Nasdaq:FBIO
Fortress Biotech, Inc.
A biopharmaceutical firm advancing proprietary oncology assets with a robust cash position but facing significant operating losses and revenue contraction in 2024.
Key Metrics
Investment Thesis
Bull Case
Investors might buy this stock if they believe the company will achieve key clinical trial successes that unlock significant value from its high-value drug candidates. The existing cash reserves of $57.3M provide a runway to fund operations while awaiting potential catalysts such as partnership announcements or regulatory approvals that could reverse current revenue trends.
Bear Case
Investors should avoid this stock given the severe financial distress characterized by negative shareholders' equity and a retained earnings deficit exceeding seven hundred million dollars. The sharp drop in revenue combined with massive operating expenses suggests the business model may struggle to achieve profitability without substantial external capital injections or successful exits.
About Fortress Biotech, Inc.
Fortress Biotech is a biopharmaceutical company focused on developing novel therapies for cancer and other serious diseases, primarily serving markets in the United States through its proprietary drug candidates. The company leverages advanced molecular technologies to create targeted treatments, aiming to address unmet medical needs while navigating the complex regulatory landscape of the FDA.
Analysis
Management Discussion
Management has successfully preserved liquidity with a net change in cash of -$24.6M over the period, though operating cash flow remains negative at -$80.2M driven by heavy R&D investments. Despite a slight reduction in losses compared to previous years, the company's revenue contraction and persistent deficits indicate that commercialization milestones or successful licensing deals are critical for financial turnaround.
Industry Overview
The biotechnology industry is highly competitive and capital-intensive, requiring significant investment in research and development to secure patents and regulatory approvals for new drugs. Companies must navigate rigorous FDA review processes while competing against established pharmaceutical giants that have larger budgets and more diversified portfolios.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Revenue | $75.7M | $84.5M | $57.7M |
| Cost of Revenue | $30.8M | $26.7M | $20.9M |
| Gross Profit | $45.0M | $57.9M | $36.8M |
| Operating Expenses | $248.5M | $200.2M | $147.2M |
| Operating Income | $-203.6M | $-142.3M | $-110.4M |
| R&D | $134.9M | $106.1M | — |
| G&A | $113.7M | $94.1M | $87.7M |
| Stock-Based Comp | $23.0M | $17.0M | $32.6M |
| Depreciation | $3.1M | $2.2M | $1.0M |
| Amortization | — | $3.8M | $3.4M |
| Other OpEx | $0 | $0 | $59.4M |
| Non-Operating Income | $-9.9M | $-11.3M | $-10.2M |
| Interest Income | $1.4M | $3.0M | $2.7M |
| Pre-Tax Income | $-213.5M | $-153.6M | $-120.5M |
| Income Tax | $449.0K | $521.0K | $312.0K |
| Continuing Ops | $-213.9M | $-154.2M | $-120.9M |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $-213.9M | $-154.2M | $-120.9M |
| Minority Interest | $-127.3M | $-93.5M | $-74.9M |
| Net to Common | $-86.6M | $-60.6M | $-46.0M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Current Assets | $230.4M | $117.0M | $90.4M |
| Cash & Equivalents | $178.3M | $80.9M | $57.3M |
| Accounts Receivable | $28.2M | $15.2M | $10.2M |
| Inventory | $14.2M | $10.2M | $14.4M |
| Prepaid Expenses | $9.7M | $10.5M | $7.1M |
| Other Current Assets | $138.0K | $167.0K | $1.3M |
| Long-Term Assets | $63.9M | $50.5M | $53.9M |
| PP&E (Net) | $13.0M | $6.5M | $3.3M |
| Operating Leases | $20.0M | $17.0M | $13.9M |
| Other LT Assets | $30.9M | $27.0M | $36.7M |
| Total Assets | $294.3M | $167.5M | $144.2M |
| Current Liabilities | $127.7M | $84.9M | $71.4M |
| Accounts Payable | $57.2M | $34.8M | $31.6M |
| Current Leases | $2.4M | $2.5M | $2.6M |
| Other Current Liab | $-29.4M | $-26.0M | $-28.4M |
| Long-Term Liabilities | $116.6M | $81.0M | $74.5M |
| LT Operating Leases | $21.6M | $18.3M | $14.8M |
| Other LT Liab | $95.0M | $62.7M | $59.7M |
| Total Liabilities | $244.3M | $165.9M | $145.9M |
| Shareholders' Equity | $50.0M | $1.6M | $-1.6M |
| Paid-In Capital | $675.8M | $717.4M | $763.6M |
| Retained Earnings | $-634.2M | $-694.9M | $-740.9M |
| Total L&E | $294.3M | $167.5M | $144.2M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income (CFO) | $-213.9M | $-154.2M | $-120.9M |
| Non-Cash Adjustments | $22.5M | $65.8M | $46.4M |
| Working Capital Changes | $12.0M | $-39.9M | $-5.7M |
| Cash from Operations | $-179.4M | $-128.2M | $-80.2M |
| Capital Expenditures | $2.7M | $63.0K | $0 |
| Cash from Investing | $-22.9M | $-2.1M | $-15.0M |
| Dividends Paid | $749.0K | $736.0K | $694.0K |
| Cash from Financing | $75.3M | $32.7M | $70.6M |
| FX Effect | $0 | $0 | $0 |
| Net Change in Cash | $-127.0M | $-97.6M | $-24.6M |
| Beginning Cash | $308.0M | $181.0M | $83.4M |
| Ending Cash | $181.0M | $83.4M | $58.8M |
Frequently Asked Questions
How does Fortress Biotech, Inc. make money?
The company's revenue is derived from collaborations, licensing agreements, and sales of its drug candidates for cancer indications, supported by substantial R&D expenditures reflected in high general and administrative costs. Revenue streams include payments from strategic partnerships that fund development stages while the company seeks to bring novel therapies to market.
What are the main risks for FBIO?
The company faces significant financial risk due to a substantial accumulated deficit of over $740M and recurring net operating losses exceeding $120M annually. Revenue volatility is evident with a sharp decline from $84.5M in 2023 to $57.7M in 2024, raising concerns about partnership stability or commercialization hurdles. High burn rates for R&D and general administration relative to revenue could necessitate further equity financing, potentially diluting shareholders.
What is FBIO's competitive advantage?
Fortress Biotech possesses a unique pipeline of first-in-class or best-in-class molecular entities designed for specific cancer subtypes, offering differentiated therapeutic mechanisms against standard-of-care treatments. The company benefits from a strong balance sheet with over $57M in cash and equivalents, providing flexibility to advance its clinical programs without immediate dilution.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.