Fortress Biotech: Very Complex, Considerably Undervalued

Summary

Fortress Biotech is actually a biopharmaceutical company devoted to acquiring, creating and commercializing novel pharmaceutical and biotechnology products. Get much more details about Fortress Biotech Inc

Company assets contain interests in ten biotech companies, 3 of which are publicly listed, a publicly listed, full-service investment bank, along with a specific goal acquisition company ("SPAC").

Given that 5 portfolio companies are publicly listed, we are able to calculate the value of its public portfolio, which in return allows us to calculate the market-implied worth of the private portfolio.

The private portfolio, having said that, appears to be undervalued given the expectable market capitalization in the IPO of subsidiary Caelum Biosciences.

I would like to present you with my evaluation of a company that I've been intrigued by ever since it came up on one of my biotech stock screeners, because it is truly unlike something else it is possible to come across in the public biotech markets.

It is actually not one, but ten biotech companies bundled into one, with a pretty broad pipeline of drugs, ranging from pre-clinical to late-stage. Additionally, it involves interests inside a full-service investment bank plus a unique goal acquisition company ("SPAC"). Although a majority of its subsidiaries are nonetheless private and offer restricted financial details, we are able to effortlessly assess the value of its public portfolio, and use it to create an estimate on the private portfolio's worth. To the benefit of an investor, the company will not only present catalysts via its pipeline, but in addition via the planned initial public supplying of a subsidiary within the next months. This hugely intriguing company is known as Fortress Biotech (NASDAQ:FBIO).

Company Description and History

Fortress Biotech, in its own words, is often a "biopharmaceutical company committed to acquiring, building and commercializing novel pharmaceutical and biotechnology products."

Fortress Biotech's story initially began in 2006 when the company was nevertheless named Coronado Biosciences. It was in stealth mode till 2011, when it announced that it had raised pretty much USD 50mn. in two separate funding rounds. The company shortly right after announced that it would go public by registering its private shares as widespread stock. Most interestingly, at the time, Coronado's principal product was a drug derived from a parasite found in pigs, with trials for a quantity of indications such as Crohn's disease and autism. On the other hand, the trial for Crohn's disease was discontinued immediately after assessment from an independent advisory committee, plus the study investigating the effect from the drug in adults with Autism Spectrum Disorder also failed to attain statistic significance.