Sulconazole Nitrate

Achieved “Last Patient Out” milestone in Phase 3 clinical program evaluating DFD-29 in May 2023 Topline data are expected in June 2023 for Phase 3 clinical program evaluating DFD-29 Company to hold conference call on May 22, 2023, at 4:30 p.m. ET SCOTTSDALE, Ariz., May 22, 2023 (GLOBE NEWSWIRE) -- Journey Medical Corporation (Nasdaq: DERM) (“Journey Medical” or “the Company”), a commercial-stage pharmaceutical company that primarily focuses on the selling and marketing of FDA approved prescription pharmaceutical products for the treatment of dermatological conditions, today announced financial results and recent corporate highlights for the first quarter ended March 31, 2023. Claude Maraoui, Journey Medical’s Co-Founder, President and Chief Executive Officer, said, “Since Journey Medical’s inception, we have made significant investments and have committed to building out our commercial product portfolios and infrastructure to position ourselves for future revenue growth. Our total revenues for the first quarter of 2023 were $12.2 million. Despite higher unit sales volumes from period-to-period for Accutane®, Amzeeq®, Zilxi® and Exelderm®, our net product revenues for the first quarter were unfavorably impacted by higher gross-to-net adjustments and lower unit sales volumes for Qbrexza®, Targadox® and Ximino®. However, in April, we have already seen a bounce back in our product net revenues and lower gross-to-net adjustments from the isolated occurrences in the first quarter, particularly for Qbrexza. For the remainder of 2023, we look forward to a return to revenue growth, further reductions in selling, general and administrative (“SG&A”) expenses from our previous guidance of $5.0 - $7.0 million to result in SG&A annual savings in excess of $12.0 million when compared to 2022, as well as achieving clinical milestones in our Phase 3 clinical trials evaluating DFD-29 for the treatment of papulopustular rosacea (“PPR”). We expect a topline data read out from the DFD-29 Phase 3 clinical trials in June of 2023 and to file a New Drug Application (“NDA”) in the second half of 2023.” Financial Results: Total net product revenues were $12.2 million for the first quarter of 2023, compared to net product revenues of $20.8 million for the first quarter of 2022. Higher unit sales volumes from period-to-period for Accutane, Amzeeq, Zilxi and Exelderm were offset by lower unit sales volumes of Qbrexza, Targadox and Ximino. In addition, all products were unfavorably impacted by higher gross-to-net adjustments compared to the first quarter of 2022.Cost of goods sold decreased by $1.8 million to $6.4 million for the three-month period ended March 31, 2023, from $8.2 million for the three-month period ended March 31, 2022. The decrease is mainly due to a $2.0 million decrease in Journey’s royalty payments, primarily related to Qbrexza and Targadox royalties as a result of decreased net product revenues. In addition, the Qbrexza royalty percentage contractually decreased by 10% in May 2022. Beginning in May 2023, Qbrexza royalties will be further reduced by an additional 12.5%, which is expected to contribute to improved gross margins in 2023.Selling, general and administrative expenses decreased by $1.4 million, to $13.3 million for the three-month period ended March 31, 2023, from $14.7 million for the three-month period ended March 31, 2022. The decrease of 10% is primarily attributable to a decrease in legal costs associated with the Company’s patent litigation settlements in 2022 and expense reduction efforts primarily in sales force and marketing. These expense reduction efforts are part of an overall cost reduction initiative that the Company implemented at the beginning of 2023, which is designed to improve operational efficiencies, optimize expenses, and reduce overall costs. Specifically, the initiative is intended to reduce selling, general and administrative expenses to better align costs with the current revenue-generating capabilities. In connection with the cost reduction initiative, the Company effected a headcount reduction to its salesforce and implemented marketing cost cuts in the first quarter of 2023. The Company incurred one-time costs of approximately $0.5 million of termination benefits to the impacted employees, including severance payments and benefits. The Company anticipates that its selling, general and administrative expenses will decrease for 2023 as it continues to focus on further expense optimization.Research and development costs were $2.0 million in the first quarter of 2023, compared to $1.3 million in the first quarter of 2022, reflecting the Company’s ongoing clinical trial expenses to develop our DFD-29 product candidate.Net loss was $10.1 million, or $0.57 per share basic and diluted, for the first quarter of 2023, compared to a net loss of $1.4 million, or $0.08 per share basic and diluted, for the first quarter of 2022.The Company’s non-GAAP results in the table below reflect Adjusted EBITDA of $(5.3 million), or $(0.30) per share basic and diluted, for the first quarter of 2023, compared to Adjusted EBITDA of $2.3 million, or $0.13 per share basic and $0.11 per share diluted for the first quarter of 2022. Adjusted EBITDA, Adjusted EBITDA per share basic and Adjusted EBITDA per share diluted are non-GAAP financial measures, each of which are reconciled to the most directly comparable financial measures calculated in accordance with GAAP below under “Use of Non-GAAP Measures.”At March 31, 2023, the Company had $26.1 million in cash and cash equivalents and restricted cash as compared to $32.0 million of cash and cash equivalents at December 31, 2022. At March 31, 2023, the Company reclassified $8.75 million of cash from cash and cash equivalents to restricted cash on the Company’s condensed consolidated balances to reflect the minimum cash requirement pursuant to an amendment to the Company’s Loan and Security Agreement with East West Bank (“EWB”). Recent Corporate Highlights: In March 2023, Journey Medical announced completion of treatment in the Phase 1 clinical trial assessing the impact of DFD-29 (Minocycline Modified Release Capsules 40 mg) on the microbial flora of healthy adults. No significant safety issues were observed during the study.In January 2023, Journey Medical completed enrollment in its DFD-29 Phase 3 clinical program for the treatment of PPR and achieved the “Last Patient Out” milestone in May 2023. Topline data from the DFD-29 Phase 3 clinical studies are expected to be announced in June of 2023. Journey Medical plans to file its NDA for DFD-29 in the second half of 2023 and expects