Full Press Release Details
Journey Medical Corporation Reports First Quarter
2023 Financial Results and Recent Corporate Highlights
Patient Out" milestone in Phase 3 clinical program evaluating DFD-29 in May 2023
Topline data are expected
in June 2023 for Phase 3 clinical program evaluating DFD-29
Company to hold conference
call on May 22, 2023, at 4:30 p.m. ET
Scottsdale, AZ - May 22, 2023 -
Journey Medical Corporation (Nasdaq: DERM) ("Journey Medical" or "the Company"), a commercial-stage pharmaceutical
company that primarily focuses on the selling and marketing of FDA approved prescription pharmaceutical products for the treatment of
dermatological conditions, today announced financial results and recent corporate highlights for the first quarter ended March 31, 2023.
Claude Maraoui, Journey Medical's Co-Founder,
President and Chief Executive Officer, said, "Since Journey Medical's inception, we have made significant investments and
have committed to building out our commercial product portfolios and infrastructure to position ourselves for future revenue growth. Our
total revenues for the first quarter of 2023 were $12.2 million. Despite higher unit sales volumes from period-to-period for Accutane ,
Amzeeq , Zilxi and Exelderm , our net product revenues for the first quarter were unfavorably impacted by higher gross-to-net
adjustments and lower unit sales volumes for Qbrexza , Targadox and Ximino . However, in April, we have already seen a bounce
back in our product net revenues and lower gross-to-net adjustments from the isolated occurrences in the first quarter, particularly for
Qbrexza. For the remainder of 2023, we look forward to a return to revenue growth, further reductions in selling, general and administrative
("SG&A") expenses from our previous guidance of $5.0 - $7.0 million to result in SG&A annual savings in excess of
$12.0 million when compared to 2022, as well as achieving clinical milestones in our Phase 3 clinical trials evaluating DFD-29 for the
treatment of papulopustular rosacea ("PPR"). We expect a topline data read out from the DFD-29 Phase 3 clinical trials in
June of 2023 and to file a New Drug Application ("NDA") in the second half of 2023."
Recent Corporate Highlights:
Conference Call and Webcast Information
Journey Medical management will conduct a conference
call and audio webcast on May 22, 2023, at 4:30 p.m. ET.
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/10178597/f951c8551f. 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 a commercial-stage pharmaceutical company that primarily focuses on the selling and marketing of FDA approved prescription
pharmaceutical products for the treatment of dermatological conditions through its efficient sales and marketing model. The company currently
markets eight branded and three generic products that help treat and heal common skin conditions. The Journey Medical team comprises industry
experts with extensive experience in developing and commercializing some of dermatology's most successful prescription 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, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. As used below and throughout this press release, the words "the Company", "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: the fact that our products and product candidates are subject to time and cost intensive regulation and clinical
testing and as a result, may never be successfully developed or commercialized; a substantial portion of our sales derive from products
that may become subject to third-party generic competition, the introduction of new competitor products, or an increase in market share
of existing competitor products, any of which could have a significant adverse impact on our operating income; we operate in a heavily
regulated industry, and we cannot predict the impact that any future legislation or administrative or executive action may have on our
operations; our revenue is dependent mainly upon sales of our dermatology products and any setback relating to the sale of such products
could impair our operating results; competition could limit our products' commercial opportunity and profitability, including competition
from manufacturers of generic versions of our products; the risk that our products do not achieve broad market acceptance, including by
government and third-party payors; our reliance third parties for several aspects of our operations; our dependence on our ability to
identify, develop, and acquire or in-license products and integrate them into our operations, at which we may be unsuccessful; the dependence
of the success of our business, including our ability to finance our company and generate additional revenue, on the successful development
and regulatory approval of the DFD-29 product candidate and any future product candidates that we may develop, in-license or acquire;
clinical drug development is very expensive, time consuming, and uncertain and our clinical trials may fail to adequately demonstrate
the safety and efficacy of our current or any future product candidates; our competitors could develop and commercialize products similar
or identical to ours; risks related to the protection of our intellectual property and our potential inability to maintain sufficient
patent protection for our technology and products; our business and operations would suffer in the event of computer system failures,
cyber-attacks, or deficiencies in our or our third parties' cybersecurity; the substantial doubt about our ability to continue as
a going concern; the effects of major public health issues, epidemics or pandemics on our product revenues and any future clinical trials;
our potential need to raise additional capital; Fortress controls a voting majority of our common stock, which could be detrimental to
our other shareholders; as well as other risks described in Part I, Item 1A, "Risk Factors," in our Annual Report on Form
10-K for the year ended December 31, 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.
