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What changed in Fortress Biotech, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Fortress Biotech, Inc.'s 2022 and 2023 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 2023 report.

+568 added−506 removedSource: 10-K (2024-03-28) vs 10-K (2023-03-31)

Top changes in Fortress Biotech, Inc.'s 2023 10-K

568 paragraphs added · 506 removed · 286 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

93 edited+125 added−73 removed78 unchanged
Biggest changeProduct Candidates and Other Intellectual Property Commercialized Products Through our partner company Journey we actively market the following branded dermatology products: Qbrexza® : Qbrexza (glycopyrronium 2.4%) is a medicated cloth towelette for the treatment of primary axillary hyperhidrosis in adults and children 9 years and older. ​ Accutane® : Accutane (isotretinoin) is an oral capsule for the treatment of severe recalcitrant nodular acne.
Biggest changeProduct Candidates and Other Intellectual Property Revenue Portfolio Through our partner company Journey we actively market the following branded dermatology products approved by the FDA for sale in the United States: ● 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); 7 Table of Contents ● 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).
ONCOlogues (Oligonucleotide Platform) Our subsidiary Oncogenuity is developing a delivery platform that allows peptic nucleic acids to enter cell membrane and nucleus, displace the targeted mutant DNA strand, and prevent mutant mRNA transcription. Oncogenuity is seeking to optimize lead candidates targeting genetically driven cancers, including KRAS G12D, and other genetic disorders.
ONCOlogues (Oligonucleotide Platform) Our subsidiary Oncogenuity is developing a delivery platform that allows peptic nucleic acids to enter a cell membrane and nucleus, displace the targeted mutant DNA strand, and prevent mutant mRNA transcription. Oncogenuity is seeking to optimize lead candidates targeting genetically driven cancers, including KRAS G12D, and other genetic disorders.
To help protect our proprietary know-how, which is not patentable, and for inventions for which patents may be difficult to enforce, we currently rely and will in the future rely on trade secret protection and confidentiality agreements to protect our interests.
To help protect our proprietary know-how, which is not patentable, and for inventions for which patents may be difficult to enforce, we currently, and will in the future, rely on trade secret protection and confidentiality agreements to protect our interests.
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 a 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.
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.
Checkpoint believes that olafertinib has the potential to be effective in this population as a monotherapy or in combination with other anti-tumor immune response potentiating compounds. Olafernitib has FDA Orphan Drug Designation for the treatment of EGFR mutation-positive NSCLC. In September 2018, Checkpoint announced preliminary interim safety and efficacy data from the ongoing Phase 1 clinical trial.
Checkpoint believes that olafertinib has the potential to be effective in this population as a monotherapy or in combination with other anti-tumor immune response potentiating compounds. Olafertinib has FDA Orphan Drug Designation for the treatment of EGFR mutation-positive NSCLC. In September 2018, Checkpoint announced preliminary interim safety and efficacy data from the ongoing Phase 1 clinical trial.
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 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.
Partner 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 two 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, four partner companies are publicly-traded, and two have consummated strategic partnerships with industry leaders AstraZeneca plc as successor-in-interest to Alexion Pharmaceuticals, Inc.
In August 2022, Helocyte announced that Triplex had received a grant from the National Institute of Allergy and Infectious Diseases of the National Institutes of Health that could provide over $20 million in non-dilutive funding. This competitive award will fund a multi-center, placebo-controlled, randomized Phase 2 study of Triplex for control of CMV in patients undergoing liver transplantation.
In August 2022, Helocyte announced that Triplex received a grant from the National Institute of Allergy and Infectious Diseases of the National Institutes of Health that could provide over $20 million in non-dilutive funding. This competitive award will fund a multi-center, placebo-controlled, randomized Phase 2 study of Triplex for control of CMV in patients undergoing liver transplantation.
There is no current FDA-approved treatment for Menkes disease. CUTX-101, along with an AAV-ATP7A gene therapy that is also being developed by Cyprium, was granted Orphan Drug Designation by the FDA and the European Medicines Agency (“EMA”) Committee for Orphan Medicinal Products.
There is no current FDA-approved treatment for Menkes disease. CUTX-101, along with an AAV-ATP7A gene therapy that is being developed by Cyprium, was granted Orphan Drug Designation by the FDA and the European Medicines Agency (“EMA”) Committee for Orphan Medicinal Products.
We face competition from many different sources, including commercial pharmaceutical and biotechnology enterprises, academic institutions, government agencies, and private and public research institutions. Many of our competitors have significantly greater financial, product development, manufacturing and marketing resources than us. Large pharmaceutical companies have extensive experience in clinical testing and obtaining regulatory approval for drugs.
We face competition from many different sources, including commercial pharmaceutical and biotechnology enterprises, academic institutions, government agencies, and private and public research institutions. Many of our competitors have significantly greater financial, product development, manufacturing and marketing resources than we do. Large pharmaceutical companies have extensive experience in clinical testing and obtaining regulatory approval for drugs.
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. Executive Officers of Fortress The following table sets forth certain information about our executive officers as of December 31, 2022. Name Age Position Lindsay A.
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. Executive Officers of Fortress The following table sets forth certain information about our executive officers as of December 31, 2023. Name Age Position Lindsay A.
Generally, “subsidiary” refers to a private Fortress subsidiary, “partner company” refers to a public Fortress subsidiary, and “partner” refers to entities with whom one of the foregoing parties has a significant business relationship, such as an exclusive license or an ongoing product-related payment obligation.
Generally, “subsidiary” refers to a private Fortress subsidiary, “partner company” refers to a public Fortress subsidiary, and “partner” refers to an entity with whom one of the foregoing parties has a significant business relationship, such as an exclusive license or an ongoing product-related payment obligation.
In October 2021, AstraZeneca acquired Caelum for an upfront payment of approximately $150 million paid to Caelum shareholders, of which approximately $56.9 million was paid to Fortress, which was net of the ten percent, 24-month escrow holdback amount and other miscellaneous transaction expenses.
In October 2021, AstraZeneca acquired Caelum for an upfront payment of approximately $150 million paid to Caelum shareholders, of which approximately $56.9 million was paid to Fortress, which was net of the ten percent escrow holdback amount and other miscellaneous transaction expenses.
Fred Hutch intends to enroll approximately 50 subjects on the study, which is being led by Principal Investigator Mazyar Shadman, M.D., M.P.H., Assistant Member of Fred Hutch’s Clinical Research Division. 13 Table of Contents The Fred Hutch IND was amended in 2019 to incorporate an optimized manufacturing process that had been developed in collaboration with Mustang.
Fred Hutch intends to enroll approximately 50 subjects on the study, which is being led by Principal Investigator Mazyar Shadman, M.D., M.P.H., Assistant Member of Fred Hutch’s Clinical Research Division. The Fred Hutch IND was amended in 2019 to incorporate an optimized manufacturing process that had been developed in collaboration with Mustang.
Generic versions are generally significantly less expensive than branded versions, and, where available, may be required to be utilized before or in preference to the branded version under third-party reimbursement programs, or substituted by pharmacies. Accordingly, when a branded product loses its market exclusivity, it normally faces intense price competition from generic forms of the product.
Generic versions are generally significantly less expensive than branded 17 Table of Contents versions, and, where available, may be required to be utilized before or in preference to the branded version under third-party reimbursement programs, or substituted by pharmacies. Accordingly, when a branded product loses its market exclusivity, it normally faces intense price competition from generic forms of the product.
Jude”), Dana-Farber Cancer Institute, Nationwide Children’s Hospital, Cincinnati Children’s Hospital Medical Center, Columbia University, the University of Pennsylvania, Mayo Foundation for Medical Education and Research (“Mayo Clinic”), AstraZeneca plc, and Dr. Reddy’s Laboratories, Ltd.
Jude Children’s Research Hospital (“St. Jude”), Dana-Farber Cancer Institute, Nationwide Children’s Hospital, Cincinnati Children’s Hospital Medical Center, Columbia University, the University of Pennsylvania, Mayo Foundation for Medical Education and Research (“Mayo Clinic”), AstraZeneca plc, and Dr. Reddy’s Laboratories, Ltd.
Malignant brain tumors are the most common cause of cancer-related deaths in adolescents and young adults aged 15-39 and the most common cancer occurring among 15-19 year-olds in the U.S. While GBM is a rare disease, it is quite lethal, with five-year survival rates historically under 10%.
Malignant brain tumors are the most common cause of cancer- 12 Table of Contents related deaths in adolescents and young adults aged 15-39 and the most common cancer occurring among 15-19 year-olds in the U.S. While GBM is a rare disease, it is quite lethal, with five-year survival rates historically under 10%.
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. 18 Table of Contents 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. Competition We operate in highly competitive segments of the biotechnology and biopharmaceutical markets.
Our website also includes announcements of investor conferences and events, information on our business strategies and results, corporate governance information, and other news and announcements that investors might find useful or interesting. The information contained on our website is not included in, or incorporated by reference into, this Annual Report on Form 10-K.
Our website also includes announcements of investor conferences and events, information on our business strategies and results, corporate governance information, and other news and announcements that investors might find useful or interesting. The information contained on our website is not included in, or incorporated by reference into, this Annual Report on Form 10-K. ​ ​ 27 Table of Contents
The conduct of the preclinical tests must comply with federal regulations and requirements including GLPs. The sponsor must submit the results of the preclinical tests, together with manufacturing information, analytical data, any available clinical data or literature and a proposed clinical protocol, to the FDA as part of the IND.
The conduct of the preclinical tests must comply with federal regulations and requirements including GLPs. The sponsor must submit the results of the preclinical tests, together with manufacturing information, analytical data, any available clinical data or 18 Table of Contents literature and a proposed clinical protocol, to the FDA as part of the IND.
Accordingly, we face pressure to continually seek out technological innovations and to market our products effectively. Our major competitors, including Galderma Laboratories, Almirall, Novan Health, 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.
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, 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.
The ACA, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and additional downward pressure on the payments received for any approved drug. Any reduction in reimbursement from Medicare or other government healthcare programs result in a similar reduction in payments from private payors.
The ACA, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and additional downward pressure on the payments received for any approved drug. Any 25 Table of Contents reduction in reimbursement from Medicare or other government healthcare programs result in a similar reduction in payments from private payors.
In a Phase 1 study, Triplex was found 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 efficacious in reducing CMV events in allogeneic stem cell transplant recipients ( ClinicalTrials.gov Identifier: NCT02506933).
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).
The objective of this trial is to turn immunologically “cold” tumors “hot” with MB-108 in order to potentially enhance the efficacy the efficacy of MB-101, then infuse MB-101 loco-regionally as was done in the Phase 1 single-agent MB-101 trial.
The objective of this trial is to turn immunologically “cold” tumors “hot” with MB-108 in order to potentially enhance the efficacy of MB-101, then infuse MB-101 loco-regionally as was done in the Phase 1 single-agent MB-101 trial. The combination of MB-101 and MB-108 is referred to as MB-109.
In December 2019, Avenue submitted an NDA for IV Tramadol to treat moderate to moderately severe postoperative pain pursuant to Section 505(b)(2) of the Federal Food, Drug and Cosmetic Act (“FDCA”), and following a Complete Response Letter (“CRL”) received in October 2020, resubmitted the NDA in February 2021.
In December 2019, Avenue submitted an NDA for IV tramadol to treat moderate to moderately severe postoperative pain pursuant to Section 505(b)(2) of the Federal Food, Drug and Cosmetic Act (“FDCA”), and following a CRL received in October 2020, resubmitted the NDA in February 2021.
This means that, subsequent to approval, the FDA may not approve any other applications to market the same drug that designated orphan use, except in limited circumstances, for seven years.
This means that, subsequent to approval, the FDA may not approve any other applications to market the same drug that designated orphan use, except in 22 Table of Contents limited circumstances, for seven years.
Having optimized MB-101 dose, schedule, route of administration and T cell selection in a completed Phase 1 trial, ongoing COH sponsored studies include: 1. MB-101 with or without nivolumab and ipilimumab in treating patients with recurrent or refractory glioblastoma (currently enrolling patients; ClinicalTrials.gov Identifier: NCT04003649); 2.
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); and ● MB-101 in treating patients with recurrent or refractory glioblastoma with a substantial component of leptomeningeal disease (currently enrolling patients; ClinicalTrials.gov Identifier: NCT04661384).
Weiss has served as our Executive Vice Chairman, Strategic Development since February 2014. He currently serves as a member of the board of directors of several of our partner companies, including Checkpoint (Nasdaq: CKPT) and Mustang (Nasdaq: MBIO). Mr. Weiss is currently the Executive Chairman of Mustang Bio, Inc. and the Chairman of the Board of Directors of Checkpoint.
Michael S. Weiss has served as our Executive Vice Chairman, Strategic Development since February 2014. He currently serves as a member of the board of directors of several of our partner companies, including Checkpoint (Nasdaq: CKPT) and Mustang (Nasdaq: MBIO). Mr.
The rationale for in-licensing MB-108 was to potentially enhance the efficacy of MB-101 by first turning immunologically “cold” malignant glioma tumors “hot” with MB-108, then infusing MB-101 loco-regionally, as was done in the phase 1 single-agent MB-101 trial.
The rationale for in-licensing MB-108 was to potentially enhance the efficacy of MB-101 by first turning immunologically “cold” malignant glioma tumors “hot” with MB-108, then infusing MB-101 loco-regionally, as was done in the phase 1 single-agent MB-101 trial. This combination is to be referred to as MB-109.
GBM is the most common brain and central nervous system (“CNS”) cancer, accounting for 49% of malignant primary brain and CNS tumors, 54% of all gliomas, and 16% of all primary brain and CNS tumors. More than 13,000 new glioblastoma cases were predicted in the U.S. for 2022.
GBM is the most common brain and central nervous system (“CNS”) cancer, accounting for 49% of malignant primary brain and CNS tumors, 54% of all gliomas, and 16% of all primary brain and CNS tumors. More than 14,490 new glioblastoma cases were predicted in the U.S. for 2023.
When patents covering certain of our products (if applicable) expire or are successfully challenged through litigation or in 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 following the 2020 election and subsequent change of Administration. ​ 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.
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.
The regulatory review and approval process is lengthy, expensive and uncertain. The process of seeking required approvals before we can market or sell a product, and the continuing need for compliance with applicable statutes and regulations require the expenditure of substantial resources and we cannot guarantee that we will be able to obtain the appropriate marketing authorization for any product.
The process of seeking required approvals before we can market or sell a product, and the continuing need for compliance with applicable statutes and regulations require the expenditure of substantial resources and we cannot guarantee that we will be able to obtain the appropriate marketing authorization for any product candidate.
CEVA-102 is the first cell product produced by CEVA-D, and may be applicable for various indications, including the treatment of severe TBI. CK-302 (Anti-GITR) CK-302 is a fully human agonistic monoclonal antibody in development at Checkpoint that is designed to bind and trigger signaling in GITR expressing cells.
CEVA-102 is the first cell product produced by CEVA-D, and may be applicable for various indications, including the treatment of severe traumatic brain injury. CK-302 (Anti-GITR) CK-302 is a fully human agonistic monoclonal antibody in development at Checkpoint that is designed to bind and trigger signaling in Glucocorticoid-Induced TNFR-Related (“GITR”) expressing cells.
