection and response services to monitor our technology infrastructure and information systems for possible threats.
The Audit Committee receives periodic updates from our management team regarding the overall state of our technology management strategy and any relevant risks from cybersecurity threats and cybersecurity incidents. Our management team is responsible for assessing and managing the material risks from cybersecurity threats and our Chief Financial Officer leads these efforts on behalf of the management team.
The Audit Committee receives periodic updates from our management team regarding the overall state of our technology management strategy and any relevant risks from cybersecurity threats and cybersecurity incidents. Our management team is responsible for assessing and managing the material risks from cybersecurity threats and our Chief Financial Officer (“CFO”) leads these efforts on behalf of the management team.
Our Chief Financial Officer is well-informed on emerging cybersecurity risks and solutions used to mitigate and remediate loss due to cybersecurity incidents and is responsible for our internal cybersecurity programs and oversight of third-party cybersecurity vendors who monitor and execute on the prevention, detection, and mitigation of cybersecurity threats and incidents. ​ ​ 67 Table of Contents
Our CFO is well-informed on emerging cybersecurity risks and solutions used to mitigate and remediate loss due to cybersecurity incidents and is responsible for our internal cybersecurity programs and oversight of third-party cybersecurity vendors who monitor and execute on the prevention, detection, and mitigation of cybersecurity threats and incidents.
We review the processes of our third party vendors and consider their ability to adhere to relevant industry practices and maintain adequate technology risk programs. In addition, we maintain cyber and cyber-related crime insurance coverage policies as part of our overall risk management strategy, however, our policies may not be sufficient to cover against all potential future claims, if any.
In addition, we maintain cyber and cyber-related crime insurance coverage policies as part of our overall risk management strategy, however, our policies may not be sufficient to cover against all potential future claims, if any.
Added
Our technology management strategy also includes ongoing security training and education for employees regarding threats, including their role and responsibility in detecting and responding to such threats. 71 Table of Contents We review the processes of our third party vendors and consider their ability to adhere to relevant industry practices and maintain adequate technology risk programs.
Added
Our CFO, as well as our management team, are informed about, and monitor the prevention, mitigation, detection and remediation of cybersecurity incidents through their management of, and participation in, the cybersecurity risk management and strategy processes described above, including the operation of our incident response plan, and report to our audit committee and overall board of directors on any appropriate items.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe believe that our existing facilities are adequate to support our current requirements and that we will be able to obtain suitable additional facilities on commercially reasonable terms if needed. ​ ​ ​ ​ ​ ​ ​ ​ Company Location Type ​ Square Footage ​ Fortress ​ Bay Harbor Islands, FL ​ Office space ​ 1,600 ​ Fortress ​ New York, NY ​ Office space ​ 23,000 ​ Fortress Waltham, MA Office space 6,100 Journey Scottsdale, AZ Office space 3,801 Mustang Worcester, MA 1 Manufacturing, lab facility, and office space 27,043 Mustang Worcester, MA 2 Office space 11,916 ​ Note 1: Mustang exited the lease of its manufacturing facility in Worcester, Massachusetts in February 2025.
Biggest changeWe believe that our existing facilities are adequate to support our current requirements and that we will be able to obtain suitable additional facilities on commercially reasonable terms if needed. ​ ​ ​ ​ ​ ​ ​ ​ Company ​ ​ ​ Location ​ ​ ​ Type ​ Square Footage ​ Fortress ​ Bay Harbor Islands, FL ​ Office space ​ 1,600 ​ Fortress ​ New York, NY 1 ​ Office space ​ 23,000 ​ Fortress Waltham, MA Office space 6,100 Journey Scottsdale, AZ Office space 3,801 ​ Note 1: In February 2026, the Company entered into an agreement to sublease the entire space to a subtenant, which agreement will expire in August 2031. ​ 72 Table of Contents
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Note 2: Mustang exited the sublease of its additional office space in Worcester, Massachusetts in June 2024. ​ ​

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 68 ​ ​ ​ PART II 68 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 68 Item 6. Reserved 69 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 70
Biggest changeItem 4. Mine Safety Disclosures 73 ​ ​ ​ PART II 73 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 73 Item 6. Reserved 73 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 74

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners, but whose 68 Table of Contents shares are held in street name by brokers and other nominees. This number of holders of record also does not include stockholders whose shares may be held in trust by other entities.
Biggest changeThe actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees. This number of holders of record also does not include stockholders whose shares may be held in trust by other entities.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information for Common Stock Our Common Stock is listed for trading on the Nasdaq Capital Market under the symbol “FBIO.” Market Information for 9.375% Series A Cumulative Redeemable Perpetual Preferred Stock Our 9.375% Series A Cumulative Redeemable Perpetual Preferred Stock is listed for trading on the Nasdaq Capital Market under the symbol “FBIOP.” Holders of Record As of March 27, 2025, there were approximately 394 holders of record of our Common Stock.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information for Common Stock Our Common Stock is listed for trading on the Nasdaq Capital Market under the symbol “FBIO.” Market Information for 9.375% Series A Cumulative Redeemable Perpetual Preferred Stock Our 9.375% Series A Cumulative Redeemable Perpetual Preferred Stock is listed for trading on the Nasdaq Capital Market under the symbol “FBIOP.” Holders of Record As of March 25, 2025, there were approximately 389 holders of record of our Common Stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following table summarizes the Company’s basic ownership of the issued and outstanding common and preferred shares in consolidated Fortress subsidiaries: ​ ​ ​ ​ ​ ​ December 31, Partner Company/Subsidiary ​ 2024 Avenue (OTC: ATXI) ​ 9.2 % Cellvation ​ 79.6 % Checkpoint (Nasdaq: CKPT) ​ 8.3 % Cyprium ​ 73.1 % Helocyte ​ 83.0 % Journey (Nasdaq: DERM) ​ 44.5 % Mustang (Nasdaq: MBIO) ​ 6.3 % Oncogenuity ​ 73.5 % Urica ​ 69.6 % ​ ​ ​ ​ 78 Table of Contents Results of Operations Comparison of Years Ended December 31, 2024 and 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ($ in thousands) 2024 2023 $ % Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product revenue, net ​ $ 55,134 ​ $ 59,662 ​ $ (4,528) ​ (8) % Collaboration revenue ​ ​ 1,500 ​ ​ 5,229 ​ ​ (3,729) (71) % Revenue – related party ​ 41 ​ 103 ​ (62) ​ (60) % Other revenue ​ ​ 1,000 ​ ​ 19,519 ​ ​ (18,519) ​ (95) % Net revenue ​ 57,675 ​ 84,513 ​ (26,838) ​ (32) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of goods - (excluding amortization of acquired intangible assets) ​ 20,879 ​ 22,893 ​ (2,014) ​ (9) % Amortization of acquired intangible assets ​ ​ 3,424 ​ 3,767 ​ (343) ​ (9) % Research and development ​ 56,629 ​ 101,747 ​ (45,118) ​ (44) % Research and development – licenses acquired ​ 252 ​ 4,324 ​ (4,072) ​ (94) % Selling, general and administrative ​ 87,731 ​ 90,981 ​ (3,250) ​ (4) % Loss recovery ​ ​ (4,553) ​ — ​ (4,553) ​ 100 % Asset impairment ​ 3,692 ​ ​ 3,143 ​ ​ 549 ​ 17 % Total operating expenses ​ 168,054 ​ 226,855 ​ (58,801) ​ (26) % Loss from operations ​ (110,379) ​ (142,342) ​ 31,963 ​ (22) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense) ​ ​ ​ ​ ​ ​ ​ ​ Interest income ​ 2,683 ​ 3,003 ​ (320) ​ (11) % Interest expense and financing fee ​ (13,527) ​ (15,315) ​ 1,788 ​ (12) % Gain (loss) on common stock warrant liabilities ​ (638) ​ 4,424 ​ (5,062) ​ (114) % Other income (expense) ​ ​ 1,318 ​ (3,403) ​ 4,721 ​ (139) % Total other expense ​ (10,164) ​ (11,291) ​ 1,127 ​ (10) % Loss before income tax expense ​ ​ (120,543) ​ (153,633) ​ 33,090 ​ (22) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income tax expense ​ ​ 312 ​ 521 ​ (209) ​ (40) % Net loss ​ (120,855) ​ (154,154) ​ 33,299 ​ (22) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less: net loss attributable to non-controlling interest ​ 74,858 ​ 93,517 ​ (18,659) ​ (20) % Net loss attributable to Fortress ​ $ (45,997) ​ $ (60,637) ​ $ 14,640 ​ (24) % ​ Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ($ in thousands) 2024 2023 $ % Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product revenue, net ​ $ 55,134 ​ $ 59,662 ​ $ (4,528) ​ (8) % Collaboration revenue ​ ​ 1,500 ​ ​ 5,229 ​ ​ (3,729) (71) % Revenue – related party ​ 41 ​ 103 ​ (62) ​ (60) % Other revenue ​ ​ 1,000 ​ ​ 19,519 ​ ​ (18,519) ​ (95) % Net revenue ​ $ 57,675 ​ 84,513 ​ $ (26,838) ​ (32) % 79 Table of Contents For the year ended December 31, 2024 we generated $57.7 million of net revenue, of which $55.1 million relates to product revenue derived from Journey’s branded and generic products, $1.5 million relates to collaboration revenue from Sentynl for the NDA submission acceptance milestone relating to CUTX-101, and $1.0 million in other revenue relates to a milestone payment from Cutia related to the approval of Amzeeq in China.
