Journey Medical Corporation Q2 FY2025 earnings call

• EMROSI launched in the second quarter of 2025, with $2.8 million in sales, surpassing prior year quarter sales and contributing to improved gross profit margins. - Prescription trends for EMROSI are strong, with over 12,800 prescriptions by the end of July and over 1,800 unique prescribers to date. - Payer access for EMROSI has increased from 30% of commercial lives in May to approximately 65% in July. - SG&A expenses are mostly flat year-over-year, reflecting higher gross profit margins and lower R&D costs. - Leveraging peer-reviewed articles in JAMA Dermatology and National Rosacea Society treatment algorithms to promote EMROSI.

In the second quarter of 2025, Journey Medical's net product revenue was $15 million. EMROSI contributed approximately $2.8 million to the net product revenue, accounting for about 18.7% of the total net revenue. Accutane sales declined due to generic competition, with a decrease of $2.3 million compared to the prior year period. QBREXZA had second quarter revenue of $6.9 million. Gross margin increased to 67% from 61% in the prior period, driven by product sales mix, notably EMROSI and Accutane. R&D costs were nil in the second quarter of 2025 compared to $900,000 in the second quarter of 2024. SG&A expenses increased to $11.9 million in the second quarter of 2025 from $10.3 million in the second quarter of 2024, mainly due to launch-related operational activities. Net loss to common shareholders was $3.8 million or $0.16 per share basic and diluted for the second quarter of 2025, and the company ended the quarter with $20.3 million in cash, same as at December 31, 2024.

• EMROSI is in the early days of launch but has shown strong initial prescription uptake and is expected to continue growing. - For the second half of the year, focus is on expanding EMROSI prescribers, growing prescription volume, expanding payer access, and converting prescription volume into revenue. - It is still early in the EMROSI launch, so hard guidance for the year and next year is not provided yet.

• Forward-looking statements involve risks that may cause actual results to differ materially from those stated; refer to risk factors in Form 10-K, Form 10-Q, Form 8-K, etc. - Payer rebating and co-pay assistance program dynamics may change and impact revenue. - Seasonality in the rosacea market could potentially affect the product's performance as it matures, though not a significant factor during the current launch phase.

Q: What is the goal for coverage of EMROSI by the end of the year?

A: Ramsey Alloush said coverage is a two-pronged approach with quantity and quality, continuing to grow quantity coverage while also focusing on quality to convert into revenue, but no specific end-of-year target was publicly disclosed.

Q: How do you see gross margin evolving over the course of the year?

A: Joseph M. Benesch stated that product mix is the driver of gross margin, and since EMROSI is a very low-cost product, as EMROSI makes up a larger percent of sales mix, margins are expected to improve.

Q: What's your thought on revenue per script given early data and summer seasonality for the rosacea market?

A: Claude Maraoui said not to do simple math on volume and reported sales as there are factors like patient assistance program and payer reimbursement delays; regarding summer seasonality, he said seasonality is not a major factor at the current launch stage and may become more relevant as the product matures.

Q: Can you give more color on NRx volume growth and stocking dynamics, and payer rebating?

A: Claude Maraoui said there was stocking of the channel in Q1, and the payer and co-pay assistance program dynamic is evolving with more managed care sign-ups expected to reduce reliance on co-pay assistance; Ramsey Alloush added that demand is assisting in negotiations with managed care but implementation with plans and pharmacies takes time.