The EMA has granted ATMP classification and Orphan Drug Designation to MB-207. ​ Olafertinib (also known as CK-101, EGFR inhibitor for EGFR mutation-positive NSCLC) Checkpoint is currently evaluating a lead small-molecule, targeted anti-cancer agent, olafertinib, as an oral, third-generation, irreversible kinase inhibitor against selective mutations of epidermal growth factor receptors (“EGFR”) for the potential treatment of adult patients with metastatic NSCLC, whose tumors have EGFR exon 19 deletion mutations.
Olafertinib (also known as CK-101, EGFR inhibitor for EGFR mutation-positive NSCLC) Checkpoint is currently evaluating a lead small-molecule, targeted anti-cancer agent, olafertinib, as an oral, third-generation, irreversible kinase inhibitor against selective mutations of epidermal growth factor receptors (“EGFR”) for the potential treatment of adult patients with metastatic NSCLC, whose tumors have EGFR exon 19 deletion mutations.
Adequate third-party reimbursement may not be available for our products to enable us to realize an appropriate return on our investment in research and product development. We are unable to predict the future course of federal or state healthcare legislation and regulations, including the Affordable Care Act (“ACA”).
Adequate third-party reimbursement may not be available for any products for which we obtain regulatory approval to enable us to realize an appropriate return on our investment in research and product development. We are unable to predict the future course of federal or state healthcare legislation and regulations, including the ACA.
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).
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, with topline data anticipated in the second quarter of 2024.
Triplex is currently the subject of four, grant-funded trials in various clinical settings including: adults undergoing stem cell transplant; adults co-infected with CMV and HIV; and in combination with a CAR T cell therapy for adults with non-Hodgkin lymphoma (“NHL”). Helocyte secured an exclusive, worldwide license to Triplex from City of Hope National Medical Center (“COH”) in April 2015.
Triplex is currently the subject of four, grant-funded trials in various clinical settings including: adults 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”). Helocyte secured an exclusive, worldwide license to Triplex from COH in April 2015.
(“DRL”), we are developing DFD-29, a modified release oral minocycline being evaluated for the treatment of inflammatory lesions of rosacea. ​ Under the DRL arrangement, Journey is responsible for the development of DFD-29, which includes conducting two Phase 3 studies to assess the efficacy, safety and tolerability of DFD-29 for the treatment of rosacea and the regulatory submission of a new drug application under Section 505(b)(2) of the FDCA.
Under the DRL arrangement, Journey is responsible for the development of DFD-29, which includes conducting two Phase 3 studies to assess the efficacy, safety and tolerability of DFD-29 for the treatment of rosacea and the regulatory submission of a new drug application under Section 505(b)(2) of the FDCA.
AJ201 (novel AR degrader and Nrf1 and Nrf2 activator) In February 2023, Avenue announced the license of intellectual property rights underlying AJ201 from AnnJi Pharmaceutical Co. Ltd.
AJ201 (Nrf1 and Nrf2 activator, androgen receptor degradation enhancer) In February 2023, Avenue announced the license of intellectual property rights underlying AJ201 from AnnJi Pharmaceutical Co. Ltd.
The combination of MB-101 and MB-108 is referred to as MB-109. ​ MB-108 (HSV-1 Oncolytic Virus C134) MB-108 is a next-generation oncolytic herpes simplex virus (“oHSV”) in development at Mustang that is conditionally replication competent; that is, it can replicate in tumor cells, but not in normal cells, thus killing the tumor cells directly through this process.
MB-108 (HSV-1 Oncolytic Virus C134 for recurrent GBM) MB-108 is a next-generation oncolytic herpes simplex virus (“oHSV”) in development at Mustang that is conditionally replication competent; that is, it is designed to replicate in tumor cells, but not in normal cells, thus killing the tumor cells directly through this process.
SBMA is a rare, inherited, X-linked genetic neuromuscular disease primarily affecting men and AJ201 was designed to modify SBMA through multiple mechanisms including degradation of the abnormal AR protein and by stimulating Nrf1 and Nrf2, which are involved in protecting cells from oxidative stress which can lead to cell death. 16 Table of Contents AJ201 has been granted Orphan Drug Designation by the FDA for the indications of SBMA, Huntington’s Disease, and Spinocerebellar Ataxia.
SBMA is a rare, inherited, X-linked genetic neuromuscular disease primarily affecting men and AJ201 was designed to modify SBMA through multiple mechanisms including degradation of the abnormal AR protein and by stimulating Nrf1 and Nrf2, which are involved in protecting cells from oxidative stress which can lead to cell death.
Rosenwald, M.D. 67 Chairman of the Board of Directors, President and Chief Executive Officer David Jin 32 Chief Financial Officer George Avgerinos, Ph.D. 69 Senior Vice President, Biologics Operations Michael S. Weiss 56 Executive Vice Chairman Strategic Development ​ Lindsay A.
Rosenwald, M.D. 68 Chairman of the Board of Directors, President and Chief Executive Officer David Jin 34 Chief Financial Officer and Head of Corporate Development George Avgerinos, Ph.D. 70 Senior Vice President, Biologics Operations Michael S. Weiss 57 Executive Vice Chairman, Strategic Development ​ Lindsay A.
(“Fuji”) to develop Dotinurad in North America and Europe (with the exclusive licensed territory later expanded to include the Middle East and North Africa). Dotinurad is a potential best-in-class urate transporter (URAT1) inhibitor for gout and possibly other hyperuricemic indications. Dotinurad (URECE® tablet) was approved in Japan in 2020 as a once-daily oral therapy for gout and hyperuricemia.
(“Fuji”) to develop dotinurad in North America and Europe (with the exclusive licensed territory later expanded to include the Middle East and North Africa). Dotinurad is a potential best-in-class urate transporter (URAT1) inhibitor for gout and possibly other hyperuricemic indications.
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 multiforme in an ongoing Phase 1 trial ( ClinicalTrials.gov Identifier: NCT03657576).
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.
Generic products generally face intense competition from other generic equivalents (including authorized generics) and therapeutically similar branded or generic products. 19 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.
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.
Our policy is to actively seek to obtain, where appropriate, the broadest intellectual property protection possible for our product candidates, proprietary information and proprietary technology through a combination of contractual arrangements and patents, both in the United States and abroad. However, patent protection may not afford us with complete protection against competitors who seek to circumvent our patents.
Our policy is to actively seek to obtain, where appropriate, the broadest intellectual property protection possible for our product candidates, proprietary information and proprietary technology through a combination of contractual arrangements and patents, both in the United States and abroad.
The cohort met its primary endpoint, with cosibelimab demonstrating a confirmed ORR of 47.4% (95% CI: 36.0, 59.1) based on independent central review of 78 patients enrolled in the metastatic CSCC cohort using RECIST 1.1. ​ Checkpoint also has a collaboration agreement with TG Therapeutics, Inc.
The cohort met its primary endpoint, with cosibelimab demonstrating a confirmed overall response (“ORR”) of 47.4% (95% CI: 36.0, 59.1) based on independent central review of 78 patients enrolled in the metastatic cSCC cohort using RECIST 1.1.
MB-101 is an optimized CAR T product targeting IL13Rα2 on the surface of the malignant cells and incorporates enhancements in CAR T design and T cell engineering to improve antitumor potency and T cell persistence.
MB-101 (IL13R α 2 CAR T Cell Program for Glioblastoma) Mustang is also currently developing MB-101 for malignant brain tumors, including glioblastoma (“GBM”). MB-101 is an optimized CAR T product targeting IL13Rα2 on the surface of the malignant cells and incorporates enhancements in CAR T design and T cell engineering to improve antitumor potency and T cell persistence.
BAER-101 (novel α2/3–subtype-selective GABA A positive allosteric modulator (“PAM”)) 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.
The RAG1-SCID program has been granted Orphan Drug Designation by the European Medicines Agency. 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.
DFD-29 (Modified Release Oral Minocycline for Inflammatory Lesions of Rosacea) Through our partner company Journey in collaboration with Dr. Reddy’s Laboratories, Ltd.
DFD-29 (modified release oral minocycline for the treatment of rosacea) Through our partner company Journey, in collaboration with Dr. Reddy’s Laboratories, Ltd. (“DRL”), we are developing DFD-29, a modified release oral minocycline being evaluated for the treatment of inflammatory lesions of rosacea.
He holds a B.S. in Industrial Engineering & Management Sciences with a double-major in Mathematical Methods in the Social Sciences from Northwestern University. George Avgerinos, Ph.D . has served as our Senior Vice President, Biologics Operations since June 2013. Dr. Avgerinos joined us from AbbVie, Inc., where he was Vice President, HUMIRA® Manufacturing Sciences and External Partnerships.
He holds a B.S. in Industrial Engineering & Management Sciences with a double-major in Mathematical Methods in the Social Sciences from Northwestern University. 26 Table of Contents George Avgerinos, Ph.D . has served as our Senior Vice President, Biologics Operations since June 2013. Dr.
From March 2015 until February 2019, Mr. Weiss served on the board of Avenue (Nasdaq: ATXI). Since December 2011, Mr. Weiss has served in multiple capacities at TG Therapeutics, Inc. (Nasdaq: TGTX), a related party, and is currently its Executive Chairman, Chief Executive Officer and President. In 1999, Mr.
Weiss is currently the Executive Chairman of Mustang Bio, Inc. and the Chairman of the Board of Directors of Checkpoint. From March 2015 until February 2019, Mr. Weiss served on the board of Avenue (Nasdaq: ATXI). Since December 2011, Mr. Weiss has served in multiple capacities at TG Therapeutics, Inc.
CAEL-101 is currently in two Phase 3 trials for AL amyloidosis and additional information on those trials can be found at ClinicalTrials.gov using identifiers: NCT04512235 and NCT04504825.
CAEL-101 is currently in two Phase 3 trials for AL amyloidosis and additional information on those trials can be found at ClinicalTrials.gov using identifiers: NCT04512235 and NCT04504825. Information on clinicaltrials.gov does not constitute part of this Annual Report on Form 10-K.
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.
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.
Fortress is eligible to receive 42.4% of all possible proceeds of the transaction, totaling up to approximately $212 million. ​ 11 Table of Contents Triplex (Vaccine for Cytomegalovirus) 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”) complications in the transplant setting.
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”) complications in the transplant setting.
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. 21 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.
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.
Preclinical proof-of-concept has been established, and the ongoing development of this technology continues to take place at Mayo Clinic. AAV-ATP7A Gene Therapy Through our subsidiary Cyprium, we are developing adeno-associated virus (“AAV”) gene therapy (“AAV-ATP7A”).
Preclinical proof-of-concept has been established, and the ongoing development of this technology is continuing in partnership with the Mayo Clinic. 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.
MB-101 in treating patients with recurrent or refractory glioblastoma with a substantial component of leptomeningeal disease (currently enrolling patients; ClinicalTrials.gov Identifier: NCT04661384); The final planned MB-101 trial will be in combination with the HSV-1 oncolytic virus (MB-108) in treating patients with recurrent or refractory glioblastoma and anaplastic astrocytoma.
The final planned MB-101 trial will be in combination with the HSV-1 oncolytic virus (MB-108) in treating patients with recurrent or refractory glioblastoma and anaplastic astrocytoma.
In November 2020, NeuPharma, Inc. commenced a Phase 3 clinical trial in China evaluating olafertinib in treatment-naïve locally advanced or metastatic NSCLC patients whose tumors have EGFR exon 19 deletion mutations.
Information on clinicaltrials.gov does not constitute part of this Annual Report on Form 10-K. 10 Table of Contents In November 2020, NeuPharma, Inc. commenced a Phase 3 clinical trial in China evaluating olafertinib in treatment-naïve locally advanced or metastatic NSCLC patients whose tumors have EGFR exon 19 deletion mutations.
Currently, Checkpoint has completed the required CMC, pharmacology and toxicology activities that it believes will support an IND application filing. 17 Table of Contents CEVA-D and CEVA-102 Through our subsidiary Cellvation, we are developing CEVA-D, a novel bioreactor device that enhances 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 (“TNF-a”) production by activated immune cells.
(“TGTX”) whereby TGTX was granted the rights to develop and commercialize cosibelimab in the field of hematological malignancies, while Checkpoint retains the right to develop and commercialize these assets in solid tumors.
(“TGTX”) whereby TGTX was granted the rights to develop and commercialize cosibelimab in the field of hematological malignancies, while Checkpoint retained the right to develop and commercialize these assets in solid tumors. Effective September 30, 2023, Checkpoint and TGTX agreed to mutually terminate these collaborations, with full rights reverting back to Checkpoint.
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. ​ 23 Table of Contents Employees and Human Capital Management ​ As of December 31, 2022, we had 187 full-time employees at Fortress and our subsidiaries and partner companies.
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.
He received his B.S. in finance from Pennsylvania State University and his M.D. from Temple University School of Medicine. David Jin h as served as our Chief Financial Officer since August 2022 and as Head of Corporate Development since May 2020. He also serves as Interim Chief Financial Officer and Chief Operating Officer of Avenue.
David Jin h as served as our Chief Financial Officer since August 2022 and as Head of Corporate Development since May 2020. He also serves as Interim Chief Financial Officer and Chief Operating Officer of Avenue.
DRL provides development support including the monitoring of two Phase 3 clinical trials. Journey initiated the Phase 3 trials in the first quarter of 2022, and completed enrollment in January 2023.
DRL provides development support including the monitoring of two Phase 3 clinical trials, which were initiated in the first quarter of 2022, and completed enrollment in January 2023. In July 2023, Journey announced positive topline data from our two DFD-29 Phase 3 clinical trials for the treatment of papulopustular rosacea.
Checkpoint entered into a Sublicense Agreement with TGTX to develop and commercialize CK-103 in the field of hematological malignancies. Checkpoint retains the right to develop and commercialize CK-103 in solid tumors.
Checkpoint entered into an exclusive license agreement with Jubilant Biosys Limited to develop and commercialize novel compounds that inhibit BET bromodomains on a worldwide basis. Checkpoint entered into a Sublicense Agreement with TGTX to develop and commercialize CK-103 in the field of hematological malignancies. Checkpoint retains the right to develop and commercialize CK-103 in solid tumors.
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. 20 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.
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.
Avgerinos received a B.A. in Biophysics from the University of Connecticut and a Ph.D. in Biochemical Engineering from the Massachusetts Institute of Technology. Dr. Avgerinos also provides services for TG Therapeutics, Inc., a related party, pursuant to a shared services agreement. ​ 24 Table of Contents Michael S.
Avgerinos’ efforts on HUMIRA® have been recognized with numerous awards, including the prestigious Abbott’s Chairman’s award in 2011. Dr. Avgerinos received a B.A. in Biophysics from the University of Connecticut and a Ph.D. in Biochemical Engineering from the Massachusetts Institute of Technology. Dr. Avgerinos also provides services for TG Therapeutics, Inc., a related party, pursuant to a shared services agreement.
Weiss founded Access Oncology, which was later acquired by Keryx Biopharmaceuticals (Nasdaq: KERX) in 2004. Following the merger, Mr. Weiss remained as CEO of Keryx. He began his professional career as a lawyer with Cravath, Swaine & Moore LLP. Mr. Weiss earned his B.S. in Finance from The University of Albany and his J.D. from Columbia Law School.