Biggest changeThe following table summarizes the Company’s basic ownership of the issued and outstanding common and preferred shares in consolidated Fortress subsidiaries: 81 Table of Contents ​ ​ ​ ​ ​ ​ December 31, Partner Company/Subsidiary ​ 2025 Avenue (OTC: ATXI) ​ 10.3 % Cellvation ​ 80.0 % Checkpoint 1 ​ — % Cyprium ​ 73.9 % Helocyte ​ 83.4 % Journey (Nasdaq: DERM) ​ 36.3 % Mustang (Nasdaq: MBIO) ​ 4.0 % Oncogenuity ​ 73.9 % Urica ​ 70.4 % ​ ​ Note 1: In May 2025, our former subsidiary, Checkpoint, was acquired by Sun Pharma. ​ Results of Operations Comparison of Years Ended December 31, 2025 and 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ Change ​ ($ in thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ $ ​ ​ ​ % Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product revenue, net ​ $ 61,239 ​ $ 55,134 ​ $ 6,105 ​ 11 % Collaboration revenue ​ ​ — ​ ​ 1,500 ​ ​ (1,500) (100) % Revenue – related party ​ — ​ 41 ​ (41) ​ (100) % Other revenue ​ ​ 2,023 ​ ​ 1,000 ​ ​ 1,023 ​ 102 % Net revenue ​ 63,262 ​ 57,675 ​ 5,587 ​ 10 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of goods - (excluding amortization of acquired intangible assets) ​ 20,924 ​ 20,879 ​ 45 ​ 0 % Amortization of acquired intangible assets ​ ​ 4,258 ​ 3,424 ​ 834 ​ 24 % Research and development ​ 11,901 ​ 56,629 ​ (44,728) ​ (79) % Research and development – licenses acquired ​ — ​ 252 ​ (252) ​ (100) % Selling, general and administrative ​ 96,400 ​ 87,731 ​ 8,669 ​ 10 % Loss recovery ​ ​ — ​ (4,553) ​ 4,553 ​ (100) % Asset impairment ​ — ​ ​ 3,692 ​ ​ (3,692) ​ (100) % Total operating expenses ​ 133,483 ​ 168,054 ​ (34,571) ​ (21) % Loss from operations ​ (70,221) ​ (110,379) ​ 40,158 ​ (36) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense) ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest income ​ 2,485 ​ 2,683 ​ (198) ​ (7) % Interest expense and financing fee ​ (10,106) ​ (13,527) ​ 3,421 ​ (25) % Loss on common stock warrant liabilities ​ (398) ​ (638) ​ 240 ​ (38) % Gain from deconsolidation of subsidiary ​ ​ 27,127 ​ ​ — ​ ​ 27,127 ​ 100 % Other income ​ ​ 17,578 ​ 1,318 ​ 16,260 ​ 1234 % Total other income (expense) ​ 36,686 ​ (10,164) ​ 46,850 ​ (461) % Loss before income tax expense ​ ​ (33,535) ​ (120,543) ​ 87,008 ​ (72) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income tax expense (benefit) ​ ​ (620) ​ 312 ​ (932) ​ (299) % Net loss ​ (32,915) ​ (120,855) ​ 87,940 ​ (73) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Attributable to non-controlling interests ​ 39,730 ​ 74,858 ​ (35,128) ​ (47) % Net income (loss) attributable to Fortress ​ $ 6,815 ​ $ (45,997) ​ $ 52,812 ​ (115) % ​ 82 Table of Contents Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ Change ​ ($ in thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ $ ​ ​ ​ % Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product revenue, net ​ $ 61,239 ​ $ 55,134 ​ $ 6,105 ​ 11 % Collaboration revenue ​ ​ — ​ ​ 1,500 ​ ​ (1,500) (100) % Revenue – related party ​ — ​ 41 ​ (41) ​ (100) % Other revenue ​ ​ 2,023 ​ ​ 1,000 ​ ​ 1,023 ​ 102 % Net revenue ​ $ 63,262 ​ 57,675 ​ $ 5,587 ​ 10 % ​ For the year ended December 31, 2025, we generated $63.3 million of net revenue, of which $61.2 million relates to product revenue derived from Journey’s sales of branded and generic products, and $2.0 million in other revenue comprises $1.4 million related to Avenue’s termination of its license agreement with AnnJi, and $0.6 million related to Journey’s supply of Amzeeq to Cutia for commercial use and sales-based royalties on Cutia’s net sales of Amzeeq.
Partner and subsidiary companies then assess a broad range of strategic arrangements to accelerate and provide additional funding to support research and development, including joint ventures, partnerships, out-licensings, sales transactions, and public and private financings. To date, four partner companies are publicly-traded, and three subsidiaries have consummated strategic partnerships with industry leaders AstraZeneca plc as successor-in-interest to Alexion Pharmaceuticals, Inc.
Partner and subsidiary companies then assess a broad range of strategic arrangements to accelerate and provide additional funding to support research and development, including joint ventures, partnerships, out-licensings, sales transactions, and public and private financings. To date, three partner companies are publicly-traded, and four subsidiaries have consummated strategic partnerships with industry leaders AstraZeneca plc as successor-in-interest to Alexion Pharmaceuticals, Inc.
While our significant accounting policies are described in the Notes to our Consolidated Financial Statements included in “Part II, Item 8, Financial Statements and Supplementary Data” in this Annual Report on Form 10-K, we believe that the following critical accounting policies are most important to understanding and evaluating our reported financial results. ​ Revenue Recognition Our gross product revenues are subject to a variety of deductions, which generally are estimated and recorded in the same period that the revenues are recognized.
While our significant accounting policies are described in the Notes to our Consolidated Financial Statements included in “Part II, Item 8, Financial Statements and Supplementary Data” in this Annual Report on Form 10-K, we believe that the following critical accounting policies are most important to understanding and evaluating our reported financial results. ​ 79 Table of Contents Revenue Recognition Our gross product revenues are subject to a variety of deductions, which generally are estimated and recorded in the same period that the revenues are recognized.
(“Caelum”), a former subsidiary of Fortress for an upfront payment of approximately $150 million paid to Caelum shareholders, of which approximately $56.9 million was paid to Fortress. The agreement also provides for additional potential payments to Caelum shareholders totaling up to $295 million, payable upon the achievement of regulatory and commercial milestones.
(“Caelum”), a former subsidiary of Fortress for an upfront payment of approximately $135 million paid to Caelum shareholders, of which approximately $56.9 million was paid to Fortress. The agreement also provides for additional potential payments to Caelum shareholders totaling up to $295 million, payable upon the achievement of regulatory and commercial milestones.
As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. 75 Table of Contents The accounting guidance requires fair value measurements be classified and disclosed in one of the following three categories: Level 1 : Quoted prices in active markets for identical assets or liabilities.
As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. The accounting guidance requires fair value measurements be classified and disclosed in one of the following three categories: Level 1 : Quoted prices in active markets for identical assets or liabilities.
Contractual Obligations Our short-term and long-term contractual obligations as of December 31, 2024 include: ​ ● Contractual payments related to our long-term debt (see Note 9, Debt and Interest, to our Consolidated Financial Statements included in “Part II, Item 8, Financial Statements and Supplementary Data” in this Annual Report on Form 10-K ); ● obligations under our leases (see Note 14, Commitments and Contingencies to our Consolidated Financial Statements ); and ● obligations under license agreements (see Note 7, License Agreements to our Consolidated Financial Statements ). ​ Under the license agreements, we are required to make milestone payments upon successful completion and achievement of certain development, regulatory and commercial milestones, the payment obligations of which are contingent upon future events, such as our achievement of specified development, regulatory and commercial milestones, and the amount, timing, and likelihood of such payments are not known.
Contractual Obligations Our short-term and long-term contractual obligations as of December 31, 2025 include: ​ ● Contractual payments related to our long-term debt (see Note 9, Debt and Interest, to our Consolidated Financial Statements included in “Part II, Item 8, Financial Statements and Supplementary Data” in this Annual Report on Form 10-K ); ● obligations under our leases (see Note 14, Commitments and Contingencies, to our Consolidated Financial Statements included in “Part II, Item 8, Financial Statements and Supplementary Data” in this Annual Report on Form 10-K ); and 93 Table of Contents ● obligations under license agreements (see Note 7, License Agreements, to our Consolidated Financial Statements included in “Part II, Item 8, Financial Statements and Supplementary Data” in this Annual Report on Form 10-K ). ​ Under the license agreements, we are required to make milestone payments upon successful completion and achievement of certain development, regulatory and commercial milestones, the payment obligations of which are contingent upon future events, such as our achievement of specified development, regulatory and commercial milestones, and the amount, timing, and likelihood of such payments are not known.
We have funded our operations to date primarily through the sale of equity and debt securities. We believe that our current cash and cash equivalents is sufficient to fund operations for at least the next twelve months.
We have funded our operations to date primarily through the sale of equity and debt securities. We believe that our current cash and cash equivalents are sufficient to fund operations for at least the next twelve months.
As of December 31, 2024, $43.1 million of securities were available for sale under the 2024 Shelf, subject to General Instruction I.B.6. of Form S-3, known as the “baby shelf rules,” which limit the number of securities that can be sold under registration statements on Form S-3.
As of December 31, 2025, $42.1 million of securities were available for sale under the 2024 Shelf, subject to General Instruction I.B.6. of Form S-3, known as the “baby shelf rules,” which limit the number of securities that can be sold under registration statements on Form S-3.
Following an event of default and any cure period, if applicable, Oaktree will have the right upon notice to accelerate all amounts outstanding under the New Oaktree Agreement, in addition to other remedies available to the lenders as secured creditors of the Company. ​ 88 Table of Contents In connection with the New Oaktree Agreement, the Company granted a security interest in favor of the Agent, for the benefit of the lenders, in substantially all of the Company’s assets, subject to customary exceptions, as collateral securing the Company’s obligations under the Agreement. ​ SWK Facility ​ On December 27, 2023 (the “SWK Closing Date”), Journey entered into a Credit Agreement with SWK Funding LLC (“SWK”).
