Revenue for the first nine months of 2022 increased 26% to $57.7 million versus the same period in 2021 of $45.6 million
DFD-29 Phase 3 studies are 75% enrolled to date
Top-line data from the Phase 3 clinical program evaluating DFD-29 for the treatment of papulopustular rosacea anticipated in the first half of 2023
Company to hold conference call on November 10, 2022 at 4:30 p.m. ET
SCOTTSDALE, Ariz., Nov. 10, 2022 (GLOBE NEWSWIRE) -- Journey Medical Corporation (Nasdaq: DERM) (“Journey Medical” or the “Company”), a commercial-stage pharmaceutical company that focuses on the development and commercialization of pharmaceutical products for the treatment of dermatological conditions, today announced financial results and recent corporate highlights for the third quarter and nine months ended September 30, 2022.
Claude Maraoui, Journey Medical’s Co-Founder, President and Chief Executive Officer said, “While our sales revenue for the third quarter of 2022 of $16.1 continues to be negatively impacted primarily by the effect of Targadox generic competition versus the third quarter of 2021, we still expect to report record revenue for the full year 2022. Also, we are pleased to have enrolled 75% of patients throughout the U.S. and Europe in our two DFD-29 Phase 3 studies for the treatment of papulopustular rosacea. We anticipate announcing top-line data from the trials in the first half of 2023 and expect to file a New Drug Application (“NDA”) shortly thereafter in the second half of 2023. After approval, we anticipate that DFD-29 will achieve peak annual net sales exceeding $100 million. We believe that this program, together with our eight branded and three authorized generic products that help treat common skin conditions, position Journey Medical for sales growth in the coming years. Journey Medical also expects to launch another product in the upcoming months.”
Financial Results:
Recent Corporate Highlights:
Conference Call and Webcast Information
Journey Medical management will conduct a conference call and audio webcast at 4:30 p.m. ET on November 10, 2022.
To listen to the conference call, interested parties within the U.S. should dial 1-866-777-2509 (domestic) or 1-412-317-5413 (international). All callers should dial in approximately 10 minutes prior to the scheduled start time and ask to be joined into the Journey Medical conference call. Participants can register for the conference here: https://dpregister.com/sreg/10172735/f4f2b41486. Please note that registered participants will receive their dial-in number upon registration.
A live audio webcast can be accessed on the News and Events page of the Investors section of Journey Medical’s website, www.journeymedicalcorp.com, and will remain available for replay for approximately 30 days after the meeting.
About Journey Medical Corporation
Journey Medical Corporation (Nasdaq: DERM) (“Journey Medical”) is focused on identifying, acquiring, developing and strategically commercializing innovative, differentiated dermatology products through its efficient sales and marketing model. The company currently markets eight products that help treat and heal common skin conditions. The Journey Medical team is comprised of industry experts with extensive experience commercializing some of the most successful prescription dermatology brands. Journey Medical is located in Scottsdale, Arizona and was founded by Fortress Biotech, Inc. (Nasdaq: FBIO). Journey Medical’s common stock is registered under the Securities Exchange Act of 1934, as amended, and it files periodic reports with the U.S. Securities and Exchange Commission (“SEC”). For additional information about Journey Medical, visit www.journeymedicalcorp.com.