(Nasdaq: TGTX), a related party, and is currently its Executive Chairman, Chief Executive Officer and President. In 1999, Mr. Weiss founded Access Oncology, which was later acquired by Keryx Biopharmaceuticals (Nasdaq: KERX) in 2004. Following the merger, Mr. Weiss remained as CEO of Keryx. He began his professional career as a lawyer with Cravath, Swaine & Moore LLP. Mr.
If a sponsor receives orphan drug exclusivity upon approval, there can be no assurance that the exclusivity will prevent another person from receiving approval for the same or a similar drug for the same or other uses. 22 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.
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 23 Table of Contents and effective.
In his 22-year career at AbbVie, Inc., formerly Abbott Laboratories, formerly BASF Bioresearch Corporation (BASF), Dr. Avgerinos was responsible for many aspects of biologics development and operations. These included the HUMIRA® operations franchise, global biologics process and manufacturing sciences, biologics CMC, manufacturing operations, and third-party manufacturing. During his tenure, Dr.
Avgerinos joined us from AbbVie, Inc., where he was Vice President, HUMIRA® Manufacturing Sciences and External Partnerships. In his 22-year career at AbbVie, Inc., formerly Abbott Laboratories, formerly BASF Bioresearch Corporation (BASF), Dr. Avgerinos was responsible for many aspects of biologics development and operations.
Similarly, an IRB or ethics committee can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s or ethics committee’s requirements or if the pharmaceutical product has been associated with unexpected serious harm to patients.
Similarly, an IRB or ethics committee can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s or ethics committee’s requirements or if the pharmaceutical product has been associated with unexpected serious harm to patients. 19 Table of Contents Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional information about the chemistry and physical characteristics of the pharmaceutical product as well as finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.
The agreement also provides for additional potential payments to Caelum shareholders totaling up to $350 million, payable upon the achievement of regulatory and commercial milestones.
The agreement also provides for additional potential payments to Caelum shareholders totaling up to $350 million, payable upon the achievement of regulatory and commercial milestones. Fortress is eligible to receive 42.4% of all possible proceeds of the transaction, including approximately $148 million to Fortress, with $31.8 million upon BLA approval.
Checkpoint has met with the FDA to discuss the adequacy of the ongoing Phase 3 trial in China. ​ CAEL-101 (Light Chain Fibril-reactive 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.
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. CAEL-101 is designed to improve organ function by reducing or eliminating amyloid deposits in the tissues and organs of patients with AL amyloidosis.
We also depend upon the skills, knowledge, experience and know-how of our management and research and development personnel, as well as that of our advisers, consultants and other contractors.
However, patent protection may not afford us with complete protection against competitors who seek to circumvent our patents. 16 Table of Contents We also depend upon the skills, knowledge, experience and know-how of our management and research and development personnel, as well as that of our advisers, consultants and other contractors.
Baergic intends to explore BAER-101 in a number of CNS disorders where patients are not adequately treated, including epilepsy and acute anxiety disorders.
Baergic intends to explore BAER-101 in a number of CNS disorders where patients are not adequately treated, including epilepsy and acute anxiety disorders. In August 2023, Avenue reported preclinical data for BAER-101 from an in vivo evaluation in SynapCell’s Genetic Absence Epilepsy Rate from the Strasbourg (“GAERS”) model of absence epilepsy.
Checkpoint plans to develop CK-103 for the treatment of various advanced and metastatic solid tumor cancers, including, but not limited to, those associated with elevated c-Myc expression. Checkpoint entered into an exclusive license agreement with Jubilant Biosys Limited to develop and commercialize novel compounds that inhibit BET bromodomains on a worldwide basis.
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. Checkpoint plans to develop CK-103 for the treatment of various advanced and metastatic solid tumor cancers, including, but not limited to, those associated with elevated c-Myc expression.
Avgerinos led and participated in the development of numerous clinical candidates which included the launch of HUMIRA®. He supported expansion of the supply chain to over $9.0 billion in annual global sales. Dr. Avgerinos’ efforts on HUMIRA® have been recognized with numerous awards, including the prestigious Abbott’s Chairman’s award in 2011. Dr.
These included the HUMIRA® operations franchise, global biologics process and manufacturing sciences, biologics CMC, manufacturing operations, and third-party manufacturing. During his tenure, Dr. Avgerinos led and participated in the development of numerous clinical candidates which included the launch of HUMIRA®. He supported expansion of the supply chain to over $9.0 billion in annual global sales. Dr.
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, St. Jude Children’s Research Hospital (“St.
Fortress works in concert with our extensive network of key opinion leaders to identify and evaluate promising products and product candidates for potential acquisition. 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”), Fred Hutchinson Cancer Center, St.
The study demonstrated statistically significant improvement in overall survival for Menkes disease subjects who received early treatment (ET) with CUTX-101, compared to an untreated historical control (HC) cohort, with a nearly 80% reduction in the risk of death (Hazard Ratio = 0.21, p ​ Cyprium also continues to asses and enroll prospective patients into its Intermediate-Size Patient Population Expanded Access Protocol.
The study demonstrated statistically significant improvement in overall survival for Menkes disease subjects who received early treatment (“ET”) with CUTX-101, compared to an untreated historical control (“HC”) cohort, with a nearly 80% reduction in the risk of death (Hazard Ratio = 0.21, p On February 24, 2021, Cyprium entered into a development and asset purchase agreement (the “Sentynl APA”) with Sentynl Therapeutics, a U.S.-based specialty pharmaceutical company owned by the Zydus Group.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeManagement of our relationships with collaborators will require: ● significant time and effort from our management team; ● coordination of our marketing and R&D programs with the respective marketing and R&D priorities of our collaborators; and ● effective allocation of our resources to multiple projects. ​ ​ 43 Table of Contents The contractual provisions we may be forced to agree upon in services, manufacturing, supply and other agreements may be inordinately one-sided, vis-à-vis current or historical standard market terms (especially as pertains contractual liability and indemnification paradigms), and as a result we may be subject to liabilities that are not attributable to our own actions or the actions of our personnel. ​ There is a finite number of service providers who can perform the services or produce the materials or product candidates that we need, and we therefore often have a limited number of options in choosing such service providers.
Biggest changeThe contractual provisions we may be forced to agree upon in services, manufacturing, supply and other agreements may be inordinately one-sided, vis-à-vis current or historical standard market terms (especially as pertains contractual liability and indemnification paradigms), and as a result we may be subject to liabilities that are not attributable to our own actions or the actions of our personnel.
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; ● 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; 48 Table of Contents ● 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; ● 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; 51 Table of Contents ● 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.
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. 39 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; ● 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. 43 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.
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; 57 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.
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; 60 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.
If we adopt an alternative brand name, we would lose the benefit of our existing trademark applications for such product candidate and may be required to expend significant additional resources in an effort to identify a suitable product brand name that would qualify under applicable trademark laws, not infringe the existing rights of third parties and be acceptable to the FDA.
If we adopt an alternative brand name, we could lose the benefit of our existing trademark applications for such product candidate and may be required to expend significant additional resources in an effort to identify a suitable product brand name that would qualify under applicable trademark laws, not infringe the existing rights of third parties and be acceptable to the FDA.
We have also entered into financing arrangements to raise capital for our subsidiaries under which Fortress Common Stock is or may be issuable to investors in lieu of cash, upon certain conditions being met; in the event such issuances take place, they will also be dilutive of the stakes of existing stockholders.
We have also entered into financing arrangements to raise capital for our subsidiaries under which Common Stock is or may be issuable to investors in lieu of cash, upon certain conditions being met; in the event such issuances take place, they will also be dilutive of the stakes of existing stockholders.
Our failure to comply with these regulations may require us to repeat clinical trials, which would delay the regulatory approval process. We also are required to register ongoing clinical trials and post the results of completed clinical trials on a government-sponsored database, ClinicalTrials.gov, within specified timeframes.
Our failure to comply with these regulations may require us to repeat clinical trials, which would delay the regulatory approval process. We also are required to register certain ongoing clinical trials and post the results of completed clinical trials on a government-sponsored database, ClinicalTrials.gov, within specified timeframes.
Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability or a breach of warranties. Product liability claims might be brought against us by consumers, health care providers or others using, administering or selling our products.
Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product candidate or product, negligence, strict liability or a breach of warranties. Product liability claims might be brought against us by consumers, health care providers or others using, administering or selling our products.
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 product candidate 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 product candidates over alternative treatments; ● the safety of product candidates 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 our product candidates; ● 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; 49 Table of Contents ● 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 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.
Even if our product candidates receive regulatory approval, they may not gain market acceptance among physicians, patients, healthcare payors and the medical community. Coverage and reimbursement of our product candidates by third-party payors, including government payors, generally would also be necessary for commercial success.
Even if our product candidates receive regulatory approval, they may not gain market acceptance among physicians, patients, healthcare payors and the medical community. Coverage and reimbursement of our product candidates, if approved by third-party payors, including government payors, generally would also be necessary for commercial success.
Before we may seek regulatory approval for the commercial sale of any of our products, we will be required to demonstrate, through well-controlled clinical trials, that our product candidates are effective and have a favorable benefit-risk profile for their target indications.
Before we may seek regulatory approval for the commercial sale of any of our product candidates, we will be required to demonstrate, through well-controlled clinical trials, that our product candidates are effective and have a favorable benefit-risk profile for their target indications.
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.
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.
We anticipate that our expenses will increase substantially if: ● one or more of our development-stage product candidates is approved for commercial sale and we decide to commercialize such product(s) ourselves, due to the need to establish the necessary commercial infrastructure to launch and commercialize this product candidate without substantial delays, including hiring sales and marketing personnel and contracting with third parties for manufacturing, testing, warehousing, distribution, cash collection and related commercial activities; ● we are required by the FDA or a foreign regulatory authority to perform studies in addition to those currently expected; 30 Table of Contents ● there are any delays in completing our clinical trials or the development of any of our product candidates; ● we execute other collaborative, licensing or similar arrangements, depending on the timing of payments we may make or receive under these arrangements; ● there are variations in the level of expenses related to our future development programs; ● we become involved in any product liability or intellectual property infringement lawsuits; and ● there are any regulatory developments affecting our competitors’ product candidates.
We anticipate that our expenses will increase substantially if: ● one or more of our development-stage product candidates is approved for commercial sale and we decide to commercialize such product(s) ourselves, due to the need to establish the necessary commercial infrastructure to launch and commercialize this product without substantial delays, including hiring sales and marketing personnel 34 Table of Contents and contracting with third parties for manufacturing, testing, warehousing, distribution, cash collection and related commercial activities; ● we are required by the FDA or a foreign regulatory authority to perform studies in addition to those currently expected; ● there are any delays in completing our clinical trials or the development of any of our product candidates; ● we execute other collaborative, licensing or similar arrangements, depending on the timing of payments we may make or receive under these arrangements; ● there are variations in the level of expenses related to our future development programs; ● we become involved in any product liability or intellectual property infringement lawsuits; and ● there are any regulatory developments affecting our competitors’ product candidates.
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 26 Table of Contents ● 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.
We face potential product liability exposure, and if successful claims are brought against us, we may incur substantial liability for one or more of our product candidates or a future product candidate we may license or acquire and may have to limit their commercialization.
We face potential product liability exposure, and if successful claims are brought against us, we may incur substantial liability for one or more of our product candidates or a future product candidate we may license or acquire and may have to limit their commercialization, if approved.
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; ● 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; 50 Table of Contents ● 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.
Until such time, if ever, as we can generate a sufficient amount of product revenue and achieve profitability, however, we expect to seek to finance potential cash needs.
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.
If our promotional activities fail to comply with these regulations or guidelines, we may be subject to compliance or enforcement actions, including Warning Letters, by, these authorities.
If our promotional activities fail to comply with these regulations or guidelines, we may be subject to compliance or enforcement actions, including Warning Letters or Untitled Letters, by, these authorities.
The development and regulatory approval processes take several years, and it is unlikely that our product candidates, even if successfully developed and approved by the FDA and/or foreign equivalent regulatory bodies, would be commercially available for several years. Only a small percentage of drugs under development successfully obtain regulatory approval and are successfully commercialized.
The development and regulatory approval processes can take many years, and it is unlikely that our product candidates, even if successfully developed and approved by the FDA and/or foreign equivalent regulatory bodies, would be commercially available for several years. Only a small percentage of drugs under development successfully obtain regulatory approval and are successfully commercialized.
In the United States, we are not permitted to market a product candidate until the FDA approves such product candidate’s BLA or NDA. The approval process is uncertain, expensive, often spans many years, and can vary substantially based upon the type, complexity and novelty of the products involved.
In the United States, we are not permitted to market a product candidate until the FDA approves such product candidate’s BLA or NDA. The approval process is uncertain, expensive, often spans many years, and can vary substantially based upon the type, complexity and novelty of the product candidates involved.
These operations provide a limited basis for our stockholders and prospective investors to assess our ability to develop and commercialize potential product candidates, as well as for you to assess the advisability of investing in our securities. ​ 41 Table of Contents We rely on third parties to conduct clinical trials.
These operations provide a limited basis for our stockholders and prospective investors to assess our ability to develop and commercialize potential product candidates, as well as for you to assess the advisability of investing in our securities. 45 Table of Contents We rely on third parties to conduct clinical trials.
We expect to fund our R&D activities from a combination of cash generated from royalties and milestones from our partners in various past, ongoing, and future collaborations, and through additional equity or debt financings from third parties. These financings could depress the stock prices of our securities.
We expect to fund our R&D activities from a combination of cash generated from royalties and milestones from our partners in various past, ongoing, and future collaborations, and through additional equity or debt financings from third parties. These financings could depress the trading prices of our Securities.
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; 53 Table of Contents ● 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 and chiropractors, 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; ● 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, 56 Table of Contents 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.
If we acquire, or enter into joint ventures with or obtain a controlling interest in, companies in the future, our operating results and the value of our Securities may be adversely affected, thereby diluting stockholder value, disrupting our business and/or diminishing the value of our holdings in our partner companies.
If we acquire, enter into joint ventures with, or obtain a controlling interest in, companies in the future, our financial condition, operating results and the value of our Securities may be adversely affected, thereby diluting stockholder value, disrupting our business and/or diminishing the value of our holdings in our partner companies.
Disputes with third parties over the applicability of such “force majeure” clauses, or the enforceability of developmental milestones and related extension mechanisms in light of such business interruptions, may arise and may become expensive and time-consuming. Our ability to use our pre-change NOLs and other pre-change tax attributes to offset post-change taxable income or taxes may be subject to limitation.
Disputes with third parties over the applicability of such “force majeure” clauses, or the enforceability of developmental milestones and related extension mechanisms in light of such business interruptions, may arise and may become expensive and time-consuming. 61 Table of Contents Our ability to use our pre-change NOLs and other pre-change tax attributes to offset post-change taxable income or taxes may be subject to limitation.
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 54 Table of Contents 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.
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.
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.
Adequate third-party reimbursement may not be available for our products to enable us to realize an appropriate return on our investment of our currently marketed products or those which we may acquire or develop in the future. ​ Managed care organizations and other third-party payors try to negotiate the pricing of medical services and products to control their costs.