potential approval from the U.S. Food and Drug Administration in the second half of 2024. In the Phase 2 clinical trials, DFD-29 (40mg) demonstrated nearly double the efficacy when compared to Oraycea® (European equivalent of Oracea®) on both co-primary endpoints. For the first co-primary endpoint, Investigator’s Global Assessment (“IGA”) treatment success, Oraycea only had a 33.33% IGA treatment success rate, while DFD-29 achieved a 66.04% IGA treatment success rate. For the second co-primary endpoint, the change in total inflammatory lesion count, Oraycea only had a 10.5 reduction in inflammatory lesions, while DFD-29 achieved a 19.2 reduction in inflammatory lesions. In May 2023, the Company entered into an amendment of its credit facility with EWB. As part of the amendment, Journey Medical paid down $10 million of the $20 million outstanding under the term loan and closed the revolving facility. The remaining amounts outstanding under the term loan will be due on July 1, 2024, and the Company will maintain a minimum required cash balance of $8.75 million in deposit accounts with EWB, which increases to $10.0 million on August 31, 2023. The minimum required cash balance is included as a separate line item, “restricted cash,” in the Company’s condensed consolidated balance sheet at March 31, 2023. In addition, the Company is no longer subject to financial covenants that were previously part of the facility. The Company continues to monitor its spending by reducing 2023 expenses, in line with its overall cost reduction initiative. In addition to reductions in sales force and marketing expenses, the Company may pursue additional cash resources through public or private equity or debt financings. Conference Call and Webcast InformationJourney Medical management will conduct a conference call and audio webcast on May 22, 2023, at 4:30 p.m. ET. To listen to the conference call, interested parties within the U.S. should dial 1-866-777-2509 (domestic) or 1-412-317-5413 (international). All callers should dial in approximately 10 minutes prior to the scheduled start time and ask to be joined into the Journey Medical conference call. Participants can register for the conference here: https://dpregister.com/sreg/10178597/f951c8551f. Please note that registered participants will receive their dial-in number upon registration. A live audio webcast can be accessed on the News and Events page of the Investors section of Journey Medical’s website, www.journeymedicalcorp.com, and will remain available for replay for approximately 30 days after the meeting. About Journey Medical CorporationJourney Medical Corporation (Nasdaq: DERM) (“Journey Medical”) is a commercial-stage pharmaceutical company that primarily focuses on the selling and marketing of FDA approved prescription pharmaceutical products for the treatment of dermatological conditions through its efficient sales and marketing model. The company currently markets eight branded and three generic products that help treat and heal common skin conditions. The Journey Medical team comprises industry experts with extensive experience in developing and commercializing some of dermatology’s most successful prescription brands. Journey Medical is located in Scottsdale, Arizona and was founded by Fortress Biotech, Inc. (Nasdaq: FBIO). Journey Medical’s common stock is registered under the Securities Exchange Act of 1934, as amended, and it files periodic reports with the U.S. Securities and Exchange Commission (“SEC”). For additional information about Journey Medical, visit www.journeymedicalcorp.com. Forward-Looking StatementsThis press release may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. As used below and throughout this press release, the words “the Company”, “we”, “us” and “our” may refer to Journey Medical. Such statements include, but are not limited to, any statements relating to our growth strategy and product development programs and any other statements that are not historical facts. The words “anticipate,” “believe,” “estimate,” “may,” “expect,” “will,” “could,” “project,” “intend” and similar expressions are generally intended to identify forward-looking statements. Forward-looking statements are based on management’s current expectations and are subject to risks and uncertainties that could negatively affect our business, operating results, financial condition and stock price. Factors that could cause actual results to differ materially from those currently anticipated include: the fact that our products and product candidates are subject to time and cost intensive regulation and clinical testing and as a result, may never be successfully developed or commercialized; a substantial portion of our sales derive from products that may become subject to third-party generic competition, the introduction of new competitor products, or an increase in market share of existing competitor products, any of which could have a significant adverse impact on our operating income; we operate in a heavily regulated industry, and we cannot predict the impact that any future legislation or administrative or executive action may have on our operations; our revenue is dependent mainly upon sales of our dermatology products and any setback relating to the sale of such products could impair our operating results; competition could limit our products’ commercial opportunity and profitability, including competition from manufacturers of generic versions of our products; the risk that our products do not achieve broad market acceptance, including by government and third-party payors; our reliance third parties for several aspects of our operations; our dependence on our ability to identify, develop, and acquire or in-license products and integrate them into our operations, at which we may be unsuccessful; the dependence of the success of our business, including our ability to finance our company and generate additional revenue, on the successful development and regulatory approval of the DFD-29 product candidate and any future product candidates that we may develop, in-license or acquire; clinical drug development is very expensive, time consuming, and uncertain and our clinical trials may fail to adequately demonstrate the safety and efficacy of our current or any future product candidates; our competitors could develop and commercialize products similar or identical to ours; risks related to the protection of our intellectual property and our potential inability to maintain sufficient patent protection for our technology and products; our business and operations would suffer in the event of computer system failures, cyber-attacks, or deficiencies in our or our third parties’ cybersecurity; the substantial doubt about our ability to continue as a going concern; the effects of major public health issues, epidemics or pandemics on our product revenues and any future clinical trials; our potential need to raise additional capital; Fortress controls a voting majority of our common stock, which could be detrimental to our other shareholders; as well as other risks described in Part I, Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2022, subsequent Reports on Form 10-Q, and our other filings we make with the SEC. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations or any changes in events, conditions or circumstances on which any such statement is based, except as may be required by law, and we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Company Contact:Jaclyn Jaffe (781) 652-4500ir@jmcderm.com Media Relations Contact:Tony Plohoros6 Degrees(908) 591-2839tplohoros@6degreespr.com JOURNEY MEDICAL CORPORATIONUnaudited Condensed Consolidated Balance Sheets($ in thousands except for share and per share amounts) March 31, December 31, 2023 2022ASSETS Current assets Cash and cash equivalents$17,349 $32,003 Accounts receivable, net of reserves 27,616 28,208 Inventory 13,278 14,159 Prepaid expenses and other current assets 2,477 3,309 Total current assets 60,720 77,679 Intangible assets, net 26,128 27,197 Operating lease right-of-use asset, net 167 189 Restricted cash 8,750 - Other assets 88 95 Total assets$95,853 $105,160 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable$43,658 $36,570 Due to related party 370 413 Accrued expenses 17,375 19,388 Accrued interest 165 160 Income taxes payable 35 35 Line of credit 3,000 2,948 Term loan, short-term (net of discount of $86) 9,914 - Deferred cash payment (net of discount of $9) - 4,991 Installment payments – licenses, short-term 2,288 2,244 Operating lease liability, short-term 93 83 Total current liabilities 76,898 66,832 Term loan, long-term (net of debt discount of $71 and $174) 9,929 19,826 Installment payments – licenses, long-term 1,450 1,412 Operating lease liability, long-term 84 108 Total liabilities 88,361 88,178 Stockholders' equity Common stock, $.0001 par value, 50,000,000 shares authorized, 11,834,362 and 11,765,700 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively 1 1 Common stock - Class A, $.0001 par value, 50,000,000 shares authorized, 6,000,000 shares issued and outstanding as of March 31, 2023 and December 31, 2022 1 1 Additional paid-in capital 86,128 85,482 Accumulated deficit (78,638) (68,502)Total stockholders' equity 7,492 16,982 Total liabilities and stockholders' equity$95,853 $105,160 JOURNEY MEDICAL CORPORATIONUnaudited Condensed Consolidated Statements of Operations($ in thousands except for share and per share amounts) Three-Month Periods Ended​March 31, 2023 2022Revenue:​​​​​Product revenue, net$12,165 ​$20,796 Other revenue 48 2,500 Total revenue 12,213 23,296 Operating expenses​​​​​Cost of goods sold – product revenue​6,449 ​​8,203 Research and development​2,033 ​​1,266 Selling, general and administrative​13,292 ​​14,715 Total operating expenses​21,774 ​​24,184 Loss from operations​(9,561)​​(888) Other expense (income) Interest income (122)​​(3)Interest expense​650 ​​389 Foreign exchange transaction losses 47 - Total other expense (income)​575 ​​386 Loss before income taxes​(10,136)​​(1,274) Income tax expense - 104 Net Loss$(10,136)​$(1,378) Net loss per common share: Basic and diluted$(0.57)​$(0.08)Weighted average number of common shares: Basic and diluted 17,807,194 17,318,344 Use of Non-GAAP Measures: In addition to the GAAP financial measures as presented in our Form 10-Q that will be filed with the SEC, the Company has, in this press release, included certain non-GAAP measurements, including Adjusted EBITDA, Adjusted EBITDA per share basic and Adjusted EBITDA per share diluted. We define Adjusted EBITDA as net income (loss) excluding interest, taxes and depreciation, less certain other non-cash and infrequent items not considered to be normal, recurring operating expenses, including, share-based compensation expense, amortization of acquired intangible assets, inventory step-ups from the purchases of intangibles assets and products, severance, non-core research and development expense and foreign exchange transaction losses. In particular, we exclude the following matters for the reasons more fully described below: Share-Based Compensation Expense: We exclude share-based compensation from our adjusted financial results because share-based compensation expense, which is non-cash, fluctuates from period to period based on factors that are not within our control, such as our stock price on the dates share-based grants are issued.Non-core and Short-term Research and Development Expense: We exclude research and development costs incurred in connection with our DFD-29 product candidate, which is the only product in our portfolio not currently approved for marketing and sale, because we do not consider such costs to be normal, recurring operating expenses that are core to our long-term strategy. Instead, our long-term strategy is focused on the marketing and sale of acquired and/or licensed FDA-approved dermatological products.Amortization of Acquired Intangible assets: We exclude the impact of certain amounts recorded in connection with the acquisitions of intangible assets that are either non-cash or not normal, recurring operating expenses due to their nature, variability of amounts, and lack of predictability as to occurrence and/or timing. These amounts may include non-cash items such as the amortization of acquired intangible assets and amortization of step-ups of acquisition accounting adjustments to inventories. Adjusted EBITDA per share basic and Adjusted EBITDA per share diluted are determined by dividing the resulting Adjusted EBITDA by the number of shares outstanding on an actual and fully diluted basis. Management believes use of these non-GAAP measures provide meaningful supplemental information regarding the Company’s performance because (i) it allows for greater transparency with respect to key measures used by management in its financial and operational decision-making, (ii) it excludes the impact of non-cash or, when specified, non-recurring items that are not directly attributable to the Company’s core operating performance and that may obscure trends in the Company’s core operating performance and (iii) it is used by institutional investors and the analyst community to help analyze the Company's results. However, Adjusted EBITDA, Adjusted