Fortress Biotech, Inc. Q3 FY2025 earnings call

• EMROSI contributed $4.9 million in Q3, a 75% increase from Q2, with 18,198 prescriptions in Q3 vs. 7,394 in Q2, a 146% growth. - GPO contracting: 2 of 3 major GPOs contracted, with the third expected to be completed early next year. - Physician feedback on EMROSI is positive, with early efficacy seen in as little as 2 weeks, strong refill rates (1:1 ratio in Q3), and unique prescribers up to over 2,700 from ~1,800. - Clinical trial data highlighted EMROSI's superiority in IGA success and inflammatory lesion reduction compared to Oracea. - Financially, EBITDA improved, and the company expects to be sustainably EBITDA positive in Q4.

Total revenues for the third quarter of 2025 were $17.6 million, representing a 21% increase compared to the third quarter of 2024. EMROSI, the best-in-class oral treatment for rosacea, contributed $4.9 million to the top line in Q3, a 75% increase from Q2. Legacy and core products (Qbrexza, Accutane, Amzeeq, Zilxi) were essentially flat sequentially and declined 16% year-over-year. Gross margin was 67.4% in Q3, improving from 63.5% in Q1 and 67.1% in Q2. SG&A expenses totaled $12.1 million, up approximately 6% from the prior year quarter. Non-GAAP EBITDA improved, with EBITDA moving from a loss of $1 million in Q3 2024 to a loss of $500,000 in Q3 2025, and adjusted EBITDA was positive at $1.7 million in Q3 2025 compared to $300,000 in Q3 2024.

• Expect EBITDA to be sustainably positive in the fourth quarter of 2025. - EMROSI is expected to reach peak annual net sales of over $200 million in the US and over $300 million globally. - Continued focus on margin expansion and disciplined expense management while scaling EMROSI's commercial footprint.

• Delays in downstream health plan formulary adoption and implementation, which can take up to 3 quarters. - Competition from generic drugs, such as the impact on Accutane from generic competition. - Uncertainty in reimbursement rates and reliance on patient co-pay assistance programs.

Q: How to view the usage of the patient assistance program on EMROSI at this stage of launch and expectations for improvement in 4Q or 2026?

A: Claude Maraoui stated that 2 of 3 major GPOs are contracted, with the third expected in early 2026. Reliance on the co-pay assistance program is expected to decrease in 2026 as more reimbursements come in.

Q: Focus between breadth and depth of prescribers in 4Q and 2026 for EMROSI?

A: Claude Maraoui mentioned that there are 3,200 target physicians, with over 2,700 unique prescribers already. There's a snowball effect as physicians see positive results, leading to more prescriptions and refills, with the NRx to TRx ratio expected to increase.

Q: View on the launch curve of EMROSI based on 4-5 months of launch?

A: Claude Maraoui said all indicators point to a very positive launch, meeting internal expectations, with key indicators like prescriber growth and clinical trial results showing momentum.

Q: Impact of EMROSI launch on Qbrexza management and growth?

A: Claude Maraoui noted that Qbrexza is in a good position with single-digit growth year-over-year, and the overlap with EMROSI prescribers is working fine as EMROSI is prioritized initially but Qbrexza remains a key revenue generator.

Q: Evolution of paid scripts ratio and reconciliation of sequential revenue vs TRx growth?

A: Ramsey Alloush stated that the company is executing well against market access plans, with progress month-over-month, and as more plans and formularies adopt, revenue will shift accordingly. Claude Maraoui added that focus is on driving prescriptions and incremental gains on the payer front.

Q: Duration of therapy and persistence for EMROSI?

A: Claude Maraoui said anecdotal feedback is positive, with patients seeing good results, but precise data will be available in 5-6 months, with expectations of 3-4 refills over 12 months.

Q: Expectation for OpEx growth next year based on launch progress?

A: Joseph Benesch mentioned that incremental expenses should be offset by revenue increases, with operating leverage continuing as revenue grows, expecting relatively consistent OpEx from period to period into 2026.