Adequate third-party reimbursement may not be available for our products to enable us to realize an appropriate return on our investment of our currently marketed products or those which we may acquire or develop in the future. 38 Table of Contents Managed care organizations and other third-party payors try to negotiate the pricing of medical services and products to control their costs.
Moreover, we may devote resources to potential acquisitions or in-licensing opportunities that are never completed, or we may fail to realize the anticipated benefits of such efforts. ​ 38 Table of Contents Certain of our officers and directors serve in similar roles at our partner companiess, subsidiaries, related parties and/or other entities with which we transact business or in which we hold significant minority ownership positions, which could result in conflicts of interests relating to ongoing and future relationships and transactions with these parties.
Moreover, we may devote resources to potential acquisitions or in-licensing opportunities that are never completed, or we may fail to realize the anticipated benefits of such efforts. 42 Table of Contents Certain of our officers and directors serve in similar roles at our partner companies, subsidiaries, related parties and/or other entities with which we transact business or in which we hold significant minority ownership positions, which could result in conflicts of interests relating to ongoing and future relationships and transactions with these parties.
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. 47 Table of Contents We in-license from third parties a majority of the intellectual property needed to develop and commercialize products and product candidates.
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. We in-license from third parties a majority of the intellectual property needed to develop and commercialize products and product candidates.
If we do become subject to the Investment Company Act, we would be required to register as an investment company and could be expected to incur significant registration and compliance costs in the future. 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.
If we do become subject to the Investment Company Act, we would be required to register as an investment company and could be expected to incur significant registration and compliance costs in the future. 57 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.
Integration and management issues associated with increased acquisitions may require a disproportionate amount of our management’s time and attention and distract our management from other activities related to running our business. 58 Table of Contents A catastrophic disaster could damage our facilities beyond insurance limits or cause us to lose key data, which could cause us to curtail or cease operations.
Integration and management issues associated with increased acquisitions may require a disproportionate amount of our management’s time and attention and distract our management from other activities related to running our business. A catastrophic disaster could damage our facilities beyond insurance limits or cause us to lose key data, which could cause us to curtail or cease operations.
Accordingly, even if we are able to obtain the requisite financing to fund development programs, we cannot be sure that any of our product candidates will be successfully developed or commercialized, which could result in the failure of our business and a loss of your investment. 25 Table of Contents Pharmaceutical development has inherent risks.
Accordingly, even if we are able to obtain the requisite financing to fund development programs, we cannot be sure that any of our product candidates will be successfully developed or commercialized, which could result in the failure of our business and a loss of your investment. Pharmaceutical development has inherent risks.
The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our drugs. ​ Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products.
The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our drugs. 40 Table of Contents Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products.
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; 51 Table of Contents ● restrictions on the labeling or marketing of a product; ● requirements to conduct post-marketing studies or clinical trials; ● warning or untitled letters; ● 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; ● injunctions or the imposition of civil or criminal penalties; and ● adverse publicity.
As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain. ​ 45 Table of Contents Our pending and future patent applications may not result in patents being issued which protect our technology or products, in whole or in part, or which effectively prevent others from commercializing competitive technologies and products.
As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain. Our pending and future patent applications may not result in patents being issued which protect our technology or products, in whole or in part, or which effectively prevent others from commercializing competitive technologies and products.
On September 16, 2011, the Leahy-Smith America Invents Act, or the Leahy-Smith Act, was signed into law. The Leahy-Smith Act includes a number of significant changes to United States patent law. These include changes to transition from a “first-to-invent” system to a “first inventor-to-file” system and to the way issued patents are challenged.
On September 16, 2011, the Leahy-Smith America 49 Table of Contents Invents Act, or the Leahy-Smith Act, was signed into law. The Leahy-Smith Act includes a number of significant changes to United States patent law. These include changes to transition from a “first-to-invent” system to a “first inventor-to-file” system and to the way issued patents are challenged.
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 . 53 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.
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 Common Stock. ​ 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. 41 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.
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.
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.
In addition, this law provided authority for limiting the number of drugs that will be covered in any therapeutic class. Cost reduction initiatives and other provisions of this law and future laws could decrease the coverage and price that we will receive for any approved products.
In addition, this law provided authority for limiting the number of drugs that will be covered in any therapeutic class. Cost reduction initiatives and other provisions 39 Table of Contents of this law and future laws could decrease the coverage and price that we will receive for any approved products.
Though we carefully manage our relationships with our contract research organizations or site management organizations, there can be no assurance that we will not encounter similar challenges or delays in the future. ​ 42 Table of Contents We rely on clinical and pre-clinical data and results obtained from and by third parties that could ultimately prove to be inaccurate or unreliable.
Though we carefully manage our relationships with our contract research organizations or site management organizations, there can be no assurance that we will not encounter similar challenges or delays in the future. We rely on clinical and pre-clinical data and results obtained from and by third parties that could ultimately prove to be inaccurate or unreliable.
Compared to us, many of our potential competitors have substantially greater: ● capital resources; ● development resources, including personnel and technology; ● clinical trial experience; ● regulatory experience; 28 Table of Contents ● 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; ● expertise in prosecution of intellectual property rights; and ● manufacturing, distribution and sales and marketing capabilities.
One area where service providers often have and exert leverage over us is the negotiation of liability language – specifically in broadly-scoped indemnification by us of service providers and/or the application of liability damages “caps” to certain of such service providers’ indemnification obligations.
One area where service providers often have and exert leverage over us is the negotiation of liability language – specifically in broadly-scoped indemnification by us of service providers and/or the application of liability damages “caps” to certain of 47 Table of Contents such service providers’ indemnification obligations.
Targadox currently competes with one therapeutically equivalent A/B rated generic product. Exelderm may face A/B rated generic competition in the future. ​ Generic versions are generally significantly less expensive than branded versions, and, where available, may be required to be utilized before or in preference to the branded version under third-party reimbursement programs, or substituted by pharmacies.
Targadox currently competes with one therapeutically equivalent A/B rated generic product. Exelderm may face A/B rated generic competition in the future. Generic versions are generally significantly less expensive than branded versions, and, where available, may be required to be utilized before or in preference to the branded version by third-party payors, or substituted by pharmacies.
The existence and consequences of such potential or perceived conflicts could expose us to lost profits, claims by our investors and creditors, and harm to our results of operations. Certain of our executives, directors and principal stockholders, whose interests may be adverse to those of our other stockholders, can control our direction and policies.
The existence and consequences of such potential or perceived conflicts could expose us to lost profits, claims by our investors and creditors, and harm to our financial condition, cash flows and/or results of operations. Certain of our executives, directors and principal stockholders, whose interests may be adverse to those of our other stockholders, can control our direction and policies.
In addition, pursuant to our current shelf registration statements on Form S-3, from time to time we may issue and sell shares of our Common Stock or Series A Preferred Stock having an aggregate offering price of up to $136.1 million as of December 31, 2022.
In addition, pursuant to our current shelf registration statements on Form S-3, from time to time we may issue and sell shares of our Common Stock or Series A Preferred Stock having an aggregate offering price of up to $100.1 million as of December 31, 2023.
Any of the aforementioned circumstances, including without limitation the COVID-19 virus, 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 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.
If the third-party data and results we rely upon prove to be inaccurate, unreliable or not applicable to our product candidates or acquired products, we could make inaccurate assumptions and conclusions about our current or future product candidates and our research and development efforts could be compromised.
If the third-party data and results we rely upon prove to be inaccurate, unreliable, not acceptable by regulatory authorities or not applicable to our product candidates or acquired products, we could make inaccurate assumptions and conclusions about our current or future product candidates and our research and development efforts could be compromised.
For example, we may be sued if any product we develop allegedly causes injury or is found to be otherwise unsuitable during clinical testing, manufacturing, marketing or sale.
For example, we may be sued if any product candidate or product we develop, license, or acquire allegedly causes injury or is found to be otherwise unsuitable during clinical testing, manufacturing, marketing or sale.
We believe that our current cash and cash equivalents will enable us to continue to fund operations in the normal course of business for at least the next 12 months from the filing of this 10-K.
We believe that our current cash and cash equivalents will enable us to continue to fund operations in the normal course of business for at least the next 12 months from the filing of this Annual Report on Form 10-K.
Four of our marketed products, Qbrexza, Amzeeq, Zilxi and Ximino, as well as DFD-29, currently have patent protection. Three of our marketed products, Accutane, Targadox, 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.
Three of our marketed products, Qbrexza, Amzeeq and Zilxi, as well as one of our product candidates, DFD-29, currently have patent protection. Three of our marketed products, Accutane, Targadox, 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.
The vast majority of our operating income for the foreseeable future is expected to come from the sale of our dermatology products through our partner company Journey. Any setback that may occur with respect to such products could significantly impair our operating results and/or reduce our revenue and the value of our Securities.
The vast majority of our operating income for the foreseeable future is expected to come from the sale of our dermatology products through our partner company Journey. Any setback that may occur with respect to such products could significantly impair our financial condition, cash flows and/or operating results and/or reduce the value of our Securities.
Our inability to generate sufficient cash flow to satisfy our debt obligations or to refinance our obligations on commercially reasonable terms, or at all, could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our Common Stock and/or debt securities to decline.
Our inability to generate sufficient cash flow to satisfy our debt obligations or to refinance our obligations on commercially 35 Table of Contents reasonable terms, or at all, could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our Securities to decline.
If we are not able to obtain FDA approval for any desired future indications for our products, our ability to effectively market and sell our products may be reduced and our business may be adversely affected.
If we are not able to obtain 32 Table of Contents FDA approval for any desired future indications for our products, our ability to effectively market and sell our products may be reduced and our business may be adversely affected.
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; ● initiation of investigations by regulators; ● impairment of our business reputation; ● costs of related litigation; 50 Table of Contents ● substantial monetary awards to patients or other claimants; ● loss of revenues; ● reduced resources of our management to pursue our business strategy; and ● the inability 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 candidate or future product candidates, if approved.
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.
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.
This strategy necessarily relies upon clinical and pre-clinical data and other results produced or obtained by third parties, which may ultimately prove to be inaccurate or unreliable.
This 46 Table of Contents strategy necessarily relies upon clinical and pre-clinical data and other results produced or obtained by third parties, which may ultimately prove to be inaccurate or unreliable.
Any future debt financings may involve covenants that restrict our operations, including limitations on our ability to incur liens or additional debt, pay dividends, redeem our stock, make certain financial commitments and engage in certain merger, consolidation or asset sale transactions, among other restrictions.
Any future debt financings may impose covenants that restrict our operations, including by limiting our ability to incur liens or additional debt, pay dividends, redeem our stock, make certain financial commitments and engage in certain merger, consolidation or asset sale transactions, among other restrictions.
During the years ended December 31, 2022 and 2021, we incurred R&D expenses of approximately $134.2 million and $113.2 million, respectively. We expect to continue to spend significant amounts on our growth strategy.
During the years ended December 31, 2023 and 2022, we incurred R&D expenses of approximately $101.7 million and $134.2 million, respectively. We expect to continue to spend significant amounts on our growth strategy.
Our information technology and other internal infrastructure systems, including corporate firewalls, servers, third-party software, data center facilities, lab equipment, and connection to the internet, face the risk of breakdown or other damage or interruption from service interruptions, system malfunctions, natural disasters, terrorism, war, and telecommunication and electrical failures, as well as security breaches from inadvertent or intentional actions by our employees, contractors, consultants, business partners, and/or other third parties, or from cyber-attacks by malicious third parties (including the deployment of harmful malware and other malicious code, ransomware, denial-of-service attacks, social engineering and other means to affect service reliability and threaten the confidentiality, integrity and availability of information), each of which could compromise our system infrastructure or lead to the loss, destruction, alteration, disclosure, or dissemination of, or damage or unauthorized access to, our data or data that is processed or maintained on our behalf, or other assets. ​ If such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our development programs and our business operations, and could result in financial, legal, business, and reputational harm to us.
Our information technology and other internal infrastructure systems, including corporate firewalls, servers, third-party software, data center facilities, lab equipment, and connection to the internet, face the risk of breakdown or other damage or interruption from service interruptions, system malfunctions, natural disasters, terrorism, war, and telecommunication and electrical failures, as well as security breaches from inadvertent or intentional actions by our employees, contractors, consultants, business partners, and/or other third parties, or from cyber-attacks by malicious third parties (including the deployment of harmful malware and other malicious code, ransomware, denial-of-service attacks, social engineering and other means to affect service reliability and threaten the confidentiality, integrity and availability of information), each of which could compromise our system infrastructure or lead to the loss, destruction, alteration, disclosure, or dissemination of, or damage or unauthorized access to, our data or data that is processed or maintained on our behalf, or other assets.
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.
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.
Furthermore, if the information technology systems of our third-party vendors and other contractors and consultants become subject to disruptions or security breaches, we may have insufficient recourse against such third parties and we may have to expend significant resources to mitigate the impact of such an event, and to develop and implement protections to prevent future events of this nature from occurring. ​ We may not be able to hire or retain key officers or employees needed to implement our business strategy and develop products and businesses.
Furthermore, if the information technology systems of our third-party vendors and other contractors and consultants become subject to disruptions or security breaches, we may have insufficient recourse against such third parties and we may have to expend significant resources to mitigate the impact of such an event, and to develop and implement protections to prevent future events of this nature from occurring.
Journey currently relies, and may continue to rely, on professional employer organizations and staffing organizations for the employment of its field sales force. ​ The establishment, development, and/or expansion of a field sales force, either by us or certain of our partners or vendors, or the establishment of a contract field sales force to market any products for which we may have or receive marketing approval is expensive and time-consuming and could delay any such product launch or compromise the successful commercialization of such products.
The establishment, development, and/or expansion of a field sales force, either by us or certain of our partners or vendors, or the establishment of a contract field sales force to market any products for which we may have or receive marketing approval is expensive and time-consuming and could delay any such product launch or compromise the successful commercialization of such products.
Third parties are often responsible for maintaining patent protection for our product candidates, at our and their expense. If that party fails to appropriately prosecute and maintain patent protection for a product candidate, our abilities to develop and commercialize products may be adversely affected, and we may not be able to prevent competitors from making, using and selling competing products.
If that party fails to appropriately prosecute and maintain patent protection for a product candidate, our abilities to develop and commercialize products may be adversely affected, and we may not be able to prevent competitors from making, using and selling competing products.
On August 27, 2020, we entered into the $60 million senior secured credit agreement (the “Oaktree Agreement” and the debt thereunder, the “Oaktree Note”) with Oaktree Fund Administration, LLC and the lenders from time-to-time party thereto (collectively, “Oaktree”).
On August 27, 2020, we entered into a $60 million senior secured credit agreement (the “Oaktree Agreement” and the debt thereunder, the “Oaktree Note”) with Oaktree Fund Administration, LLC and the lenders from time-to-time party thereto (collectively, “Oaktree”). At December 31, 2023 the amount outstanding under the Oaktree Agreement was $50 million.
If we become obligated to pay all or a portion of such indemnification amounts, our business and the market value of our Common Stock and/or debt securities may be materially adversely affected. 37 Table of Contents Additionally, we have agreed in the past, and may agree in the future, to act as guarantor in connection with equity or debt raises by our partner companies, pursuant to which we may become obligated either to pay what could be a significant amount of cash or issue what could be a significant number of shares of Fortress Common Stock or perpetual preferred stock if certain events occur or do not occur, which could lead to a depletion of resources or dilution to our Common Stock, or both.
