Get the Latest Investment Ideas Delivered Straight to Your Inbox. Subscribe


Coverage Initiated on Biopharma With 'Low Risk/High Margin Assets'
Research Report

Share on Stocktwits


The case is made in a ROTH Capital Partners report for investing in this U.S.-based pharma having multiple shots on goal.

In a June 30 research note, analyst Scott Henry reported that ROTH Capital Partners initiated coverage on Fortress Biotech Inc. (FBIO:NASDAQ) with a Buy rating and a $4 per share price target (today's share price is about $1.50).

"The current assets have significantly greater value than the current enterprise value. We further believe that multiple catalysts could both increase the company valuation and provide nondilutive capital to fund development costs," Henry cited as the reasons for ROTH's Buy rating on Fortress.

Based in New York, Fortress is a biopharmaceutical company that in-licenses high potential, clinical-stage assets to use through its entity or through majority owned subsidiaries.

Henry presented the bases of ROTH's investment thesis. One, Fortress has great diversification, among assets, including clinical programs; among private subsidiaries and among ownership in other public companies. "No single asset/company contributes greater than 25% to our estimated total valuation," the analyst pointed out.

Two, catalysts expected in the next 12–18 months could move up the stock price, highlighted Henry. They include:

  1. The filing of intravenous tramadol (Fortress owns 32%).
  2. The launch of the pivotal trial for MB-107 in X-linked severe combined immunodeficiency (Fortress owns about 30%).
  3. The start of the Phase 2 CAEL-101 trial in AL amyloidosis (Fortress owns about 43%).
  4. The advancement of its checkpoint therapeutics oncology programs (Fortress owns about 32%).
  5. A data readout from the Phase 3 CUTX-101 trial in Menkes disease (Fortress owns about 89%).

Three, Fortress has several potential chances to generate nondilutive cash that could benefit shareholders, Henry pointed out. They include a:

  1. Buyout of Fortress' stake in Avenue Therapeutics, about $55 million (late 2020).
  2. Pediatric voucher for Cyprium, $50–100 million (2021).
  3. Buyout of Fortress' Caelum Biosciences stake, at least $150 million (2022).

1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Disclosures from ROTH Capital Partners, Fortress Biotech Inc., Company Note, June 30, 2019

Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

ROTH makes a market in shares of Fortress Biotech, Inc. and as such, buys and sells from customers on a principal basis.

A Research Analyst and/or a member of the Analyst's household own(s) debt or equity securities of Fortress Biotech, Inc. stock.

Shares of Fortress Biotech, Inc. may be subject to the Securities and Exchange Commission's Penny Stock Rules, which may set forth sales practice requirements for certain low-priced securities.

ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months.

Want to read more about Biotechnology / Pharmaceuticals investment ideas?
Get Our Streetwise Reports Newsletter Free and be the first to know!

A valid email address is required to subscribe