EBITDA per share basic, Adjusted EBITDA per share diluted and any other non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP. Further, non-GAAP financial measures used by the Company and the manner in which they are calculated may differ from the non-GAAP financial measures or the calculations of the same non-GAAP financial measures used by other companies, including the Company’s competitors. The table below provides a reconciliation from GAAP to non-GAAP measures: JOURNEY MEDICAL CORPORATIONReconciliation of GAAP to Non-GAAP Adjusted EBITDA($ in thousands except for share and per share amounts) Three-month periods ended March 31, 2023 2022 GAAP Net Loss $ (10,136) $ (1,378) EBITDA: Interest 528 386 Taxes - 104 Depreciation - - Amortization of acquired intangible assets 1,069 1,017 EBITDA (8,539) 129 Non-GAAP Adjusted EBITDA: Share-based compensation 646 773 Inventory step-up expense - 140 Non-core & short-term R&D 1,999 1,266 Foreign exchange transaction losses 47 - Severance 526 - Non-GAAP Adjusted EBITDA $ (5,321) $ 2,308 Net loss per common share Basic: GAAP Net loss $(0.57) $(0.08)Non-GAAP Net (loss) gain $(0.30) $0.13 Net loss per common share Diluted: GAAP Net loss $(0.57) $(0.08)Non-GAAP Net (loss) gain $(0.30) $0.11 Weighted average number of common shares Basic: 17,807,194 17,318,344 Weighted average number of common shares Diluted: 17,807,194 20,341,996 The weighted average number of common shares Basic in the above table is used to calculate both GAAP and Non-GAAP basic and diluted loss per share for the three-month periods ended March 31, 2023, and GAAP basic and diluted loss per share for the three-month period ended March 31, 2022, as the net loss for these periods is antidilutive and the effect would be to reduce the loss per share.

Fortress is advancing several late-stage clinical assets with two NDA submissions anticipated in second half of 2023 PDUFA goal date of January 3, 2024 set by FDA for cosibelimab to treat metastatic or locally advanced cutaneous squamous cell carcinoma MIAMI, May 15, 2023 (GLOBE NEWSWIRE) -- Fortress Biotech, Inc. (Nasdaq: FBIO) (“Fortress”), an innovative biopharmaceutical company focused on efficiently acquiring, developing and commercializing or monetizing promising therapeutic products and product candidates, today announced financial results and recent corporate highlights for the first quarter ended March 31, 2023. Lindsay A. Rosenwald, M.D., Fortress’ Chairman, President and Chief Executive Officer, said, “Fortress and our subsidiaries and partner companies continued advancing our promising clinical-stage drug candidates for a wide range of diseases during the first quarter of 2023. We expect data updates from multiple clinical programs in the coming months, including Phase 3 topline results for DFD-29 to treat papulopustular rosacea (“PPR”) in June of 2023. We also expect to report dose escalation and response data for MB-106, a CD20-targeted, autologous CAR T cell therapy to treat relapsed or refractory B-cell non-Hodgkin lymphomas (“B-NHL”) and chronic lymphocytic leukemia (“CLL”), throughout the year. Dotinurad for the treatment of gout and Triplex for the treatment of cytomegalovirus continue to advance in clinical trials and we anticipate a dotinurad Phase 1 topline data readout in U.S. healthy volunteers in the second quarter of this year.” Dr. Rosenwald continued, “On the regulatory front, we expect the rolling New Drug Application (“NDA”) submission for CUTX-101 to treat Menkes disease to be complete by the end of 2023. We also anticipate filing an NDA for DFD-29 in the second half of 2023 and look forward to the January 3, 2024, Prescription Drug User Fee Act (“PDUFA”) goal date for cosibelimab to treat patients with metastatic or locally advanced cutaneous squamous cell carcinoma (“cSCC”). Overall, it is an exciting time for Fortress as we advance potential treatments for patients in need while focusing on increasing shareholder value.” Recent Corporate Highlights1: Cosibelimab (Anti PD-L1 antibody) Our partner company, Checkpoint Therapeutics, Inc. (Nasdaq: CKPT) (“Checkpoint”), submitted a Biologics License Application (“BLA”) to the FDA for cosibelimab, its investigational anti-PD-L1 antibody, as a treatment for patients with metastatic or locally advanced cSCC who are not candidates for curative surgery or radiation, in January 2023. In March 2023, the FDA accepted the BLA filing for cosibelimab and set a PDUFA goal date of January 3, 2024. In its BLA filing acceptance letter, the FDA indicated that no potential filing review issues have been identified, and that an advisory committee meeting to discuss the application is not currently planned. According to U.S. prescription claims data, in 2021, approximately 11,000 cSCC patients were treated with systemic therapies. As PD-1 inhibitors comprised less than half of patient prescriptions, cSCC remains a disease with a need for more effective and tolerable treatment options, particularly for the significant number of cSCC patients with immunosuppressive conditions or autoimmune diseases. With its unique mechanism of action and compelling safety profile, we believe cosibelimab, if approved, would be uniquely positioned to provide an important new treatment option for cSCC patients that are currently underserved by available therapies.Cosibelimab was sourced by Fortress and is currently in development at Checkpoint. Dotinurad (Urate Transporter (URAT1) Inhibitor) Dotinurad is in development for the treatment of gout. We anticipate topline data from the Phase 1 trial to evaluate dotinurad in healthy volunteers in the United States in the second quarter of 2023 and expect to begin pivotal clinical trials in early 2024.