Taking the Less Crowded Path
I’ve always loved portfolio management. To me, it’s not just about returns — it’s a reflection of how I think and how I move through life.
I don’t go all in on anything. In investing, and in life, I prefer deliberate decisions. I like understanding why I’m doing something before I do it.
I’ve learned that I’m naturally a contrarian. Take hiking, one of my favorite activities. I go early and choose the least populated trails, avoiding the crowds. I approach investing the same way.
I’m drawn to sectors that aren’t getting much attention yet — places where expectations are low, narratives aren’t fully formed, and patience still matters.
Right now, most of the conversation is centered around precious metals, AI, and mining. Those areas may still have merit, but they’re also well discussed.
This year, I’m focusing more of my attention on areas that feel less crowded — REITs and biotech.
Biotech, in particular, has my attention. It’s volatile, but it also has tremendous long-term potential.
This issue is about how I’m thinking about biotech today, why I’m approaching it differently than before, and one company that fits into that mindset.
Biotech Investing
I’ll be upfront: I don’t know much about biotech. I don’t pretend to understand how drugs are developed or approved either.
But I do like the biotech sector. The potential can be explosive. It’s also one of the most volatile areas of the market, where prices move quickly on news most people — me included — don’t fully understand.
In the past, I approached biotech cautiously. I made small, deliberate positions, and when a stock moved up quickly, I often sold and took the profit.
That worked at times. But over time, I realized that quick gains aren’t why I’m interested in this space.
What I’m doing now is different. I’m building a basket of small biotech positions that I plan to hold for a long time — potentially 10 years.
I’m not looking for doubles. I’m looking for outcomes that can really move the needle for me financially — the kind that usually only show up if you’re willing to let ideas ride.
That also means accepting reality. Many of these investments won’t work. Some will disappoint. A few may go nowhere for years.
I’m comfortable with that trade-off. The risk is defined, expectations are realistic, and the upside — if even one or two work — can matter.
Because I don’t have deep expertise in biotech, I rely on experienced researchers. I use their work as a starting point, not a conclusion.
One idea that came across my desk through a premium research subscription was for a company called Fortress Biotech (NASDAQ:FBIO).
What stood out to me wasn’t the science. It was how the company is structured.
Fortress is set up more like a holding company or incubator. Instead of betting everything on one drug, it builds and owns stakes in multiple smaller companies, each focused on a specific disease. That structure spreads risk across several programs, rather than tying the entire story to a single outcome.
The Diseases Fortress Is Working On
One of the reasons I’m drawn to biotech is simple. These are companies trying to treat or cure diseases. And at the end of the day, there’s nothing more important than our health.
Fortress is tied to three main disease areas, each at a different stage and each addressing a real medical problem.
The first is Menkes disease, a rare genetic disorder that affects infants and young children. It interferes with how the body processes copper, which is essential for brain development. Without treatment, it can lead to severe developmental problems and can be life-threatening.
Fortress, through one of its companies, is developing a treatment for this condition. That drug is called CUTX-101, and it became the focus of an important FDA decision in 2025.
The second disease area is rosacea, a chronic skin condition that affects millions of people. It isn’t life-threatening, but it can significantly impact quality of life and confidence.
Fortress has exposure here through Emrosi, an FDA-approved treatment for rosacea that is already on the market via its majority-owned subsidiary, Journey Medical. This part of the business is commercial, not experimental.
The third area is gout, a painful form of arthritis caused by high levels of uric acid in the body. Fortress has an economic interest in Dotinurad, a gout treatment still in development and aimed at a much larger patient population.
When I look at these together, Fortress feels less like a single bet and more like a collection of ongoing attempts to solve different medical problems.
The FDA Setback
In late 2025, Fortress ran into a setback tied specifically to CUTX-101, the drug being developed to treat Menkes disease.
As the company approached a key regulatory milestone, the Food and Drug Administration issued what’s called a Complete Response Letter. In plain terms, that meant the drug wasn’t approved yet.