Following an event of default and any cure period, if applicable, Oaktree will have the right upon notice to accelerate all amounts outstanding under the New Oaktree Agreement, in addition to other remedies available to the lenders as secured creditors of the Company. ​ 91 Table of Contents In connection with the New Oaktree Agreement, the Company granted a security interest in favor of Oaktree, for the benefit of the lenders, in substantially all of the Company’s assets, subject to customary exceptions, as collateral securing the Company’s obligations under the New Oaktree Agreement. ​ SWK Facility ​ On December 27, 2023 (the “SWK Closing Date”), Journey entered into a Credit Agreement with SWK.
We may also be required to make milestone payments and royalty payments in connection with the sale of products developed under these agreements, if approved and sold. ​ Additionally, we enter into agreements in the normal course of business with CROs and other vendors for clinical trials and with vendors for preclinical services and products for operating purposes, which are generally terminable by us upon written notice. 90 Table of Contents Item 7A.
We may also be required to make milestone payments and royalty payments in connection with the sale of products developed under these agreements, if approved and sold. ​ Additionally, we enter into agreements in the normal course of business with CROs and other vendors for clinical trials and with vendors for preclinical services and products for operating purposes, which are generally terminable by us upon written notice.
In addition, the Company is also required to (i) raise common equity, or receive in monetizations or distributions, by the end of each calendar year prior to the maturity date, in an aggregate amount equal to the greater of $20 million or 50% of an amount set forth in an annual budget delivered to the lenders and (ii) maintain a specified minimum equity stake in Journey.
In addition, the Company is also required to (i) raise cash proceeds from the sale of common stock, or receive monetizations or distributions, by the end of each calendar year prior to the maturity date, in an aggregate amount equal to the greater of $20 million or 50% of an amount set forth in an annual budget delivered to the lenders and (ii) maintain a specified minimum equity stake in Journey.
Journey In December 2022, Journey filed a shelf registration statement on Form S-3 (File No. 333-269079 ), which was declared effective in January 2023 (the “Journey 2022 S-3”). This shelf registration statement covers the offering, issuance and sale by Journey of up to an aggregate of $150.0 million of Journey’s common stock, preferred stock, debt securities, warrants, and units.
Journey On December 30, 2022, Journey filed a shelf registration statement on Form S-3 (File No. 333-269079) (the “Journey 2022 S-3”), which was declared effective on January 26, 2023. The Journey 2022 S-3 covered the offering, issuance and sale by Journey of up to an aggregate of $150.0 million of Journey’s common stock, preferred stock, debt securities, warrants, and units.
We fund our operations through cash on hand, the sale of debt, third-party financings, and the sale of subsidiaries and partner companies.
We fund our operations through cash on hand, debt issuances, third-party financings, asset sales, and the sale of subsidiaries and partner companies.
We have executed arrangements with some of the world’s foremost universities, research institutes and pharmaceutical companies, including City of Hope National Medical Center (“COH” or “City of Hope”), Fred Hutchinson Cancer Center, Dana-Farber Cancer Institute, Nationwide Children’s Hospital, Columbia University, the University of Pennsylvania, AstraZeneca plc and Dr. Reddy’s Laboratories, Ltd.
We have executed arrangements with some of the world’s foremost universities, research institutes and pharmaceutical companies, including City of Hope National Medical Center (“COH” or “City of Hope”), Dana-Farber Cancer Institute, Nationwide Children’s Hospital, Columbia University, the University of Pennsylvania, AstraZeneca plc, Dr. Reddy’s Laboratories, Ltd. (“DRL”), and Sun Pharmaceutical Industries Limited (“Sun Pharma”).
Liquidity and Capital Resources Sources of Liquidity At December 31, 2024, we had an accumulated deficit of $740.9 million primarily as a result of research and development expenses, purchases of in-process research and development and selling, general and administrative expenses.
Liquidity and Capital Resources Sources of Liquidity At December 31, 2025, we had an accumulated deficit of $734.1 million primarily as a result of research and development expenses, purchases of in-process research and development and selling, general and administrative expenses.
Under the terms of the New Oaktree Agreement, the loans have a 30-month interest-only period with a maturity date of July 25, 2027, and bear interest at an annual rate equal to the 3-month Secured Overnight Financing Rate (SOFR) plus 7.625% (subject to a 2.50% SOFR floor and a 5.75% SOFR cap).
Under the terms of the New Oaktree Agreement, as amended, the loans have a 41-month interest-only period with a maturity date of June 30, 2028, and bear interest at an annual rate equal to the 3-month Secured Overnight Financing Rate (“SOFR”) plus 7.625% (subject to a 2.50% SOFR floor and a 5.75% SOFR cap).
The Company borrowed $35.0 million under the agreement on the closing date and is able to draw up to an additional $15.0 million at the lenders’ discretion to support future business development activities .
The Company borrowed $35.0 million under the 2024 Oaktree Agreement on the Closing Date (the “2024 Oaktree Note”) and is eligible to draw up to an additional $15.0 million at the lenders’ discretion to support future business development activities.
Quantitative and Qualitative Disclosures About Market Risk. Not applicable.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Not applicable.
However, on July 5, 2024, our board of directors paused the payment of dividends on our Series A Preferred Stock until further notice. As a result, we are no longer eligible to use Form S-3 and have lost the ability to use the 2024 Shelf.
However, on July 5, 2024, the board of directors paused the payment of dividends on our Series A Preferred Stock until further notice. As a result, the Company is not currently eligible to use Form S-3 and has lost the ability to use the 2024 Shelf.
During the year ended December 31, 2024, Mustang issued approximately 0.1 million shares of common stock at an average price of $18.78 per share for net proceeds of $2.5 million under the Mustang ATM, after deducting aggregate fees of approximately $0.1 million.
During the year ended December 31, 2025, Mustang issued approximately 0.1 million shares of common stock at an average price of $11.55 per share for net proceeds of $0.6 million under the Mustang ATM, after deducting aggregate fees of approximately $27,000.
At December 31, 2024, we had cash and cash equivalents of $57.3 million of which $20.9 million relates to Fortress and the private subsidiaries (primarily funded by Fortress), $6.6 million relates to Checkpoint, $6.8 million relates to Mustang, $20.3 million relates to JMC and $2.6 million relates to Avenue. Restricted cash primarily relates to office leases and totals $1.6 million.
At December 31, 2025, we had cash and cash equivalents of $79.4 million of which $35.2 million relates to Fortress and the private subsidiaries (primarily funded by Fortress), $17.3 million relates to Mustang, $24.1 million relates to JMC and $2.9 million relates to Avenue. Restricted cash relates to office leases and totals $1.2 million.
The offer and sale of the shares will be made pursuant to a base prospectus forming a part of the Avenue 2021 S-3, and the related prospectus supplement dated May 10, 2024. During the year ended December 31, 2024, Avenue issued 0.6 million shares through the Avenue ATM for net proceeds of $1.6 million.
The offers and sales of the shares were to be made pursuant the Avenue 2021 S-3, and the related prospectus supplement dated May 10, 2024. During the year ended December 31, 2025, Avenue issued 0.9 million shares through the Avenue ATM for net proceeds of $2.1 million.
Fifty percent of the then-outstanding principal balance of the loans is due on March 31, 2027, with the remaining principal amount due on the maturity date. ​ The Company may voluntarily prepay, in whole or in part, the amounts due under the New Oaktree Agreement at any time subject to a prepayment fee.
The Company is required to make quarterly interest-only payments until the maturity date, except 12.5% of the then-outstanding principal balance of the loans is due on September 30, 2027, 12.5% of the principal balance of the loans is due on December 30, 2027, 37.5% of the principal balance of the loans is due on March 31, 2028, with the remaining principal amount due on the maturity date. ​ The Company may voluntarily prepay, in whole or in part, the amounts due under the New Oaktree Agreement at any time subject to a prepayment fee.
On May 31, 2024, Mustang entered into an At-the-Market Offering Agreement (the “Mustang ATM”) relating to the sale of shares of common stock pursuant to the Mustang 2024 S-3.
The ability of Mustang to register new offers and sales of securities under the Mustang 2024 S-3 expires on June 12, 2027. On May 31, 2024, Mustang entered into an At-the-Market Offering Agreement (the “Mustang ATM”) relating to the sale of shares of common stock pursuant to the Mustang 2024 S-3.
We expect selling, general and administrative expenses to remain flat or decrease in 2025. Loss Recovery Journey recorded a loss recovery benefit to income of $4.6 million in connection with the recovery of funds related to a previously disclosed cybersecurity incident in September 2021. Journey received the $4.6 million in cash in December 2024.
Loss Recovery Journey recorded a loss recovery benefit to income of $4.6 million in connection with the recovery of funds related to a previously disclosed cybersecurity incident in September 2021. Journey received the $4.6 million in cash in December 2024. There was no comparable benefit recorded in 2025.
The net proceeds to Mustang from the exercise of the existing warrants were approximately $3.6 million, after deducting placement agent fees and offering expenses payable by Mustang of $0.4 million.
The net proceeds of the offering, after deducting the fees and expenses of the placement agent in the transaction, and other offering expenses payable by Mustang, but excluding the net proceeds from the exercise of the Warrants, was approximately $6.9 million.
Avenue’s common stock began trading under the symbol “ATXI” on the OTC Markets system on March 19, 2025.
Avenue’s common stock was subsequently formally delisted from the Nasdaq Capital Market in July 2025. Avenue’s common stock began trading under the symbol “ATXI” on the OTC Markets system on March 19, 2025.
In May 2024, Avenue entered into an At-the-Market Offering Agreement (the “Avenue ATM”) under which Avenue may offer and sell, from time to time at its sole discretion, up to $3.9 million of shares of its common stock.
On December 15, 2025, Avenue filed a Post-Effective Amendment No. 1 to Form S-3 on Form S-1 (File No. 333-279125), which Post-Effective Amendment was declared effective on December 16, 2025. ​ In May 2024, Avenue entered into an At-the-Market Offering Agreement (the “Avenue ATM”) under which Avenue was then able to offer and sell, from time to time at its sole discretion, up to $3.9 million of shares of its common stock.
