Fortress Biotech was one of the sponsors for the Benzinga Global Small Cap Conference that took place on December 8-9, 2020. The information contained in this article in no way represents investment advice or opinion on the part of Benzinga or its writers and is intended for informational purposes only.
Companies within the fields of biotechnology and pharmaceuticals work to develop medicines for the treatment of various diseases and medical conditions. Typically, companies in both industries tend to focus their research on a specific branch of medicine (i.e., oncology, immunology, neurology, etc.).
And while most pharmaceutical and biotech companies focus solely on developing their own programs, Fortress Biotech (NASDAQ: FBIO) takes a different approach to this classic business model.
Fortress Biotech is a biopharmaceutical company that focuses on identifying promising drug candidates. Once identified, the company acquires, develops, and markets these assets with the help of its partner companies and collaborations with academic research institutions.
So, to better understand how this business model works, Chairman, President & CEO of Fortress Biotech Lindsay A. Rosenwald M.D., joined the recent Benzinga Global Small Cap Conference to further explain the company’s strategy.
According to Dr. Rosenwald, globally, life science R&D spends as much as $400 billion annually, much of which focuses on the development of new medicines. He went on to explain that there are often opportunities to acquire these new research programs for a fraction of fair market value. Essentially, the company’s business model is to look for these opportunities.
To provide a more comprehensive breakdown of this business model, the following outlines Fortress Biotech’s three-step process:
- Step 1 – Fortress Biotech’s business development team identifies and evaluates the assets (clinical programs, drug candidates)
- Step 2 – Fortress Biotech develops the assets with partner companies
- Step 3 – Fortress Biotech and its partner companies find a way to generate income and monetize the assets as quickly as possible
“The whole idea is to use our business development team to find these development-stage programs that we think have a good chance of getting to the market in a reasonable period of time for a reasonable cost,” began Rosenwald. “Fortress Biotech then pairs these programs with our partner companies, keeps adding value to those partner companies by bringing more products to them, and helps them develop drug candidates.”
The business model Fortress Biotech created has led to the development of its diverse pipeline of products. Currently, the company, through its partner companies, has five marketed products, 26 product candidates, eight ongoing pre-clinical programs, and 27 ongoing clinical trials.
Their pipeline also covers different branches of medicine. Given the company’s current portfolio, its main focus area is oncology/hematology, followed by rare/genetic diseases, dermatology, central nervous system disorders, infectious diseases, and pain.
Dr. Rosenwald explained that while other companies may focus on a specific disease or treatment modality, Fortress Biotech is not bound by either. Instead, they focus on opportunism and diversification.
“What differentiates Fortress Biotech from others in the industry is that most life science companies either focus on a therapeutic category like the central nervous system or cancer, or a treatment modality, whether it’s antibodies, cell therapy, small molecules or gene therapy,” said Rosenwald. “We care that the drug that we find looks like it works and that it is on a clear path to the market.”
Fortress Biotech has one New Drug Application (NDA) on file with the U.S. Food and Drug Administration (FDA) and anticipates another NDA filing with the FDA this year.
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