Full Press Release Details
Corporation Reports Third Quarter 2022 Financial Results and Recent Corporate Highlights
for the first nine months of 2022 increased 26% to $57.7 million versus the same period in 2021 of $45.6 million
Phase 3 studies are 75% enrolled to date
data from the Phase 3 clinical program evaluating DFD-29 for the treatment of papulopustular rosacea anticipated in the first half of
to hold conference call on November 10, 2022 at 4:30 p.m. ET
AZ - November 10, 2022 - 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.
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."
and Webcast Information
management will conduct a conference call and audio webcast at 4:30 p.m. ET on November 10, 2022.
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.
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.
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.
Condensed Consolidated Balance Sheets
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 |
Condensed Consolidated Statements of Operations
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 revenue | 7,221 | 11,167 | 23,057 | 22,559 | ||||||||||||
| Research and development | 2,812 | 718 | 6,687 | 747 | ||||||||||||
| Research and development - licenses acquired | - | 76 | - | 13,819 | ||||||||||||
| Selling, general and administrative | 15,575 | 10,755 | 45,481 | 24,776 | ||||||||||||
| Wire transfer fraud loss | - | 9,540 | - | 9,540 | ||||||||||||
| Total operating expenses | 25,608 | 32,256 | 75,225 | 71,441 | ||||||||||||
| Loss from operations | (9,492 | ) | (12,646 | ) | (17,522 | ) | (25,824 | ) | ||||||||
| Other expense | ||||||||||||||||
| Interest income | (3 | ) | - | (10 | ) | - | ||||||||||
| Interest expense | 559 | 1,373 | 1,402 | 2,936 | ||||||||||||
| Foreign exchange transaction losses | 22 | - | 22 | - | ||||||||||||
| Change in fair value of derivative liability | - | 2 | - | 184 | ||||||||||||
| Total other expense | 578 | 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:
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:
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.
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
provides a reconciliation from GAAP to non-GAAP measures:
of GAAP to Non-GAAP Adjusted EBITDA (Adjusted Operating Net Income (loss))
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.