Additionally, we have agreed in the past, and may agree in the future, to act as guarantor in connection with equity or debt raises by our partner companies, pursuant to which we may become obligated either to pay what could be a significant amount of cash or issue what could be a significant number of shares of Common Stock or Preferred Stock if certain events occur or do not occur, which could lead to a depletion of resources or dilution to our Common Stock, or both.
We may face increased costs and find it necessary or appropriate to expend substantial resources in the event of an actual or perceived security breach. ​ The costs related to significant security breaches or disruptions could be material, and our insurance policies may not be adequate to compensate us for the potential losses arising from any such disruption in, or failure or security breach of, our systems or third-party systems where information important to our business operations or commercial development is stored or processed.
The costs related to significant security breaches or disruptions could be material, and our insurance policies may not be adequate to compensate us for the potential losses arising from any such disruption in, or failure or security breach of, our systems or third-party systems where information important to our business operations or commercial development is stored or processed.
We continue to generate operating losses in all periods including losses from operations of approximately $203.6 million and $188.5 million for the years ended December 31, 2022 and 2021, respectively. At December 31, 2022, we had an accumulated deficit of approximately $634.2 million.
We continue to generate operating losses in all periods including losses from operations of approximately $142.3 million and $203.6 million for the years ended December 31, 2023 and 2022, respectively. At December 31, 2023, we had an accumulated deficit of approximately $694.9 million.
If our products are not included within an adequate number of formularies or adequate reimbursement levels are not provided, or if those policies increasingly favor generic products, this could have a material adverse effect on our business and financial condition.
If our products are not included within an adequate number of formularies or adequate reimbursement levels are not provided, or if those policies increasingly favor generic products, this could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our Securities to decline.
To the extent that we raise additional capital by issuing Common Stock (or preferred stock that is convertible into Common Stock), the share ownership of existing stockholders will be diluted.
To the extent that we raise additional capital by issuing Common Stock (or other Securities that are convertible into or exercisable for shares of Common Stock), the share ownership of existing stockholders will be diluted.
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.
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. 63 Table of Contents In addition, these provisions may limit the ability of stockholders to approve transactions that they may deem to be in their best interests.
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. ​ 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.
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.
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.
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. ​ 52 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.
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. ​ We face challenges as our products face generic competition and/or losses of exclusivity. ​ Journey’s products do and may compete with well-established products, both branded and generic, with similar or the same indications.
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.
Additionally, while we may seek approval of our products 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. ​ Legislative and regulatory changes to the healthcare systems of the United States and certain foreign countries could impact our ability to sell our products profitably.
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.
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. 48 Table of Contents We and our licensors also rely on trade secrets and proprietary know-how to protect product candidates.
Risks Inherent in Drug Development ​ Most of our product candidates are in the early stages of development and may not be successfully developed or commercialized, and the product candidates that do advance into clinical trials may not receive regulatory approval. ​ Most of our existing product candidates remain in the early stages of development and will require substantial further capital expenditures, development, testing and regulatory approvals prior to commercialization.
Risks Inherent in Drug Development Most of our product candidates are in the early stages of development and may not be successfully developed or commercialized, and the product candidates that do advance into clinical trials may not receive regulatory approval.
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, 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, preventing us from generating revenue from such products’ sale. Alternatively, even if a product candidate is approved for marketing, future adverse events could lead to the withdrawal of such product from the market.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Neither we nor any of our subsidiaries or partner companies own any real estate. We lease office space and other facilities as set forth in the table below. We believe that our existing facilities are adequate to support our current requirements.
Biggest changeItem 2. Properties We, and our subsidiaries and partner companies, primarily lease office space and other facilities as set forth in the table below. The only office space owned by us is our office space in Bay Harbor Islands, FL.
We also believe that we will be able to obtain suitable additional facilities on commercially reasonable terms on an “as needed basis.” ​ ​ ​ ​ ​ ​ ​ ​ 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 3,681 Mustang Worcester, MA Manufacturing, office space 27,043 Mustang Worcester, MA Office space 26,503 ​ ​ ​ 62 Table of Contents
We 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 3,681 Mustang Worcester, MA Manufacturing, lab facility, and office space 27,043 Mustang Worcester, MA Office space 11,916 ​ ​

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeSuits and claims may be brought against the Company by customers, suppliers, partners and/or third parties (including tort claims for personal injury arising from clinical trials of the Company’s product candidates and property damage) alleging deficiencies in performance, breach of contract, etc., and seeking resulting alleged damages. ​ Item 4. Mine Safety Disclosures Not applicable. PART II
Biggest changeSuits and claims may be brought against the Company by customers, suppliers, partners and/or third parties (including tort claims for personal injury arising from clinical trials of the Company’s product candidates and property damage) alleging deficiencies in performance, breach of contract, negligence and other matters, and seeking resulting alleged damages. Item 4.
Item 3. Legal Proceedings To our knowledge, there are no legal proceedings pending against us, other than routine actions and administrative proceedings, and other actions not deemed material are not expected to have a material adverse effect on our financial condition, results of operations, or cash flows.
Item 3. Legal Proceedings To our knowledge, there are no material legal proceedings pending against us, other than routine actions and administrative proceedings, and other actions we have deemed not material and not expected to have, individual or in the aggregate, a material adverse effect on our financial condition, results of operations, or cash flows.
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Mine Safety Disclosures Not applicable. ​ ​ 66 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 63 ​ ​ ​ PART II 63 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 63 Item 6. Reserved 63 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 64
Biggest changeItem 4. Mine Safety Disclosures 66 ​ ​ ​ PART II 67 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 67 Item 6. Reserved 67 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 68

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeOur 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 28, 2023, there were approximately 433 holders of record of our Common Stock.
Biggest changeMarket 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, 2024, there were approximately 432 holders of record of our Common Stock.
Dividends on Series A Preferred Stock accrue daily and are cumulative from, and including, the date of original issue and are payable monthly at the rate of 9.375% per annum of its liquidation preference, which is equivalent to $2.34375 per annum per share.
Dividends on Series A Preferred Stock accrue daily and are cumulative from, and including, the date of original issue and are payable monthly at the rate of 9.375% per annum of its liquidation preference, which is equivalent to $2.34375 per annum per share. Unregistered Sales of Equity Securities None.
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Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information for Common Stock We became a public company on November 17, 2011.
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Purchases of Equity Securities by the Issuer and Affiliated Purchasers Not applicable.
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Securities Authorized for Issuance Under Equity Compensation Plans The information required by Item 5 of Form 10-K regarding equity compensation plans is incorporated herein by reference to “Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.” Unregistered Sales of Equity Securities None.

Item 7. Management's Discussion & Analysis

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

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Biggest changeComparison of Years Ended December 31, 2022 and 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ($ in thousands) 2022 2021 $ % Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product revenue, net ​ $ 70,995 ​ $ 63,134 ​ $ 7,861 ​ 12 % Collaboration revenue ​ ​ 1,882 ​ ​ 5,389 ​ ​ (3,507) (65) % Revenue – related party ​ 192 ​ 268 ​ (76) ​ (28) % Other revenue ​ ​ 2,674 ​ ​ — ​ ​ 2,674 ​ 100 % Net revenue ​ 75,743 ​ 68,791 ​ 6,952 ​ 10.1 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of goods sold – product revenue ​ 30,775 ​ 32,084 ​ (1,309) ​ (4) % Research and development ​ 134,199 ​ 113,240 ​ 20,959 ​ 19 % Research and development – licenses acquired ​ 677 ​ 15,625 ​ (14,948) ​ (96) % Selling, general and administrative ​ 113,656 ​ 86,843 ​ 26,813 ​ 31 % Wire transfer fraud loss ​ ​ — ​ ​ 9,540 ​ ​ (9,540) ​ (100) % Total operating expenses ​ 279,307 ​ 257,332 ​ 21,975 ​ 9 % Loss from operations ​ (203,564) ​ (188,541) ​ (15,023) ​ 8 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense) ​ ​ ​ ​ ​ ​ ​ ​ Interest income ​ 1,398 ​ 649 ​ 749 ​ 115 % Interest expense and financing fee ​ (13,642) ​ (15,308) ​ 1,666 ​ (11) % Foreign exchange loss ​ ​ (89) ​ — ​ (89) ​ 100 % Change in fair value of investments ​ ​ — ​ 39,294 ​ (39,294) ​ (100) % Change in fair value of warrant liabilities ​ 1,129 ​ (447) ​ 1,576 ​ (353) % Grant income ​ ​ 1,304 ​ — ​ 1,304 ​ 100 % Total other income (expense) ​ (9,900) ​ 24,188 ​ (34,088) ​ (141) % Loss before income tax expense ​ ​ (213,464) ​ (164,353) ​ (49,111) ​ 30 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income tax expense ​ ​ 449 ​ 473 ​ (24) ​ (5) % Net loss ​ (213,913) ​ (164,826) ​ (49,087) ​ 30 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less: net loss attributable to non-controlling interest ​ 127,338 ​ 100,123 ​ 27,215 ​ 27 % Net loss attributable to common stockholders ​ $ (86,575) ​ $ (64,703) ​ $ (21,872) ​ 34 % 76 Table of Contents For the year ended December 31, 2022, the net increase in revenue of $7.0 million or 10% is due to Journey’s expanded product portfolio, which resulted in a net product revenue increase of $7.9 million, and the increase in other revenue of $2.7 million resulting from the $2.5 million milestone payment from Maruho triggered by Maruho’s receipt of manufacturing and marketing approval in Japan of Rapifort® Wipes 2.5% and $0.2 million in royalties, also from Maruho.
Biggest changeThe following table summarizes the Company’s basic ownership of the issued and outstanding common and preferred shares in consolidated Fortress subsidiaries: ​ ​ ​ ​ ​ ​ December 31, Partner Company/Subsidiary ​ 2023 Avenue 1 ​ 4 % Cellvation ​ 79 % Checkpoint 1 ​ 9 % Cyprium ​ 74 % Helocyte ​ 83 % Journey 1 ​ 50 % Mustang 1 ​ 19 % Oncogenuity ​ 73 % Urica ​ 68 % ​ ​ Note 1: Denotes entities that are publicly-traded. ​ 76 Table of Contents Results of Operations Comparison of Years Ended December 31, 2023 and 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ($ in thousands) 2023 2022 Revenue ​ ​ ​ ​ ​ ​ ​ Product revenue, net ​ $ 59,662 ​ $ 70,995 ​ Collaboration revenue ​ ​ 5,229 ​ ​ 1,882 ​ Revenue – related party ​ 103 ​ 192 ​ Other revenue ​ ​ 19,519 ​ ​ 2,674 ​ Net revenue ​ 84,513 ​ 75,743 ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses ​ ​ ​ ​ ​ ​ ​ Cost of goods sold – product revenue ​ 26,660 ​ 30,775 ​ Research and development ​ 101,747 ​ 134,199 ​ Research and development – licenses acquired ​ 4,324 ​ 677 ​ Selling, general and administrative ​ 94,124 ​ 113,656 ​ Total operating expenses ​ 226,855 ​ 279,307 ​ Loss from operations ​ (142,342) ​ (203,564) ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense) ​ ​ ​ ​ ​ Interest income ​ 3,003 ​ 1,398 ​ Interest expense and financing fee ​ (15,315) ​ (13,642) ​ Change in fair value of warrant liabilities ​ 4,424 ​ 1,129 ​ Other income (expense) ​ ​ (3,403) ​ 1,215 ​ Total other expense ​ (11,291) ​ (9,900) ​ Loss before income tax expense ​ ​ (153,633) ​ (213,464) ​ ​ ​ ​ ​ ​ ​ ​ ​ Income tax expense ​ ​ 521 ​ 449 ​ Net loss ​ (154,154) ​ (213,913) ​ ​ ​ ​ ​ ​ ​ ​ ​ Less: net loss attributable to non-controlling interest ​ 93,517 ​ 127,338 ​ Net loss attributable to Fortress ​ $ (60,637) ​ $ (86,575) ​ ​ ​ 77 Table of Contents Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ($ in thousands) 2023 2022 $ % Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product revenue, net ​ $ 59,662 ​ $ 70,995 ​ $ (11,333) ​ (16) % Collaboration revenue ​ ​ 5,229 ​ ​ 1,882 ​ ​ 3,347 178 % Revenue – related party ​ 103 ​ 192 ​ (89) ​ (46) % Other revenue ​ ​ 19,519 ​ ​ 2,674 ​ ​ 16,845 ​ 630 % Net revenue ​ $ 84,513 ​ 75,743 ​ $ 8,770 ​ 12 % ​ For the year ended December 31, 2023 we generated $84.5 million of net revenue, of which $59.7 million relates to the sale of Journey branded and generic products, $19.5 million of other revenue relates to Journey’s $19 million milestone payment and royalties of $0.5 million from Maruho Co., Ltd.
Partner 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 two 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, four partner companies are publicly-traded, and two have consummated strategic partnerships with industry leaders AstraZeneca plc as successor-in-interest to Alexion Pharmaceuticals, Inc.
(“Maruho”) related to the manufacturing and marketing approval and sales of Rapifort® Wipes 2.5% in Japan, $1.9 million relates to Cyprium’s collaboration revenue with Sentynl, and $0.2 million of revenue relates to Checkpoint’s collaborative agreements with TGTX, a related party.
(“Maruho”) related to the manufacturing and marketing approval and sales of Rapifort® Wipes 2.5% in Japan, $5.2 million relates to Cyprium’s collaboration revenue with Sentynl, and $0.1 million of revenue relates to Checkpoint’s collaborative agreements with TGTX, a related party.
Level 3 : Unobservable inputs which are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. 72 Table of Contents The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
Level 3 : Unobservable inputs which are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. 74 Table of Contents The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
AstraZeneca acquired Caelum for an upfront payment of approximately $150 million paid to Caelum shareholders, of which approximately $56.9 million was paid to Fortress, net of the ten percent, 24-month escrow holdback amount and other miscellaneous transaction expenses.
AstraZeneca acquired Caelum for an upfront payment of approximately $150 million paid to Caelum shareholders, of which approximately $56.9 million was paid to Fortress, which was net of the ten percent escrow holdback amount and other miscellaneous transaction expenses.
Our failure to raise capital as and when needed would have a material adverse impact on our financial condition and our ability to pursue our business strategies. We may seek funds through equity or debt financings, joint venture or similar development collaborations, the sale of partner companies, royalty financings, or through other sources of financing.
Our failure to raise capital as and when needed would have a material adverse impact on our financial condition and our ability to pursue our business strategies. We may seek funds through equity or debt financings, joint venture or similar development collaborations, the sale of partner companies, royalty financings, or through other sources of financing. See “Item 1A.
Such variable consideration represents chargebacks, coupons, discounts, other sales allowances, governmental rebate programs and sales returns. These deductions represent estimates of the related obligations and, as such, knowledge and judgment are required when estimating the impact of these revenue deductions on gross sales for a reporting period.
Such variable consideration represents chargebacks, coupons, discounts, other sales allowances and sales returns. These deductions represent estimates of the related obligations and, as such, knowledge and judgment are required when estimating the impact of these revenue deductions on gross sales for a reporting period.
