What changed in this filing

/stocks — the workspaceLOADING

Item 5. Market for Registrant’s Common Equity

2021-03-31 compared with 2020-03-16 · 23 added, 555 removed, 6 unchanged (99% of the section changed)

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information for Common Stock

We became a public company on November 17, 2011.

Our Common Stock is listed for trading on the NASDAQ Capital Market under the symbol “FBIO.”

Market Information for 9.375% Series A Cumulative Redeemable Perpetual Preferred Stock

Our 9.375% Series A Cumulative Redeemable Perpetual Preferred Stock is listed for trading on the NASDAQ Capital Market under the symbol “FBIOP.”

Issuer and Affiliate Purchases of our 9.375% Series A Cumulative Redeemable Perpetual Preferred Stock

Total Number of Shares Purchased (Repurchased)

Average Price Paid per Share (or Unit)

Total Number of Shares Purchased (Repurchased) as Part of Publicly Announced Plans or Programs

Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs

March 1, 2020 - March 31, 2020

August 1, 2020 - August 31, 2020

Shares were purchased pursuant to the Company’s share repurchase program of outstanding 9.375% Series A Cumulative Redeemable Perpetual Preferred Stock (Nasdaq:

FBIOP) (“Preferred Stock”), announced on March 23, 2020.

In connection with an underwritten offering of the Preferred Stock by the Company, 52,500 shares of Preferred Stock were purchased by Lindsay A.

Rosenwald, M.D.

and 16,667 shares of Preferred Stock were purchased by Malcolm Hoenlein on August 26, 2020, as reported on each director’s Form 4 filed with the SEC on September 1, 2020.

Holders of Record

As of March 12, 2020, there were

approximately 552 holders of record of our Common Stock.

The actual number of stockholders is greater than this number of

record holders and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and

other nominees.

This number of holders of record also does not include stockholders whose shares may be held in trust by

other entities.

We have never paid cash dividends on our

Common Stock and currently intend to retain our future earnings, if any, to fund the development and growth of our business.

As of March 18, 2020, there were approximately 545 holders of record of our Common Stock.

The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.

This number of holders of record also does not include stockholders whose shares may be held in trust by other entities.

We have never paid cash dividends on our Common Stock and currently intend to retain our future earnings, if any, to fund the development and growth of our business.

Dividends on Series A Preferred Stock accrue daily and are cumulative from, and including, the date of original issue and are payable monthly at the rate of 9.375% per annum of its liquidation preference, which is equivalent to $2.34375 per annum per share.

Equity Compensation Plans

The information required by Item 5 of Form 10-K

regarding equity compensation plans is incorporated herein by reference to “Item 12.

Security Ownership of Certain Beneficial

Owners and Management and Related Stockholder Matters.”

The information required by Item 5 of Form 10-K regarding equity compensation plans is incorporated herein by reference to “Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.”

Selected Consolidated Financial Data

Not applicable.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Statements in the following discussion

and throughout this report that are not historical in nature are “forward-looking statements.”

You can identify forward-looking

statements by the use of words such as “expect,”

“anticipate,”

“estimate,”

“may,”

“will,”

“should,”

“intend,”

“believe,”

and similar expressions.

Although we believe

the expectations reflected in these forward-looking statements are reasonable, such statements are inherently subject to risk and

we can give no assurances that our expectations will prove to be correct.

Actual results could differ from those described in this

report because of numerous factors, many of which are beyond our control.

These factors include, without limitation, those described

under Item 1A “Risk Factors.”

We undertake no obligation to update these forward-looking statements to reflect

events or circumstances after the date of this report or to reflect actual outcomes.

Please see “Forward-Looking Statements”

at the beginning of this Form 10-K.

The following discussion of our financial

condition and results of operations should be read in conjunction with our financial statements and the related notes thereto and

other financial information appearing elsewhere in this Form 10-K.

We undertake no obligation to update any forward-looking

statements in the discussion of our financial condition and results of operations to reflect events or circumstances after the

date of this report or to reflect actual outcomes

We are a biopharmaceutical company dedicated

to acquiring, developing and commercializing pharmaceutical and biotechnology products and product candidates, which we do at the

Fortress level, at our majority-owned and majority-controlled subsidiaries and joint ventures, and at entities we founded and in

which we maintain significant minority ownership positions.