The market reacted quickly. Shares fell from around $4 into the low $2 range in a matter of days.
At first glance, it looked like a rejection of the drug itself. That’s how the stock traded.
But the details mattered. The FDA didn’t raise concerns about whether CUTX-101 worked or whether it was safe. The issue was related to manufacturing — how and where the drug would be produced.
That distinction is important. Problems with the drug itself are very different from problems with the process used to make it.
Manufacturing issues can often be addressed. They cause delays, add cost, and test patience — but they don’t automatically end a program.
This didn’t remove the risk, but it did change how I viewed the setback. The story shifted from if to when, and whether the company could manage the process.
💰 The Financial Reality Check
By late 2025, Fortress already had a real operating business in place.
All of Fortress’s current revenue comes from its majority-owned subsidiary, Journey Medical (NASDAQ:FBIO), which Fortress controls and consolidates into its financials.
Journey Medical isn’t built around a single product. It sells several FDA-approved dermatology treatments, including legacy products for acne and excessive sweating. Together, these form the steady base of Fortress’s revenue today.
In the third quarter of 2025, Fortress reported $17.6 million in net revenue. For the first nine months of the year, revenue reached $47.2 million.
A newer and increasingly important part of that story is Emrosi, the FDA-approved treatment for rosacea. Emrosi generated approximately $4.9 million in revenue in Q3 alone, and about $9.7 million year-to-date. It’s already contributing, and it’s still early in its commercial ramp.
The research I read views Emrosi as proof that Fortress can get a drug approved, launched, and generating real revenue — not as the main upside.
That same research points to the real long-term upside coming from Dotinurad, a gout treatment still in development through Fortress’s ownership stake and royalty interest in its partner company.
In a successful scenario, Dotinurad has the potential to reach $1–2 billion in peak annual sales. Fortress owns roughly 15% of the company developing it and is entitled to a 3% royalty on net sales, which could translate into $100–200 million in annual cash flow over time.
Importantly, those figures don’t include any revenue from the Menkes disease treatment. CUTX-101 targets a very small patient population, so I’m not counting on it to move the numbers. I prefer to think about the Dotinurad opportunity on its own.
That outcome is still years away and far from guaranteed. To me, Emrosi is about revenue today, Dotinurad is about long-term upside, and the Menkes program is about medical impact, not scale.
The underlying economics are solid. Over the first nine months of 2025, Fortress reported cost of goods sold of $15.5 million against $47.2 million in revenue, implying gross margins of roughly two-thirds, with margins improving as newer products scale.
On the balance sheet, Fortress ended the quarter with approximately $87 million in cash and equivalents. There is also a little over $50 million in debt, but most of it doesn’t mature until 2027 or 2028, which gives the company time rather than forcing short-term decisions.
Dilution remains part of the picture. It has happened before and could happen again. That’s the trade-off for running multiple development programs while also maintaining a commercial business.
When I look at Fortress through its numbers, I see a company with real revenue today, improving margins, enough cash to keep moving forward — and a separate layer of long-term upside that doesn’t have to work for the business to survive.
How I’m Thinking About Risk
In the past, I followed the recommendations from my research and did what felt sensible at the time. When a position doubled, I sold it and took the gain.
There’s nothing wrong with that. It worked. But over time, I realized that quick wins weren’t going to get me where I actually want to go.
I want to give these companies a full decade to show what they can become. No constant trading. No rushing to lock in small wins.
I’m no longer satisfied with a quick double. I’m looking for outcomes that can truly change things for me financially.
Biotech is one of the few places where that kind of growth is still possible. The risk is real, but so is the upside.
That’s why, this year, I’m focusing my attention on building a basket of biotech positions and letting time do the work.
For transparency, I added shares of Fortress Biotech at $3.46. It’s a small position, sized appropriately for the risk, and one I’m comfortable holding as part of this longer-term biotech basket.