Fortress Biotech, Inc. Quarterly report [Sections 13 or 15(d)]

Quarterly report [Sections 13 or 15(d)]

License Agreements

License Agreements	9 Months Ended
Sep. 30, 2026
License Agreements
License Agreements	8. License Agreements AcqCorpLXII License for FB-607 In September 2026, AcqCorpLXII entered into a license agreement with Cedars-Sinai Medical Center (“CSMC”) and other named parties, pursuant to which AcqCorpLXII obtained an exclusive worldwide license (the “CSMC License”) to rifaximin combined with N-acetylcysteine, referred to as FB-607 or RNIB21, for the prevention, treatment, diagnosis, detection and monitoring of diseases and conditions in humans and animals, including irritable bowel syndrome with diarrhea. Upfront consideration consisted of $0.2 million in cash, 2,750,000 shares of the common stock of AcqCorpLXII valued at approximately $0.1 million, and 237,733 shares of Fortress common stock valued at $0.5 million. Subsequent to the transaction, Fortress remains the majority owner and controlling shareholder of AcqCorpLXII. The transaction was accounted for as an asset acquisition, and acquisition costs of $1.0 million, including transaction costs, were expensed as research and development during the three and nine months ended September 30, 2026. The CSMC License provides for development and regulatory milestones of up to $25.0 million, commercial milestones of up to $35.0 million, royalties of low-to-mid single digits, and tiered sublicensing revenue payments, in each case to be paid by AcqCorpLXII to CSMC. AcqCorpLXII is also obligated to reimburse historical patent costs following equity financings exceeding $10.0 million in aggregate gross proceeds; such costs totaled approximately $0.5 million as of the license date. Separate commitments, subject to specified conditions, include future clinical study funding of up to $1.0 million. As of September 30, 2026, no milestones had been achieved, no royalties or sublicense payments were payable, and the patent-cost reimbursement financing condition had not been satisfied. Avenue License for clenbuterol (“ATX-04”) In February 2026, Avenue entered into a license agreement with Duke University (“Duke”), pursuant to which Avenue obtained an exclusive worldwide license (the "ATX-04 License") from Duke to certain patents and know-how pertaining to ATX-04, a selective β2-adrenergic agonist for Pompe disease, for the treatment of lysosomal storage diseases. Under the ATX-04 License, Avenue made an upfront payment to Duke and has an obligation to make development, regulatory, and commercial milestone payments upon the achievement of certain milestones. In addition, Avenue is obligated to pay a tiered low single-digit royalty on future net sales of ATX-04. Beginning with calendar year 2028 and until first regulatory approval, Avenue is obligated to make minimum annual royalty payments. In the event the ATX-04 License is terminated, minimum royalty obligations will cease, and Avenue will only be responsible for amounts due up to the termination date. In accordance with ASC 730-10-25-1, Research and Development, costs incurred in obtaining technology licenses are charged to research and development expense if the technology licensed has not reached technological feasibility and has no alternative future use. The licenses purchased by the Company require substantial completion of research and development, regulatory and marketing approval efforts in order to reach technological feasibility and have no alternate use. For the nine months ended September 30, 2026, there was a nominal amount of expense recognized by Avenue for the ATX-04 License. AnnJi Pharmaceutical Co. Ltd. (“AnnJi”) License Termination In April 2025, Avenue and AnnJi entered into a License Termination and Program Transfer Agreement, pursuant to which the prior license agreement for AJ201 was terminated, the parties dismissed all pending dispute resolution proceedings and provided mutual releases of claims, and Avenue transferred all rights to the program back to AnnJi. Avenue also agreed to a 48-month non-compete in specified territories. In connection with the termination, Avenue repurchased shares previously issued to AnnJi for nominal consideration and paid $0.2 million for legal expense reimbursement, which was accounted for as consideration payable to a customer and reduced revenue recognized. AnnJi paid Avenue $1.6 million (net of withholding taxes) for the transfer of the underlying rights under the License Termination and Program Transfer Agreement. Avenue recognized $1.4 million as other revenue in the nine months ended September 30, 2025, representing the consideration for the transfer of rights less the consideration for legal expenses. Avenue is also eligible to receive (i) up to $5.0 million in development and regulatory milestones, (ii) up to $17.0 million in commercial milestones, (iii) royalties of 1.75% on net sales of AJ201, subject to reduction in certain circumstances, and (iv) a share of sublicensing income, subject to specified caps and minimums. These amounts represent variable consideration and are constrained until the achievement of the specified milestones. Journey Journey holds global rights to Emrosi (Minocycline Hydrochloride Modified Release Capsules, 40 mg) pursuant to a license agreement with Dr. Reddy’s Laboratories, Ltd., under which Journey has made upfront and milestone payments, including $15.0 million upon FDA approval in November 2024, at which time the licensed assets were assigned to Journey. Journey may be required to make additional regulatory and commercial milestone payments of up to $150.0 million and pays royalties ranging from 10% to 14% on net sales, subject to reduction in certain circumstances. In 2022, Journey acquired Amzeeq and Zilxi from Vyne Therapeutics, Inc., including contingent sales-based milestone payments of up to $450.0 million. As part of the transaction, Journey assumed a license agreement with Cutia Therapeutics (HK) Limited (“Cutia”), under which Cutia has rights to commercialize the products in Greater China and Journey supplies finished product and earns low single-digit royalties on net sales. In August 2025, Journey commenced commercial supply of product to Cutia and recognized approximately $42,000 and $0.8 million, and $0.6 million and $0.6 million, respectively, of other revenue for the three and nine months ended September 30, 2026 and 2025 related to product sales.