Fortress has a talented and experienced business development team,

comprising scientists, doctors and finance professionals, who identify and evaluate promising products and product candidates for

potential acquisition by new or existing partner companies.

Through our partner companies, we have executed such arrangements in

partnership with some of the world’s foremost universities, research institutes and pharmaceutical companies, including City

of Hope National Medical Center, Fred Hutchinson Cancer Research Center, St.

Jude Children’s Research Hospital, Dana-Farber

Cancer Institute, Nationwide Children’s Hospital, Cincinnati Children’s Hospital Medical Center, Columbia University,

the University of Pennsylvania, and AstraZeneca plc.

Following the exclusive license or other acquisition of the

intellectual property underpinning a product or product candidate, we leverage our business, scientific, regulatory, legal and

finance expertise to help our partners achieve their goals.

Our partner companies then assess a broad range of strategic arrangements

to accelerate and provide additional funding to support research and development, including joint ventures, partnerships, out-licensings,

and public and private financings;

to date, three partner companies are publicly-traded, and two have consummated strategic partnerships

with industry leaders Alexion Pharmaceuticals, Inc.

and InvaGen Pharmaceuticals, Inc.

(a subsidiary of Cipla Limited).

Recent Events

Marketed Dermatology Products

In 2019, our marketed products generated net revenue of $34.9 million, compared to net revenue of $23.4 million in 2018.

In the third quarter of 2019 we launched Ximino®, a prescription oral antibiotic for acne.

We currently have 41 sales representatives dedicated to the dermatology product portfolio.

Our dermatology products are marketed by our partner company, Journey Medical Corporation (“Journey”

or “JMC”).

Late Stage Product Candidates

Intravenous (IV) Tramadol

The first stage of the strategic transaction between InvaGen Pharmaceuticals Inc.

(“InvaGen”)

and our partner company Avenue Therapeutics, Inc.

(“Avenue”) closed in February 2019.

InvaGen acquired approximately

5.8 million shares of Avenue’s common stock at $6.00 per share for total gross consideration of $35.0 million, representing

a 33.3% stake in Avenue’s capital stock on a fully diluted basis.

We anticipate that the second stage with InvaGen will be

completed in 2020, if the conditions of the Stock Purchase and Merger Agreement are met, and InvaGen will acquire the remaining

capital stock of Avenue.

This will result in a net distribution to Fortress of approximately $48 million plus potential future

product royalties.

In June 2019, we announced that our second pivotal Phase 3 trial of IV tramadol achieved the

primary endpoint of a statistically significant improvement in Sum of Pain Intensity Difference over 24 hours (“SPID24”)

compared to placebo in patients with postoperative pain following abdominoplasty surgery.

In addition, the trial met all of its

key secondary endpoints.

The study also included a standard-of-care IV opioid as an active comparator, which was IV morphine 4

In this study, IV tramadol also demonstrated similar efficacy and safety to that of IV morphine.

In December 2019, Avenue submitted a New Drug Application (“NDA”) to the U.S.

Food and Drug Administration (“FDA”) for IV tramadol for the management of moderate to moderately severe pain in adults

in a medically supervised health care setting.

In February 2020, the FDA accepted Avenue’s NDA submission for review and set a Prescription

Drug User Fee Act (“PDUFA”) goal date of October 10, 2020.

In January 2020, our partner company Cyprium Therapeutics, Inc.

(“Cyprium”)

announced that the FDA granted Rare Pediatric Disease Designation to Copper Histidinate, also referred to as CUTX-101, for the

treatment of Menkes disease.

Cyprium plans to begin submitting a rolling NDA for CUTX-101 to the FDA in the fourth quarter of 2020.

CAEL-101 (AL Amyloidosis)

In January 2019, Caelum Biosciences, Inc.

(“Caelum”) signed an agreement

with Alexion Pharmaceuticals, Inc.

(“Alexion”) (NASDAQ:

ALXN) to advance the development of CAEL-101.

terms of the agreement, Alexion purchased a 19.9% minority equity interest in Caelum for $30 million.

Additionally, Alexion agreed

to make potential payments to Caelum upon the achievement of certain developmental milestones, in exchange for which Alexion obtained

a contingent exclusive option to acquire the remaining equity in the company.