The interest rate resets quarterly. Interest payments began in February 2024 and are paid quarterly. Beginning in February 2026, the Company is required to repay a portion of the outstanding principal of the Term Loans quarterly in an amount equal to 7.5% of the principal amount of funded Term Loans.
Interest payments began in February 2024 and are paid quarterly. Beginning in February 2027, the Company is required to repay a portion of the outstanding principal of the Term Loans quarterly in an amount equal to $2.5 million per quarter, or 10% of the principal amount of funded Term Loans, with any remaining principal balance due on the maturity date.
The trial is funded by a grant from the National Institutes of Health’s National Institute of Allergy and Infectious Diseases (“NIH/NIAID”) that could provide over $20 million in non-dilutive funding and will be conducted in up to 20 nationally recognized transplant centers in the United States (NCT06075745). ● Triplex is currently also the subject of multiple other ongoing clinical trials, including: a Phase 1/2 trial for CMV control in pediatric recipients of HSCT (NCT03354728); a Phase 1 trial of Triplex in combination with a bi-specific CMV/CD19 CAR T cell therapy for the treatment of non-Hodgkin lymphoma (NCT05432635); a Phase 2 trial for safety and effectiveness in reducing CMV complications in patients previously infected with CMV and undergoing donor hematopoietic cell transplant (NCT02506933); a Phase 1 trial of Triplex in combination with CAR T cell therapy for adults with non-Hodgkin lymphoma (NCT05801913); and a Phase 1 trial of Triplex in combination with an allogeneic anti-CD19-CAR CMV-specific T cell therapy for adults with high-risk acute lymphoblastic leukemia (NCT06735690). 72 Table of Contents ● In 2023, Helocyte additionally entered into an option agreement with City of Hope for exclusive worldwide rights to a novel bispecific CMV/HIV CAR T cell therapy (optionally for use in combination with Triplex), which is currently the subject of a Phase 1 trial in adults living with HIV-1 (see NCT06252402 ). ● Triplex was sourced by Fortress and is currently in development at our subsidiary, Helocyte.
The trial is funded by a grant from the National Cancer Institute (“NCI”) (NCT06059391). ● Triplex is currently also the subject of multiple other ongoing clinical trials, including: a Phase 1/2 trial for CMV control in pediatric recipients of HSCT (NCT03354728); a Phase 1 trial of Triplex in combination with a bi-specific CMV/CD19 CAR T cell therapy for the treatment of non-Hodgkin lymphoma (NCT05432635); a Phase 2 trial for safety and effectiveness in reducing CMV complications in patients previously infected with CMV and undergoing donor hematopoietic cell transplant (NCT02506933); a Phase 1 trial of Triplex in combination with CAR T cell therapy for adults with non-Hodgkin lymphoma (NCT05801913); and a Phase 1 trial of Triplex in combination with an allogeneic anti-CD19-CAR CMV-specific T cell therapy for adults with high-risk acute lymphoblastic leukemia (NCT06735690). ● Triplex was sourced by Fortress and is currently in development at our subsidiary, Helocyte.
We assessed the classification of the common stock purchase warrants issued in connection with such transactions and determined that such instruments met the criteria for equity classification. The note proceeds were allocated between the 2024 Oaktree Note (as defined below) and the warrants on a relative fair value basis.
We assessed the classification of the common stock purchase warrants issued in connection with such transactions and determined that such instruments met the criteria for equity classification.
In addition, the New Oaktree Agreement contains certain financial covenants, including, (i) a requirement that the Company maintain a minimum liquidity of $7.0 million, which may be reduced or increased as described in the New Oaktree Agreement, and (ii) that product net sales of Journey meet a consolidated minimum net sales amount of $50.0 million on a trailing 12-month basis, tested quarterly, which may be reduced or increased as described in the Agreement (the “Minimum Net Sales Test”), subject to certain exclusions.
In addition, the New Oaktree Agreement contains certain financial covenants, including, (i) a requirement that the Company maintain a minimum liquidity of $7.0 million, which may be reduced or increased as described in the New Oaktree Agreement, and (ii) that product net sales of Journey meet a consolidated minimum net sales amount of $60.0 million as of the last day of the fiscal quarter ending December 31, 2025, $65.0 million as of the last day of the fiscal quarter ending March 31, 2026, $70.0 million as of the last day of the fiscal quarter ending June 30, 2026, $75.0 million as of the last day of the fiscal quarter ending September 30, 2026, and $80.0 million as of the fiscal quarter ending December 31, 2026 and the last day of each fiscal quarter thereafter, subject to certain exclusions.
For the years ended December 31, 2024 and 2023, selling, general and administrative expenses were $87.7 million and $91.0 million, respectively.
For the years ended December 31, 2025 and 2024, selling, general and administrative expenses were $96.4 million and $87.7 million, respectively, an increase of $8.7 million, or 10%.
We accrue the costs incurred under agreements with these third parties based on estimates of actual work completed in accordance with the respective agreements.
A substantial portion of our ongoing research and development activities is conducted by third-party service providers. We accrue the costs incurred under agreements with these third parties based on estimates of actual work completed in accordance with the respective agreements.
(“AstraZeneca”) and Sentynl Therapeutics, Inc. (“Sentynl”) a wholly owned subsidiary of Zydus Lifesciences Ltd. Our subsidiary and partner companies that are pursuing development and/or commercialization of biopharmaceutical products and product candidates are: Checkpoint Therapeutics, Inc. (Nasdaq: CKPT, “Checkpoint”), Journey Medical Corporation (Nasdaq: DERM, “Journey” or “JMC”), Mustang Bio, Inc. (Nasdaq: MBIO, “Mustang”), Avenue Therapeutics, Inc.
(“AstraZeneca”), Sentynl Therapeutics, Inc. (“Sentynl”), Axsome Therapeutics, Inc. (“Axsome”), and Sun Pharma. Our subsidiaries and partner companies that are pursuing development and/or commercialization of biopharmaceutical products and product candidates are: Journey Medical Corporation (Nasdaq: DERM, “Journey” or “JMC”), Mustang Bio, Inc. (Nasdaq: MBIO, “Mustang”), Avenue Therapeutics, Inc. (OTC: ATXI, “Avenue”), Cellvation, Inc. (“Cellvation”), Cyprium Therapeutics, Inc. (“Cyprium”), Helocyte, Inc.
R&D at Fortress is inclusive of annual PIK dividend income received from the subsidiaries (see Note 16, Related Party Transactions, in the Notes to the Consolidated Financial Statements included in “Part II, Item 8, Financial Statements and Supplementary Data” in this Annual Report on Form 10-K).Journey’s increased R&D costs are due to the Emrosi FDA fee of $4.1 million paid in January 2024 (FDA approval was received in November 2024), and the $3 million milestone paid to Dr.
R&D expense at Fortress and the private subsidiaries has increased $5.6 million, or 125%, primarily because R&D at Fortress is inclusive of annual PIK dividend income received from the subsidiaries (see Note 16, Related Party Transactions, in the Notes to the Consolidated Financial Statements included in “Part II, Item 8, Financial Statements and Supplementary Data” in this Annual Report on Form 10-K), and PIK income received by Fortress has decreased $8.5 million, due primarily to the deconsolidation of Checkpoint in May 2025.
Research and development expenses Research and development (“R&D”) costs primarily consist of personnel-related expenses, including salaries, benefits, travel, and other related expenses, stock-based compensation, payments made to third parties for licenses and milestones, costs related to in-licensed products and technology, payments made to third party contract research organizations for preclinical and clinical studies, investigative sites for clinical trials, consultants, the cost of acquiring and manufacturing clinical trial materials, costs associated with regulatory filings and patents, laboratory costs and other supplies. 80 Table of Contents For the years ended December 31, 2024 and 2023, R&D expenses were approximately $56.6 million and $101.7 million, respectively.
Amortization of Acquired Intangible Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ Change ($ in thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ $ ​ ​ ​ % Amortization of acquired intangible assets ​ $ 4,258 ​ $ 3,424 ​ $ 834 ​ 24 % ​ Amortization of acquired intangible assets increased by $0.8 million, or 24%, to $4.3 million for the year ended December 31, 2025, from $3.4 million for the year ended December 31, 2024, driven by the addition of the Emrosi acquired intangible asset upon Journey’s payment to DRL of the milestone payment triggered by the FDA’s approval of Emrosi in November 2024. 83 Table of Contents Research and development expenses R&D costs primarily consist of personnel-related expenses, including salaries, benefits, travel, and other related expenses, stock-based compensation, payments made to third parties for licenses and milestones, costs related to in-licensed products and technology, payments made to third party contract research organizations for preclinical and clinical studies, investigative sites for clinical trials, consultants, the cost of acquiring and manufacturing clinical trial materials, costs associated with regulatory filings and patents, laboratory costs and other supplies.
Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low in any particular period. 76 Table of Contents ​ 77 Table of Contents Recent Accounting Pronouncements See Note 2, Summary of Significant Accounting Policies, in the Notes to the Consolidated Financial Statements included in “Part II, Item 8, Financial Statements and Supplementary Data” in this Annual Report on Form 10-K.
Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low in any particular period.
The table below provides a summary of research and development by entity, for the years ended December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ Change ​ ($ in thousands) 2024 2023 ​ $ % Research & development ​ ​ ​ ​ Fortress 1 ​ ​ $ (4,443) ​ $ 3,996 $ (8,439) ​ (211) % Avenue ​ ​ 6,645 ​ 6,131 514 ​ 8 % Checkpoint ​ ​ 36,152 ​ 43,566 (7,414) ​ (17) % JMC ​ ​ ​ 9,857 ​ ​ 7,541 ​ ​ 2,316 ​ 31 % Mustang ​ ​ 8,418 ​ 40,513 (32,095) ​ (79) % Total research & development expense ​ ​ $ 56,629 ​ $ 101,747 $ (45,118) ​ (44) % ​ Note 1: Includes Fortress and private subsidiaries primarily funded by Fortress: Aevitas (until April 2023), Cellvation, Cyprium, Helocyte, Oncogenuity and Urica.