Forward-Looking Statements
This press release may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. As used below and throughout this press release, the words “we”, “us” and “our” may refer to Journey Medical. Such statements include, but are not limited to, any statements relating to our growth strategy and product development programs and any other statements that are not historical facts. The words “anticipate,” “believe,” “estimate,” “may,” “expect,” “will,” “could,” “project,” “intend” and similar expressions are generally intended to identify forward-looking statements. Forward-looking statements are based on management’s current expectations and are subject to risks and uncertainties that could negatively affect our business, operating results, financial condition and stock price. Factors that could cause actual results to differ materially from those currently anticipated include: risks relating to our growth strategy; our ability to obtain, perform under and maintain financing and strategic agreements and relationships; risks relating to the results of research and development activities; uncertainties relating to preclinical and clinical testing; risks relating to the timing of starting and completing clinical trials, including disruptions that may result from hostilities in Europe; our dependence on third-party suppliers; risks relating to the COVID-19 outbreak and its potential impact on our employees’ and consultants’ ability to complete work in a timely manner and on our ability to obtain additional financing on favorable terms or at all; our ability to attract, integrate and retain key personnel; the early stage of products under development; our need for substantial additional funds; government regulation; patent and intellectual property matters; competition; potential recovery of funds lost from previously disclosed cyber security breaches; as well as other risks described in Part I, Item 1A, “Risk Factors,” in our Annual Report on Form 10-K filed on March 28, 2022, subsequent Reports on Form 10-Q, and our other filings we make with the SEC. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations or any changes in events, conditions or circumstances on which any such statement is based, except as may be required by law, and we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
Company Contact:
Jaclyn Jaffe
(781) 652-4500
ir@jmcderm.com
Media Relations Contact:
Tony Plohoros
6 Degrees
(908) 591-2839
tplohoros@6degreespr.com
JOURNEY MEDICAL CORPORATION
Unaudited Condensed Consolidated Balance Sheets
(Dollars in thousands except for share and per share amounts) September 30, December 31, 2022 2021 ASSETS Current assets Cash and cash equivalents$34,891 $49,081 Accounts receivable, net of reserves 28,533 23,112 Inventory 15,230 9,862 Prepaid expenses and other current assets 942 2,438 Total current assets 79,596 # 84,493 Intangible assets, net 28,424 12,552 Operating lease right-of-use asset, net 22 89 Other assets 103 150 Total assets$108,145 $97,284 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable$33,626 $22,812 Due to related party 74 641 Accrued expenses 17,783 22,733 Accrued interest 125 - Income taxes payable 22 8 Line of credit - 812 Deferred cash payment (net of discount of $76) 4,924 - Installment payments – licenses, short-term 4,198 4,510 Operating lease liability 25 98 Total current liabilities 60,777 51,614 Term loan (net of debt discount of $190) 19,810 - Installment payments – licenses, long-term 1,374 3,627 Total liabilities 81,961 55,241 Stockholders' equity Common stock, $.0001 par value, 50,000,000 shares authorized, 11,642,659 and 11,316,344 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively 1 1 Common stock - Class A, $.0001 par value, 50,000,000 shares authorized, 6,000,000 shares issued and outstanding as of September 30, 2022 and December 31, 2021 1 1 Additional paid-in capital 84,042 80,915 Accumulated deficit (57,860) (38,874)Total stockholders' equity 26,184 42,043 Total liabilities and stockholders' equity$108,145 $97,284
JOURNEY MEDICAL CORPORATION
Unaudited Condensed Consolidated Statements of Operations
(Dollars in thousands except for share and per share amounts) Three-Month Periods Ended Nine-Month Periods Ended September 30, September 30, 2022 2021 2022 2021 Revenue: Product revenue, net$16,043 $19,610 $55,074 $45,617 Other revenue 73 - 2,629 - Total Revenue 16,116 19,610 57,703 45,617 Operating expenses Cost of goods sold – product revenue7,221 11,167 23,057 22,559 Research and development2,812 718 6,687 747 Research and development - licenses acquired - 76 - 13,819 Selling, general and administrative15,575 10,755 45,481 24,776 Wire transfer fraud loss - 9,540 - 9,540 Total operating expenses25,608 32,256 75,225 71,441 Loss from operations(9,492)(12,646) (17,522)(25,824) Other expense - Interest income (3)- (10)- Interest expense559 1,373 1,402 2,936 Foreign exchange transaction losses 22 - 22 - Change in fair value of derivative liability- 2 - 184 Total other expense578 1,375 1,414 3,120 Loss before income taxes(10,070)(14,021) (18,936)(28,944) Income tax expense (benefit) 10 (3,375) 50 (6,701) Net Loss$(10,080)$(10,646) $(18,986)$(22,243) Net loss per common share: Basic and diluted$(0.57)$(1.16) $(1.09)$(2.43) Weighted average number of common shares: Basic and diluted 17,618,064 9,161,333 17,464,561 9,160,344
Use of Non-GAAP Measures:
In addition to the GAAP financial measures as presented in our Form 10-Q that will be filed with the Securities and Exchange Commission (“SEC”), the Company has, in this press release, included certain non-GAAP measurements, including Adjusted EBITDA (Adjusted Operating Net Income (loss)), Adjusted Operating Net Income (loss) per share basic and Adjusted Net Income (loss) per share diluted. We define Adjusted EBITDA (Adjusted Operating Net Income (loss)) as net income (loss) excluding interest, taxes and depreciation, less certain other non-cash items, namely, share-based compensation expense, amortization of acquired intangible assets, inventory step-ups from the purchases of intangibles assets and products, as more fully described as follows:
Adjusted Operating Net Income (loss) per share basic and Adjusted Net Income (loss) per share diluted are determined by dividing the resulting Adjusted EBITDA (Adjusted Operating Net Income (loss)) by the number of shares outstanding on an actual and fully diluted basis.
