Full Press Release Details
Journey Medical Corporation Reports Third Quarter
2021 Financial Results and Recent Corporate Highlights
Generated record net
revenues of $19.6 million for the third quarter of 2021
Completed initial public
offering of common stock and raised $31.2 million in net proceeds
Scottsdale, AZ - December 10, 2021
- 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 third quarter ended September 30, 2021.
Claude Maraoui, Journey Medical's President
and Chief Executive Officer, said, "This is an exciting time for Journey Medical, as we recently debuted on the Nasdaq, strengthened
our leadership team with the addition of Chief Financial Officer Ernest De Paolantonio and broadened our board of directors to include
four new independent directors. Looking ahead, we plan to dose the first patient in the Phase 3 clinical program for DFD-29 that is being
evaluated for the treatment of inflammatory lesions of rosacea in the first quarter of 2022 and plan to launch one additional prescription
product in the first half of 2022. Our strong financial foundation, seasoned dermatology sales force and strategic development pipeline
position us for continued and long-term growth."
Recent Corporate Highlights:
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") on December 15, 2021 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.
The table below provides a reconciliation from
GAAP to non-GAAP measures:
| For the three months ended | For the nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| ($ in thousands except for share and per share amounts) | 2021 | 2020 | 2021 | 2020 | ||||||||||||
| Net (Loss) income | $ | (10,646 | ) | $ | 29 | $ | (22,243 | ) | $ | 2,781 | ||||||
| Non-cash related items | ||||||||||||||||
| Stock based compensation | 8 | 32 | 41 | 131 | ||||||||||||
| Non-cash interest | 620 | 187 | 1,650 | 492 | ||||||||||||
| Amortization of licenses | 658 | 355 | 1,983 | 1,065 | ||||||||||||
| Amortization of debt discount | 378 | - | 648 | - | ||||||||||||
| Depreciation | - | 1 | - | 4 | ||||||||||||
| Change in fair value of derivative liabilities | 2 | - | 184 | - | ||||||||||||
| Qbrexza inventory step-up | 3,001 | - | 4,239 | - | ||||||||||||
| Non-recurring items | ||||||||||||||||
| Wire transfer fraud loss | 9,450 | (2) | 9,450 | (2) | ||||||||||||
| Non-GAAP income (loss) | $ | 3,470 | (1) | $ | 604 | $ | (4,049 | ) (1) | $ | 4,473 | ||||||
| Per common share - basic: | ||||||||||||||||
| Net (loss) income (GAAP) | $ | (1.16 | ) | $ | 0.00 | $ | (2.43 | ) | $ | 0.30 | ||||||
| Non-GAAP Net income (loss) | $ | 0.38 | $ | 0.07 | $ | (0.44 | ) | $ | 0.49 | |||||||
| Per common share - diluted: | ||||||||||||||||
| Net (loss) income (GAAP) | $ | (1.16 | ) | $ | 0.00 | $ | (2.43 | ) | $ | 0.26 | ||||||
| Non-GAAP Net income (loss) | $ | 0.32 | $ | 0.06 | $ | (0.44 | ) | $ | 0.41 | |||||||
| Weighted average common shares outstanding - basic | 9,161,333 | 9,133,333 | 9,160,344 | 9,133,333 | ||||||||||||
| Weighted average common shares outstanding - diluted | 10,892,050 | 10,800,475 | 9,160,344 | 10,817,678 |
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 seven 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; 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
Consolidated Balance Sheets
($ in thousands except for share and per share
| September 30, | December 31, | |||||||
| 2021 | 2020 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | 21,689 | $ | 8,246 | ||||
| Accounts receivable, net of reserves | 31,738 | 23,928 | ||||||
| Inventory | 11,614 | 1,404 | ||||||
| Prepaid expenses and other current assets | 1,754 | 1,664 | ||||||
| Total current assets | 66,795 | 35,242 | ||||||
| Long-term assets | ||||||||
| Intangible assets, net | 13,043 | 15,029 | ||||||
