Full Press Release Details
Journey Medical Corporation Reports Full-Year
2021 Financial Results and Recent Corporate Highlights
Generated record net
product revenues of $63.1 million for the full year 2021
Completed initial public
offering of common stock and raised $30.6 million in net proceeds
in Phase 3 clinical program evaluating DFD-29 for the treatment of papulopustular rosacea
Company to hold conference
call on March 23, 2022 at 4:30 p.m. ET
Scottsdale, AZ - March 23, 2022 -
Journey Medical Corporation (NASDAQ: DERM) ("Journey Medical"), 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 fourth quarter and full year ended December 31, 2021.
Claude Maraoui, Journey Medical's Co-Founder,
President and Chief Executive Officer, said, "Journey Medical had a transformational year advancing corporate and clinical milestones.
We generated record net product revenues of $63.1 million in 2021, completed an IPO which produced proceeds of $30.6 million net
of discounts and other offering costs, and became listed on Nasdaq. From Q2 of 2021 through early 2022, we in-licensed, acquired,
and launched four prescription dermatology products including Accutane , Qbrexza , Amzeeq and Zilxi , in addition to
DFD-29. We are extremely pleased to have expanded our dermatologic footprint to include nine marketed dermatology products and have our
pivotal Phase 3 clinical program underway for DFD-29, which is being evaluated for the treatment of papulopustular rosacea. We plan to
launch one additional prescription product in the first half of 2022. With a strong financial foundation, a seasoned dermatology sales
force and leadership team, and a strategic development pipeline, Journey Medical is well-positioned for continued growth in 2022 and beyond."
| The Company's twelve-month non-GAAP adjusted earnings before interest, taxes, depreciation, and amortization ("EBITDA") for 2021 including one-time charges of non-cash stock compensation, Qbrexza inventory step-up cost, cyber security loss, research and development license and activity, was a positive $2.9 million (referenced in the table below). | ||
| The Company's non-GAAP results in the table below reflect non-GAAP net loss of $16.9 million, or $1.66 per share basic and diluted, for the full year of 2021, compared to non-GAAP net income of $7.6 million, or $0.83 per share basic, and $0.70 per share diluted for the full year of 2020. |
Recent Corporate Highlights:
Use of Non-GAAP Measures:
In addition to the GAAP financial measures as
presented in our Form 10-K that will be filed with the Securities and Exchange Commission ("SEC") on March 25, 2022, the Company
has, in this press release, included certain non-GAAP measurements. In addition, the Company has also provided a Journey Medical non-GAAP
measurement, which starts with the GAAP (loss) income and removes stock-based compensation expense, non-cash interest expense, amortization
of licenses and debt discount, changes in fair value of derivative liability, Qbrexza inventory step-up, depreciation expense and wire
transfer fraud loss.
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, non-GAAP (loss) income 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. We utilize non-GAAP measures such
as EBITDA and adjusted EBITDA, or adjusted operating income.
Adjusted EBITDA is defined as earnings for the period presented, before interest, taxes, depreciation, and amortization. Adjusted EBITDA
(adjusted operating income) represents EBITDA adjusted for stock compensation, non-operating fair value adjustments, inventory step-ups,
research and development and other non-recurring items considered not a direct reflection of our core operations and our ongoing performance.