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. The clinical program supporting approval included over 1,000 patients.Dotinurad was sourced by Fortress and is currently in development at Urica. MB-106 (CD20-targeted CAR T Cell Therapy) Mustang Bio, Inc.’s (Nasdaq: MBIO) (“Mustang Bio”) lead clinical candidate is MB-106, a CD20-targeted, autologous CAR T cell therapy to treat relapsed or refractory B-NHL and CLL. MB-106 data to date include an overall response rate of 96% and complete response rate of 75% in a wide range of hematologic malignancies, including Waldenstrom macroglobulinemia (“WM”), in a clinical trial conducted by Mustang Bio’s collaborators at Fred Hutch. In parallel, Mustang Bio’s multicenter, open-label, non-randomized Phase 1/2 clinical trial evaluating the safety and efficacy of MB-106 continues to accrue, and Mustang Bio anticipates escalation to the final dose level in the Phase 1 indolent lymphoma arm in the third quarter of this year. The FDA granted Orphan Drug Designation to MB-106 for the treatment of WM, and Mustang Bio has treated the first WM patient in the indolent lymphoma arm of the trial. Results from this arm are expected to support an accelerated Phase 2 registration strategy for WM, with the first pivotal Phase 2 WM patient potentially to be treated in the first quarter of 2024. In the second quarter of this year, Mustang Bio plans to report safety and efficacy data from the indolent lymphoma arm.Phase 1/2 data from the Fred Hutch clinical trial on MB-106, a CD20-targeted, autologous CAR T cell therapy for patients with relapsed or refractory B-NHL and CLL, will be presented at the European Hematology Association Hybrid Congress (“EHA2023”) taking place June 8-11, 2023, in Frankfurt, Germany and at the International Conference on Malignant Lymphoma (“ICML”) taking place June 13-17, 2023, in Lugano, Switzerland. Data from the WM cohort were selected for poster presentation at EHA2023 and outpatient treatment of follicular lymphoma was selected for oral presentation at ICML.MB-106 was sourced by Fortress and is currently in development at Mustang Bio. CUTX-101 (Copper Histidinate for Menkes disease) Our subsidiary, Cyprium Therapeutics, Inc. (“Cyprium”) has completed two pivotal studies in patients with Menkes disease treated with CUTX-101, copper histidinate (CuHis). In a pre-specified analysis of the studies, a 79% reduction in the risk of death was observed in patients treated within four weeks of birth, compared with a historical control cohort of untreated patients, and median overall survival (OS) was 177.1 months for CUTX-101 compared to 16.1 months for historical control, with a hazard ratio (HR) of (95% CI) = 0.208 (0.094, 0.463) p<0.0001. A 75% reduction in the risk of death was observed in patients treated after four weeks of birth, compared with untreated historical control subjects, and median OS was 62.4 and 17.6 months, respectively; HR (95% CI) = 0.253 (0.119, 0.537); p<0.0001.In 2021, Cyprium signed a Development and Asset Purchase Agreement with Sentynl Therapeutics, Inc. (“Sentynl”), a wholly owned subsidiary of Zydus Lifesciences Ltd., for CUTX-101 to treat Menkes disease. Cyprium is responsible for the development of CUTX-101, and Sentynl will be responsible for commercialization of CUTX-101, as well as progressing newborn screening activities.In December 2021, Cyprium initiated the rolling submission of an NDA to the FDA for CUTX-101, which is ongoing and expected to be completed by the end of 2023.Cyprium will retain 100% ownership over any FDA priority review voucher that may be issued at NDA approval of CUTX-101.CUTX-101 was sourced by Fortress and is currently in development at Cyprium. CAEL-101 (Light Chain Fibril-reactive Monoclonal Antibody for AL Amyloidosis) On October 5, 2021, AstraZeneca plc (“AstraZeneca”) acquired Caelum Biosciences, Inc. (“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 Fortress’ $6.4 million portion of the $15 million, 24-month escrow holdback amount and other miscellaneous transaction expenses. 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 potential milestone payments, which, together with the upfront payment, would total up to approximately $212 million.There are two ongoing Phase 3 studies of CAEL-101 for AL amyloidosis. (ClinicalTrials.gov identifiers: NCT04512235 and NCT04504825).2AstraZeneca has estimated that it expects the FDA to accept its BLA submission for review during calendar year 2024.CAEL-101 (anselamimab) was sourced by Fortress and was developed by Caelum (founded by Fortress) until its acquisition by AstraZeneca in October 2021. Triplex (Cytomegalovirus (“CMV”) vaccine) We expect that the Phase 2 clinical trial of Triplex for adults co-infected with HIV and CMV will complete enrollment in the second half of 2023 with topline data anticipated in 2024. The study aims to show potential reduction in intensity of highly active antiretroviral therapy treatment, which is used in up to 1.7 million treated HIV patients.Triplex received a grant from the National Institute of Allergy and Infectious Diseases that could provide over $20 million in non-dilutive funding. This will fund a 420 patient multi-center, placebo-controlled, randomized Phase 2 study of Triplex for control of CMV in patients undergoing liver transplantation and is expected to begin enrollment this year. We believe this data set could ultimately be used to support approval of Triplex in this setting.Triplex is currently the subject of three ongoing clinical trials including: pediatric patients undergoing stem cell transplant; adults co-infected with CMV and HIV; and in combination with a CAR T cell therapy for adults with NHL.Triplex was sourced by Fortress and is currently in development at our subsidiary, Helocyte, Inc. AJ201 In March 2023, we announced that our partner company, Avenue Therapeutics, Inc. (Nasdaq: ATXI) (“Avenue”), entered into an exclusive license agreement with AnnJi Pharmaceutical Co., Ltd. for intellectual property related to AJ201, a first-in-class clinical asset currently in a Phase 1b/2a study in the U.S. for the treatment of spinal and bulbar muscular atrophy, also known as Kennedy's Disease. Kennedy’s Disease is a debilitating rare genetic neuromuscular disease primarily affecting men. Although there is a range of cited prevalence rates in the literature, a recent study used genetic analysis to estimate disease prevalence of 1:6,887 males3.AJ201 was sourced by Fortress and is currently in development at Avenue. IV Tramadol In March 2023, Avenue participated in a Type C meeting with the FDA to discuss the proposed study protocol to assess the risk of respiratory depression related to opioid stacking on IV Tramadol compared to IV morphine. The Type C meeting minutes from the FDA indicate that the FDA and Avenue are in agreement with a majority of the proposed protocol items and are in active discussion about remaining open items. The minutes indicate that the FDA also agrees that a successful study will support the submission of a complete response to the second Complete Response Letter for IV Tramadol pending final agreement on a statistical analysis plan and a full review of the submitted data in the complete response as well as concurrence from the Division of Anesthesia, Analgesia and Addiction Products.IV Tramadol was sourced by Fortress and is currently in development at Avenue. In vivo CAR T Platform Technology We continue to collaborate with the Mayo Clinic to potentially revolutionize the delivery of CAR T in patients. The technology has