Fortress Biotech, Inc. Q3 FY2025 earnings call

• EMROSI achieved significant growth, contributing $4.9 million in Q3, a 75% jump from Q2. It saw 18,198 prescriptions in Q3, up from 7,394 in Q2, a 146% increase. Two out of the three major GPOs are contracted, with the third expected early next year.
• Physician feedback on EMROSI is highly positive, with early efficacy observed as soon as 2 weeks into therapy. Initial refill rates for EMROSI were strong, with a 1:1 ratio of refills to new prescriptions in Q3. Unique dermatology prescribers rose to over 2,700 from approximately 1,800.
• EMROSI presented clinical data at dermatology conferences, highlighting benefits such as superiority in IGA success and reduced inflammatory lesions.
• EBITDA is on an upward trajectory, and Journey anticipates being sustainably EBITDA positive in Q4 2025.

Total revenues for the third quarter of 2025 stood at $17.6 million, marking a 21% increase compared to $14.9 million in the third quarter of 2024. EMROSI contributed $4.9 million to the top line in Q3, representing a 75% surge from Q2. The legacy and core products, including Qbrexza, Accutane, Amzeeq, and Zilxi, were essentially flat sequentially but saw a 16% year-over-year decline due to Accutane generic competition. Gross margin in Q3 2025 was 67.4%, up from 63.5% in Q1 and 67.1% in Q2. SG&A expenses amounted to $12.1 million, a 6% increase from the prior year quarter. The GAAP net loss was $2.3 million, and on a non-GAAP basis, EBITDA improved from a loss of $1 million in Q3 2024 to a loss of $500,000, with adjusted EBITDA reaching $1.7 million in Q3 2025.

• EMROSI is expected to continue growing, with potential peak annual net sales exceeding $200 million in the US and over $300 million globally.
• EBITDA is projected to be sustainably positive in Q4 2025.
• Reliance on the co-pay assistance program is expected to decrease in 2026 as more payers adopt EMROSI.

• Dependence on the co-pay assistance program until better payer reimbursements are established.
• Generic competition for Accutane could impact its franchise if competitors lower prices and capture market share.

Q: How should we view the usage of the patient assistance program for EMROSI at this stage and its improvement in 4Q or 2026?

A: The co-pay assistance program will be used less as payers increasingly reimburse. The last major GPO is expected to come on board early in 2026, and reliance on the co-pay program is likely to diminish in 2026.

Q: What is the focus between breadth and depth of prescribers in 4Q and 2026?

A: Both breadth and depth are important. Currently, there are over 2,700 unique prescribers, and the focus is on building reinforcement among existing prescribers to increase prescriptions. A snowball effect is expected as physicians observe positive results in their practices.

Q: How do you view the launch curve of EMROSI?

A: All indicators point to a very positive launch, aligning with internal expectations. Key indicators like increasing prescribers and refill ratios suggest potential for acceleration.

Q: What is the impact of EMROSI's launch on Qbrexza management?

A: Qbrexza is in a strong position with single-digit year-over-year growth. The overlap with EMROSI writers is manageable, and the sales force is compensated based on Qbrexza, which is currently the top revenue generator.

Q: How will the ratio of paid scripts evolve with payer updates?

A: Progress is being made against the market access plan, with solid monthly advancements. As more plans and formularies adopt EMROSI, revenue generation will shift accordingly.

Q: What data is available on the duration of therapy and persistence for EMROSI?

A: Anecdotally, feedback from patients and prescribers is positive. More precise data is expected in 5-6 months, but trends are encouraging.

Q: What is the expectation for OpEx growth next year?

A: OpEx is expected to remain relatively consistent, with revenue growth anticipated to offset any incremental expenses, leveraging the current infrastructure.