Friday, December 2, 2016

Fortress Biotech, Inc. (FBIO) set to Profit from Profuse Product Portfolio

Fortress Biotech, Inc. (NASDAQ: FBIO) is not putting all its eggs in one basket. This is a biopharmaceutical company with multiple revenue streams and a profuse product portfolio so diversified that Harry Markowitz, the father of modern portfolio theory, might tip his hat to the way the company has sought to mitigate developmental risks. Fortress’ diverse product pipeline also gives it multiple shots at hitting its financial goals, increased by the symbiotic relationship between development areas. The research platforms are structured so that success in one area is likely to add impetus to another.

Fortress is parent to a group of companies dedicated to acquiring, developing and commercializing novel pharmaceutical and biotechnology products. The company plans to develop and commercialize products that it acquires both directly and indirectly by establishing subsidiary companies, also known as Fortress Companies. The company will then leverage its biopharmaceutical business expertise and drug development capabilities to help the Fortress Companies achieve their goals. Additionally, Fortress will provide funding and management services to each of the Fortress Companies, and, from time to time, the company and the Fortress Companies will seek licensing, partnerships, joint ventures, and/or public and private financing to accelerate and provide additional funding to support their research and development programs.

The current pipeline ranges over products in various stages of development. Still in the pre-clinical stage are programs for oncolytic virus (a virus to destroy cancer cells); the CK-103 BET Inhibitor, also directed at cancer; and at least five others.

At the phase I/II stage, Fortress and its subsidiaries have at least a dozen programs underway. These include N-acetyl-D-mannosamine (ManNAc) Triplex for kidney disease and GNE myopathy, CNDO-109 and CD123 CAR for acute myeloid leukemia (AML), and CEVA101 for adult and pediatric traumatic brain injury (TBI).

This year, under subsidiary Journey Medical Corporation (JMC), the company took four products, Targatox, Dermasorb, Ceracade and Luxamend, to market. In July 2016, JMC received FDA approval to manufacture Targadox™, its product for the treatment of severe acne. Sales commenced in October 2016. During the second quarter of 2016, JMC began sales of “Journey” branded products including Luxamend®, its prescription wound cream, and Ceracade™, its emollient for the treatment of various types of dermatitis. At the end of the third quarter (September 30, 2016), JMC product sales had reached $1.8 million, a sign of very good things to come.

Several analysts have taken notice. The Cerbat Gem ( reports that ‘Fortress Biotech Inc. stock had its “buy” rating reaffirmed by stock analysts at FBR & Co in a note issued to investors on November 18.’ On October 3, Roth Capital initiated coverage of Fortress, setting a ‘Buy’ rating and a price target of $9.00. In addition, Zacks Investment Research raised Fortress Biotech from a ‘Hold’ rating to a ‘Buy’ rating and set a $3.00 price objective for the company in a research report issued on September 20th. Fortress stock currently trades at around $2.30 on the NASDAQ under the symbol FBIO.

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