The agreement also provides

for potential additional payments, in the event Alexion exercises the purchase option, for up to $500 million, which

includes an upfront option exercise payment and potential regulatory and commercial milestone payments.

In October 2019, the European Commission granted orphan drug designation to CAEL-101 for the

treatment of AL amyloidosis.

The FDA had previously granted two orphan drug designations to CAEL-101 in the U.S.

for the use of

CAEL-101 as a therapeutic agent for patients with AL amyloidosis, and the use of CAEL-101 as a radio-imaging agent in amyloidosis.

Caelum received feedback from the FDA that supports initiating a pivotal Phase 2/3 program.

expects to begin dosing in the first half of 2020.

MB-107 ( Ex vivo Lentiviral Therapy for X-linked Severe

Combined Immunodeficiency (XSCID))

In April 2019, the New England Journal of Medicine published data from St.

Jude Children’s

Research Hospital (“St.

Jude”).

The data are from a Phase 1/2 clinical trial of a lentiviral gene therapy for the treatment

of newly diagnosed infants under two years old with XSCID, also known as bubble boy disease.

Data demonstrate the lentiviral gene

therapy achieved normalization of T-cell numbers in all eight newly diagnosed infants with XSCID to date, and disseminated infections

resolved completely in all affected infants.

Seven of the eight infants treated have developed normal IgM levels to date.

of those seven infants have discontinued monthly infusions of intravenous immunoglobulin (“IVIG”) therapy to date.

Three of those four infants who discontinued monthly IVIG infusions have responded to vaccines to date.

In August 2019, our partner company Mustang Bio, Inc.

(“Mustang”) received

notification that MB-107, a lentiviral gene therapy for the treatment of XSCID, was granted Regenerative Medicine Advanced Therapy

(“RMAT”) designation by the FDA.

Also in August 2019, Mustang entered into a license agreement with CSL Behring for the Cytegrity™

stable producer cell line, which will be used to produce the viral vector for MB-107.

Updated Phase 1/2 clinical data for MB-107 were selected for oral and poster presentations at the

61st American Society of Hematology (“ASH”) Annual Meeting, which was held in December 2019.

Data demonstrated

that MB-107 preceded by low-dose busulfan conditioning continued to be well tolerated and resulted in development of functional

immune system both in newly diagnosed infants with XSCID and in older patients with XSCID who had received prior hematopoietic

stem cell transplantation (HSCT).

Also, the enhanced transduction procedure demonstrated improvements in the speed of NK cell recovery

and of resolution of chronic norovirus infection in older patients with XSCID who had received prior HSCT.

Cosibelimab (formerly CK-301)

In September 2019, positive interim results for cosibelimab

were presented at the European Society for Medical Oncology Congress 2019 in Barcelona, Spain.

The poster presentation provided

updated interim efficacy and safety results from the ongoing multicenter Phase 1 clinical trial of cosibelimab, including expansion

cohorts in CSCC and NSCLC.

A 50% objective response rate was observed in CSCC, and a 40% objective response rate was observed in

Cosibelimab appeared to be safe and well-tolerated with a potentially favorable safety profile as compared to the currently

available anti-PD-1 therapies.

In January 2020, Checkpoint announced confirmation of the registration path for

cosibelimab in metastatic CSCC and the FDA feedback supports the plan to submit a BLA based on data from ongoing Phase 1

Over one-third of enrollment is complete in the cohort of patients with metastatic CSCC.

CK-101 (EGFR mutation-positive NSCLC)

In March 2019, Checkpoint announced two new patent issuances by the U.S.

Patent and Trademark

Office and the European Patent Office for CK-101.

The patents cover CK-101 in the U.S.

and Europe through at least August 2034,

not including any potential patent term extensions.

Early Stage Product Candidates

MB-102 (CD123 CAR T for AML)

In July 2019, Mustang received notification that the FDA granted Orphan Drug Designation to

MB-102 (CD123-targeted CAR T cell therapy) for the treatment of acute myeloid leukemia (“AML”).

In August 2019, Mustang announced that the FDA has approved the IND application to initiate

a multicenter Phase 1/2 clinical trial of MB-102 in AML, blastic plasmacytoid dendritic cell neoplasm (“BPDCN”) and

high-risk myelodysplastic syndrome (“MDS”).