The table below provides a summary of research and development by entity, for the years ended December 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ Change ​ ($ in thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ $ ​ ​ ​ % Research & development ​ ​ ​ ​ ​ ​ ​ ​ Fortress 1 ​ $ 1,125 ​ $ (4,443) $ 5,568 ​ (125) % Avenue ​ 1,037 ​ 6,645 (5,608) ​ (84) % Checkpoint 2 ​ 10,775 ​ 36,152 (25,377) ​ (70) % Journey ​ ​ 480 ​ ​ 9,857 ​ ​ (9,377) ​ (95) % Mustang ​ (1,516) ​ 8,418 (9,934) ​ (118) % Total research & development expense ​ $ 11,901 ​ $ 56,629 $ (44,728) ​ (79) % ​ Note 1: Includes Fortress and private subsidiaries primarily funded by Fortress: Cellvation, Cyprium, Helocyte, Oncogenuity and Urica.
Cash Flows The following table summarizes our cash flows during the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ($ in thousands) 2024 2023 Change Total cash (used in)/provided by: ​ ​ ​ Operating activities ​ $ (80,191) ​ $ (128,225) ​ $ 48,034 Investing activities ​ (15,000) ​ (2,103) ​ (12,897) Financing activities ​ 70,641 ​ 32,739 ​ 37,902 Net decrease in cash and cash equivalents and restricted cash ​ $ (24,550) ​ $ (97,589) ​ $ 73,039 ​ Operating Activities Net cash used in operating activities decreased by $48.0 million from the year ended December 31, 2023 to the year ended December 31, 2024.
Cash Flows The following table summarizes our cash flows during the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ($ in thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ Change Total cash (used in)/provided by: ​ ​ ​ ​ ​ ​ Operating activities ​ $ (65,777) ​ $ (80,191) ​ $ 14,414 Investing activities ​ 10,121 ​ (15,000) ​ 25,121 Financing activities ​ 77,442 ​ 70,641 ​ 6,801 Net increase (decrease) in cash and cash equivalents and restricted cash ​ $ 21,786 ​ $ (24,550) ​ $ 46,336 ​ Operating Activities Net cash used in operating activities decreased by $14.4 million from the year ended December 31, 2024 to the year ended December 31, 2025.
The capital raise and minimum stake covenants and financial covenants, including minimum liquidity and minimum net sales, will not apply if the outstanding principal balance of the loan is less than or equal to $10 million.
The capital raise and minimum stake covenants and financial covenants will not apply if (i) the outstanding principal balance of the loan is less than or equal to $10 million or (ii) the outstanding principal balance of the loan is less than or equal to $15.0 million and Fortress receives the distribution of proceeds from Cyprium following the closing of the sale of the PRV by Cyprium pursuant to the PRV APA.
The table below provides a summary by entity of selling, general and administrative expenses for the years ended December 31, 2024 and 2023, respectively: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ Change ​ ($ in thousands) 2024 2023 ​ $ ​ % Selling, general & administrative ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fortress 1 ​ ​ $ 18,691 ​ $ 25,987 $ (7,296) ​ (28) % Avenue ​ ​ 4,638 ​ 4,179 459 ​ 11 % Checkpoint ​ ​ 20,063 ​ 8,685 11,378 ​ 131 % JMC ​ ​ 40,204 ​ 43,910 (3,706) ​ (8) % Mustang ​ ​ 4,135 ​ 8,220 (4,085) ​ (50) % Total selling, general & administrative expense ​ ​ $ 87,731 ​ $ 90,981 $ (3,250) ​ (4) % ​ ​ Note 1: Includes Fortress and private subsidiaries primarily funded by Fortress: Aevitas (until April 2023), Cellvation, Cyprium, Helocyte, Oncogenuity and Urica.
The table below provides a summary by entity of selling, general and administrative expenses for the years ended December 31, 2025 and 2024, respectively: 85 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ ​ ​ ​ December 31, ​ Change ​ ($ in thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ $ ​ % Selling, general & administrative ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fortress 1 ​ $ 17,371 ​ $ 18,691 $ (1,320) ​ (7) % Avenue ​ 3,450 ​ 4,638 (1,188) ​ (26) % Checkpoint 2 ​ 27,263 ​ 20,063 7,200 ​ 36 % Journey ​ 44,368 ​ 40,204 4,164 ​ 10 % Mustang ​ 3,948 ​ 4,135 (187) ​ (5) % Total selling, general & administrative expense ​ $ 96,400 ​ $ 87,731 $ 8,669 ​ 10 % ​ ​ Note 1: Includes Fortress and private subsidiaries primarily funded by Fortress: Cellvation, Cyprium, Helocyte, Oncogenuity and Urica.
Fortress is eligible to receive 42.4% of all potential milestone payments, which together with the upfront payment, would total up to approximately $182 million. ● There are two ongoing global Phase 3 studies of CAEL-101 for Mayo Stage IIIa and Mayo Stage IIIb AL amyloidosis. (ClinicalTrials.gov identifiers: NCT04512235 and NCT04504825 ).
Fortress is eligible to receive 42.4% of all potential milestone payments, which, together with the upfront payment, would total up to approximately $182 million. ● There are two ongoing global Phase 3 pivotal studies of CAEL-101 (also known as anselamimab) for Mayo Stage IIIa and Mayo Stage IIIb amyloid light-chain amyloidosis (“AL amyloidosis”), known as Cardiac Amyloid Reaching for Extended Survival (“CARES”) (ClinicalTrials.gov identifiers: NCT04512235 and NCT04504825 ). ● On July 16, 2025, AstraZeneca announced an update from its Cardiac Amyloid Reaching for the CARES Phase 3 clinical program showing that anselamimab did not achieve statistical significance for the primary endpoint compared to placebo in patients with Mayo stages IIIa and IIIb AL amyloidosis.
In the cohort with dual intratumoral (ICT) / intraventricular (ICV) delivery and an optimized manufacturing process there was a ~70% improvement in median overall survival (10.2 months) compared to the expected survival rate of six months in this patient population. ● We are currently exploring with COH to conduct an investigator-sponsored single-institution trial under the COH IND to treat patients with IL13Rα2+ recurrent GBM and high-grade astrocytoma with MB-109 that could potentially be initiated in the fourth quarter of 2025. ● MB-101, MB-108, and MB-109 are currently in development at our partner company, Mustang. ​ MB-106 (CD20-targeted CAR T cell therapy) ● In March 2024, Mustang announced an expansion into autoimmune diseases with MB-106, a personalized CD20-targeted, 3rd-generation autologous CAR T-cell therapy.
In the cohort with dual intratumoral (ICT) / intraventricular (ICV) delivery and an optimized manufacturing process there was a ~70% improvement in median overall survival (10.2 months) compared to the expected survival rate of six months in this patient population. 77 Table of Contents ● Mustang is currently exploring with COH an investigator-sponsored single-institution trial under the COH IND to treat patients with IL13Rα2+ recurrent GBM and high-grade astrocytoma with MB-109 that could potentially be initiated in the second quarter of 2026. ● MB-101, MB-108, and MB-109 are currently in development at our partner company, Mustang. ​ ATX-04 (clenbuterol) ● On February 18, 2026, our partner company Avenue entered into a license agreement with Duke University (“Duke”), whereby Avenue obtained an exclusive worldwide license (the "ATX-04 License") from Duke to certain patents and know-how pertaining to clenbuterol for the treatment of lysosomal storage diseases. ● ATX-04 is a selective β2-adrenergic agonist with human proof-of-concept data demonstrating improved muscle function and enhanced response to enzyme replacement therapy.
As of December 31, 2024, approximately $34.8 million of the Mustang 2024 S-3 remains available for sales of securities, subject to General Instruction I.B.6. of Form S-3. The ability of Mustang to register new offers and sales of securities under the Mustang 2024 S-3 expires on June 12, 2027.
Under the Mustang 2024 S-3, Mustang may sell up to a total of $40.0 million of its securities. As of December 31, 2025, approximately $34.2 million of the Mustang 2024 S-3 remained available for sales of securities, subject to General Instruction I.B.6. of Form S-3.
Stock-based compensation expense included in selling, general and administrative expenses in the years ended December 31, 2024 and 2023 was $25.5 million and $13.8 million, respectively. ​ 82 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ ($ in thousands) 2024 2023 $ % Stock-based compensation - Selling, general and administrative ​ ​ ​ ​ ​ Fortress 1 ​ $ 8,737 ​ $ 8,428 ​ $ 309 ​ 4 % Avenue ​ 967 ​ 707 ​ 260 ​ 37 % Checkpoint ​ 10,004 ​ 1,728 ​ 8,276 ​ 479 % JMC ​ ​ 5,590 ​ ​ 2,494 ​ ​ 3,096 ​ 124 % Mustang ​ 200 ​ 435 ​ (235) ​ (54) % Total stock-based compensation expense - selling, general and administrative ​ $ 25,498 ​ 13,792 ​ $ 11,706 ​ 85 % ​ Note 1: Includes Fortress and private subsidiaries primarily funded by Fortress: Aevitas (until April 2023), Cellvation, Cyprium, Helocyte, Oncogenuity and Urica.