Media Relations Contact:
JOURNEY MEDICAL CORPORATION
Consolidated Balance Sheets
($ in thousands except
for share and per share amounts)
| March 31, | December 31, | |||||||
| 2023 | 2022 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 17,349 | $ | 32,003 | ||||
| Accounts receivable, net of reserves | 27,616 | 28,208 | ||||||
| Inventory | 13,278 | 14,159 | ||||||
| Prepaid expenses and other current assets | 2,477 | 3,309 | ||||||
| Total current assets | 60,720 | 77,679 | ||||||
| Intangible assets, net | 26,128 | 27,197 | ||||||
| Operating lease right-of-use asset, net | 167 | 189 | ||||||
| Restricted cash | 8,750 | - | ||||||
| Other assets | 88 | 95 | ||||||
| Total assets | $ | 95,853 | $ | 105,160 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 43,658 | $ | 36,570 | ||||
| Due to related party | 370 | 413 | ||||||
| Accrued expenses | 17,375 | 19,388 | ||||||
| Accrued interest | 165 | 160 | ||||||
| Income taxes payable | 35 | 35 | ||||||
| Line of credit | 3,000 | 2,948 | ||||||
| Term loan, short-term (net of discount of $86) | 9,914 | - | ||||||
| Deferred cash payment (net of discount of $9) | - | 4,991 | ||||||
| Installment payments - licenses, short-term | 2,288 | 2,244 | ||||||
| Operating lease liability, short-term | 93 | 83 | ||||||
| Total current liabilities | 76,898 | 66,832 | ||||||
| Term loan, long-term (net of debt discount of $71 and $174) | 9,929 | 19,826 | ||||||
| Installment payments - licenses, long-term | 1,450 | 1,412 | ||||||
| Operating lease liability, long-term | 84 | 108 | ||||||
| Total liabilities | 88,361 | 88,178 | ||||||
| Stockholders' equity | ||||||||
| Common stock, $.0001 par value, 50,000,000 shares authorized, 11,834,362 and 11,765,700 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively | 1 | 1 | ||||||
| Common stock - Class A, $.0001 par value, 50,000,000 shares authorized, 6,000,000 shares issued and outstanding as of March 31, 2023 and December 31, 2022 | 1 | 1 | ||||||
| Additional paid-in capital | 86,128 | 85,482 | ||||||
| Accumulated deficit | (78,638 | ) | (68,502 | ) | ||||
| Total stockholders' equity | 7,492 | 16,982 | ||||||
| Total liabilities and stockholders' equity | $ | 95,853 | $ | 105,160 |
Condensed Consolidated Statements of Operations
except for share and per share amounts)
| Three-Month Periods Ended | ||||||||
| March 31, | ||||||||
| 2023 | 2022 | |||||||
| Revenue: | ||||||||
| Product revenue, net | $ | 12,165 | $ | 20,796 | ||||
| Other revenue | 48 | 2,500 | ||||||
| Total revenue | 12,213 | 23,296 | ||||||
| Operating expenses | ||||||||
| Cost of goods sold - product revenue | 6,449 | 8,203 | ||||||
| Research and development | 2,033 | 1,266 | ||||||
| Selling, general and administrative | 13,292 | 14,715 | ||||||
| Total operating expenses | 21,774 | 24,184 | ||||||
| Loss from operations | (9,561 | ) | (888 | ) | ||||
| Other expense (income) | ||||||||
| Interest income | (122 | ) | (3 | ) | ||||
| Interest expense | 650 | 389 | ||||||
| Foreign exchange transaction losses | 47 | - | ||||||
| Total other expense (income) | 575 | 386 | ||||||
| Loss before income taxes | (10,136 | ) | (1,274 | ) | ||||
| Income tax expense | - | 104 | ||||||
| Net Loss | $ | (10,136 | ) | $ | (1,378 | ) | ||
| Net loss per common share: | ||||||||
| Basic and diluted | $ | (0.57 | ) | $ | (0.08 | ) | ||
| Weighted average number of common shares: | ||||||||
| Basic and diluted | 17,807,194 | 17,318,344 |
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 SEC, the Company has, in this press release, included certain non-GAAP measurements,
including Adjusted EBITDA, Adjusted EBITDA per share basic and Adjusted EBITDA per share diluted. We define Adjusted EBITDA as net income
(loss) excluding interest, taxes and depreciation, less certain other non-cash and infrequent items not considered to be normal, recurring
operating expenses, including, share-based compensation expense, amortization of acquired intangible assets, inventory step-ups from the
purchases of intangibles assets and products, severance, non-core research and development expense and foreign exchange transaction losses.
In particular, we exclude the following matters for the reasons more fully described below:
Adjusted EBITDA per share basic and Adjusted EBITDA
per share diluted are determined by dividing the resulting Adjusted EBITDA by the number of shares outstanding on an actual and fully
Management believes use of these non-GAAP measures