Our significant estimates include, but are not limited to, provisions for product returns, coupons, rebates, chargebacks, discounts, allowances and distribution fees paid by Journey to certain wholesalers, inventory realization, useful lives assigned to long-lived assets and amortizable intangible assets, fair value of stock options and warrants, stock-based compensation, common stock issued to acquire licenses, investments, accrued expenses, provisions for income taxes and contingencies.
Our significant estimates include, but are not limited to, provisions for product returns, coupons, rebates, allowances and distribution fees paid by Journey to certain wholesalers, inventory realization, useful lives assigned to long-lived assets and amortizable intangible assets, fair value of stock options and warrants, stock-based compensation, common stock issued to acquire licenses, accrued expenses, and contingencies.
The discount is being amortized utilizing the effective interest method over the term of the Oaktree Note, which is approximately 16.08% at December 31, 2022. 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.
The discount is being amortized utilizing the effective interest method over the term of the Oaktree Note, which is approximately 16.13% at December 31, 2023. 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.
We have executed arrangements with some of the world’s foremost universities, research institutes and pharmaceutical companies, including City of Hope National Medical Center, Fred Hutchinson Cancer Center, St. Jude Children’s Research Hospital (“St.
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, St. Jude Children’s Research Hospital (“St.
Restricted cash related to an undertaking posted by Cyprium to secure potential damages in an injunctive proceeding and our office leases is $2.7 million. In July 2021, the Company filed a shelf registration statement on Form S-3 (File No. 333-258145), which was declared effective in July 2021 (the “2021 S-3”).
Restricted cash related to an undertaking posted by Cyprium to secure potential damages in an injunctive proceeding and our office leases is $2.4 million. In July 2021, the Company filed a shelf registration statement (File No. 333-255185) on Form S-3, which was declared effective on July 30, 2021 (the "2021 Shelf").
These factors include, without limitation, those described under Item 1A “Risk Factors.” We undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this report or to reflect actual outcomes. Please see “Forward-Looking Statements” at the beginning of this Form 10-K.
These factors include, without limitation, those described under Item 1A “Risk Factors.” We undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this report or to reflect actual outcomes. Please see the section of this report titled “Special Cautionary Notice Regarding Forward-Looking Statements” at the beginning of this Form 10-K.
For the year ended December 31, 2022, the Company issued approximately 4.1 million shares of common stock at an average price of $1.50 per share for gross proceeds of $6.2 million. In connection with these sales, the Company paid aggregate fees of $0.2 million.
For the year ended December 31, 2023, the Company issued approximately 0.2 million shares of common stock at an average price of $9.61 per share for gross proceeds of $2.2 million. In connection with these sales, the Company paid aggregate fees of $0.1 million.
In a concurrent private placement, Avenue also agreed to issue to the same investor a total of 1,940,299 warrants to purchase up to one share of common stock each at an exercise price of $1.55 per share and a purchase price of $0.125. The purchase price of each share is $1.55.
In a concurrent private placement, Avenue also agreed to issue to the same investor a total of 1,940,299 warrants to purchase up to one share of common stock each at an exercise price of $1.55 per share for gross proceeds of approximately $0.2 million.
While our significant accounting policies are described in the notes to our consolidated financial statements included elsewhere in this Report, 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 IV, Item 15, Exhibits and Financial Statement Schedules” 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.
Net proceeds from the February 2023 Direct Offering were $6.7 million after deducting commissions and other transaction costs. ​ In April 2021, Mustang filed a shelf registration statement on Form S-3 (File No. 333-255476) which was declared effective in May 2021 (the “Mustang 2021 S-3”).
The total gross proceeds from the offering were approximately $11.1 million with net proceeds of approximately $10.0 million after deducting approximately $1.1 million in commissions and other transaction costs. ​ Mustang In April 2021, Mustang filed a shelf registration statement on Form S-3 (File No. 333-255476) which was declared effective in May 2021 (the “Mustang 2021 S-3”).
Noncash, stock-based compensation expense included in research and development for the years ended December 31, 2022 and 2021, was $4.4 million and $4.3 million, respectively. ​ Selling, General and Administrative Expenses Selling, general and administrative expenses consist principally of personnel related costs, costs required to support the marketing and sales of our commercialized products, professional fees for legal, consulting, audit and tax services, rent and other general operating expenses not otherwise included in research and development expenses.
Selling, General and Administrative Expenses Selling, general and administrative expenses consist principally of personnel related costs, costs required to support the marketing and sales of our commercialized products, professional fees for legal, consulting, audit and tax services, rent and other general operating expenses not otherwise included in research and development expenses.
Results of Operations General For the year ended December 31, 2022 we generated $75.7 million of net revenue, of which $71.0 million relates to the sale of Journey branded and generic products, $2.7 million relates to Journey’s milestone payment and royalties from Maruho Co., Ltd.
For the year ended December 31, 2022, we generated $75.7 million of net revenue, of which $71.0 million relates to the sale of Journey branded and generic products, $2.7 million relates to Journey’s royalties from Maruho, $1.9 million relates to Cyprium’s collaboration revenue with Sentynl and $0.2 million relates to Checkpoint’s collaborative agreements with TGTX.
At December 31, 2022, we had cash and cash equivalents of $178.3 million of which $51.8 million relates to Fortress and the private partner companies, primarily funded by Fortress, $12.1 million relates to Checkpoint, $75.7 million relates to Mustang, $32.0 million relates to JMC and $6.7 million relates to Avenue.
At December 31, 2023, we had cash and cash equivalents of $80.9 million of which $40.6 million relates to Fortress and the private partner companies, primarily funded by Fortress, $4.9 million relates to Checkpoint, $6.2 million relates to Mustang, $27.4 million relates to JMC and $1.8 million relates to Avenue.
We had $30.8 million and $32.1 million of costs of goods sold in connection with the sale of JMC branded and generic products for the years ended December 31, 2022 and 2021, respectively.
Cost of goods sold ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ($ in thousands) 2023 2022 $ % Cost of goods sold – product revenue ​ $ 26,660 ​ $ 30,775 ​ $ (4,115) ​ (13) % ​ We had $26.7 million and $30.8 million of costs of goods sold in connection with the sale of JMC branded and generic products for the years ended December 31, 2023 and 2022, respectively.
Fair Value Measurement The Company follows accounting guidance on fair value measurements for financial assets and liabilities measured at fair value on a recurring basis.
The potential of our estimates to vary differs by program, product, type of customer and geographic location. Fair Value Measurement The Company follows accounting guidance on fair value measurements for financial assets and liabilities measured at fair value on a recurring basis.
Avenue received net proceeds of approximately $10.3 million at closing after deducting underwriting discounts and commissions and other expenses of the offering. 82 Table of Contents In January 2023, Avenue entered into an agreement with a single institutional investor for the sale of 1,940,299 shares of common stock and pre-funded warrants.
The total gross proceeds from the offering were approximately $5.0 million with net proceeds of approximately $3.8 million after deducting commissions and other transaction costs, before giving effect to any exercises of the November 2023 Warrants. ​ In January 2023, Avenue entered into an agreement with a single institutional investor for the sale of 1,940,299 shares of common stock and pre-funded warrants for gross proceeds of approximately $3.0 million.
Smaller Reporting Company Status We are a “smaller reporting company,” meaning that either (i) the market value of our shares held by non-affiliates is less than $250 million or (ii) the market value of our shares held by non-affiliates is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year.
Recent Accounting Pronouncements See Note 2, Summary of Significant Accounting Policies, in the Notes to the Consolidated Financial Statements included in “Part IV, Item 15, Exhibits and Financial Statement Schedules” in this Annual Report on Form 10-K. ​ 75 Table of Contents Smaller Reporting Company Status We are a “smaller reporting company,” meaning that either (i) the market value of our shares held by non-affiliates is less than $250 million or (ii) the market value of our shares held by non-affiliates is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year.
The Series A warrants became exercisable immediately upon issuance and will expire five years following the issuance date and have an exercise price of $4.075 per share and the Series B warrants became exercisable immediately upon issuance and will expire eighteen months following the issuance date and have an exercise price of $4.075 per share.
The warrants have an exercise price of $3.21 per share, are immediately exercisable, and will expire five years following the date of issue.
At December 31, 2022, $150.0 million remains available under the Journey 2022 S-3. ​ In November 2020, Checkpoint filed a shelf registration statement on Form S-3 (File No. 333-251005) which was declared effective in December 2020 (the “Checkpoint 2020 S-3”).
At December 31, 2023, 4,151,297 shares remain available for issuance under the Journey 2022 S-3. Checkpoint In March 2023, Checkpoint filed a shelf registration statement (File No. 333-270843) on Form S-3 (the “Checkpoint 2023 S-3”), which was declared effective May 5, 2023. Under the Checkpoint 2023 S-3, Checkpoint may sell up to a total of $150 million of its securities.
Liquidity and Capital Resources Components of cash flows from publicly-traded partner companies are comprised of: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2022 ($ in thousands) Fortress 1 Avenue Checkpoint JMC Mustang Total Statement of cash flows data: ​ ​ ​ ​ ​ ​ ​ ​ Total cash (used in)/provided by: ​ ​ ​ ​ ​ ​ ​ ​ Operating activities ​ $ (35,651) ​ $ (7,596) ​ $ (57,554) ​ $ (13,534) ​ $ (65,066) ​ $ (179,401) Investing activities ​ 24 ​ — ​ — ​ (20,000) ​ (2,952) ​ (22,928) Financing activities ​ (621) ​ 10,541 ​ 14,887 ​ 16,456 ​ 34,056 ​ 75,319 Net increase in cash and cash equivalents and restricted cash ​ $ (36,248) ​ $ 2,945 ​ $ (42,667) ​ $ (17,078) ​ $ (33,962) ​ $ (127,010) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2021 ($ in thousands) Fortress 1 Avenue Checkpoint JMC Mustang Total Statement of cash flows data: ​ ​ ​ ​ ​ ​ Total cash (used in)/provided by: ​ ​ ​ ​ ​ ​ Operating activities ​ $ (30,636) ​ $ (3,750) ​ $ (26,306) ​ $ (2,181) ​ $ (53,667) ​ $ (116,540) Investing activities ​ 55,880 ​ — ​ — ​ (10,000) ​ (5,366) ​ 40,514 Financing activities ​ (19,519) ​ 4,381 ​ 40,269 ​ 53,016 ​ 70,847 ​ 148,994 Net increase in cash and cash equivalents and restricted cash ​ $ 5,725 ​ $ 631 ​ $ 13,963 ​ $ 40,835 ​ $ 11,814 ​ $ 72,968 ​ Note 1: Includes Fortress and non-public subsidiaries. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ($ in thousands) 2022 2021 Change Statement of cash flows data: ​ ​ ​ Total cash (used in)/provided by: ​ ​ ​ Operating activities ​ $ (179,401) ​ $ (116,540) ​ $ (62,861) Investing activities ​ (22,928) ​ 40,514 ​ (63,442) Financing activities ​ 75,319 ​ 148,994 ​ (73,675) Net increase in cash and cash equivalents and restricted cash ​ $ (127,010) ​ $ 72,968 ​ $ (199,978) ​ ​ 80 Table of Contents Operating Activities Net cash used in operating activities increased $62.9 million from the year ended December 31, 2021 to the year ended December 31, 2022.
Components of cash flows from publicly-traded partner companies are: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2023 ($ 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 increase in cash and cash equivalents and restricted cash ​ $ (11,288) ​ $ (4,925) ​ $ (7,140) ​ $ (4,564) ​ $ (69,672) ​ $ (97,589) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2022 ($ in thousands) Fortress 1 Avenue Checkpoint JMC Mustang Total Statement of cash flows data: ​ ​ ​ ​ ​ ​ Total cash (used in)/provided by: ​ ​ ​ ​ ​ ​ Operating activities ​ $ (35,651) ​ $ (7,596) ​ $ (57,554) ​ $ (13,534) ​ $ (65,066) ​ $ (179,401) Investing activities ​ 24 ​ — ​ — ​ (20,000) ​ (2,952) ​ (22,928) Financing activities ​ (621) ​ 10,541 ​ 14,887 ​ 16,456 ​ 34,056 ​ 75,319 Net increase in cash and cash equivalents and restricted cash ​ $ (36,248) ​ $ 2,945 ​ $ (42,667) ​ $ (17,078) ​ $ (33,962) ​ $ (127,010) ​ Note 1: Includes Fortress and non-public subsidiaries.
(Nasdaq: ATXI, “Avenue”), Baergic Bio, Inc. (“Baergic”, a subsidiary of Avenue), Cellvation, Inc. (“Cellvation”), Checkpoint Therapeutics, Inc. (Nasdaq: CKPT, “Checkpoint”), Cyprium Therapeutics, Inc. (“Cyprium”), Helocyte, Inc. (“Helocyte”), Journey Medical Corporation (Nasdaq: DERM, “Journey” or “JMC”), Mustang Bio, Inc. (Nasdaq: MBIO, “Mustang”), Oncogenuity, Inc. (“Oncogenuity”) and Urica Therapeutics, Inc. (“Urica”, formerly UR-1 Therapeutics, Inc.).
(“Cyprium”), Helocyte, Inc. (“Helocyte”), Journey Medical Corporation (Nasdaq: DERM, “Journey” or “JMC”), Mustang Bio, Inc. (Nasdaq: MBIO, “Mustang”), Oncogenuity, Inc. (“Oncogenuity”) and Urica Therapeutics, Inc. (“Urica”). Aevitas Therapeutics, Inc.
During the year ended December 31, 2022, Checkpoint issued a total of 532,816 shares of common stock under the Checkpoint 2020 S-3 for aggregate total gross proceeds of approximately $10.1 million at an average selling price of $18.99 per share.
Under the Mustang 2021 S-3, Mustang may sell up to a total of $200.0 million of its securities. During the year ended December 31, 2023, Mustang issued approximately 0.1 million shares of common stock at an average price of $3.15 per share for gross proceeds of $0.2 million under the ATM Agreement.
We expect research and development costs to remain flat or decrease modestly in 2023.
We expect selling, general and administrative expenses to remain flat or decrease modestly in 2024.
This included a concurrent private placement with investors in the registered direct offering for the pro rata rights to acquire securities exercisable into common stock in certain future operating subsidiaries that consummate a specified corporate development transaction within the next five years. ​ 81 Table of Contents The amount of securities we are able to sell pursuant to the registration statement on Form S-3 is limited.
This included a concurrent private placement with investors in the registered direct offering for the pro rata rights to acquire securities exercisable into common stock in certain future operating subsidiaries that consummate a specified corporate development transaction within the next five years. ​ In November 2023, the Company closed on a public offering of the issuance and sale of an aggregate of 5,885,000 units at a purchase price of $1.70 per unit.
The agreement also provides for additional potential payments to Caelum shareholders totaling up to $350 million, payable upon the achievement of regulatory and commercial milestones. Fortress is eligible to receive 42.4% of all proceeds of the transaction, totaling up to approximately $212 million. ● There are two ongoing Phase 3 studies of CAEL-101 for AL amyloidosis.
Fortress is eligible to receive 42.4% of all proceeds of the transaction, including approximately $148 million to Fortress, with $31.8 million upon BLA approval. ● There are two ongoing Phase 3 studies of CAEL-101 for AL amyloidosis.