the potential to generate CAR T cells within the patient’s body after two outpatient injections, without the need for traditional ex vivo allogeneic or autologous CAR T cell processing wait time and expense.We anticipate the publication of proof-of-concept research from in vivo animal studies in 2023.The novel CAR T technology was sourced by Fortress and is currently in development at Mustang Bio. Marketed Dermatology Products and Product Candidates Journey Medical Corporation (Nasdaq: DERM) (“Journey Medical”), our partner company, markets prescription dermatology products.In January 2023, Journey Medical completed enrollment in its DFD-29 Phase 3 clinical program for the treatment of papulopustular rosacea and achieved the “Last Patient Out” milestone in May 2023. Topline data from the DFD-29 Phase 3 clinical studies are expected in June of 2023. Journey Medical plans to submit its NDA for DFD-29 in the second half of 2023, and an FDA approval decision is anticipated in the second half of 2024. In the Phase 2 clinical trials, DFD-29 (40mg) demonstrated nearly double the efficacy when compared to Oraycea® (European equivalent of Oracea®) on both co-primary endpoints. 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. 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. Journey Medical’s total product net revenues were $12.2 million for the first quarter of 2023, compared to first quarter 2022 total product net revenues of $20.8 million. Compared to the prior year period, net sales were primarily impacted by Targadox® generic competition and gross-to-net deductions for Targadox and Ximino®, including returns and managed care rebates. Higher unit sales were seen in Accutane®, Amzeeq®, Zilxi® and Exelderm®, while Qbrexza® volume decreased but was offset by pricing increases. General Corporate: Fortress In February 2023, Fortress completed a registered direct offering priced at-the-market under Nasdaq rules for total gross proceeds of approximately $13.9 million, and a concurrent private placement with investors in the registered direct offering for the pro rata rights to acquire, in the aggregate, securities exercisable into common stock in certain future operating subsidiaries that consummate a specified corporate development transaction within the next five years. Financial Results: To assist our stockholders in understanding our company, we have prepared non-GAAP financial metrics for the three months ended March 31, 2023 and 2022. These metrics exclude the operations of our four public partner companies: Avenue, Checkpoint, Journey Medical and Mustang Bio, as well as any one-time, non-recurring, non-cash transactions. The goal in providing these non-GAAP financial metrics is to highlight the financial results of Fortress’ core operations, which comprise our privately held development-stage entities, as well as our business development and finance functions. As of March 31, 2023, Fortress’ consolidated cash, cash equivalents and restricted cash totaled $154.9 million, compared to $181.0 million as of December 31, 2022, a decrease of $26.1 million during the quarter.On a GAAP basis, Fortress’ net revenue totaled $12.4 million for the first quarter of 2023, which included $12.2 million in net revenue generated from our marketed dermatology products. This compares to net revenue totaling $23.9 million for the first quarter of 2022, which included $20.8 million in net revenue generated from our marketed dermatology products.On a GAAP basis, consolidated research and development expenses including license acquisitions were $39.5 million for the first quarter of 2023, compared to $36.7 million for the first quarter of 2022. On a non-GAAP basis, Fortress research and development expenses were $2.3 million for the first quarter of 2023, compared to $2.8 million for first quarter of 2022.On a GAAP basis, consolidated selling, general and administrative expenses were $25.3 million for the first quarter of 2023, compared to $26.3 million for the first quarter of 2022. On a non-GAAP basis, Fortress selling, general and administrative expenses were $7.0 million, for the first quarter of 2023, compared to $6.2 million for the first quarter of 2022.On a GAAP basis, consolidated net loss attributable to common stockholders was $21.5 million, or $0.21 per share, for the first quarter of 2023, compared to consolidated net loss attributable to common stockholders of $15.8 million, or $0.18 per share for the first quarter of 2022.Fortress’ non-GAAP loss attributable to common stockholders was $6.5 million, or $0.06 per share, for the first quarter of 2023, compared to Fortress’ non-GAAP loss attributable to common stockholders of $5.7 million, or $0.07 per share, for the first quarter of 2022. Use of Non-GAAP Measures:In addition to the GAAP financial measures as presented in our filings with the Securities and Exchange Commission (“SEC”), including our Form 10-Q to be filed on May 15, 2023, the Company, in this press release, has included certain non-GAAP measurements. The non-GAAP net loss attributable to common stockholders is defined by the Company as GAAP net loss attributable to common stockholders, less net losses attributable to common stockholders from our public partner companies Avenue, Checkpoint, Journey Medical and Mustang Bio (“public partner companies”), as well as our former subsidiary, Caelum. In addition, the Company has also provided a Fortress non-GAAP loss attributable to common stockholders which is a modified EBITDA calculation that starts with the non-GAAP loss attributable to common stockholders and removes stock-based compensation expense, non-cash interest expense, amortization of licenses and debt discount, changes in fair values of investment, changes in fair value of derivative liability, and depreciation expense. The Company also provides non-GAAP research and development costs, defined as GAAP research and development costs, less research and development costs of our public partner companies and non-GAAP selling, general and administrative costs, defined as GAAP selling, general and administrative costs, less selling, general and administrative costs of our public partner companies. Management believes each of these non-GAAP measures provide meaningful supplemental information regarding the Company's performance because (i) it allows for greater transparency with respect to key measures used by management in its financial and operational decision-making; (ii) it excludes the impact of non-cash or, when specified, non-recurring items that are not directly attributable to the Company's core operating performance and that may