MB-101 (IL13Rα2 CAR T for Glioblastoma)

In October 2019, Mustang announced that COH received $4.1 million in grant awards for a

clinical trial of MB-101 (IL13Rα2-targeted CAR T cell therapy) in combination with nivolumab (commercial name:

Opdivo®) and

ipilimumab (commercial name:

Yervoy®) in patients with recurrent malignant glioma.

The trial, which is now enrolling

patients, is the first human study to combine IL13Rα2-targeted CAR T cell therapy with checkpoint inhibitors, as well

as the first to locally deliver CAR T cells with systemic nivolumab combination treatment.

MB-108 (C134 Oncolytic Virus for GBM)

In February 2019, Mustang partnered and entered into an exclusive worldwide license agreement

with Nationwide Children’s Hospital to develop an oncolytic virus (C134), an attenuated herpes simplex virus type 1, for

the treatment of glioblastoma multiforme (“GBM”).

Mustang intends to combine MB-108 with MB-101 (IL13Rα2-targeted CAR

T cell therapy) to potentially enhance efficacy in treating GBM.

In May 2019, the FDA granted Orphan Drug Designation to MB-108 for the treatment of malignant

glioma, a type of brain cancer with a median survival of less than 18 months.

In October 2019, Mustang announced that the first participant was dosed in a Phase 1 clinical

trial to determine the safety and efficacy of MB-108 in recurrent GBM.

MB-104 (CS1 CAR T for Multiple Myeloma and Light Chain

In May 2019, Mustang announced that COH began enrolling patients with relapsed or treatment-resistant

multiple myeloma in an innovative CS1-targeted CAR T cell therapy (MB-104) trial.

MB-103 (HER2 CAR T for GBM & Metastatic Breast

Cancer to Brain)

In August 2019, Mustang announced that the California Institute for Regenerative

Medicine (“CIRM”) granted COH $9.3 million to fund an ongoing Phase 1 clinical trial of MB-103 (HER2-targeted CAR

T cell therapy) for the treatment of HER2-positive breast cancer with brain metastases.

MB-105 (PSCA CAR T for Prostate & Pancreatic

In September 2019, Mustang announced that COH opened and began to treat its first

patients in a Phase 1 clinical trial of MB-105 (PSCA-targeted CAR T cell therapy) for the treatment of PSCA+ metastatic

castration-resistant prostate cancer.

MB-106 (CD20-targeted CAR T cell therapy)

In February 2020 Mustang announced that they have achieved a complete response in the first patient dosed with MB-106

following Mustang and Fred Hutch’s optimization of the cell process.

The complete response was seen on Day 28 in a patient with relapsed follicular lymphoma, and neither cytokine release syndrome

nor neurologic toxicity was observed.

BAER-101 (novel α2/3–subtype-selective GABA

A positive allosteric modulator (“PAM”))

In December 2019, we entered into an exclusive worldwide licensing agreement with AstraZeneca

for AZD7325 (now known as BAER-101), a novel α2/3–subtype-selective GABA A positive allosteric modulator (“PAM”),

as well as an agreement with Cincinnati Children’s Hospital Medical Center (“Cincinnati Children’s”) to

advance clinical development in select central nervous system (“CNS”) disorders.

BAER-101 is currently in development at our partner company, Baergic Bio, Inc.

(“Baergic”).

General Corporate

In July 2019, Checkpoint was added to the Russell 2000®

In August 2019, we announced the appointment of Kevin L.

Lorenz, J.D., to our Board of Directors.

In November 2019, we announced that Fortress ranked number 10 in Deloitte’s 2019 Technology Fast 500™, an

annual ranking of the fastest-growing North American companies in the technology, media, telecommunications, life sciences and

energy tech sectors.

In November 2019, we closed an underwritten public offering of our 9.375% Series A Cumulative Redeemable Perpetual

Preferred Stock.

In February 2020, we closed an additional underwritten public offering of our 9.375% Series A Cumulative Redeemable

Perpetual Preferred Stock.

Critical Accounting Policies and Use of Estimates

See Note 2 to the Consolidated Financial

Results of Operations

For the year ended December 31,

2019 we generated $36.6 million of net revenue;

$34.9 million of revenue relates primarily to the sale of Journey branded and

generic products and $1.7 million of revenue is in connection with Checkpoint’s collaborative agreements with TGTX, a

related party.