| Operating lease right-of-use asset, net | 111 | 175 | ||||||
| Deferred tax assets | 8,361 | 1,454 | ||||||
| Other assets | 749 | 6 | ||||||
| Total long-term assets | 22,264 | 16,664 | ||||||
| Total assets | $ | 89,059 | $ | 51,906 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 28,180 | $ | 1,839 | ||||
| Accounts payable, related party | 600 | 117 | ||||||
| Accrued expenses | 26,048 | 21,498 | ||||||
| Accrued expenses, related party | 433 | - | ||||||
| Installment payments - licenses, short-term (net of debt discount of $567 and $778 as of September 30, 2021 and December 31, 2020, respectively) | 4,433 | 4,522 | ||||||
| Operating lease liabilities, short-term | 96 | 85 | ||||||
| Total current liabilities | 59,790 | 28,061 | ||||||
| Income tax payable | - | 99 | ||||||
| Note payable, related party | 14,972 | 5,220 | ||||||
| Installment payments - licenses, long-term (net of debt discount of $461 and $863 as of September 30, 2021 and December 31, 2020, respectively) | 3,539 | 8,137 | ||||||
| Convertible class A preferred stock settled note, short-term (net of debt discount of $1,923 as of September 30, 2021) | 18,078 | - | ||||||
| Derivative warrant liability | 4,365 | - | ||||||
| Operating lease liabilities, long-term | 24 | 97 | ||||||
| Total liabilities | 100,768 | 41,614 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' equity (deficit) | ||||||||
| Common stock, $.0001 par value, 50,000,000 shares authorized, 3,161,333 and 3,151,333 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively | - | - | ||||||
| Common stock - Class A, $.0001 par value, 50,000,000 shares authorized, 6,000,000 shares issued and outstanding as of September 30, 2021 and December 31, 2020 | 1 | 1 | ||||||
| Additional paid-in capital | 5,413 | 5,171 | ||||||
| (Accumulated deficit) Retained earnings | (17,123 | ) | 5,120 | |||||
| Total stockholders' (deficit) equity | (11,710 | ) | 10,292 | |||||
| Total liabilities and stockholders' equity | $ | 89,059 | $ | 51,906 |
Condensed Consolidated Statements of Operations
except for share and per share amounts)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Product revenue, net | $ | 19,610 | $ | 9,447 | $ | 45,617 | $ | 30,808 | ||||||||
| Operating expenses | ||||||||||||||||
| Cost of goods sold - product revenue | 11,167 | 3,379 | 22,559 | 10,313 | ||||||||||||
| Research and development | 718 | - | 747 | - | ||||||||||||
| Research and development - licenses acquired | 76 | - | 13,819 | - | ||||||||||||
| Selling, general and administrative | 10,755 | 5,829 | 24,776 | 16,270 | ||||||||||||
| Wire transfer fraud loss | 9,540 | - | 9,540 | - | ||||||||||||
| Total operating expenses | 32,256 | 9,208 | 71,441 | 26,583 | ||||||||||||
| (Loss) income from operations | (12,646 | ) | 239 | (25,824 | ) | 4,225 | ||||||||||
| Other expense | ||||||||||||||||
| Interest expense | 1,373 | 187 | 2,936 | 492 | ||||||||||||
| Change in fair value of derivative liability | 2 | - | 184 | - | ||||||||||||
| Total other expense | 1,375 | 187 | 3,120 | 492 | ||||||||||||
| (Loss) income before income taxes | (14,021 | ) | 52 | (28,944 | ) | 3,733 | ||||||||||
| Income tax (benefit) expense | (3,375 | ) | 23 | (6,701 | ) | 952 | ||||||||||
| Net (loss) income | $ | (10,646 | ) | $ | 29 | $ | (22,243 | ) | $ | 2,781 | ||||||
| Net (loss) income per common share - basic | $ | (1.16 | ) | $ | 0.00 | $ | (2.43 | ) | $ | 0.30 | ||||||
| Net (loss) income per common share - diluted | $ | (1.16 | ) | $ | 0.00 | $ | (2.43 | ) | $ | 0.26 | ||||||
| Weighted average common shares outstanding - basic | 9,161,333 | 9,133,333 | 9,160,344 | 9,133,333 | ||||||||||||
| Weighted average common shares outstanding - diluted | 9,161,333 | 10,800,475 | 9,160,344 | 10,817,678 |