Management believes use of these non-GAAP measures provide meaningful supplemental information regarding the Company’s performance because (i) it allows for greater transparency with respect to key measures used by management in its financial and operational decision-making, (ii) it excludes the impact of non-cash or, when specified, non-recurring items that are not directly attributable to the Company’s core operating performance and that may obscure trends in the Company’s core operating performance and (iii) it is used by institutional investors and the analyst community to help analyze the Company's results. However, Adjusted EBTIDA (Adjusted Operating Net Income (loss)), Adjusted Operating Net Income (loss) per share basic, Adjusted Net Income (loss) per share diluted and any other non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP. Further, non-GAAP financial measures used by the Company and the manner in which they are calculated may differ from the non-GAAP financial measures or the calculations of the same non-GAAP financial measures used by other companies, including the Company’s competitors.
The table below provides a reconciliation from GAAP to non-GAAP measures:
JOURNEY MEDICAL CORPORATION
Reconciliation of GAAP to Non-GAAP Adjusted EBITDA (Adjusted Operating Net Income (loss))
(Dollars in thousands except for share and per share amounts) Three-month periods ended Nine-month periods ended September 30, September 30, 2022 2021 2022 2021 GAAP Net Loss $(10,080) $(10,646) $(18,986) $(22,243) EBITDA: Interest 556 1,373 1,392 2,936 Taxes 10 (3,375) 50 (6,701)Depreciation - - - - Amortization of acquired intangible assets 1,016 658 3,050 1,983 EBITDA (8,498) (11,990) (14,494) (24,025) Non-GAAP Adjusted EBITDA (Adjusted Operating Net (loss) gain ): Share-based compensation 1,438 8 2,985 41 Change in fair value of derivative liabilities - 2 - 184 Inventory step-up expense 214 3,001 525 4,239 Wire transfer fraud loss - 9,540 - 9,540 R&D 2,778 718 6,653 747 Foreign exchange transaction losses 22 - 22 - Severance 27 - 27 260 Non-GAAP Adjusted EBITDA (Adjusted Operating Net (loss) gain ) $(4,019) $1,279 $(4,282) $(9,014) Net loss per common share Basic: GAAP Net loss $(0.57) $(1.16) $(1.09) $(2.43)Non-GAAP Net (loss) gain $(0.23) $0.14 $(0.25) $(0.98) Net loss per common share Diluted: GAAP Net loss $(0.57) $(0.98) $(1.09) $(2.43)Non-GAAP Net (loss) gain $(0.23) $0.12 $(0.25) $(0.98) Weighted average number of common shares Basic: 17,618,064 9,161,333 17,464,561 9,160,344 Weighted average number of common shares Diluted: 17,618,064 10,892,050 17,464,561 9,160,344
The weighted average number of shares of common stock outstanding used to calculate both basic and diluted income loss per share is the same for the three-month period ended September 30, 2022 and the nine-month periods ended September 30, 2022 and 2021 since the Company reported a net loss for these periods.