At December 31, 2019, we had an accumulated deficit of $436.2 million primarily as a result of research

and development expenses, purchases of in-process research and development and general and administrative expenses.

may in the future generate revenue from a variety of sources, including license fees, milestone payments, research and

development payments in connection with strategic partnerships and/or product sales, our current non-marketed product

candidates are at various stages of development and may never be successfully developed or commercialized.

Accordingly, we

expect to continue to incur substantial losses from operations for the foreseeable future and there can be no assurance that

we will ever generate significant revenues.

We had $10.5 million of costs of goods

sold in connection with the sale of JMC branded and generic products for the year ended December 31, 2019.

Research and Development Expenses

Research and development costs primarily

consist of personnel related expenses, including salaries, benefits, travel, and other related expenses, stock-based compensation,

payments made to third parties for licenses and milestones, costs related to in-licensed products and technology, payments made

to third party contract research organizations for preclinical and clinical studies, investigative sites for clinical trials, consultants,

the cost of acquiring and manufacturing clinical trial materials, costs associated with regulatory filings and patents, laboratory

costs and other supplies.

Also included in research and development

is the total purchase price for licenses acquired during the period.

For the years ended December 31, 2019

and 2018, research and development expenses were approximately $75.2 million and $83.3 million, respectively.

Additionally, during

the years ended December 31, 2019 and 2018, we expensed approximately $6.1 million and $4.1 million, respectively, in costs

related to the acquisition of licenses.

The table below provides a summary of research

and development costs associated with the development of our licenses by entity, for the years ended December 31, 2019 and

Year Ended December 31,

($ in thousands)

Research & Development

Partner companies:

Total Research & Development

Includes the following partner

Aevitas, Baergic, Caelum (2018 only), Cellvation, Cyprium, Helocyte and Tamid Bio, Inc.

(a Fortress partner company

that has since discontinued operations) (“Tamid”).

Noncash, stock-based compensation expense included in research

and development for the year ended December 31, 2019 and 2018, was $2.8 million and $5.3 million, respectively.

General and Administrative Expenses

General and administrative expenses consist

principally of personnel related costs, professional fees for legal, consulting, audit and tax services, rent and other general

operating expenses not otherwise included in research and development expenses.

For the years ended December 31, 2019 and

2018, general and administrative expenses were $55.6 million and $53.4 million, respectively.

Stock based compensation expense

included in general and administrative expenses in 2019 and 2018 was $10.4 million and $9.7 million, respectively.

The table below provides a summary by entity

of general and administrative expenses for the years ended December 31, 2019 and 2018, respectively:

Year Ended December 31,

($ in thousands)

General & Administrative

Partner companies:

Total General &Administrative

Includes cost of outsourced sales

Includes the following partner

Aevitas, Baergic, Caelum (2018 only), Cellvation, Cyprium, Escala, Helocyte and Tamid.

Comparison of Years Ended December 31,

2019 and 2018

For the Years Ended

($ in thousands, except per share amounts)

Product revenue, net

Revenue - from a related party

Operating expenses

Cost of goods sold - product revenue

Research and development

Research and development –

licenses acquired

General and administrative

Total operating expenses

Loss from operations

Other income (expense)

Interest income

Interest expense and financing fee

Change in fair value of derivative liabilities

Change in fair value of subsidiary convertible note

Change in fair value of investments

Gain on deconsolidation of Caelum

Total other income (expense)

Loss from continuing operations

Discontinued operations:

Gain from disposal of National

Loss from discontinued operations, net of tax

Total loss from discontinued operations

net loss attributable to non-controlling interest

Net loss attributable to common stockholders

For the year ended December 31, 2019,

$1.7 million of revenue was in connection with Checkpoint’s collaborative agreements with TGTX, and $34.9 million of revenue

related primarily to the sale of Journey branded and generic products.

The net increase in revenue of $9.7 million or 36% is due

to the expansion of Journey’s marketed products, as well as overall sales growth, which resulted in a product revenue increase

of $11.5 million offset by a decrease in revenue from a related party of $1.8 million.

Cost of goods sold increased by $4.4 million

or 72% due to the growth in Journey’s product sales.

