Full Press Release Details
Journey Medical Corporation Reports Full-Year
2023 Financial Results and Recent Corporate Highlights
Company generated total revenues
of $79.2 million for the full year ended December 31, 2023, a 7% increase from the $73.7 million reported in 2022
Achieved $15.6 million in
operating cost savings in 2023, ahead of initial guidance of $12.0 million
New Drug Application for rosacea treatment candidate
DFD-29 accepted for U.S. FDA review; PDUFA goal date of November 4, 2024
Company to hold conference
call today at 4:30 p.m. ET to discuss the financial results and provide a business update
Scottsdale, AZ - March 21, 2024 -
Journey Medical Corporation (Nasdaq: DERM) ("Journey Medical" or "the Company"), a commercial-stage pharmaceutical
company that primarily focuses on the selling and marketing of U.S. Food and Drug Administration ("FDA")-approved prescription
pharmaceutical products for the treatment of dermatological conditions, today announced financial results and recent corporate highlights
for the full year ended December 31, 2023.
Claude Maraoui, Journey Medical's Co-Founder,
President and Chief Executive Officer, said, "2023 was a year of growth and development for Journey Medical. Our full-year revenue
reflected a record high for the Company, attributed primarily to our efforts to expand the reach of Qbrexza in additional territories
in Asia through a licensing agreement with Maruho Co., Ltd. ("Maruho"), as well as continued sales of our four core dermatology
branded products. We also significantly streamlined our cost infrastructure, positioning the Company to realize improved operating leverage
from our future sales and anticipated growth. Another key highlight of the year was the progress that we made in advancing DFD-29 (Minocycline
Hydrochloride Modified Release Capsules, 40 mg) through late-stage clinical development. Based on the results of our two Phase 3 trials,
DFD-29 has the potential to become the only oral, systemic therapy to address inflammatory lesions and erythema (redness) from rosacea,
differentiating it as a potential best-in-class solution. Based on the positive results, we submitted a New Drug Application ("NDA")
to the U.S. Food and Drug Administration in January 2024 for the potential approval of DFD-29. The FDA accepted the NDA this month and
has set a Prescription Drug User Fee Act ("PDUFA") goal date of November 4, 2024. Given our portfolio of recognized dermatology
brands, our proven sales force and streamlined cost infrastructure, and the potential to launch DFD-29 in early 2025, we believe Journey
is well-positioned for growth and to bring significant value to patients, our physician customers, and our shareholders."
| Selling, general and administrative expenses were $43.9 million for the full year 2023, compared to $59.5 million for 2022. The decrease is mainly due to our expense reduction efforts primarily in sales and marketing and other SG&A areas. During the fourth quarter of 2022, we began the implementation of a cost reduction initiative designed to improve operational efficiencies, optimize expenses and reduce overall costs. | ||
| Research and development costs were $7.5 million for the full year 2023, compared to $10.9 million for the full year 2022. The decrease is due to lower clinical trial expenses for DFD-29 given the completion of the Phase 3 clinical trial program. | ||
| Net loss was $(3.9) million, or $(0.21) per share basic and diluted for the full year 2023, compared to net loss of $(29.6) million or $(1.69) per share basic and diluted for the full year 2022. The $25.8 million decrease in net loss from period-to-period was driven by our expense optimization efforts and the Maruho upfront payment. | ||
| The Company's non-GAAP results in the table below reflect Adjusted EBITDA of $15.6 million, or $0.85 per share basic and $0.75 per share diluted for the full year 2023. This compares to Adjusted EBITDA of $(7.3 million), or $(0.42) per share basic and diluted for the full year 2022. Adjusted EBITDA, Adjusted EBITDA per share basic and Adjusted EBITDA per share diluted are non-GAAP financial measures, each of which are reconciled to the most directly comparable financial measures calculated in accordance with GAAP below under " Use of Non-GAAP Measures ." | ||
| At December 31, 2023, Journey Medical's cash and cash equivalents totaled $27.4 million, compared to $24.8 million on September 30, 2023, and $32.0 million on December 31, 2022, an increase of $2.6 million for the quarter and a decrease of $4.6 million from the prior-year period. | ||
| In December 2023, Journey Medical entered into a $20.0 million credit facility with SWK Holdings Corporation ("SWK"), a specialized finance company with a focus on the global healthcare sector. The credit facility provides for an initial term loan of $15.0 million that the Company intends to use for general corporate purposes, including to support the potential launch of DFD-29. The Company also has the option to draw an additional tranche of $5.0 million under the credit facility within one year. |
FY 2023 and Recent Corporate Highlights:
| In March 2024, the FDA accepted the NDA for DFD-29 (Minocycline Hydrochloride Modified Release Capsules, 40 mg) and set a PDUFA goal date of November 4, 2024. If approved, DFD-29 will be the lowest-dose oral minocycline on the market and has the potential to be the new treatment paradigm for the millions of patients suffering from rosacea. The Company had submitted the NDA to the FDA seeking approval for DFD-29 for the treatment of inflammatory lesions and erythema of rosacea in adults in January 2024. | ||
| In October 2023, Journey Medical announced data from a comparative bioavailability (bridging) study of DFD-29 vs. Solodyn (Minocycline Hydrochloride Extended-Release Tablets, 105 mg), which were presented at the 43rd Annual Fall Clinical Dermatology Conference. The data demonstrated that systemic exposure of DFD-29 was significantly lower than that of Solodyn and that DFD-29 was safe and well tolerated throughout the study. | ||