Stock-based compensation expense included in selling, general and administrative expenses in the years ended December 31, 2025 and 2024 was $22.5 million and $25.5 million, respectively, a decrease of $3.0 million, or 12%. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ ($ in thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ $ ​ ​ ​ % Stock-based compensation - Selling, general and administrative ​ ​ ​ ​ ​ ​ ​ ​ ​ Fortress 1 ​ $ 6,189 ​ $ 8,737 ​ $ (2,548) ​ (29) % Avenue ​ 541 ​ 967 ​ (426) ​ (44) % Checkpoint 2 ​ 9,315 ​ 10,004 ​ (689) ​ (7) % Journey ​ ​ 6,288 ​ ​ 5,590 ​ ​ 698 ​ 12 % Mustang ​ 139 ​ 200 ​ (61) ​ (31) % Total stock-based compensation expense - selling, general and administrative ​ $ 22,472 ​ 25,498 ​ $ (3,026) ​ (12) % ​ 86 Table of Contents Note 1: Includes Fortress and private subsidiaries primarily funded by Fortress: Cellvation, Cyprium, Helocyte, Oncogenuity and Urica.
Cost of goods sold ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ($ in thousands) 2024 2023 $ % Cost of goods sold – (excluding amortization of acquired intangible assets) ​ $ 20,879 ​ $ 22,893 ​ $ (2,014) ​ (9) % ​ We had $20.9 million and $22.9 million of costs of goods sold in connection with JMC branded and generic product revenue for the years ended December 31, 2024 and 2023, respectively.
Cost of Goods Sold ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ Change ​ ($ in thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ $ ​ ​ ​ % Cost of goods sold – (excluding amortization of acquired intangible assets) ​ $ 20,924 ​ $ 20,879 ​ $ 45 ​ 0 % ​ Cost of goods sold – (excluding amortization of acquired intangible assets) was consistent year over year at $20.9 million for the years ended December 31, 2025 and 2024.
Asset Impairment ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ($ in thousands) 2024 2023 $ % Asset impairment ​ $ 3,692 ​ $ 3,143 ​ $ 549 ​ 17 % ​ For the year ended December 31, 2024, Mustang recorded an asset impairment of $3.7 million, comprised of $2.2 million impairment loss allocated to leasehold improvements, $0.4 million impairment related to right-of-use asset, and $1.0 million related to equipment based on an expected transaction.
Asset Impairment ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ Change ($ in thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ $ ​ ​ ​ % Asset impairment ​ $ — ​ $ 3,692 ​ $ (3,692) ​ (100) % ​ For the year ended December 31, 2024, Mustang recorded an asset impairment of $3.7 million, of which approximately $2.7 million was attributable to Mustang’s assessment of the recoverability of the asset group consisting of leasehold improvements and associated right-of-use asset, and $1.0 million related to property, plant and equipment held for sale at December 31, 2024, and subsequently sold in 2025.
Avenue ​ In December 2021, Avenue filed a shelf registration statement (File No. 333-261520) on Form S-3 (the “Avenue 2021 S-3”), which was declared effective on December 10, 2021. As of December 31, 2024, approximately $3.9 million of the securities were available for sale under the Avenue 2021 S-3, subject to General Instruction I.B.6. of Form S-3.
As of December 31, 2025, all of the Series C-1 Warrants and 284,452 of the Series C-2 Warrants remain outstanding. Avenue ​ In December 2021, Avenue filed a shelf registration statement (File No. 333-261520) on Form S-3 (the “Avenue 2021 S-3”), which was declared effective on December 10, 2021.
The increase in stock-based compensation expense included in R&D for the year ended December 31, 2024 is primarily attributable to performance-based vesting of grants at Checkpoint, triggered by the FDA approval of UNLOXCYT in December 2024. 81 Table of Contents We expect research and development costs to decrease in 2025.
The decrease in stock-based compensation expense included in R&D for the year ended December 31, 2025 is attributable to reduced expense at Fortress of $0.4 million, or 21%, due to grants fully vested as of July 2025, performance-based vesting of grants at Checkpoint, triggered by the FDA approval of UNLOXCYT in December 2024, coupled with the deconsolidation of Checkpoint in May 2025, and the $0.6 million, or 98%, increase at Mustang due to the non-repeat of stock compensation expense credits from the April 2024 reduction in the Mustang workforce.
Components of cash flows from publicly-traded partner companies are: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2024 ($ in thousands) Fortress 1 Avenue Checkpoint JMC Mustang Total Statement of cash flows data: ​ ​ ​ ​ ​ ​ ​ ​ Total cash (used in)/provided by: ​ ​ ​ ​ ​ ​ ​ ​ Operating activities ​ $ (19,527) ​ $ (9,026) ​ $ (31,101) ​ $ (9,127) ​ $ (11,410) ​ $ (80,191) Investing activities ​ — ​ — ​ — ​ (15,000) ​ — ​ (15,000) Financing activities ​ (231) ​ 9,837 ​ 32,777 ​ 16,993 ​ 11,265 ​ 70,641 Net increase (decrease) in cash and cash equivalents and restricted cash ​ $ (19,758) ​ $ 811 ​ $ 1,676 ​ $ (7,134) ​ $ (145) ​ $ (24,550) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2023 ($ in thousands) Fortress 1 Avenue Checkpoint JMC Mustang Total Statement of cash flows data: ​ ​ ​ ​ ​ ​ Total cash (used in)/provided by: ​ ​ ​ ​ ​ ​ Operating activities ​ $ (26,947) ​ $ (9,451) ​ $ (47,590) ​ $ 5,240 ​ $ (49,477) ​ $ (128,225) Investing activities ​ 11 ​ (3,000) ​ — ​ (5,000) ​ 5,886 ​ (2,103) Financing activities ​ 15,648 ​ 7,526 ​ 40,450 ​ (4,804) ​ (26,081) ​ 32,739 Net decrease in cash and cash equivalents and restricted cash ​ $ (11,288) ​ $ (4,925) ​ $ (7,140) ​ $ (4,564) ​ $ (69,672) ​ $ (97,589) ​ Note 1: Includes Fortress and non-public subsidiaries.
The increase is attributable to an increase in proceeds from partner companies’ equity offerings and warrant exercises of $12.0 million and the decrease in the payments made to Oaktree of $45.4 million, partially offset by decreased proceeds from the issuance of common stock for equity offerings of the Company in the current period of $17.4 million and the decrease in proceeds from long-term debt of $33.8 million. ​ Components of cash flows from publicly-traded partner companies are: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2025 ($ in thousands) ​ ​ ​ Fortress 1 ​ ​ ​ Avenue ​ ​ ​ Checkpoint 2 ​ ​ ​ Journey Mustang Total Statement of cash flows data: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total cash (used in)/provided by: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating activities ​ $ 6,915 ​ $ (1,833) ​ $ (53,154) ​ $ (12,441) ​ $ (5,264) ​ $ (65,777) Investing activities ​ 8,956 ​ — ​ — ​ — ​ 1,165 ​ 10,121 Financing activities ​ (2,714) ​ 2,094 ​ 47,310 ​ 16,226 ​ 14,526 ​ 77,442 Net increase (decrease) in cash and cash equivalents and restricted cash ​ $ 13,157 ​ $ 261 ​ $ (5,844) ​ $ 3,785 ​ $ 10,427 ​ $ 21,786 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2024 ($ in thousands) ​ ​ ​ Fortress 1 ​ ​ ​ Avenue ​ ​ ​ Checkpoint ​ ​ ​ Journey ​ ​ ​ Mustang ​ ​ ​ Total Statement of cash flows data: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total cash (used in)/provided by: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating activities ​ $ (19,527) ​ $ (9,026) ​ $ (31,101) ​ $ (9,127) ​ $ (11,410) ​ $ (80,191) Investing activities ​ — ​ — ​ — ​ (15,000) ​ — ​ (15,000) Financing activities ​ (231) ​ 9,837 ​ 32,777 ​ 16,993 ​ 11,265 ​ 70,641 Net increase (decrease) in cash and cash equivalents and restricted cash ​ $ (19,758) ​ $ 811 ​ $ 1,676 ​ $ (7,134) ​ $ (145) ​ $ (24,550) ​ Note 1: Includes Fortress and non-public subsidiaries.
Investing Activities Net cash used by investing activities for the year ended December 31, 2023 of $2.1 million increased $12.9 million to $15.0 million for the year ended December 31, 2024. The change is due to Journey’s payment of the $15 million milestone due to Dr. Reddy in December 2024 triggered by the FDA approval of Emrosi.
The change is due to Journey’s payment of the $15 million milestone paid to DRL in December 2024 triggered by the FDA approval of Emrosi, coupled with the net cash increase of $9.0 million related to the sale of Checkpoint to Sun Pharma in May 2025, and Mustang’s $1.2 million proceeds from the sale of its held-for-sale assets related to the exit of its manufacturing facility in the year ended 2025.
The Avenue May 2024 Warrants have an exercise price of $6.20 per share, and terms of eighteen months for one series and five years for the other series. ​ Debt ​ Oaktree Facility ​ On July 25, 2024, Fortress entered into a $50.0 million senior secured credit agreement (the “New Oaktree Agreement”) with a maturity date of July 25, 2027 with Oaktree Fund Administration, LLC and the lenders from time-to-time party thereto (collectively, “Oaktree”).
Avenue is no longer able to utilize the Avenue ATM as a result of the delisting of its stock from trading on Nasdaq. ​ 90 Table of Contents Debt ​ Oaktree Facility ​ On July 25, 2024, Fortress entered into the $50.0 million senior secured credit agreement (the “2024 Oaktree Agreement”) with Oaktree Fund Administration, LLC and the lenders from time-to-time party thereto (collectively, “Oaktree”).
In November 2024, Checkpoint received approximately $9.2 million upon the exercise of existing Series B warrants to purchase 3,256,269 shares of Checkpoint common stock, which warrants were originally issued and sold in a registered direct offering from May 2023 with an exercise price of $2.821 per share.
In April 2025, Checkpoint received approximately $9.2 million from the exercise of warrants for the issuance of 3,256,269 shares of common stock with an average exercise price of $2.82 per share.