Research and development expenses decreased

$8.1 million, or 10%, from the year ended December 31, 2018 to the year ended December 31, 2019.

The following table

shows research and development spending for Fortress and each partner company:

Year Ended December 31,

($ in thousands)

Research & Development

Stock-based compensation

Partner company:

Sub-total stock-based compensation

Other research & development

Partner company:

Total Research & Development

Includes the following partner

Aevitas, Baergic, Caelum (2018 only), Cellvation, Cyprium, Escala, Helocyte, and Tamid.

The increase in stock-based compensation

for Checkpoint is attributable to new grants made in 2019 and to the decrease in value attributed to marking to market grants held

by non-employees in 2018, while the decrease in Mustang’s stock-based compensation is due to the decrease in value attributed

to marking to market grants held by non-employees in 2018.

With the adoption of ASU 2018-07 on January 1, 2019, non-employee

compensation costs are recognized over the requisite service period based on a measurement of fair value for stock awards made

at the time the award is granted.

The decrease in Fortress research and development

spending is due to the lower research and development headcount subsequent to the transfer of Fortress research and development

employees to TGTX, a related party, in the quarter ended September 30, 2018.

Checkpoint’s decrease in research and development

spending is attributable to the decreased manufacturing costs for cosibelimab, offset slightly by increased clinical trial expense

for its product candidates.

Mustang’s increase in research and development spending is attributable to lab supplies for the

cell processing facility, as well as increased headcount and sponsored research for several programs, including XSCID.

in “Other”

is attributable to costs incurred by Caelum for the start-up of product development activities, and Helocyte

for the start-up of sponsored research activities not replicated in 2019.

General and administrative expenses increased

$2.2 million, or 4%, from the year ended December 31, 2018 to the year ended December 31, 2019.

The following table shows

general and administrative spending for Fortress and by each partner company:

Year Ended December 31,

($ in thousands)

General & Administrative

Stock-based compensation

Partner company:

Sub-total stock-based compensation

Other general and administrative

Partner company:

Total General &Administrative

Includes cost of outsourced sales

Includes the following partner

Aevitas, Baergic, Caelum (2018 only), Cellvation, Cyprium, Escala, Helocyte and Tamid.

For the year ended December 31, 2019,

the increase in general and administrative expenses of $2.2 million or 4% is primarily attributable to an increase in JMC’s

sales and marketing costs due to increased headcount and costs related to the launch of Ximino, Mustang’s

increased headcount and increased legal fees associated with debt and equity capital raises, offset by a decrease in Fortress headcount-related

costs due to lower headcount for Fortress, a decrease in accounting fees for Fortress due to the sale of National, and lower legal,

marketing and investor relations costs at Avenue due to the lead-up to the InvaGen transaction, as well as the decrease in Other

due to the deconsolidation of Caelum.

Total other income (expense) increased

$20.0 million, or 185%, from expense of $10.8 million for the year ended December 31, 2018 to income of $9.2 million for the

year ended December 31, 2019, primarily due to the $18.5 million gain on the deconsolidation of Caelum and an increase of

$1.5 million in interest income due to higher cash balances in 2019.

Non-controlling interests increased $3.9

million, or 7%, from the year ended December 31, 2018 to the year ended December 31, 2019.

This increase reflects the

partner companies’

share of net loss.

Liquidity and Capital Resources

Components of cash flows from publicly-traded partner companies

are comprised of:

For the Year Ended December 31, 2019

($ in thousands)

Statement of cash flows data:

Total cash (used in)/provided by:

Operating activities

Investing activities

Financing activities

Net increase in cash and cash equivalents and restricted cash

For the Year Ended December 31, 2018

($ in thousands)

Statement of cash flows data:

Total cash (used in)/provided by:

Operating activities

Investing activities

Financing activities

Net increase (decrease) in cash and cash equivalents and restricted cash

Includes Fortress and non-public subsidiaries.

Operating Activities

Net cash used in operating activities decreased

$3.9 million from the year ended December 31, 2018 to the year ended December 31, 2019.

The decrease is due to the decrease

of $29.1 million in net loss from continuing operations, primarily offset by the gain from the deconsolidation of Caelum of $18.5

million, the change in operating assets and liabilities of $10.6 million, a decrease in stock-based compensation expense of $1.8

million, and a decrease in the fair value of investments of $1.4 million partially offset by the increase in depreciation and amortization

expense of $3.5 million.