obscure trends in the Company's core operating performance; and (iii) it is used by institutional investors and the analyst community to help analyze the Company's standalone results separate from the results of its public partner companies. However, non-GAAP loss attributable to common stockholders and any other non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP. Further, non-GAAP financial measures used by the Company and the manner in which they are calculated may differ from the non-GAAP financial measures or the calculations of the same non-GAAP financial measures used by other companies, including the Company's competitors. The tables below provide a reconciliation from GAAP to non-GAAP measures: For the three months ended March 31,($ in thousands except for share and per share amounts) 2023 2022 Net loss attributable to common stockholders $(21,537)$(15,760)Net loss attributable to common stockholders - Avenue1 (949) (535)Net loss attributable to common stockholders - Checkpoint2 (1,768) (2,924)Net loss attributable to common stockholders - Journey Medical3 (5,733) (817)Net loss attributable to common stockholders - Mustang Bio4 (3,166) (2,541)Non-GAAP (loss) attributable to common stockholders $(9,921)$(8,943)Stock based compensation 2,870 2,782 Amortization of debt discount 484 357 Depreciation 93 100 Fortress non-GAAP (loss) income attributable to common stockholders $(6,474)$(5,705) Per common share - basic and diluted: Net loss attributable to common stockholders (GAAP) $(0.21)$(0.18)Non-GAAP net loss attributable to common stockholders $(0.10)$(0.10)Fortress non-GAAP (loss) income attributable to common stockholders $(0.06)$(0.07)Fortress non-GAAP (loss) income attributable to common stockholders - diluted Weighted average common shares outstanding - basic and diluted 101,885,648 86,255,142 Avenue net loss for the three months ended March 31, 2023 of $7.5 million net of non-controlling interest ("NCI") of $6.4 million, Master Services Agreement ("MSA") fee to Fortress of $0.1 million, and financing fee to Fortress of $0.1 million; net loss for the three months ended March 31, 2022 of $2.9 million, net of NCI of $2.4 million.Checkpoint net loss for the three months ended March 31, 2023 of $10.5 million net of NCI of $8.4 million, MSA fee to Fortress of $0.1 million, and financing fee to Fortress of $0.2 million; net loss for the three months ended March 31, 2022 of $16.8 million net of NCI of $13.6 million, MSA fee to Fortress of $0.1 million, and financing fee to Fortress of $0.2 million.Journey Medical net loss for the three months ended March 31, 2023 of $10.1 million net of NCI of $4.4 million; net loss for the three months ended March 31, 2022 of $1.4 million net of NCI of $0.5 million and tax expense recognized on a stand-alone basis of $0.1 million.Mustang Bio net loss for the three months ended March 31, 2023 of $16.7 million net of NCI of $13.3 million, Fortress MSA fee of $0.1 million, and Fortress financing fee of $0.1 million; net loss for the three months ended March 31, 2022 of $19.8 million net of NCI of $16.2 million, MSA fee to Fortress of $0.3 million and financing fee to Fortress of $0.8 million. Reconciliation to non-GAAP research and development costs and non-GAAP selling, general and administrative costs: For the three months ended March 31, ($ in thousands) 2023 2022 Research and development1$ 39,506 $ 36,722 Less: Research and development - Avenue2 5,383 1,808 Research and development - Checkpoint 15,826 14,670 Research and development - Journey Medical 2,033 1,266 Research and development - Mustang Bio3 13,938 16,164 Non-GAAP research and development costs$ 2,327 $ 2,814 Selling, general and administrative$ 25,341 $ 26,270 Less: General and administrative - Avenue4 849 1,055 General and administrative - Checkpoint5 2,011 1,922 Selling, general and administrative - Journey Medical 13,292 14,715 General and administrative - Mustang Bio6 2,150 2,402 Non-GAAP selling, general and administrative costs$ 7,039 $ 6,177 Includes Research and development expense and Research and development - licenses acquired expense for the periods presented.Excludes $0.1 million of Fortress MSA expense payable to Fortress for the three months ended March 31, 2023.Excludes $0.1 million of Fortress MSA expense payable to Fortress for the each of the three months ended March 31, 2023 and 2022, respectively.Excludes $0.1 million of Fortress MSA expense and $0.1 million financing fee payable to Fortress for the three months ended March 31, 2023.Excludes $0.1 million of Fortress MSA expense and $0.2 million Fortress financing fee for the three months ended March 31, 2023; and excludes $0.1 million of Fortress MSA expense and $0.2 million Fortress financing fee for the three months ended March 31, 2022.Excludes $0.1 million of Fortress MSA expense and $0.1 million Fortress financing fee for the three months ended March 31, 2023; and $0.1 million of Fortress MSA expense and $0.9 million Fortress financing fee for the three months ended March 31, 2022. About Fortress Biotech Fortress Biotech, Inc. (“Fortress”) is an innovative biopharmaceutical company focused on acquiring, developing and commercializing high-potential marketed and development-stage drugs and drug candidates. The company has eight marketed prescription pharmaceutical products and over 30 programs in development at Fortress, at its majority-owned and majority-controlled partners and subsidiaries and at partners and subsidiaries it founded and in which it holds significant minority ownership positions. Such product candidates span six large-market areas, including oncology, rare diseases and gene therapy, which allow it to create value for shareholders. Fortress advances its diversified pipeline through a streamlined operating structure that fosters efficient drug development. The Fortress model is driven by a world-class business development team that is focused on leveraging its significant biopharmaceutical industry expertise to further expand the company’s portfolio of product opportunities. Fortress has established partnerships with some of the world’s leading academic research institutions and biopharmaceutical companies to maximize each opportunity to its full potential, including AstraZeneca, City of Hope, Fred Hutchinson Cancer Center, St. Jude Children’s Research Hospital, Nationwide Children’s Hospital and Sentynl. For more information, visit www.fortressbiotech.com. Forward-Looking StatementsThis press release may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. As used below and throughout this press release, the words “we”, “us” and “our” may refer to