The table below provides a reconciliation from
GAAP to non-GAAP measures:
| For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| ($'s in thousands except for share and per share amounts) | 2021 | 2020 | 2021 | 2020 | ||||||||||||
| Net (Loss) income | $ | (21,751 | ) | $ | 2,502 | $ | (43,994 | ) | $ | 5,283 | ||||||
| EBITDA: | ||||||||||||||||
| Interest | 4,096 | 206 | 7,032 | 698 | ||||||||||||
| Taxes | 8,335 | 918 | 1,634 | 1,870 | ||||||||||||
| Depreciation | - | - | - | - | ||||||||||||
| Amortization | 491 | 355 | 2,474 | 1,419 | ||||||||||||
| EBITDA | $ | (8,829 | ) | $ | 3,981 | $ | (32,854 | ) | $ | 9,270 | ||||||
| ADJUSTED EBITDA (Adjusted Operating Income): | ||||||||||||||||
| Stock based compensation | 2,425 | 22 | 2,466 | 153 | ||||||||||||
| Change in fair value of derivative liabilities | 263 | - | 447 | - | ||||||||||||
| Qbrexza inventory step-up | 2,299 | - | 6,538 | - | ||||||||||||
| Wire transfer fraud loss | 0 | - | 9,540 | - | ||||||||||||
| R&D | 1,992 | - | 2,739 | - | ||||||||||||
| R&D Licenses Acquired | 0 | - | 13,819 | - | ||||||||||||
| Severance | 175 | - | 175 | - | ||||||||||||
| Adjusted EBITDA (Adjusted Operating Income) | $ | (1,675 | ) | $ | 4,003 | $ | 2,870 | $ | 9,423 | |||||||
| NON-GAAP: | ||||||||||||||||
| Net (Loss) income | $ | (21,751 | ) | $ | 2,502 | $ | (43,994 | ) | $ | 5,283 | ||||||
| Non-cash related items | ||||||||||||||||
| Stock based compensation | 2,425 | 22 | 2,466 | 153 | ||||||||||||
| Non-cash interest | 2,004 | 206 | 3,038 | 698 | ||||||||||||
| Amortization of licenses | 491 | 355 | 2,474 | 1,419 | ||||||||||||
| Amortization of debt discount | 1,923 | - | 2,571 | - | ||||||||||||
| Depreciation | - | 1 | - | 5 | ||||||||||||
| Change in fair value of derivative liabilities | 263 | - | 447 | - | ||||||||||||
| Qbrexza inventory step-up | 2,299 | - | 6,538 | - | ||||||||||||
| Non-recurring items | ||||||||||||||||
| Wire transfer fraud loss | - | 9,540 | (2) | |||||||||||||
| Non-GAAP income (loss) | $ | (12,346 | ) (1) | $ | 3,086 | $ | (16,920 | ) (1) | $ | 7,558 | ||||||
| Per common share - basic: | ||||||||||||||||
| Net (loss) income (GAAP) | $ | (1.64 | ) | $ | 0.27 | $ | (4.32 | ) | $ | 0.58 | ||||||
| Non-GAAP Net income (loss) | $ | (0.93 | ) | $ | 0.34 | $ | (1.66 | ) | $ | 0.83 | ||||||
| Per common share - diluted: | ||||||||||||||||
| Net (loss) income (GAAP) | $ | (1.64 | ) | $ | 0.23 | $ | (4.32 | ) | $ | 0.49 | ||||||
| Non-GAAP Net income (loss) | $ | (0.93 | ) | $ | 0.28 | $ | (1.66 | ) | $ | 0.70 | ||||||
| Weighted average common shares outstanding - basic | 13,244,773 | 9,143,882 | 10,189,844 | 9,135,985 | ||||||||||||
| Weighted average common shares outstanding - diluted | 13,244,773 | 10,891,394 | 10,189,844 | 10,836,122 |
Conference Call and Webcast Information
Journey Medical management will conduct a conference
call and audio webcast at 4:30 p.m. ET on March 23, 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 ten
minutes prior to the scheduled start time and ask to be joined into the Journey Medical conference call. Participants can register for
the conference by navigating to https://dpregister.com/sreg/10164652/f202af9c44. 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 nine 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 is registered under the Securities Exchange Act of 1934, as amended, and 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. 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; as well as other risks described in our SEC filings. 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. The information contained herein is intended to be reviewed in its totality, and any stipulations, conditions
or provisos that apply to a given piece of information in one part of this press release should be read as applying mutatis mutandis
to every other instance of such information appearing herein.
