Fortress Biotech, Inc. Q2 FY2026 earnings call

Core Product (Emrosi) Commercial Progress

• Total Emrosi prescriptions reached ~36,000 in Q2 2026, a 20% sequential increase from Q1 2026, accelerating from 11% sequential growth in the prior quarter. June 2026 new prescriptions hit an all-time monthly high of over 5,300, up from a 4,700 average in the prior 3 months.
• Unique dermatology prescribers for Emrosi grew to over 4,500, a more than 40% increase from 3,200 at the end of 2025 and a 21.6% increase from 3,700 at the end of Q1 2026. There is significant remaining room for growth, with over 15,000 total practicing dermatologists in the U.S.
• Emrosi's superior head-to-head efficacy against Oracea (the only other branded oral rosacea treatment) from Phase III trials, placebo-like safety profile, and rapid onset of action are driving prescriber adoption and patient loyalty.
• Average selling price (ASP) for Emrosi increased 10% sequentially in Q2 2026, following a prior increase in Q1 2026, driven by improving formulary status and a growing share of reimbursed prescriptions.

Payer and Market Access Progress

• The company completed agreements with all top 3 U.S. Group Purchasing Organizations (GPOs) earlier in 2026, bringing Emrosi access to over 169 million of 192 million total U.S. covered commercial lives.
• The share of commercial lives with high-quality (single step edit or better) formulary coverage increased from 34% in Q1 2026 to ~38% as of Q2 2026, and a large national health plan added Emrosi to its formulary in early August 2026.

Operational and Organizational Updates

• The company hired and deployed 5 additional experienced dermatology sales professionals in late Q2 2026, mostly to new white space territories with some territory splits to support increased market penetration.
• The company launched Eurax Cream, an enhanced-formulation anti-itch antipruritic dermatology product, in late Q2 2026, which is the third-priority promoted product in the company's portfolio behind Emrosi and QBREXZA.
• The company maintains an active business development strategy: exploring out-licensing of commercial rights to its patented products (including Emrosi) in non-U.S. territories, and in-licensing additional dermatology assets to expand its product portfolio.

Financial Performance

• GAAP net loss narrowed substantially to $300,000 ($0.01 per share) in Q2 2026, from a $3.8 million ($0.16 per share) net loss in Q2 2025.
• Non-GAAP EBITDA and adjusted EBITDA were positive for both Q2 2026 and the first half of 2026, with adjusted EBITDA of $2.9 million for the quarter. SG&A expenses decreased to $10.9 million from $11.9 million year-over-year, a decline driven by lower year-over-year Emrosi launch-related spending. The company ended Q2 with $25.6 million in cash.

Total net product revenue for Q2 2026 was $18.5 million, a 23% year-over-year increase from $15 million in Q2 2025. The Emrosi segment generated $8.1 million in net revenue, accounting for approximately 43.8% of total quarterly revenue. QBREXZA, the company's second core product, contributes annual revenue of $25 million to $26 million, with a slight sequential quarterly decline in Q2 2026 due to temporary patient and payer mix shifts, though underlying demand is increasing. Eurax Cream is a newly launched niche dermatology product that began commercialization in late Q2 2026 and has not yet meaningfully contributed to revenue. Gross margin for the overall company was 67% in Q2 2026, consistent with the year-ago quarter.

• Management reaffirms that 2026 will be a breakout year for Journey Medical, with strong revenue growth and sustained positive EBITDA for the remainder of the year.
• Management expects Emrosi's ASP to continue improving sequentially throughout the second half of 2026 as payer formulary progress continues, driving further sales growth.
• A moderate step-up in SG&A is expected in the second half of 2026 to support new marketing and advertising programs, but SG&A as a percentage of total revenue is expected to remain consistent with prior levels.
• Management expects ongoing progress increasing the share of commercial lives with high-quality Emrosi formulary coverage throughout Q3 2026, Q4 2026, and into 2027, which will further support revenue and ASP growth.
• The company expects new sales representatives and the newly launched Eurax Cream to augment overall revenue growth, with Emrosi remaining the highest priority product in the portfolio.

• Forward-looking statements, including expectations for revenue growth, profitability, regulatory progress, and out-licensing deals, are inherently uncertain, and actual results may differ materially due to unforeseen risks. Key risks are detailed in the company's periodic SEC filings (Form 10-K, Form 10-Q).
• Payer formulary negotiation timelines are extended, and progress removing access barriers (such as prior authorization and double-step therapy requirements) may be slower than expected, limiting near-term reimbursement and ASP growth.
• International out-licensing negotiations are delayed by cross-market regulatory, legislative, and political dynamics, and there is no guarantee that definitive deals will be completed on favorable terms or at all.
• QBREXZA quarterly revenue can fluctuate due to uncontrollable shifts in patient and payer mix, which may lead to uneven sequential performance.

Q: Scott Henry (Alliance Global Partners) asked whether Emrosi's 10% sequential ASP increase in Q2 will continue into future quarters, what seasonal trends affect prescription volume, and if the recent plateau in weekly prescriptions changes the growth outlook. / A: Management confirmed that sequential ASP growth will continue as payer reimbursement initiatives are implemented. They noted that rosacea treatment has minimal meaningful seasonality, and periods of stable weekly prescription volume are followed by step-up growth, consistent with Emrosi's launch trajectory. July prescription volume grew to 14,000 from 13,000 in June, with new prescriptions and unique prescribers continuing to climb, keeping growth trends strongly positive.

Q: Scott Henry also asked for the long-term outlook for QBREXZA after its slight Q2 revenue decline. / A: Management explained that QBREXZA is the company's second priority promoted product after Emrosi, and the Q2 decline stemmed from temporary shifts in patient/payer mix and residual effects of early-year insurance deductible resets. Demand has grown into the hyperhidrosis summer season, with July prescriptions approaching 15,000, and high patient satisfaction supports consistent long-term annual revenue of $25 million to $26 million.

Q: Mayank Mamtani (B. Riley Securities) asked for an update on ex-U.S. out-licensing efforts for Emrosi and other company products, including any IP-related impacts on timelines. / A: Management confirmed that Journey Medical maintains a global robust patent portfolio for all its core brands including Emrosi, with ongoing active negotiations for out-licensing in Europe, Canada, Asia, and other non-U.S. markets. As noted, negotiations take time due to differing regional market and regulatory dynamics, and the company's primary focus remains on growing Emrosi in the U.S. Updates will be provided once definitive agreements are reached.

Q: Brandon Folkes (H.C. Wainwright) asked where remaining access friction for Emrosi exists in the U.S. market, and for growth expectations for newly launched Eurax Cream. / A: Management explained that most access friction stems from higher barriers (prior authorization or double-step therapy) for roughly 80-90 million commercially covered lives that already have basic access, and the company is working to move these plans to high-quality single-step or better coverage. For Eurax, it is a newly launched enhanced-formulation anti-itch product, promoted third after Emrosi and QBREXZA, and early physician feedback is positive, though it is too early to give specific revenue guidance.