Fortress individually or together with one or more partner companies, as dictated by context. Such statements include, but are not limited to, any statements relating to our growth strategy and product development programs, ability to generate shareholder value, ability of our products to receive necessary approvals, including FDA approval, ability of our products and therapies to help patients and any other statements that are not historical facts. Forward-looking statements are based on management’s current expectations and are subject to risks and uncertainties that could negatively affect our business, operating results, financial condition and stock price. Factors that could cause actual results to differ materially from those currently anticipated include, risks relating to: our growth strategy; financing and strategic agreements and relationships; our need for substantial additional funds and uncertainty relating to financings; our ability to identify, acquire, close and integrate product candidates successfully and on a timely basis; our ability to attract, integrate and retain key personnel; the early stage of products under development; the results of research and development activities; uncertainties relating to preclinical and clinical testing; risks relating to the timing of starting and completing clinical trials; the ability to secure and maintain third-party manufacturing, marketing and distribution of our and our partner companies’ products and product candidates; government regulation; patent and intellectual property matters; competition; as well as other risks described in our SEC filings. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations or any changes in events, conditions or circumstances on which any such statement is based, except as may be required by law, and we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The information contained herein is intended to be reviewed in its totality, and any stipulations, conditions or provisos that apply to a given piece of information in one part of this press release should be read as applying mutatis mutandis to every other instance of such information appearing herein. Company Contact:Jaclyn JaffeFortress Biotech, Inc.(781) 652-4500ir@fortressbiotech.com Media Relations Contact:Tony Plohoros6 Degrees(908) 591-2839tplohoros@6degreespr.com FORTRESS BIOTECH, INC. AND SUBSIDIARIESUnaudited Condensed Consolidated Balance Sheets($ in thousands except for share and per share amounts) March 31, December 31, 2023 2022 ASSETS Current assets Cash and cash equivalents$152,483 $178,266 Accounts receivable, net 27,616 28,208 Inventory 13,278 14,159 Other receivables - related party 636 138 Prepaid expenses and other current assets 8,368 9,661 Total current assets 202,381 230,432 Property, plant and equipment, net 12,194 13,020 Operating lease right-of-use asset, net 19,467 19,991 Restricted cash 2,438 2,688 Intangible asset, net 26,128 27,197 Other assets 943 973 Total assets$ 263,551 $ 294,301 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable and accrued expenses$105,419 $97,446 Deferred revenue 547 728 Income taxes payable 722 722 Common stock warrant liabilities 9,459 13,869 Operating lease liabilities, short-term 2,515 2,447 Partner company term loan, short-term, net 2,318 — Partner company convertible preferred shares, short-term, net 2,937 2,052 Partner company line of credit 3,000 2,948 Partner company installment payments - licenses, short-term, net 2,288 7,235 Other short-term liabilities 268 268 Total current liabilities 129,473 127,715 Notes payable, long-term, net 89,996 91,730 Operating lease liabilities, long-term 21,026 21,572 Partner company installment payments - licenses, long-term, net 1,450 1,412 Other long-term liabilities 1,800 1,847 Total liabilities 243,745 244,276 Commitments and contingencies Stockholders’ equity Cumulative redeemable perpetual preferred stock, $0.001 par value, 15,000,000 authorized, 5,000,000 designated Series A shares, 3,427,138 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively, liquidation value of $25.00 per share 3 3 Common stock, $0.001 par value, 200,000,000 shares authorized, 130,417,161 and 110,494,245 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively 130 110 Additional paid-in-capital 693,433 675,841 Accumulated deficit (655,770) (634,233)Total stockholders' equity attributed to the Company 37,796 41,721 Non-controlling interests (17,990) 8,304 Total stockholders' equity 19,806 50,025 Total liabilities and stockholders' equity$ 263,551 $ 294,301 FORTRESS BIOTECH, INC. AND SUBSIDIARIESUnaudited Condensed Consolidated Statements of Operations($ in thousands except for share and per share amounts) Three Months Ended March 31, 2023 2022Revenue Product revenue, net$12,165 $20,796 Collaboration revenue 181 577 Revenue - related party 35 52 Other revenue 48 2,500 Net revenue 12,429 23,925 Operating expenses Cost of goods sold - product revenue 6,449 8,203 Research and development 35,276 36,722 Research and development - licenses acquired 4,230 — Selling, general and administrative 25,341 26,270 Total operating expenses 71,296 71,195 Loss from operations (58,867) (47,270) Other income (expense) Interest income 1,036 142 Interest expense and financing fee (4,296) (2,350)Foreign exchange loss (47) — Change in fair value of warrant liabilities 6,678 — Grant income 351 — Total other income (expense) 3,722 (2,208)Net loss (55,145) (49,478) Net loss attributable to non-controlling interests 33,608 33,718 Net loss attributable to common stockholders$ (21,537) $ (15,760) Net loss per common share attributable to common stockholders - basic and diluted$(0.21) $(0.18) Weighted average common shares outstanding - basic and diluted 101,885,648 86,255,142 1 The development programs depicted in this press release include product candidates in development at Fortress, at Fortress’ private subsidiaries (referred to herein as “subsidiaries”), at Fortress’ public subsidiaries (referred to herein as “partner companies”) and at entities with which one of the foregoing parties has a significant business relationship, such as an exclusive license or an ongoing product-related payment obligation (such entities referred to herein as “partners”). The words “we”, “us” and “our” may refer to Fortress individually, to one or more of our subsidiaries and/or partner companies, or to all such entities as a group, as dictated by context.2 Information on clinicaltrials.gov does not constitute part of this release.3 M. Zanovello et al., Unexpected frequency of the pathogenic ARCAG repeat 2 expansion in the general population. Brain, in press (2023).