Jaclyn Jaffe and Bill Begien
Media Relations Contact:
JOURNEY MEDICAL CORPORATION
Condensed Consolidated
($ in thousands except
for share and per share amounts)
| December 31, | ||||||||
| ($'s in thousands except for share and per share amounts) | 2021 | 2020 | ||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 49,081 | $ | 8,246 | ||||
| Accounts receivable, net of reserves | 23,112 | 23,928 | ||||||
| Inventory | 9,862 | 1,404 | ||||||
| Prepaid expenses and other current assets | 2,438 | 1,664 | ||||||
| Total current assets | 84,493 | 35,242 | ||||||
| Intangible assets, net | 12,552 | 15,029 | ||||||
| Operating lease right-of-use asset, net | 89 | 175 | ||||||
| Deferred tax assets | - | 1,454 | ||||||
| Other assets | 150 | 6 | ||||||
| Total assets | $ | 97,284 | $ | 51,906 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 22,812 | $ | 1,839 | ||||
| Accounts payable, related party | 589 | 117 | ||||||
| Accrued expenses | 22,733 | 21,498 | ||||||
| Accrued expenses, related party | 52 | - | ||||||
| Line of credit | 812 | - | ||||||
| Installment payments - licenses, short-term (net of debt discount of $490 and $778 as of December 31, 2021 and December 31, 2020, respectively) | 4,510 | 4,522 | ||||||
| Operating lease liabilities, short-term | 98 | 85 | ||||||
| Total current liabilities | 51,606 | 28,061 | ||||||
| Income tax payable | 8 | 99 | ||||||
| Note payable, related party | - | 5,220 | ||||||
| Installment payments - licenses, long-term (net of debt discount of $373 and $863 as of December 31, 2021 and December 31, 2020, respectively) | 3,627 | 8,137 | ||||||
| Operating lease liabilities, long-term | - | 97 | ||||||
| Total liabilities | 55,241 | 41,614 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' equity | ||||||||
| Common stock, $.0001 par value, 50,000,000 shares authorized, 11,316,344 and 3,151,333 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | 1 | - | ||||||
| Common stock - Class A, $.0001 par value, 50,000,000 shares authorized, 6,000,000 shares issued and outstanding as of December 31, 2021 and December 31, 2020 | 1 | 1 | ||||||
| Additional paid-in capital | 80,915 | 5,171 | ||||||
| (Accumulated deficit) retained earnings | (38,874 | ) | 5,120 | |||||
| Total stockholders' equity | 42,043 | 10,292 | ||||||
| Total liabilities and stockholders' equity | $ | 97,284 | $ | 51,906 |
Consolidated Statements of Operations
except for share and per share amounts)
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
| ($'s in thousands except for share and per share amounts) | 2021 | 2020 | 2021 | 2020 | |||||||||||
| Product revenue, net | $ | 17,517 | $ | 13,723 | $ | 63,134 | $ | 44,531 | |||||||
| Operating expenses | |||||||||||||||
| Cost of goods sold - product revenue | 9,525 | 4,281 | 32,084 | 14,594 | |||||||||||
| Research and development | 1,992 | - | 2,739 | - | |||||||||||
| Research and development - licenses acquired | - | - | 13,819 | - | |||||||||||
| Selling, general and administrative | 15,057 | 5,816 | 39,833 | 22,086 | |||||||||||
| Wire transfer fraud loss | - | - | 9,540 | - | |||||||||||
| Total operating expenses | 26,574 | 10,097 | 98,015 | 36,680 | |||||||||||
| (Loss) income from operations | (9,057 | ) | 3,626 | (34,881 | ) | 7,851 | |||||||||
| Other expense | |||||||||||||||
| Interest income | - | - | (2 | ) | - | ||||||||||
| Interest expense | 4,096 | 206 | 7,034 | 698 | |||||||||||
| Change in fair value of derivative liability | 263 | - | 447 | - | |||||||||||
| Total other expense | 4,359 | 206 | 7,479 | 698 | |||||||||||
| Net (loss) income before income taxes | (13,416 | ) | 3,420 | (42,360 | ) | 7,153 | |||||||||
| Income tax (benefit) expense | 8,335 | 918 | 1,634 | 1,870 | |||||||||||
| Net (loss) income | $ | (21,751 | ) | $ | 2,502 | $ | (43,994 | ) | $ | 5,283 | |||||
| Per common share - basic | $ | (1.64 | ) | $ | 0.27 | $ | (4.32 | ) | $ 0.58 | ||||||
| Per common share - diluted | $ | (1.64 | ) | $ | 0.23 | $ | (4.32 | ) | $ 0.49 | ||||||
| Weighted average common shares outstanding - basic | 13,244,773 | 9,143,882 | 10,189,844 | 9,135,985 | |||||||||||
| Weighted average common shares outstanding - diluted | 13,244,773 | 10,891,394 | 10,189,844 | 10,836,122 |