Fortress Biotech, Inc. Q2 FY2022 earnings call

• Journey saw solid growth in Q2 2022 despite supply chain delays, which were resolved in July. • QBREXZA and ACCUTANE continued to gain momentum, with combined net sales up 74% year-over-year. • Recently acquired products AMZEEQ and ZILXI added to cost contributions. • Phase 3 clinical program for DFD-29 is ongoing, with patient enrollment tracking to plan; 45% of targeted 640 patients enrolled. • Anticipate top-line data from DFD-29 trials in first half of 2023 and NDA submission in second half of 2023. • Market opportunity for DFD-29 is significant, with an estimated 16 million U.S. patients with rosacea and $1 billion in prescription sales in 2021.

Total net revenues increased 20% to $18.3 million for the three months ending June 30, 2022 from $15.3 million in the same period of 2021. QBREXZA and ACCUTANE saw combined net sales of $11.3 million in Q2 2022, up 74% from $6.5 million in Q2 2021. Targadox had $3 million less due to generic competition. Ximino and Exelderm had product shortages. QBREXZA and ACCUTANE contributed significantly to revenue growth, while Targadox and certain product shortages offset some growth.

• Management expects to provide forward-looking guidance in upcoming quarters, especially with new assets like AMZEEQ and ZILXI. • Non-GAAP adjusted EBITDA is expected to turn positive in upcoming quarters as it has been since 2017. • Look forward to another year of record revenue growth with expansion of product portfolio through licensing and acquisitions.

• Cybersecurity breach resulted in losses, with seized cryptocurrency in liquidation process but exact recovery timeline unknown. • Temporary supply chain delays in Q2 impacted availability of certain products like Ximino and Exelderm. • Unforeseen challenges during the quarter, though resolved, could impact performance if not managed properly.

Q: What do we need to see in the data in order to differentiate DFD-29 from others? And how does enrollment compare to initial expectation?

A: To differentiate, significant improvement on inflammatory lesion counts and erythema component of rosacea. Enrollment is on track with a slight delay on European leg of second study due to regulatory approvals, but overall still within anticipated buffers.

Q: Could you comment on specific campaigns resonating well for QBREXZA and repeat versus new prescriptions?

A: Focus on digital campaigns via Facebook, Instagram, etc., to build awareness. New prescriptions for QBREXZA have been trending upward, with January at 3600 and June at ~5400, and total prescriptions more than doubling.