Investing Activities

Net cash provided by investing activities

increased $1.3 million from the year ended December 31, 2018 to the year ended December 31, 2019.

increase is primarily due to a decrease in the purchase of short-term investments of $47.6 million, a decrease in the purchase

of property and equipment of $4.7 million, and an increase in net cash provided by discontinued activities of $3.3 million.

activities are offset by the decrease in the redemption of certificates of deposit of $48.4 million, an increase in the purchasing

of research and development licenses of $3.6 million, $1.2 million decrease in cash due to deconsolidation of Caelum, as

well as an increase of $1.2 million in funds used to purchase intangible assets.

Financing Activities

Net cash provided by financing

activities was $146.7 million for the year ended December 31, 2019, compared to $50.6 million of net cash provided by

financing activities for the year ended December 31, 2018, an increase of $96.1 million.

The increase is primarily due

to $56.8 million increase in proceeds from partner company’s under written capital raises and $22.0 million

in partner company’s at-the-market offering, $13.6 million increase in proceeds from partner company’s Horizon

Notes, as well as $13.2 million increase in proceeds from the Company’s at-the-market offering, and an increase of $5.3

million in net proceeds from the issuance of Series A preferred stock, and a $4.4 million decrease in debt repayment of

partner Company’s convertible notes.

This is offset slightly by the $20.0 million decrease in proceeds from the

Company’s 2018 Venture Notes.

We fund our operations through cash on hand, the sale of debt

and third-party financings.

At December 31, 2019, we had cash, cash equivalents and restricted cash of $153.4 million of which

$51.1 million relates to Fortress, $26.1 million relates to Checkpoint, $62.4 million relates to Mustang, $8.7 million relates

to Avenue, and $5.1 million relates to the remaining partner companies.

Restricted cash of $16.6 million is comprised of:

million collateralizing the IDB Note, $0.6 million of which is securing a letter of credit used as a security deposit for the New

York, NY lease that became effective on October 3, 2014, $1.0 million secures the Worcester, Massachusetts lease signed by

Mustang that became effective on October 27, 2017, and $0.1 million securing the Waltham, Massachusetts lease signed by Fortress

that became effective in October 2015.

Pursuant to the terms of an Amended and

Restated At Market Issuance Sales Agreement with MLV & Co.

LLC, and FBR Capital Markets & Co.

(“ATM”),

for the year ended December 31, 2019, Fortress issued approximately 8.0 million shares of common stock at an average price

of $1.88 per share for gross proceeds of $15.1 million.

On June 28, 2019, Fortress entered

into an At Market Issuance Sales Agreement (“2019 Common ATM”), with Cantor Fitzgerald & Co., Oppenheimer &

Co., Inc., H.C.

Wainwright & Co.

Inc., Jones Trading Institutional Services LLC and B.

Riley, as selling agents,

governing potential sales of the Company’s common stock.

For the year ended December 31, 2019, the Company issued approximately

3.8 million shares of common stock for gross proceeds of $5.6 million at an average selling price of $1.49.

Under the 2019 Common

ATM, the Company pays the agents a commission rate of up to 3.0% of the gross proceeds from the sale of any shares of common stock,

and in connection with these sales, with respect to the year ended December 31, 2019, Fortress paid aggregate fees of approximately

$0.2 million.

an At Market Sales Agreement (the “2018 Preferred ATM”), with B.

Riley, National Securities Corporation, LifeSci Capital

LLC, Maxim Group LLC and Noble Capital Markets, Inc.

as selling agents, governing the issuance of the Company’s 9.375%

Series A Cumulative Redeemable Perpetual Preferred Stock (“Perpetual Preferred Stock”), for the year ended December 31,

2019, the Company issued 39,292 shares of Perpetual Preferred Stock for gross proceeds $0.8 million at an average selling price

November 2019, Fortress announced the pricing of an underwritten public offering of 262,500 shares of its 9.375% Series A

Cumulative Redeemable Perpetual Preferred Stock, (plus a 45-day option to purchase up to an additional 39,375 shares, which was

exercised in November 2019) at a price of $20.00 per share for gross proceeds of approximately $6.0 million, before deducting

underwriting discounts and commissions and offering expenses.