| In September 2023, Journey Medical entered into an exclusive license agreement with Maruho. Under the terms of the Agreement, Journey Medical received a $19.0 million non-refundable upfront payment and granted Maruho an exclusive license to develop and commercialize Qbrexza (glycopyrronium tosylate hydrate) for the treatment of hyperhidrosis in South Korea, Taiwan, Hong Kong, Macau, Thailand, Indonesia, Malaysia, Philippines, Singapore, Vietnam, Brunei, Cambodia, Myanmar and Laos (the "Territory"). Maruho is responsible for all development and commercialization costs for the product throughout the Territory. |
| In July 2023, Journey Medical announced positive topline results from the two DFD-29 Phase 3 clinical trials (MVOR-1 & MVOR-2) for the treatment of rosacea. Both randomized controlled trials achieved their co-primary and all secondary endpoints with subjects completing the 16-week treatment with no significant safety issues. DFD-29 demonstrated statistical superiority compared to both Oracea capsules and placebo for Investigator's Global Assessment (IGA) treatment success and the reduction in the total inflammatory lesion count in both clinical trials. The Company also announced results from the DFD-29 Phase 3 studies on a secondary endpoint related to erythema (redness) assessment. DFD-29 showed significantly superior reduction in Clinicians Erythema Assessment (CEA) compared to placebo in both of the Phase 3 clinical trials. | ||
| In June 2023, Journey Medical announced positive topline results from the Phase 1 clinical trial assessing the impact of DFD-29 on the microbial flora of healthy adults and also evaluated the safety and tolerability of DFD-29 . The study achieved all primary objectives and no significant safety issues were noted during the study. The results indicate that DFD-29 can be safely used for up to 16 weeks with no significant risk of microbiota suppression or development of resistance. |
Conference Call and Webcast Information
Journey Medical management will conduct a conference
call and audio webcast on March 21, 2024, 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/10186538/fb9ff440e2. 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 seven branded and two 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," "potential"
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, 2023, 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
Unaudited Consolidated
($ in thousands except
for share and per share amounts)
| December 31, | ||||||||
| 2023 | 2022 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 27,439 | $ | 32,003 | ||||
| Accounts receivable, net of reserves | 15,222 | 28,208 | ||||||
| Inventory | 10,206 | 14,159 | ||||||
| Prepaid expenses and other current assets | 3,588 | 3,309 | ||||||
| Total current assets | 56,455 | 77,679 | ||||||
| Intangible assets, net | 20,287 | 27,197 | ||||||
| Operating lease right-of-use asset, net | 101 | 189 | ||||||
| Other assets | 6 | 95 | ||||||
| Total assets | $ | 76,849 | $ | 105,160 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 18,149 | $ | 36,570 | ||||
| Due to related party | 195 | 413 | ||||||
| Accrued expenses | 20,350 | 19,388 | ||||||
| Accrued interest | 22 | 160 | ||||||
| Income taxes payable | 53 | 35 | ||||||
| Line of credit | - | 2,948 | ||||||
| Deferred cash payment, net of discount | - | 4,991 | ||||||
| Installment payments - licenses, short-term | 3,000 | 2,244 | ||||||
| Operating lease liability, short-term | 99 | 83 | ||||||
| Total current liabilities | 41,868 | 66,832 | ||||||
| Term loan, net of discount | 14,622 | 19,826 | ||||||
| Installment payments - licenses, long-term | - | 1,412 | ||||||
| Operating lease liability, long-term | 9 | 108 | ||||||
| Total liabilities | 56,499 | 88,178 | ||||||
| Stockholders' equity | ||||||||
| Common stock, $.0001 par value, 50,000,000 shares authorized, 13,323,952 and 11,765,700 shares issued and outstanding as of December 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 December 31, 2023 and December 31, 2022 | 1 | 1 | ||||||
| Additional paid-in capital | 92,703 | 85,482 | ||||||
| Accumulated deficit | (72,355 | ) | (68,502 | ) | ||||
| Total stockholders' equity | 20,350 | 16,982 | ||||||
| Total liabilities and stockholders' equity | $ | 76,849 | $ | 105,160 |
Consolidated Statements of Operations
except for share and per share amounts)
| Years Ended | ||||||||
| December 31, | ||||||||
| 2023 | 2022 | |||||||
| Revenue: | ||||||||
| Product revenue, net | $ | 59,662 | $ | 70,995 | ||||
| Other revenue | 19,519 | 2,674 | ||||||
| Total revenue | 79,181 | 73,669 | ||||||
| Operating expenses | ||||||||
| Cost of goods sold - product revenue | 26,660 | 30,775 | ||||||
| Research and development | 7,541 | 10,943 | ||||||
| Selling, general and administrative | 43,910 | 59,468 | ||||||
| Loss on impairment of intangible assets | 3,143 | - | ||||||
| Total operating expenses | 81,254 | 101,186 | ||||||
| Loss from operations | (2,073 | ) | (27,517 | ) | ||||
| Other expense (income) | ||||||||
| Interest income | (322 | ) | (60 | ) | ||||
| Interest expense | 1,698 | 2,019 | ||||||
| Foreign exchange transaction losses | 183 | 89 | ||||||
| Total other expense (income) | 1,559 | 2,048 | ||||||
| Loss before income taxes | (3,632 | ) | (29,565 | ) | ||||
| Income tax expense | 221 | 63 | ||||||
| Net Loss | $ | (3,853 | ) | $ | (29,628 | ) | ||
| Net loss per common share: | ||||||||
| Basic and diluted | $ | (0.21 | ) | $ | (1.69 | ) | ||
| Weighted average number of common shares: | ||||||||
| Basic and diluted | 18,232,422 | 17,531,274 |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements