Full Press Release Details
Corporation Reports Third Quarter 2024 Financial Results and Recent Corporate Highlights
FDA approved Emrosi (Minocycline Hydrochloride Extended Release Capsules, 40 mg) for the treatment of inflammatory
lesions of rosacea in adults; launch expected in late Q1 or early Q2 of 2025
revenues for the third quarter ended September 30, 2024 were $14.6 million
AZ - November 12, 2024 - Journey Medical Corporation (Nasdaq: DERM) ("Journey Medical"
or "the Company", "we", or "our"), 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 third quarter ended
Claude Maraoui, Journey Medical's Co-Founder,
President and Chief Executive Officer, said, "Given the recent FDA approval of Emrosi , (Minocycline Hydrochloride Extended
Release Capsules, 40 mg), formerly referred to as DFD-29, for the treatment of inflammatory lesions of rosacea in adults, we are completing
manufacturing activities and deploying our experienced dermatology sales force to quickly enable patient access to this unique therapeutic
solution. This approval is a transformational milestone for both Journey Medical and the dermatology community, as Emrosi has the potential
to become the best-in-class oral medication and standard of care to address inflammatory lesions of rosacea."
Mr. Maraoui continued, "We also continued
to commercialize our core dermatology products and experienced a solid third quarter of 2024, with $14.6 million in revenues. We look
forward to continued growth with the anticipated launch of Emrosi in late first quarter or early second
Recent Corporate Highlights:
About Journey Medical Corporation
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
commercialization of our recently approved product, EmrosiTM, 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 Balance Sheets
($ in thousands except for share and per share
| September 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 22,461 | $ | 27,439 | ||||
| Accounts receivable, net of reserves | 10,671 | 15,222 | ||||||
| Inventory | 11,788 | 10,206 | ||||||
| Prepaid expenses and other current assets | 1,242 | 3,588 | ||||||
| Total current assets | 46,162 | 56,455 | ||||||
| Intangible assets, net | 17,844 | 20,287 | ||||||
| Operating lease right-of-use asset, net | 32 | 101 | ||||||
| Other assets | 6 | 6 | ||||||
| Total assets | $ | 64,044 | $ | 76,849 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 15,339 | $ | 18,149 | ||||
| Due to related party | 370 | 195 | ||||||
| Accrued expenses | 16,008 | 20,350 | ||||||
| Accrued interest | 332 | 22 | ||||||
| Income taxes payable | - | 53 | ||||||
| Installment payments - licenses, short-term | 1,250 | 3,000 | ||||||
| Operating lease liability, short-term | 34 | 99 | ||||||
| Total current liabilities | 33,333 | 41,868 | ||||||
| Term loan, long-term, net of debt discount | 19,785 | 14,622 | ||||||
| Operating lease liability, long-term | - | 9 | ||||||
| Total liabilities | 53,118 | 56,499 | ||||||
| Stockholders' equity | ||||||||
| Common stock, $.0001 par value, 50,000,000 shares authorized, 14,728,904 and 13,323,952 shares issued and outstanding as of September 30, 2024 and December 31, 2023, 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, 2024 and December 31, 2023 | 1 | 1 | ||||||
| Additional paid-in capital | 99,472 | 92,703 | ||||||
| Accumulated deficit | (88,548 | ) | (72,355 | ) | ||||
| Total stockholders' equity | 10,926 | 20,350 | ||||||
| Total liabilities and stockholders' equity | $ | 64,044 | $ | 76,849 |
Consolidated Statements of Operations
($ in thousands except for share and per share
| Three-Month Periods Ended | Nine-Month Periods Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Revenue: | ||||||||||||||||
| Product revenue, net | $ | 14,629 | $ | 15,279 | $ | 42,514 | $ | 44,405 | ||||||||
| Other revenue | - | 19,260 | - | 19,519 | ||||||||||||
| Total revenue | 14,629 | 34,539 | 42,514 | 63,924 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Cost of goods sold - product revenue | 5,285 | 6,429 | 18,642 | 20,645 | ||||||||||||
| Research and development | 842 | 2,229 | 9,639 | 6,036 | ||||||||||||
| Selling, general and administrative | 11,396 | 8,636 | 30,144 | 34,069 | ||||||||||||
| Loss on impairment of intangible assets | - | - | - | 3,143 | ||||||||||||
| Total operating expenses | 17,523 | 17,294 | 58,425 | 63,893 | ||||||||||||
| Income (loss) from operations | (2,894 | ) | 17,245 | (15,911 | ) | 31 | ||||||||||
| Other expense (income) | ||||||||||||||||
| Interest income | (188 | ) | (8 | ) | (566 | ) | (209 | ) | ||||||||
| Interest expense | 758 | 268 | 1,869 | 1,674 | ||||||||||||
| Foreign exchange transaction losses | 51 | 101 | 104 | 181 | ||||||||||||
| Gain on extinguishment of debt | (1,125 | ) | - | (1,125 | ) | - | ||||||||||
| Total other expense (income) | (504 | ) | 361 | 282 | 1,646 | |||||||||||
| Income (loss) before income taxes | (2,390 | ) | 16,884 | (16,193 | ) | (1,615 | ) | |||||||||
| Income tax expense | - | 95 | - | 95 | ||||||||||||
| Net income (loss) | $ | (2,390 | ) | $ | 16,789 | $ | (16,193 | ) | $ | (1,710 | ) | |||||
| Net income (loss) per common share: | ||||||||||||||||
| Basic | $ | (0.12 | ) | $ | 0.91 | $ | (0.80 | ) | $ | (0.09 | ) | |||||
| Diluted | $ | (0.12 | ) | $ | 0.80 | $ | (0.80 | ) | $ | (0.09 | ) | |||||
| Weighted average number of common shares: | ||||||||||||||||
| Basic | 20,537,794 | 18,416,368 | 20,137,942 | 18,078,437 | ||||||||||||
| Diluted | 20,537,794 | 21,034,758 | 20,137,942 | 18,078,437 |
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"), 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 and amortization, less certain
other non-cash and infrequent items not considered to be normal, recurring operating expenses, including, share-based compensation expense,
amortization and impairments of acquired intangible assets, severance, short-term 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 the 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 EBITDA, Adjusted EBITDA per share basic, Adjusted EBITDA
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 competitors.
The table below provides a reconciliation from
GAAP to non-GAAP measures:
JOURNEY MEDICAL CORPORATION
Reconciliation of GAAP to Non-GAAP Adjusted
(Dollars in thousands except for share and per
| Three-Month Periods Ended | Nine-Month Periods Ended | |||||||||||||||
| September 30 | September 30 | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| GAAP Net Loss | $ | (2,390 | ) | $ | 16,789 | $ | (16,193 | ) | $ | (1,710 | ) | |||||
| EBITDA: | ||||||||||||||||
| Interest | 570 | 260 | 1,303 | 1,465 | ||||||||||||
| Taxes | - | 95 | - | 95 | ||||||||||||
| Amortization of acquired intangible assets | 814 | 814 | 2,443 | 2,952 | ||||||||||||
| EBITDA | (1,006 | ) | 17,958 | (12,447 | ) | 2,802 | ||||||||||
| Non-GAAP Adjusted EBITDA: | ||||||||||||||||
| Non-Cash Components: | ||||||||||||||||
| Share-based compensation | 1,640 | 558 | 4,720 | 2,077 | ||||||||||||
| Gain on extinguishment of debt | (1,125 | ) | - | (1,125 | ) | - | ||||||||||
| Loss on impairment of intangible assets | - | - | - | 3,143 | ||||||||||||
| Non-core & Infrequent Components: | ||||||||||||||||
| Short-term R&D (includes one-time DFD-29 license and milestone payments) | 692 | 2,206 | 9,173 | 5,949 | ||||||||||||
| Foreign exchange transaction losses | 51 | 100 | 104 | 181 | ||||||||||||
| Severance | - | - | 147 | 711 | ||||||||||||
| Non-GAAP Adjusted EBITDA | $ | 252 | $ | 20,822 | $ | 572 | $ | 14,863 | ||||||||
| Net income (loss) & Non-GAAP Adjusted EBITDA per common share: | ||||||||||||||||
| Basic | ||||||||||||||||
| GAAP Net Loss | $ | (0.12 | ) | $ | 0.91 | $ | (0.80 | ) | $ | (0.09 | ) | |||||
| Non-GAAP Adjusted EBITDA | $ | 0.01 | $ | 1.13 | $ | 0.03 | $ | 0.82 | ||||||||
| Diluted | ||||||||||||||||
| GAAP Net Loss | $ | (0.12 | ) | $ | 0.80 | $ | (0.80 | ) | $ | (0.09 | ) | |||||
| Non-GAAP Adjusted EBITDA | $ | 0.01 | $ | 0.99 | $ | 0.02 | $ | 0.72 | ||||||||
| Weighted average number of common shares: | ||||||||||||||||
| GAAP - Basic | 20,537,794 | 18,416,368 | 20,137,942 | 18,078,437 | ||||||||||||
| GAAP - Diluted | 20,537,794 | 21,034,758 | 20,137,942 | 18,078,437 | ||||||||||||
| Non-GAAP - Basic | 20,537,794 | 18,416,368 | 20,137,942 | 18,078,437 | ||||||||||||
| Non-GAAP - Diluted | 24,762,014 | 21,034,758 | 24,263,348 | 20,588,661 |