Research and development – licenses acquired ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ($ in thousands) 2024 2023 $ % Research and development – licenses acquired ​ $ 252 ​ $ 4,324 ​ $ (4,072) ​ (94) % ​ The decrease in research and development – licenses acquired of $4.1 million in 2024 is due primarily to $4.2 million paid by Avenue to AnnJi for the AJ201 license in 2023.
Research and development – licenses acquired ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ Change ($ in thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ $ ​ ​ ​ % Research and development – licenses acquired ​ $ — ​ $ 252 ​ $ (252) ​ (100) % ​ The decrease in research and development – licenses acquired of $0.3 million, or 100%, in 2025 is due primarily to $0.3 million incurred by Mustang in 2024 related to a milestone achievement, with no comparable expense in the year ended December 31, 2025.
Dotinurad was efficacious and well-tolerated in more than 500 Japanese patients treated for up to 58 weeks in Phase 3 clinical trials. ● Dotinurad was sourced by Fortress and was in development at our Urica subsidiary until being acquired by Crystalys in July 2024. ​ ​ MB-109 (IL13Rα2-targeted CAR T Cells (MB-101) + HSV-1 oncolytic virus (MB-108)) ​ ● In November 2024, we announced that the FDA granted Orphan Drug Designation for Mustang for MB-108, a herpes simplex virus type 1 (“HSV-1”) oncolytic virus, for the treatment of malignant glioma. ● In March 2024, data from the Phase 1 trial evaluating MB-101 IL13Rα2-targeted CAR T-cells in high-grade glioma were published in Nature Medicine.
In July 2025, we announced that the FDA granted Orphan Drug Designation to Mustang for MB-101 for the treatment of recurrent diffuse and anaplastic astrocytoma (astrocytomas) and glioblastoma. ● In March 2024, data from the Phase 1 trial evaluating MB-101 IL13Rα2-targeted CAR T-cells in high-grade glioma were published in Nature Medicine.
(“Urica”). ​ 70 Table of Contents Recent Events Revenue Portfolio ● For the years ended December 31, 2024 and 2023, total net revenue was $57.7 million and $84.5 million, respectively, which includes net product revenue from Journey’s commercial portfolio of $55.1 million and $59.7 million, respectively.
(“Baergic”), previously a subsidiary of Avenue, was acquired by Axsome in November 2025. ​ ​ 74 Table of Contents Recent Events Revenue Portfolio ● For the years ended December 31, 2025 and 2024, total net revenue was $63.3 million and $57.7 million, respectively, which includes net product revenue from Journey’s commercial portfolio of $61.2 million and $55.1 million, respectively. ● For the year ended December 31, 2025, other revenue included $1.4 million related to Avenue’s termination of its license agreement with AnnJi Pharmaceutical Co.
Avenue currently plans to continue to file its required periodic reports and other filings with the SEC. ● In February 2025 Mustang announced it had concurrently exited the lease for its manufacturing facility in Worcester, Massachusetts and sold certain fixed assets including furniture and equipment to AbbVie Bioresearch Center, Inc. for $1.0 million. ● In January 2025, Mustang effected a 1-for-50 reverse stock split to achieve compliance with the minimum bid price listing requirement of the Nasdaq Capital Market. ● In July 2024, Journey entered into an amendment of its existing credit facility with SWK, increasing the amount of the facility from $20 million to $25 million. ● In April 2024, Avenue effected a 1-for-75 reverse stock split to achieve compliance with the minimum bid price listing requirement of the Nasdaq Capital Market. 74 Table of Contents ● In April 2024, Mustang’s board of directors approved a reduction in its workforce of approximately 81% of its employee base in order to reduce costs and preserve capital; the reduction occurred primarily in April 2024 and was substantially complete in the second quarter of 2024. ● Throughout 2024, Checkpoint raised total net proceeds of approximately $32.8 million through equity offerings and the exercise of existing warrants .
Avenue currently plans to continue to file its required periodic reports and other filings with the SEC. ● In February 2025, Mustang announced it had concurrently exited the lease for its manufacturing facility in Worcester, Massachusetts and sold certain fixed assets including furniture and equipment to AbbVie Bioresearch Center, Inc. for $1.0 million. ● In January 2025, Mustang effected a 1-for-50 reverse stock split to achieve compliance with the minimum bid price listing requirement of the Nasdaq Capital Market. ​ Critical Accounting Policies and Use of Estimates Our Consolidated Financial Statements included in this Annual Report on Form 10-K include certain amounts that are based on management’s best estimates and judgments.
The pre-funded warrants have an exercise price of $0.005 per share, became exercisable upon issuance and remain exercisable until exercised in full.
The Pre-Funded Warrants had an exercise price of $0.0001 per share, were exercisable immediately upon issuance and expired when exercised in full. Each Warrant has an exercise price of $3.01 per share and became exercisable beginning on the effective date of stockholder approval of the issuance of the Warrant Shares (the “Warrant Stockholder Approval”).
Reddy’s Laboratories Ltd. ​ ​ 71 Table of Contents CUTX-101 (copper histidinate injection for Menkes disease) ​ ● In January 2025, our subsidiary Cyprium announced that the FDA had accepted the NDA for CUTX-101 (copper histidinate for Menkes disease) for priority review with a target action date of September 30, 2025. ● In December 2023, Cyprium completed the asset transfer of CUTX-101 to Sentynl, a wholly owned subsidiary of Zydus Lifesciences Ltd.
In December 2025, we announced the FDA accepted the resubmission of the NDA for CUTX-101 as a Class 1 resubmission with a new PDUFA target action date of January 14, 2026. ● In December 2023, Cyprium completed the asset transfer of CUTX-101 to Sentynl.
Failure by the Company to comply with the financial covenants will result in an event of default, subject to certain cure rights of the Company with respect to the Minimum Net Sales Test. ​ The New Oaktree Agreement contains events of default that are customary for financings of this type, in certain circumstances subject to customary cure periods.
Failure by the Company to comply with the financial covenants will result in an event of default, subject to certain cure rights of the Company with respect to the Minimum Net Sales Test. The Minimum Net Sales Test covenant does not apply any time the outstanding principal balance of the Loan is less than or equal to $10.0 million.
For the year ended December 31, 2024, the Company issued and sold approximately 2.0 million shares of common stock at an average price of $1.98 per share for gross proceeds of $3.9 million. In connection with these sales, the Company paid aggregate fees of $0.1 million.
This post-effective amendment was declared effective by the SEC on April 2, 2025. During the year ended December 31, 2025, 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 the Company’s at-the-market offering program.
Journey received FDA approval for Emrosi on November 4, 2024 and drew on the remaining $5.0 million on November 25, 2024. Loans under the Credit Facility mature on December 27, 2027, and bear interest at a rate per annum equal to the three-month term Secured Overnight Financing Rate (“SOFR”) (subject to a SOFR floor of 5%) plus 7.75%.
The Third Amendment, among other things, extends the maturity date of Journey’s existing SWK Credit Facility from December 27, 2027 to June 27, 2028. Term loans under the SWK Credit facility bear interest at a rate per annum equal to the three-month term SOFR (subject to a SOFR floor of 5%) plus 7.75%. The interest rate resets quarterly.
Reddy’s Laboratories, Ltd triggered by the FDA’s acceptance of the Emrosi NDA in March 2024, offset by lower clinical trial expenses to develop Emrosi, as the clinical phase of the project has concluded. ​ Noncash, stock-based compensation expense included in R&D for the years ended December 31, 2024 and 2023, was $7.1 million and $3.2 million, respectively. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ ($ in thousands) 2024 2023 $ % Stock-based compensation - research & development ​ ​ ​ ​ Fortress 1 ​ $ 1,746 ​ $ 1,624 ​ $ 122 7 % Avenue ​ 269 ​ 199 ​ 70 35 % Checkpoint ​ 5,248 ​ 1,169 ​ 4,079 349 % JMC ​ ​ 508 ​ ​ 112 ​ ​ 396 ​ 353 % Mustang ​ (650) ​ 133 ​ (783) (589) % Total stock-based compensation expense - research and development ​ $ 7,121 ​ $ 3,237 ​ $ 3,884 120 % Note 1: Includes Fortress and private subsidiaries primarily funded by Fortress: Aevitas (until April 2023), Cellvation, Cyprium, Helocyte, Oncogenuity and Urica.
Journey’s decreased R&D costs of $9.4 million, or 95%, are due to pre-approval project costs related to Emrosi incurred in 2024, which concluded following the FDA’s approval of Emrosi in November 2024. ​ R&D expense at Avenue decreased $5.6 million, or 84%, due to a $5.2 million decrease in pre-clinical and clinical development costs for AJ201 prior to entering into the termination agreement with AnnJi, a $0.1 million decrease in manufacturing expenses, and a $0.1 million decrease in personnel costs. ​ 84 Table of Contents Noncash, stock-based compensation expense included in R&D for the years ended December 31, 2025 and 2024, was $6.3 million and $7.1 million, respectively, a decrease of $0.9 million, or 12%. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ ($ in thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ $ ​ ​ ​ % Stock-based compensation - research & development ​ ​ ​ ​ ​ ​ ​ ​ Fortress 1 ​ $ 1,371 ​ $ 1,746 ​ $ (375) (21) % Avenue ​ 124 ​ 269 ​ (145) (54) % Checkpoint 2 ​ 4,782 ​ 5,248 ​ (466) (9) % Journey ​ ​ — ​ ​ 508 ​ ​ (508) ​ (100) % Mustang ​ (10) ​ (650) ​ 640 (98) % Total stock-based compensation expense - research and development ​ $ 6,267 ​ $ 7,121 ​ $ (854) (12) % ​ Note 1: Includes Fortress and private subsidiaries primarily funded by Fortress: Cellvation, Cyprium, Helocyte, Oncogenuity and Urica.
For the year ended December 31, 2024, net product revenues decreased by $4.5 million, or 8%, to $55.1 million for the year ended December 31, 2024, from $59.7 million for the year ended December 31, 2023.
For the year ended December 31, 2025, net product revenues increased by $6.1 million, or 11%, from $55.1 million. The increase is primarily due to the U.S commercial launch of Emrosi generating incremental revenues of $14.7 million in 2025.
These decreases were partially offset by an increase in general and administrative expenses at Checkpoint, primarily driven by the increase in stock-based compensation due to performance-based vesting.
The increase in general and administrative expenses at Checkpoint of $7.2 million, or 36%, is primarily driven by the increase in stock-based compensation due to performance-based vesting triggered by the transaction with Sun Pharma. The increase at Journey of $4.2 million, or 10%, is primarily due to incremental operational activities related to the launch and commercialization of Emrosi.
We recorded the related issue costs and value ascribed to the warrants as a debt discount of the 2024 Oaktree Note (as defined below). The discount is being amortized utilizing the effective interest method over the term of the Oaktree Note, which is approximately 15.39% at December 31, 2024.
The discount is being amortized utilizing the effective interest method over the term of the 2024 Oaktree Note, which was approximately 11.6% at December 31, 2025. Accrued Research and Development Expense We record accruals for estimated costs of research, preclinical, clinical and manufacturing development within accrued expenses which are significant components of research and development expenses.
For the year ended December 31, 2023, we generated $84.5 million of net revenue, of which $59.7 million relates to product revenue derived from Journey’s branded and generic products, $19.5 million relates to Journey’s royalties from Maruho, $5.2 million relates to Cyprium’s collaboration revenue with Sentynl and $0.1 million relates to Checkpoint’s prior collaboration agreements with TGTX.
For the year ended December 31, 2024, we generated $57.7 million of net revenue, of which $55.1 million relates to product revenue derived from Journey’s branded and generic products, $1.5 million relates to collaboration revenue from Sentynl for the NDA submission acceptance milestone relating to CUTX-101, and $1.0 million in other revenue relates to a $1.0 million milestone payment from Cutia that became payable to JMC upon Cutia receiving marketing approval for topical 4% minocycline foam in the People’s Republic of China.
For the year ended December 31, 2024, the decrease in selling, general and administrative expenses of $3.3 million, or 4%, is primarily attributable to decreased expenses at Fortress relating to general operational cost reductions and lower legal expenses incurred by private subsidiaries.
The decrease in selling, general and administrative expenses at Fortress and the private subsidiaries of $1.3 million, or 7%, is primarily attributable to decreased stock compensation expense at Fortress due to fully-vested grants offset by less equity fees received from the partner companies of Fortress due to less equity offerings and warrant exercises for the public subsidiaries in 2025.
On May 31, 2024, Mustang filed a shelf registration statement on Form S-3 (File No. 333-279891) (the “Mustang 2024 S-3”), which was declared effective on June 12, 2024. Under the Mustang 2024 S-3, Mustang may sell up to a total of $40.0 million of its securities.
In May 2025, Checkpoint was sold to Sun Pharma in a transaction that resulted in the Company receiving $28.0 million in cash proceeds (see Note 3, Asset Purchase and Merger Agreements, in the Notes to the Consolidated Financial Statements included in “Part II, Item 8, Financial Statements and Supplementary Data” in this Annual Report on Form 10-K). 89 Table of Contents Mustang On May 31, 2024, Mustang filed a shelf registration statement on Form S-3 (File No. 333-279891) (the “Mustang 2024 S-3”), which was declared effective on June 12, 2024.
Cyprium will retain 100% ownership over any FDA priority review voucher that may be issued at the New Drug Application (“NDA”) approval for CUTX-101. ● CUTX-101 was sourced by Fortress and was developed by Cyprium until the asset transfer in December 2023. ​ CAEL-101 (monoclonal antibody for AL amyloidosis) ● On October 5, 2021, AstraZeneca acquired Caelum Biosciences, Inc.
Additionally, Cyprium is eligible to receive up to $128 million in aggregate sales milestones and royalties on net sales of ZYCUBO ranging from 3% to 12.5% on tiered annual net sales. ● CUTX-101 was sourced by Fortress and was developed by Cyprium until the asset transfer in December 2023. ​ Late Stage Product Candidates CAEL-101 (light chain fibril-reactive monoclonal antibody for AL amyloidosis) ● On October 5, 2021, AstraZeneca acquired Caelum Biosciences, Inc.
Sentynl is obligated under the applicable agreement to use commercially reasonable efforts to develop and commercialize CUTX-101, including the funding of the same. Additionally, Cyprium remains eligible to receive up to $129 million in aggregate development and sales milestones under the Agreement and royalties on net sales of CUTX-101 ranging from 3% to 12.5% on tiered annual net sales.
Sentynl is obligated under the applicable agreement to use commercially reasonable efforts to develop and commercialize CUTX-101.
The increase in stock-based compensation expense included in selling, general and administrative expense for the year ended December 31, 2024 is primarily attributable to performance-based vesting of grants at Checkpoint, triggered by the FDA approval of UNLOXCYT received in December 2024, and additional expense incurred at Journey related to new employee grants.
The decrease in stock-based compensation expense included in selling, general and administrative expense for the year ended December 31, 2025 is primarily attributable to Long-Term Incentive Plan vesting that occurred in July 2025, decreasing Fortress’ expense by $2.5 million, or 29%. We expect selling, general and administrative expenses to remain flat or increase in 2026.
Triplex (cytomegalovirus (CMV) vaccine) ​ ● Triplex, a potential vaccine for control of cytomegalovirus (“CMV”), is currently being studied in a Phase 2 clinical trial for adults co-infected with HIV and CMV that is now fully enrolled with topline data anticipated in the third quarter of 2025.
In return, Crystalys issued to Urica shares of its common stock, including certain anti-dilution provisions through the raise of $150 million in equity securities, and also granted Urica a secured 3% royalty on future net sales of dotinurad. ● Dotinurad was approved in Japan in 2020 has also obtained regulatory approval in China, Philippines and Thailand. ● Dotinurad was sourced by Fortress and was in development at our Urica subsidiary until being acquired by Crystalys in July 2024. ​ Triplex (cytomegalovirus vaccine and immunotherapy) ​ ● Triplex, a potential vaccine and immunotherapy for prevention and control of cytomegalovirus (“CMV”), is currently being studied in a Phase 2 clinical trial for adults co-infected with HIV and CMV that is now fully enrolled with topline data anticipated in the first half of 2026.
Checkpoint In March 2023, Checkpoint filed a registration statement on Form S-3 (File No. 333-270843), which was declared effective May 5, 2023 (the “Checkpoint 2023 S-3”). Under the Checkpoint 2023 S-3, Checkpoint may sell up to a total of $150 million of its securities.
On January 15, 2026, Journey filed a shelf registration statement on Form S-3 (File No. 333-292758) (the “Journey 2026 Shelf”), which was declared effective by the Securities and Exchange Commission on January 21, 2026.
Removed
(OTC: ATXI, “Avenue”), Baergic Bio, Inc. (“Baergic,” a subsidiary of Avenue), Cellvation, Inc. (“Cellvation”), Cyprium Therapeutics, Inc. (“Cyprium”), Helocyte, Inc. (“Helocyte”), Oncogenuity, Inc. (“Oncogenuity”) and Urica Therapeutics, Inc.
Added
(“Helocyte”), Oncogenuity, Inc. (“Oncogenuity”) and Urica Therapeutics, Inc. (“Urica”). Checkpoint Therapeutics, Inc. (“Checkpoint”), previously a partner company of ours, was acquired by Sun Pharma in May 2025. Baergic Bio, Inc.
Removed
Total net revenue in 2023 included the receipt by Journey of a $19.0 million upfront payment for the exclusive license of certain rights relating to Qbrexza in Asia. ● In the fourth quarter of 2024, we announced the respective FDA approvals of Emrosi™ (Minocycline Hydrochloride Extended-Release Capsules, 40mg), by Journey; and UNLOXCYT TM (cosibelimab-ipdl), for the treatment of adults in metastatic or locally advanced cutaneous squamous cell carcinoma (“cSCC”) in adults who are not candidates for curative surgery or radiation, by Checkpoint. ​ Late Stage Product Candidates UNLOXCYT™ (cosibelimab-ipdl, anti-PD-L1 antibody) ● On December 13, 2024, our partner company, Checkpoint received approval from the FDA for UNLOXCYT (cosibelimab-ipdl), for the treatment of metastatic or locally advanced cutaneous squamous cell carcinoma (“cSCC”) in adults who are not candidates for curative surgery or radiation. ● In September 2024, Checkpoint presented longer-term data from our pivotal trial of cosibelimab during the European Society for Medical Oncology (“ESMO”) Congress 2024.
Added
Ltd. (“AnnJi”), and $0.6 million related to Journey’s supply of Amzeeq to Cutia for commercial use and sales-based royalties on Cutia’s net sales of Amzeeq. ● In January 2026, we announced the FDA approval of ZYCUBO (copper histidinate, also known as CUTX-101) for the treatment of Menkes Disease in pediatric patients.
Removed
Longer-term results for cosibelimab presented at the ESMO Congress demonstrate a deepening of response over time, with higher objective response and complete response rates than initially observed at the primary analyses. ● In July 2024, Checkpoint announced a collaboration to explore the combined therapeutic potential of cosibelimab with GC Cell’s Immuncell-LC, an innovative autologous Cytokine Induced Killer (“CIK”) T cell therapy composed of cytotoxic T lymphocytes and natural killer T cells. ● UNLOXCYT was sourced by Fortress and developed at Checkpoint. ​ Emrosi ( Minocycline Hydrochloride Extended-Release Capsules, 40mg, also known as DFD-29, for the treatment of rosacea) ● In November 2024, Journey announced that the FDA approved Emrosi™ (Minocycline Hydrochloride Extended-Release Capsules, 40mg) for the treatment of inflammatory lesions of rosacea in adults.

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