License Agreements

9 Months Ended

Sep. 30, 2026

License Agreements

License Agreements

8. License Agreements

AcqCorpLXII

License for FB-607

In September 2026, AcqCorpLXII entered into a license agreement with Cedars-Sinai Medical Center (“CSMC”) and other named parties, pursuant to which AcqCorpLXII obtained an exclusive worldwide license (the “CSMC License”) to rifaximin combined with N-acetylcysteine, referred to as FB-607 or RNIB21, for the prevention, treatment, diagnosis, detection and monitoring of diseases and conditions in humans and animals, including irritable bowel syndrome with diarrhea. Upfront consideration consisted of $0.2 million in cash, 2,750,000 shares of the common stock of AcqCorpLXII valued at approximately $0.1 million, and 237,733 shares of Fortress common stock valued at $0.5 million. Subsequent to the transaction, Fortress remains the majority owner and controlling shareholder of AcqCorpLXII. The transaction was accounted for as an asset acquisition, and acquisition costs of $1.0 million, including transaction costs, were expensed as research and development during the three and nine months ended September 30, 2026.

The CSMC License provides for development and regulatory milestones of up to $25.0 million, commercial milestones of up to $35.0 million, royalties of low-to-mid single digits, and tiered sublicensing revenue payments, in each case to be paid by AcqCorpLXII to CSMC. AcqCorpLXII is also obligated to reimburse historical patent costs following equity financings exceeding $10.0 million in aggregate gross proceeds; such costs totaled approximately $0.5 million as of the license date. Separate commitments, subject to specified conditions, include future clinical study funding of up to $1.0 million.

As of September 30, 2026, no milestones had been achieved, no royalties or sublicense payments were payable, and the patent-cost reimbursement financing condition had not been satisfied.

Avenue

License for clenbuterol (“ATX-04”)

In February 2026, Avenue entered into a license agreement with Duke University (“Duke”), pursuant to which Avenue obtained an exclusive worldwide license (the "ATX-04 License") from Duke to certain patents and know-how pertaining to ATX-04, a selective β2-adrenergic agonist for Pompe disease, for the treatment of lysosomal storage diseases.

Under the ATX-04 License, Avenue made an upfront payment to Duke and has an obligation to make development, regulatory, and commercial milestone payments upon the achievement of certain milestones. In addition, Avenue is obligated to pay a tiered low single-digit royalty on future net sales of ATX-04.

Beginning with calendar year 2028 and until first regulatory approval, Avenue is obligated to make minimum annual royalty payments. In the event the ATX-04 License is terminated, minimum royalty obligations will cease, and Avenue will only be responsible for amounts due up to the termination date.

In accordance with ASC 730-10-25-1, Research and Development, costs incurred in obtaining technology licenses are charged to research and development expense if the technology licensed has not reached technological feasibility and has no alternative future use. The licenses purchased by the Company require substantial completion of research and development, regulatory and marketing approval efforts in order to reach technological feasibility and have no alternate use. For the nine months ended September 30, 2026, there was a nominal amount of expense recognized by Avenue for the ATX-04 License.

AnnJi Pharmaceutical Co. Ltd. (“AnnJi”) License Termination

In April 2025, Avenue and AnnJi entered into a License Termination and Program Transfer Agreement, pursuant to which the prior license agreement for AJ201 was terminated, the parties dismissed all pending dispute resolution proceedings and provided mutual releases of claims, and Avenue transferred all rights to the program back to AnnJi. Avenue also agreed to a 48-month non-compete in specified territories.

In connection with the termination, Avenue repurchased shares previously issued to AnnJi for nominal consideration and paid $0.2 million for legal expense reimbursement, which was accounted for as consideration payable to a customer and reduced revenue recognized.

AnnJi paid Avenue $1.6 million (net of withholding taxes) for the transfer of the underlying rights under the License Termination and Program Transfer Agreement. Avenue recognized $1.4 million as other revenue in the nine months ended September 30, 2025, representing the consideration for the transfer of rights less the consideration for legal expenses.

Avenue is also eligible to receive (i) up to $5.0 million in development and regulatory milestones, (ii) up to $17.0 million in commercial milestones, (iii) royalties of 1.75% on net sales of AJ201, subject to reduction in certain circumstances, and (iv) a share of sublicensing income, subject to specified caps and minimums. These amounts represent variable consideration and are constrained until the achievement of the specified milestones.

Journey

Journey holds global rights to Emrosi (Minocycline Hydrochloride Modified Release Capsules, 40 mg) pursuant to a license agreement with Dr. Reddy’s Laboratories, Ltd., under which Journey has made upfront and milestone payments, including $15.0 million upon FDA approval in November 2024, at which time the licensed assets were assigned to Journey. Journey may be required to make additional regulatory and commercial milestone payments of up to $150.0 million and pays royalties ranging from 10% to 14% on net sales, subject to reduction in certain circumstances.

In 2022, Journey acquired Amzeeq and Zilxi from Vyne Therapeutics, Inc., including contingent sales-based milestone payments of up to $450.0 million. As part of the transaction, Journey assumed a license agreement with Cutia Therapeutics (HK) Limited (“Cutia”), under which Cutia has rights to commercialize the products in Greater China and Journey supplies finished product and earns low single-digit royalties on net sales.

In August 2025, Journey commenced commercial supply of product to Cutia and recognized approximately $42,000 and $0.8 million, and $0.6 million and $0.6 million, respectively, of other revenue for the three and nine months ended September 30, 2026 and 2025 related to product sales.