Also included in research and development is the total purchase price for licenses acquired during the period. For the years ended December 31, 2022 and 2021, research and development expenses were approximately $134.2 million and $113.2 million, respectively.
For the years ended December 31, 2023 and 2022, research and development expenses were approximately $101.7 million and $134.2 million, respectively.
During the year ended December 31, 2022, Mustang issued approximately 7.9 million shares of common stock at an average selling price of $0.84 per share under the Mustang 2020 S-3 for aggregate total gross proceeds of approximately $6.6 million. At December 31, 2022, approximately $8.0 million of the Mustang 2020 S-3 remains available for sales of securities.
For the year ended December 31, 2023, Journey issued approximately 0.7 million shares of common stock at an average price of $6.189 per share for gross proceeds of $4.6 million under the Journey ATM. In connection with these sales, Journey paid aggregate fees of $0.1 million.
For the years ended December 31, 2022 and 2021, selling, general and administrative expenses were $113.7 million and $86.8 million, respectively. Stock based compensation expense included in selling, general and administrative expenses in 2022 and 2021 was $18.5 million and $15.2 million, respectively.
For the years ended December 31, 2023 and 2022, selling, general and administrative expenses were $94.1 million and $113.7 million, respectively.
See “Risk Factors.” ​ 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”).
Net proceeds to Fortress, after deducting the placement agent’s fees and other offering expenses, were approximately $10.2 million. 82 Table of Contents 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”).
Proceeds from the facility will be used to support the ongoing clinical development of key investigational product candidates within Mustang’s pipeline and for general working capital purposes. ​ We will require additional financing to fully develop and prepare regulatory filings and obtain regulatory approvals for our existing and new product candidates, fund operating losses, and, if deemed appropriate, establish or secure through third parties manufacturing for our potential products, and sales and marketing capabilities.
Liquidity and Capital Resources Sources of Liquidity At December 31, 2023, we had an accumulated deficit of $694.9 million primarily as a result of research and development expenses, purchases of in-process research and development and selling, general and administrative expenses. ​ 81 Table of Contents We will require additional financing to fully develop and prepare regulatory filings and obtain regulatory approvals for our existing and new product candidates, fund operating losses, and, if deemed appropriate, establish or secure through third parties manufacturing for our potential products, and sales and marketing capabilities.
Investing Activities Net cash provided by investing activities for the year ended December 31, 2021 of $40.5 million decreased $63.4 million to net cash used by investing activities of $22.9 million for the year ended December 31, 2022.
Investing Activities Net cash used by investing activities for the year ended December 31, 2022 of $22.9 million decreased $20.8 million to net cash used by investing activities of $2.1 million for the year ended December 31, 2023. The change is primarily due to Journey’s purchase of the VYNE Therapeutics, Inc.
The table below provides a summary by entity of selling, general and administrative expenses for the years ended December 31, 2022 and 2021, respectively: ​ 75 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ ​ ​ ​ December 31, ​ % of Total ​ ($ in thousands) 2022 2021 2022 ​ 2021 Selling, General & Administrative ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fortress ​ ​ $ 26,919 ​ $ 26,062 24 % 30 % Partner Companies: ​ ​ ​ ​ ​ ​ ​ ​ ​ Avenue ​ ​ 5,013 ​ 2,484 4 % 3 % Checkpoint ​ ​ 7,782 ​ 7,006 6 % 8 % JMC 1 ​ ​ 59,503 ​ 39,895 53 % 46 % Mustang ​ ​ 10,740 ​ 8,866 10 % 10 % Other 2 ​ ​ 3,699 ​ 2,530 3 % 3 % Total Selling, General & Administrative Expense ​ ​ $ 113,656 ​ $ 86,843 100 % 100 % ​ Note 1: Includes field sales force costs for the year ended December 31, 2022 and 2021 of $23.5 million and $16.0 million, respectively.
The table below provides a summary by entity of selling, general and administrative expenses for the years ended December 31, 2023 and 2022, respectively: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ Change ​ ($ in thousands) 2023 2022 ​ $ ​ % Selling, general & administrative ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fortress ​ ​ $ 21,468 ​ $ 26,919 $ (5,451) ​ (20) % Subsidiaries/Partner Companies: ​ ​ ​ ​ ​ ​ ​ ​ ​ Avenue ​ ​ 3,676 ​ 5,013 (1,338) ​ (27) % Checkpoint ​ ​ 7,232 ​ 7,782 (550) ​ (7) % JMC 1 ​ ​ 47,053 ​ 59,503 (12,449) ​ (21) % Mustang ​ ​ 9,289 ​ 10,740 (1,451) ​ (14) % Other 2 ​ ​ 5,406 ​ 3,699 1,707 ​ 46 % Total selling, general & administrative expense ​ ​ $ 94,124 ​ $ 113,656 $ (19,532) ​ (17) % ​ Note 1: Includes an asset impairment charge of $3.1 million in the year ended December 31, 2023 for the Ximino product line.
Additionally, during the years ended December 31, 2022 and 2021, we incurred approximately $0.7 million and $15.6 million, respectively, in costs related to the acquisition of licenses. 74 Table of Contents The table below provides a summary of research and development costs associated with the development of our licenses by entity, for the years ended December 31, 2022 and 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ % of total ​ ($ in thousands) 2022 2021 2022 2021 Research & Development ​ ​ ​ Fortress ​ ​ $ 2,360 ​ $ 2,593 2 % 2 % Partner Companies: ​ ​ ​ ​ ​ ​ ​ ​ ​ Avenue ​ ​ 2,381 ​ 1,255 2 % 1 % Checkpoint ​ ​ 47,940 ​ 41,855 36 % 37 % JMC ​ ​ ​ 10,943 ​ ​ 2,739 ​ 8 % 2 % Mustang ​ ​ 62,030 ​ 49,631 46 % 44 % Other 1 ​ ​ 8,545 ​ 15,167 6 % 14 % Total Research & Development Expense ​ ​ $ 134,199 ​ $ 113,240 100 % 100 % ​ Note 1: Includes the following subsidiaries: Aevitas, Baergic (through November 7, 2022), Cellvation, Cyprium, Helocyte, Oncogenuity and Urica.
The table below provides a summary of research and development by entity, for the years ended December 31, 2023 and 2022: ​ 78 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ Change ​ ($ in thousands) 2023 2022 ​ $ % Research & development ​ ​ ​ ​ Fortress ​ ​ $ 2,172 ​ $ 2,360 $ (188) ​ (8) % Subsidiaries/Partner Companies: ​ ​ ​ ​ ​ ​ ​ ​ ​ Avenue ​ ​ 5,426 ​ 2,381 3,045 ​ 128 % Checkpoint ​ ​ 40,147 ​ 47,940 (7,793) ​ (16) % JMC ​ ​ ​ 7,540 ​ ​ 10,943 ​ ​ (3,403) ​ (31) % Mustang ​ ​ 38,830 ​ 62,030 (23,200) ​ (37) % Other 1 ​ ​ 7,632 ​ 8,545 (913) ​ (11) % Total research & development expense ​ ​ $ 101,747 ​ $ 134,199 $ (32,452) ​ (24) % ​ Note 1: Includes the following subsidiaries: Aevitas (until April 2023), Baergic (until November 2022), Cellvation, Cyprium, Helocyte, Oncogenuity and Urica.
We anticipate topline data from the Phase 1 trial in the first half of 2023. ● Dotinurad (URECE® tablet) was approved in Japan in 2020 as a once-daily oral therapy for gout and hyperuricemia. Dotinurad was efficacious and well-tolerated in more than 500 Japanese patients treated for up to 58 weeks in Phase 3 clinical trials.
Urica expects to announce data from this trial in the first half of 2024. ● In June 2023, Urica announced data from the Phase 1 clinical trial in healthy volunteers showed comparable pharmacokinetic, pharmacodynamic and safety profile between U.S. and Japanese healthy subjects. ● Dotinurad (URECE® tablet) was approved in Japan in 2020 as a once-daily oral therapy for gout and hyperuricemia.
Subsequent to 2022, in February 2023, the Company completed a registered direct offering of common stock priced At-the-Market under Nasdaq rules pursuant to which it issued and sold 16,642,894 shares of its common stock at a purchase price of $0.835 per share and secured approximately $13.3 million in net proceeds after deducting estimated offering expenses.
Risk Factors – We may need substantial additional funding and may be unable to raise capital when needed, which may force us to delay, curtail or eliminate one or more of our R&D programs, commercialization efforts or planned acquisitions and potentially change our growth strategy.” In February 2023, the Company completed a registered direct offering of common stock priced At-the-Market under Nasdaq rules pursuant to which it issued and sold 1.1 million shares of its common stock at a purchase price of $12.53 per share (as adjusted for the Reverse Stock Split) and secured approximately $13.3 million in net proceeds after deducting estimated offering expenses.
During the course of 2022, JMC expanded their field sales force to support their increased product portfolio. Note 2: Includes the following subsidiaries: Aevitas, Baergic (through November 7, 2022), Cellvation, Cyprium, Helocyte, Oncogenuity and Urica.
Note 2: Includes the following subsidiaries: Aevitas (until April 2023), Baergic (until November 2022), Cellvation, Cyprium, Helocyte, Oncogenuity and Urica.
Financing Activities Net cash provided by financing activities was $75.3 million for the year ended December 31, 2022, compared to $149.0 million of net cash provided by financing activities for the year ended December 31, 2021, a decrease of $73.7 million.
(“VYNE”) product licenses of $20.0 million and Mustang’s property and equipment purchases of $2.7 million for the year ended December 31, 2022, offset by $6 million in proceeds from the sale of property and equipment recorded by Mustang for the uBriGene transaction. 84 Table of Contents Financing Activities Net cash provided by financing activities was $75.3 million for the year ended December 31, 2022, compared to $32.7 million of net cash provided by financing activities for the year ended December 31, 2023, a decrease of $42.6 million.
The shares and warrants were sold under the Checkpoint 2020 S-3. ​ In February 2023, Checkpoint closed on a registered direct offering (“February 2023 Direct Offering”) with a single institutional investor for the issuance and sale of 1,180,000 shares of its common stock and 248,572 pre-funded warrants. Each pre-funded warrant is exercisable for one share of common stock.
In October 2023, Mustang closed on the October 2023 Registered Direct Offering with a single institutional accredited investor for the issuance and sale of an aggregate of (i) 920,000 shares of its common stock and (ii) pre-funded warrants to purchase up to 1,688,236 shares of its common stock at a purchase price of $1.70 per share and $1.699 per pre-funded warrant in a registered direct offering priced at-the-market under the rules of The Nasdaq Stock Market LLC.
The decrease in “Other” is attributable to a decrease of $3.2 million in costs incurred by Cyprium for its rolling NDA submission for CUTX-101, a decrease of $1.2 million of costs incurred by Urica for the dotinurad clinical program, and reduced costs at Oncogenuity and Aevitas related to sponsored reseach.
The decrease in “Other” is attributable to a decrease of $1.3 million in costs incurred by Cyprium for the CUTX-101 development program as it was assumed by Sentynl, a decrease of $0.4 million for Aevitas development since the deconsolidation of that subsidiary due to the transaction with 4DMT, offset by an increase of $1.7 million of costs incurred by Urica for the dotinurad clinical program.
The increase is primarily due to the increase in net loss of $49.1 million for the year ended December 31, 2022 as compared to the year ended December 31, 2021, with the increases in cash used by accounts payable and accrued expenses of $34.2 million, accounts receivable of $6.1 million, deferred revenue of $4.5 million as compared to the year ended December 31, 2021 offset by the decrease in the fair value of the investment in Caelum for the year ended December 31, 2021 of $39.3 million.
The decrease is primarily attributable to the decrease in net loss of $59.8 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022, and the net decrease in cash from changes in operating assets and liabilities of $11.9 million offset by the increase in loss from deconsolidation and dissolution of subsidiaries of $4.1 million and a $3.1 million asset impairment loss.
Checkpoint’s increase in research and development spending is attributable to an $8.3 million increase in manufacturing costs of product candidates, $3.0 million increase in headcount costs, and $1.7 million increased regulatory costs, offset by a decrease in milestone payments of $6.4 million related to the 2021 non-refundable milestone payment that was triggered by the first patient dosed in a Phase 3 clinical study of cosibelimab, and a $1.8 million decrease in clinical costs due to the closing of the CONTERNO study, initiated in December 2021, due to the ongoing conflict in Ukraine and the disruption of clinical trial sites in the region.
Checkpoint’s decrease in research and development spending of $7.8 million is attributable to a $6.6 million decrease in manufacturing costs and a $5.6 million decrease in clinical costs, offset by an increase in regulatory costs of $0.8 million, due to the PDUFA fee to the FDA for the BLA filing for cosibelimab, and $2.3 million in license fees due upon the FDA filing acceptance of the BLA.
Offsetting these decreases was the increase in proceeds from partner companies’ long-term debt of $47.1 million, as well as the $10.5 million repayment of Fortress’ Oaktree Note. Sources of Liquidity Stock Offerings and At-The-Market Share Issuances We fund our operations through cash on hand, the sale of debt, third-party financings, and the sale of partner companies.
Risk Factors—Risks Pertaining to the Need for and Impact of Existing and Additional Financing Activities.” Stock Offerings and At-The-Market Share Issuances We fund our operations through cash on hand, the sale of debt, third-party financings, and the sale of partner companies.
The common stock and the pre-funded warrants were sold together with Series A warrants to purchase up to 1,734,105 shares of common stock and Series B warrants to purchase up to 1,734,105 shares of common stock, at a purchase price of $4.325 per share of common stock and associated common stock warrants, and $4.33249 per pre-funded warrant and associated common stock warrants.
As part of the inducement, Checkpoint agreed to issue new unregistered Series A Warrants to purchase up to 6,325,354 shares and new unregistered Series B Warrants to purchase up to 6,325,354 shares of Checkpoint Common Stock. The Series A and B warrants are exercisable immediately upon issuance with an exercise price of $1.51 per share.
Journey’s increased research and development costs are due to clinical trial expenses to develop DFD-29, for which their Phase 3 clinical trials are 100% enrolled as of January 2023.
Journey’s decreased research and development costs are due to lower clinical trial expenses to develop DFD-29, as the project winds down and eventually concludes. Potential FDA approval for DFD-29 is expected in the second half of 2024.
The injunction enjoined the CMO from terminating the MSA and prohibited the CMO from further attempts to terminate the MSA during the pendency of dispute resolution procedures. ● CUTX-101 was sourced by Fortress and is currently in development at our partner company, Cyprium. ​ CAEL-101 (Light Chain Fibril-reactive Monoclonal Antibody for AL Amyloidosis) ● CAEL-101 was sourced by Fortress in 2017 and was developed by Caelum until it was acquired by AstraZeneca o n October 5, 2021.
The results indicate that DFD-29 can be safely used for up to 16 weeks with no significant risk of microbiota suppression or development of resistance. ​ CAEL-101 (monoclonal antibody for AL amyloidosis) ● CAEL-101 was sourced by Fortress in 2017 and was developed by Caelum until it was acquired by AstraZeneca o n October 5, 2021.