February 22, 2020 Fortress announced the pricing of an underwritten public offering of 625,000 shares of its Perpetual Preferred

Stock, (plus a 45-day option to purchase up to an additional 93,750 shares, which was exercised in February 2020) at a price

of $20.00 per share for gross proceeds of approximately $14.4 million, before deducting underwriting discounts and commissions

and offering expenses.

From January 1, 2020 through March 12,

2020 the Company issued approximately 2.3 million shares of common stock for gross proceeds of $6.1 million at an average selling

price of $2.5922 under the 2019 ATM.

Checkpoint had entered into an At-the-Market

Issuance Sales Agreement (the "Checkpoint ATM") with Cantor Fitzgerald & Co., Ladenburg Thalmann &

Wainwright & Co., LLC, relating to the sale of shares of common stock.

In 2019, Checkpoint sold a total

of 2,273,189 shares of common stock under the Checkpoint ATM for aggregate total gross proceeds of approximately $8.0 million

at an average selling price of $3.52 per share.

In November 2019, Checkpoint completed

an underwritten public offering, whereby it sold 15,400,000 shares of its common stock at a price of $1.27 per share for gross

proceeds of approximately $19.6 million.

Total net proceeds from the offering were approximately $17.6 million, net of underwriting

discounts and offering expenses of approximately $2.0 million.

In March 2018, Checkpoint completed

an underwritten public offering, whereby it sold 5,290,000 shares of its common stock at a price of $4.35 per share for gross

proceeds of approximately $23.0 million.

Total net proceeds from the offering were approximately $20.8 million, net of underwriting

discounts and offering expenses of approximately $2.2 million.

Mustang had entered into an At-the-Market

Issuance Sales Agreement (the "Mustang ATM") with B.

Riley FBR, Inc., Cantor Fitzgerald & Co., National

Securities Corporation, and Oppenheimer & Co.

(each an "Agent"

and collectively, the "Agents"),

relating to the sale of shares of common stock, for the year ended December 31, 2019, Mustang issued approximately 3.5 million

shares of common stock at an average price of $6.42 per share for gross proceeds of $22.5 million.

In April 2019, Mustang announced

the pricing of an underwritten public offering, whereby it sold 6,875,000 shares of its common stock, (plus a 30-day option to

purchase up to an additional 1,031,250 shares of common stock, which was exercised in May 2019) at a price of $4.00 per share

for gross proceeds of approximately $31.6 million, before deducting underwriting discounts and commissions and offering expenses.

The shares were sold under the 2018 Mustang S-3.

Mustang paid aggregate fees of approximately $2.1 million and received approximately

$29.5 million of net proceeds.

From January 1, 2020 through March 12,

2020 Mustang issued approximately 1.2 million shares of common stock for gross proceeds of $5.0 million at an average selling

price of $4.00 under the Mustang ATM.

In 2019, Fortress also raised $0.1 million

from the issuance of our common shares in connection with our ESPP, compared to $0.2 million raised from the issuance of our common

shares in connection with our ESPP in 2018 .

We will require additional financing to fully develop and prepare

regulatory filings and obtain regulatory approvals for our existing and new product candidates, fund operating losses, and, if

deemed appropriate, establish or secure through third parties manufacturing for our potential products, and sales and marketing

capabilities.

We have funded our operations to date primarily through the sale of equity and debt securities.

We believe that our

current cash and cash equivalents is sufficient to fund operations for at least the next twelve months.

Our failure to raise capital

as and when needed would have a material adverse impact on our financial condition and our ability to pursue our business strategies.

We may seek funds through equity or debt financings, joint venture or similar development collaborations, the sale of partner companies

(such as the stock purchase of Caelum by Alexion that would result from option exercise or the contingent merger of Avenue with

InvaGen), royalty financings, or through other sources of financing.

Off-Balance Sheet Arrangements

We do not have any financings or other

relationships with unconsolidated entities or other persons.

Recently Issued Accounting Pronouncements

See Note 2 of Notes to the Consolidated

Financial Statements for a discussion of recent accounting standards and pronouncements.

Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Financial Statements and Supplementary Data.

The information required by this Item is

set forth in the consolidated financial statements and notes thereto beginning at page F-1 of this Annual Report on Form 10-K.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity