Sign in

You're signed outSign in or to get full access.

FB

Fortress Biotech, Inc. (FBIO)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered mixed optics: revenue rose 20.5% YoY to $17.6M but missed S&P Global consensus, while EPS swung to a profit with a sizable beat driven by non-operating gains and lower operating costs . Revenue: $17.6M vs $21.0M est.; Diluted EPS: $0.11 vs -$0.625 est. (S&P Global) — revenue miss but EPS beat due largely to “Other income” and reduced R&D/SG&A . Estimates from S&P Global marked with “*”.
  • Execution on monetization and portfolio: Sun Pharma closed the Checkpoint deal; Fortress received ~$28M upfront and retains a 2.5% royalty on UNLOXCYT plus a CVR; Avenue reached a deal to sell Baergic to Axsome; dotinurad advanced into two Phase 3 trials .
  • Near-term drivers: CUTX-101 received a CRL due to cGMP deficiencies at the manufacturer; resubmission expected “shortly.” Emrosi ramp continues with >2,700 unique prescribers, TRx up ~146% QoQ, two of three GPOs contracted (third expected early 2026), positioning for improved reimbursed mix in 2026 .
  • Cost structure and P&L: Operating loss narrowed and net income attributable to common stockholders improved to $3.7M (vs. $(15.0)M YoY), aided by $15.7M total other income; R&D and SG&A were down YoY (R&D sharply lower) .
  • Strategic implication: Stock narrative hinges on (1) Emrosi’s payer adoption curve and mix shift away from copay support, (2) CUTX-101 resubmission timing, and (3) monetization/royalty streams from transactions (Sun Pharma/Checkpoint; Axsome/Baergic) and pipeline progress (dotinurad) .

What Went Well and What Went Wrong

  • What Went Well

    • Monetization execution: Sun Pharma acquired Checkpoint; Fortress received ~$28M upfront, potential up to $4.8M via CVR, plus a 2.5% royalty on UNLOXCYT net sales — validation of the model and balance sheet accretion . Quote: “The sale of Checkpoint generated approximately $28 million in upfront consideration… and a 2.5% royalty on future net sales of UNLOXCYT™” .
    • Emrosi commercial traction: Q3 TRx grew ~146% QoQ (18,198 vs 7,394 in Q2); >2,700 unique prescribers, positive physician feedback, and refills tracking 1:1 with new scripts in Q3 .
    • Portfolio advancement: Dotinurad dosed first Phase 3 patients; Avenue/AXSM deal sets up potential future milestones/royalties; cash rose to $86.2M (from $57.3M at FY24) .

  • What Went Wrong

    • Revenue below consensus: Q3 net revenue $17.6M vs S&P Global consensus $21.0M*, reflecting payer adoption lag and reliance on copay support in early launch phase . Management acknowledged downstream formulary adoption can take up to three quarters; third GPO expected early 2026 .
    • Regulatory setback: FDA issued CRL for CUTX-101 (cGMP deficiencies at manufacturer); resubmission expected “shortly,” but approval timing pushed out .
    • Quality of EPS beat: Diluted EPS $0.11 benefited from $15.7M in “Total other income (expense)” (including $17.7M “Other income”), rather than core operating leverage; operating income remained negative .

Financial Results

Overall performance vs prior periods and estimates

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Net Revenue ($USD Millions)$14.629 $13.139 $16.413 $17.631
Loss from Operations ($USD Millions)$(22.095) $(22.317) $(36.473) $(6.811)
R&D Expense ($USD Millions)$9.446 $3.938 $8.126 $0.208
SG&A ($USD Millions)$21.993 $25.663 $38.757 $17.415
Net Income (Loss) Attrib. to Common ($USD Millions)$(15.040) $(12.715) $13.355 $3.675
Diluted EPS ($)$(0.76) $(0.48) $0.45 $0.11
Cash & Equivalents (period-end, $USD Millions)—$91.339 $74.386 $86.218

Revenue composition

Revenue CompositionQ2 2025Q3 2025
Net Product Revenue (Dermatology) ($USD Millions)$15.009 $17.025
Other Revenue ($USD Millions)$1.404 $0.606
Total Net Revenue ($USD Millions)$16.413 $17.631

Key KPIs

KPIQ2 2025Q3 2025Notes
Emrosi total prescriptions (TRx)7,394 18,198 ~146% QoQ growth
Emrosi unique prescribers~1,800 prior update >2,700 ~50% increase vs prior update
Emrosi revenue ($USD Millions)—$4.9 Contribution to top line in Q3
Payer access>100M commercial lives (July) Continued progress; 2 of 3 GPOs in place Third GPO expected early 2026

Estimate comparison (S&P Global)

MetricQ1 2025Q2 2025Q3 2025
Revenue – Actual ($M) vs Consensus ($M)$13.139 vs $11.6205* $16.413 vs $14.5340* $17.631 vs $21.0185*
EPS (Diluted) – Actual vs Consensus$(0.48) vs $(0.495)* $0.45 vs $(0.36)* $0.11 vs $(0.625)*

Values marked with * are from S&P Global.

Context:

  • Q3: Revenue MISS (actual $17.631M vs $21.0185M*), EPS BEAT (actual $0.11 vs $(0.625)*). Note: EPS aided by “Total other income (expense)” of $15.664M and lower operating expenses .
  • Q2: EPS beat driven by a $27.127M gain from deconsolidation of a subsidiary, inflating GAAP earnings; operating loss remained significant .

Guidance Changes

Metric/TopicPeriodPrevious GuidanceCurrent GuidanceChange
CUTX-101 NDA status2025PDUFA goal date 9/30/2025 CRL issued for cGMP deficiencies; resubmission “shortly” Lowered/Delayed
EBITDA (sustainably positive)Q4 2025—Expect to become sustainably EBITDA+ in Q4 2025 New/Maintained expectation
Emrosi GPO contractingEarly 2026—2 of 3 GPOs in place; third expected early 2026 New timing detail
Emrosi long-term sales potentialLT—Peak net sales potential >$200M US, >$300M global (management aspiration) Target reiterated

Earnings Call Themes & Trends

TopicQ1 2025 (prior)Q2 2025 (prior)Q3 2025 (current)Trend
Emrosi launch & adoptionLaunch initiated; first scripts end of March Full launch 4/7; payer access >100M lives TRx 18,198 (+146% QoQ); >2,700 prescribers; strong refills Accelerating
Payer access / Copay—Expanded access (100M lives) 2 of 3 GPOs signed; 2–3 quarters for downstream plan adoption; copay bridging near term Improving coverage into 2026
Revenue mix & pricing——Analyst probed revenue/script; management highlighted gross-to-net volatility early in launch, no specific guidance Stabilization pending coverage
Regulatory: CUTX-101NDA accepted; PDUFA 9/30 PDUFA 9/30 confirmed CRL for cGMP deficiencies; resubmission expected shortly Temporary setback
Monetization: CheckpointDeal signed with Sun Pharma Closing and proceeds described Closed; ~$28M received; CVR and 2.5% royalty retained Completed
Pipeline: dotinurad——Two Phase 3 trials initiated; Crystalys $205M financing Advancing
Operating leverage—SG&A elevated with launch; deconsolidation gain aided EPS SG&A down YoY; expect EBITDA+ in Q4 Improving

Management Commentary

  • Strategy and portfolio: “Fortress has achieved several strategic milestones that reinforce the strength of our diversified business model… The sale of Checkpoint generated approximately $28 million in upfront consideration, with the potential for additional CVR payments and future royalty income… We also anticipate the resubmission of the [CUTX-101] NDA…” — Lindsay A. Rosenwald, M.D., Chairman, President & CEO .
  • Emrosi’s early performance: “Emrosi… contributed $4.9 million to our top line in Q3… total prescription growth of approximately 146%, with 18,198 prescriptions in Q3 compared to… 7,394 in Q2… over 2,700 unique Emrosi prescribers” — Claude Morali (Journey Medical) .
  • Reimbursement trajectory: “Downstream health plan formulary adoption… takes time, up to three quarters… our patient copay assistance program is bridging the gap… contracting with the remaining GPO… completed early next year [2026]” — Claude Morali .
  • Profitability outlook: “EBITDA continues to improve, and we continue to expect that Fortress will become sustainably EBITDA positive in the fourth quarter” — Joseph Beneš / Claude Morali (Journey Medical) .

Q&A Highlights

  • Copay vs covered scripts: Management expects reliance on copay to decline as payer adoption builds; two GPOs already contracted, third expected early 2026; coverage implementation typically takes 2–3 quarters after contracting .
  • Breadth vs depth of prescribing: Strategy is to continue adding prescribers while moving existing prescribers up the usage curve; strong clinical feedback and refill momentum expected to convert trials into deeper adoption .
  • Revenue per script variability: Management declined to guide on gross-to-net; expects improvements as reimbursement increases and copay reliance falls .
  • Launch curve: Indicators point to an accelerating launch trajectory given growing prescriber base and increasing refill ratios .
  • Legacy portfolio: Accutane currently appears stable; competition remains a watch item; Qbrexza sequentially up with expectation of single-digit Rx growth YoY despite competition .

Estimates Context

  • Q3 2025 vs S&P Global consensus: Revenue $17.631M vs $21.0185M* (MISS); Diluted EPS $0.11 vs $(0.625)* (BEAT). EPS quality aided by $15.664M total other income (incl. $17.672M “Other income”), while operating income remained negative .
  • Prior quarters: Q2 revenue and EPS also exceeded consensus, with EPS inflated by a $27.127M deconsolidation gain . Q1 was roughly in line/slight beats on revenue and EPS vs consensus .

Values marked with * are from S&P Global.

Key Takeaways for Investors

  • Emrosi’s ramp is the central equity driver; strong TRx growth and prescriber breadth underpin a constructive trajectory, but revenue realization will track payer adoption and reduced copay reliance over coming quarters (coverage typically lags 2–3 quarters) .
  • Q3 revenue missed consensus; this reflects early-launch gross-to-net dynamics rather than end-market demand issues per management’s commentary; watch for sequential revenue acceleration as coverage deepens in 2026 .
  • EPS beat in Q3 (and Q2) was significantly supported by non-operating items (other income; deconsolidation gain in Q2), not underlying operating margin expansion; focus on operating loss reduction for quality of earnings .
  • Regulatory overhang on CUTX-101 should be transitory (CRL due to cGMP at manufacturer); resubmission expected “shortly,” but approval timing risk persists .
  • Monetization pipeline remains active: Checkpoint proceeds and royalties, Avenue’s Baergic sale to Axsome (future milestones/royalties), and dotinurad’s two Phase 3 trials provide optionality for medium-term value creation .
  • Cost discipline visible: R&D and SG&A down YoY; management reiterates expectation to turn sustainably EBITDA positive in Q4 2025 — monitor delivery against this milestone .
  • 6–12 month setup: Key catalysts include CUTX-101 resubmission/response, Emrosi third GPO contracting (early 2026), payer/formulary wins, and dotinurad Phase 3 progress; narrative will move on evidence of sustained revenue lift and improving operating metrics .

Values marked with * are from S&P Global.