Mustang expects to file an IND in 2023 to initiate an MB-109 Phase 1 clinical trial. ● MB-101 and MB-108 were sourced by Fortress and they are currently in development at Mustang Bio. ​ In vivo CAR T Platform Technology ​ ● We continue to collaborate with the Mayo Clinic to progress our exclusively licensed novel in vivo CAR T technology platform that may be able to transform the administration of CAR T therapies and has the potential to be used as an off-the-shelf therapy. ● We anticipate the publication of proof-of-concept research in a murine tumor model in 2023. ● The novel CAR T technology was sourced by Fortress and is currently in development at Mustang. ​ MB-110 Ex Vivo Lentiviral Gene Therapy for RAG1 Severe Combined Immunodeficiency (“RAG1-SCID”) ​ ● In July 2022, we announced that the first patient successfully received LV-RAG1 ex vivo lentiviral gene therapy to treat recombinase-activating gene-1 (“RAG1”) severe combined immunodeficiency (“RAG1-SCID”) in an ongoing Phase 1/2 multicenter clinical trial taking place in Europe.
MB-109 (MB-101 + MB-108 (HSV-1 oncolytic virus)) ​ ● In October 2023, Mustang announced that the FDA has accepted its IND application to initiate a Phase 1 open label, multicenter clinical trial to assess the safety, tolerability and efficacy of MB-109, a novel combination of MB-101 and MB-108 (herpes simplex virus 1 oncolytic virus), for the treatment of IL13Rα2+ recurrent glioblastoma (“rGBM”) and high-grade astrocytoma. ● MB-108 was sourced by Fortress and is currently in development at Mustang. ​ MB-110 (Ex Vivo Lentiviral Gene Therapy for RAG1 Severe Combined Immunodeficiency) ​ ● In July 2022, Mustang announced that the first patient successfully received LV-RAG1 ex vivo lentiviral gene therapy to treat recombinase-activating gene-1 (“RAG1”) severe combined immunodeficiency (“RAG1-SCID”) in an ongoing Phase 1/2 clinical trial taking place in Europe. ● Leiden University Medical Centre is continuing to treat patients and expects to expand the trial to other centers in 2023. ● LV-RAG1 is exclusively licensed by Mustang for the development of MB-110, a first-in-class ex vivo lentiviral gene therapy for the treatment of RAG1-SCID. ● MB-110 was sourced by Fortress and is currently in development at Mustang. ​ ​ 72 Table of Contents AJ201 (Nrf1 and Nrf2 activator, androgen receptor degradation enhancer) ​ ● In January 2024, Avenue announced that all patients have been enrolled in Avenue’s Phase 1b/2a study, which is evaluating AJ201 in the U.S. for the treatment of spinal and bulbar muscular atrophy (“SBMA”), also known as Kennedy’s Disease.
Avenue’s increase in research and development spend in 2022 is primarily attributable to costs related to the FDA Advisory Committee Meeting for IV Tramadol in early 2022.
Avenue’s increase in research and development in 2023 is primarily attributable to clinical costs related to the Phase 1b/2a of AJ201 for the treatment of SBMA, also known as Kennedy’s disease.
Any recovered proceeds will be recorded when considered probable. ​ 79 Table of Contents Total other income (expense) changed $34.1 million, or 141%, from income of $24.2 million for the year ended December 31, 2021 to expense of $9.9 million for the year ended December 31, 2022, primarily due to the $39.3 million gain on the fair value of Caelum recognized in 2021, offset by the increase in change in fair value of warrant liabilities associated with warrants related to financings at Avenue and Checkpoint of $1.6 million, a decrease of $1.7 million in interest expense and financing fees due to non-recurring costs in 2021 related to Journey’s convertible preferred share offering, and lower interest expense for the year ended December 31, 2022 associated with the Company’s credit facility with Oaktree, as well as $1.3 million in grant income recognized by Mustang in the year ended December 31, 2022.
Other expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ Change ​ ($ in thousands) 2023 2022 $ % Other income (expense) ​ ​ ​ ​ ​ ​ ​ ​ Interest income ​ $ 3,003 ​ $ 1,398 ​ $ 1,605 ​ 115 % Interest expense and financing fee ​ (15,315) ​ (13,642) ​ (1,673) ​ 12 % Change in fair value of warrant liabilities ​ 4,424 ​ 1,129 ​ 3,295 ​ 292 % Other income (expense) ​ ​ (3,403) ​ 1,215 ​ (4,618) ​ (380) % Total other expense ​ $ (11,291) ​ (9,900) ​ $ (1,391) ​ 14 % ​ Total other income (expense) increased $1.4 million, or (14)%, from expense of $9.9 million for the year ended December 31, 2022 to expense of $4.7 million for the year ended December 31, 2023, primarily due to the increase in change in fair value of warrant liabilities associated with warrants related to financings at Avenue and Checkpoint of $9.9 million, and an increase in interest income of $1.6 million, offset by an increase of $1.7 million in interest expense and financing fees due to costs associated with debt payoff at Journey and Mustang, and an increase of $4.6 million in other expense in the year ended December 31, 2023 due primarily to $4.1 million associated with the deconsolidation and dissolution of partner companies.
Under the terms of the agreement, Cyprium received $8 million upfront to fund the development of CUTX-101 and could receive up to $12 million in regulatory milestone payments related to the NDA submission and approval process and is eligible to receive sales milestones totaling up to $255.0 million in the aggregate, plus royalties.
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.
Each common unit consists of one share of common stock and one warrant to purchase one share of common stock, and each pre-funded unit consists of one pre-funded warrant to purchase one share of common stock and one warrant to purchase one share of common stock.
Each unit consists of (i) one share of common stock, and (ii) one warrant to purchase one share of common stock, exercisable immediately upon issuance at a price of $1.70 per share and expiring five years following the issuance date.
For the year ended December 31, 2022, the increase in selling, general and administrative expenses of $26.8 million or 31% is primarily attributable to increased expenses at Journey related to their increased salesforce as well as increased marketing expense related to Journey’s expanded product portfolio, increased headcount and other supporting services related to being a public company, and increased legal costs associated with patent litigation.
For the year ended December 31, 2023, the decrease in selling, general and administrative expenses of $19.0 million or 17% is primarily attributable to decreased expenses at Journey related to their expense reduction efforts in sales and marketing, as JMC began a cost reduction initiative designed to improve operational efficiencies, optimize expenses and reduce overall costs to better align costs to their revenue-generating capabilities.
Fortress has a talented and experienced business development team, comprising scientists, doctors and finance professionals, who work in concert with our extensive network of key opinion leaders to identify and evaluate promising products and product candidates for potential acquisition by new or existing partner companies.
(“Fortress” or the “Company”) is a biopharmaceutical company focused on acquiring and advancing assets to enhance long-term value for shareholders through product revenue, equity holding and dividend and royalty revenue streams. Fortress works in concert with our extensive network of key opinion leaders to identify and evaluate promising products and product candidates for potential acquisition.
The decrease in research and development – licenses acquired of $14.9 million, or 96%, from the year ended December 31, 2021 as compared to the year ended December 31, 2022 is due primarily to $13.8 million expense recorded in 2021 for Journey’s license, collaboration, and assignment agreement with Dr.
We expect research and development costs to remain flat or decrease modestly in 2024. ​ 79 Table of Contents Research and development – licenses acquired ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ($ in thousands) 2023 2022 $ % Research and development – licenses acquired ​ $ 4,324 ​ $ 677 ​ $ 3,647 ​ 539 % ​ The increase in research and development – licenses acquired of $3.6 million in 2023 is due primarily to $4.2 million paid for Avenue’s license from AnnJi for AJ201.
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(“Fortress” or the “Company”) is a biopharmaceutical company dedicated to acquiring, developing and commercializing pharmaceutical and biotechnology products and product candidates, which we do through Fortress itself and through partner companies and subsidiaries.
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(“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 Avenue Therapeutics, Inc. (Nasdaq: ATXI, “Avenue”), Baergic Bio, Inc. (“Baergic”, a subsidiary of Avenue), Cellvation, Inc. (“Cellvation”), Checkpoint Therapeutics, Inc. (Nasdaq: CKPT, “Checkpoint”), Cyprium Therapeutics, Inc.
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(“AstraZeneca”) and Sentynl Therapeutics, Inc. (“Sentynl”), respectively. On October 5, 2021, AstraZeneca purchased 100% of our partner Caelum for approximately $150 million upfront and up to $350 million in contingent regulatory and sales milestone payments. Our subsidiary and partner companies that are pursuing development and/or commercialization of biopharmaceutical products and product candidates are Aevitas Therapeutics, Inc. (“Aevitas”), Avenue Therapeutics, Inc.
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(“Aevitas”) was a consolidated subsidiary company until the sale of its primary asset to 4D Molecular Therapeutics in April 2023. 68 Table of Contents Recent Events Revenue Portfolio ● For the years ended December 31, 2023 and 2022, total net revenue was $84.5 million and $75.7 million, respectively, which includes net product revenue from Journey’s commercial portfolio of $59.7 million and $71.0 million, respectively. ● In August 2023, Journey entered into an exclusive license agreement with Maruho Co., Ltd.
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Recent Events Marketed Dermatology Products ● In 2022, Journey’s commercial portfolio generated net revenue of $71.0 million, compared to net revenue of $63.1 million in 2021. 64 Table of Contents ● At December 31, 2022, Journey currently had 74 field sales representatives dedicated to marketing and promoting their dermatology product portfolio. ● In January 2022, Journey received notice from its exclusive out-licensing partner in Japan, Maruho Ltd.
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(“Maruho”), a Japanese company specializing in dermatology and also Journey’s exclusive licensing partner that developed and is commercializing Qbrexza (Rapifort®) in Japan. Under the terms of the agreement, Journey Medical received a $19 million upfront payment and granted Maruho an exclusive license to develop and commercialize Qbrexza® (Rapifort) for the treatment of hyperhidrosis in additional territories in Asia (the “Territory”).
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(“Maruho”), that Japan’s Ministry of Health, Labor and Welfare approved Rapifort® Wipes 2.5% (glycopyrronium tosylate hydrate) for the treatment of primary axillary hyperhidrosis.
Added
Maruho is responsible for all development and commercialization costs for the program throughout the Territory. Late Stage Product Candidates Cosibelimab (anti-PD-L1 antibody) ● Our partner company, Checkpoint, submitted a Biologics License Application (“BLA”) to the U.S.
Removed
This approval triggered a milestone payment of $10.0 million to Journey, $7.5 million of which was paid to Dermira pursuant to the terms of the Asset Purchase Agreement between Journey and Dermira for Qbrexza, resulting in net proceeds of $2.5 million paid to Journey. ● In January 2022, JMC acquired Amzeeq (minocycline) topical foam, 4%, and Zilxi (minocycline) topical foam, 1.5%, two U.S Food and Drug Administration (“FDA”) approved Topical Minocycline Products and Molecule Stabilizing Technology (MST)™ from Vyne Therapeutics, Inc., which expanded Journey’s product portfolio of actively marketed branded dermatology products to eight. ● In May 2022, Journey received notice from Maruho that its commercial launch of Rapifort was initiated and Journey began receiving royalty payments from Maruho of 10% of net sales of Rapifort in Japan in the second quarter of 2022. ● In May 2022, Journey announced that it had entered into three separate settlement agreements (the “Settlement Agreements”) with Padagis for patent infringement lawsuits that Journey filed to enforce the patents covering Qbrexza®, Amzeeq®, and Zilxi®.
Added
Food and Drug administration (“FDA”) for cosibelimab, its investigational anti-PD-L1 antibody, as a treatment for patients with metastatic or locally advanced cutaneous squamous cell carcinoma (“cSCC”) who are not candidates for curative surgery or radiation, in January 2023. In December 2023, the FDA issued a complete response letter (“CRL”) for the cosibelimab BLA.
Removed
Pursuant to the terms of the Settlement Agreements, Padagis is prohibited from launching generic versions of Qbrexza®, Amzeeq® and Zilxi® until August 15, 2030, July 1, 2031, and April 1, 2027, respectively. Each of the aforementioned lawsuits were dismissed on May 19, 2022. Additionally, in December 2022, Journey settled the Qbrexza patent infringement lawsuit that Journey filed against Teva Pharmaceuticals.
Added
The CRL only cited findings that arose during a multi-sponsor inspection of Checkpoint’s third-party contract manufacturing organization as approvability issues to address in a resubmission. The CRL did not state any concerns about the clinical data package, safety, or labeling for the approvability of cosibelimab.
Removed
Late Stage Product Candidates DFD-29 (modified early release oral minocycline for the treatment of rosacea) ● Journey completed enrollment in its DFD-29 Phase 3 clinical program for the treatment of papulopustular rosacea. Topline data from the two DFD-29 Phase 3 clinical studies are expected to be announced in the first half of 2023.
Added
We believe we can address the feedback in a resubmission to enable marketing approval in 2024. ● In October 2023, Checkpoint announced the publication of results from the multicenter, multiregional, pivotal trial evaluating cosibelimab in patients with metastatic cSCC in the Journal for ImmunoTherapy of Cancer (JITC) , the peer-reviewed, online journal of the Society of Immunotherapy of Cancer.
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Journey plans to submit the New Drug Application (“NDA”) for DFD-29 in the second half of 2023 and FDA approval is anticipated in the second half of 2024. ● In the Phase 2 clinical trials, DFD-29 (40mg) demonstrated nearly double the efficacy when compared against Oraycea® (European equivalent of Oracea®) on both co-primary endpoints.
Added
The paper, entitled, “ Efficacy and Safety of Cosibelimab, an Anti–PD-L1 Antibody, in Metastatic Cutaneous Squamous Cell Carcinoma ” (doi:10.1136/jitc-2023-007637), describes safety and efficacy results from 78 patients with metastatic cSCC enrolled at clinical sites in eight countries. ● In July 2023, Checkpoint announced new, longer-term data for cosibelimab from its pivotal studies in locally advanced and metastatic cSCC.
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For the first co-primary endpoint, Investigator’s Global Assessment (“IGA”) treatment success, Oraycea had a 33.33% IGA treatment success rate, while DFD-29 achieved a 66.04% IGA treatment success rate.
Added
These results demonstrate a deepening of response over time, resulting in substantially higher complete response rates than previously reported (55% objective response rate; 23% complete response rate in locally advanced cSCC and 50% objective response rate; 13% complete response rate in metastatic cSCC).
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For the second co-primary endpoint, the change in total inflammatory lesion count, Oraycea had a 10.5 reduction in inflammatory lesions, while DFD-29 achieved a 19.2 reduction in inflammatory lesions. ● In March 2023, Journey announced completion of treatment in the Phase 1 clinical trial assessing the impact of DFD-29 on the microbial flora of healthy adults.
Added
Furthermore, responses continue to remain durable over time. ● In June 2023, Checkpoint announced that new pharmacokinetic modeling data on cosibelimab supporting the extension to an every-three-week dosing regimen were presented at the Population Approach Group Europe 2023 annual meeting.
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No significant safety issues were noted during the study. ​ CUTX-101 (Copper Histidinate injection for Menkes Disease) ​ ● In 2021, our subsidiary Cyprium signed a Development and Asset Purchase Agreement with Sentynl, a subsidiary of Zydus Lifesciences Ltd., for CUTX-101 for the treatment of Menkes disease.

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