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
second quarter ended June 30, 2024.
Claude Maraoui, Journey Medical’s Co-Founder,
President and Chief Executive Officer, said, “We continued to
execute on our business plan in the second quarter, delivering
$14.9 million in total net product revenue and positive Adjusted
EBITDA. We are pleased with these results, particularly given our
strategic decision to reduce the Company’s expense base in 2023. We
believe that the business is now sufficiently right-sized to
support our core dermatology franchise and effectively launch
DFD-29. We’re looking forward to the DFD-29 PDUFA date and
anticipate a productive second half of 2024 with additional
business progress and continued financial performance. Importantly,
we grew revenue 14% sequentially from the first quarter of this
year as we remain on track to deliver on our 2024 financial
guidance. We also strengthened our corporate team with the
appointment of Joseph M. Benesch as our permanent Chief Financial
Officer and the appointment of Michael C. Pearce to our Board of
Directors.”
Financial Results:
- Total net product revenues were
$14.9 million for the second quarter of 2024, a 12% decrease
compared to the second quarter of 2023. The decrease from the
prior-year period was primarily due to the timing of customer
orders for Qbrexza®, continued generic competition for Targadox®,
and our decision to discontinue Ximino® at the end of the third
quarter of 2023. Net product revenues in the second quarter of 2024
increased by 14% sequentially from the first quarter of 2024.
- Research and development costs were
$0.9 million in the second quarter of 2024, compared to $1.8
million in the second quarter of 2023. The decrease is due to lower
clinical trial expenses to develop DFD-29, as the clinical phase of
the project has concluded.
- Selling, general and administrative
expenses were $10.3 million for the second quarter 2024, a $1.8
million decrease from the $12.1 million reported in the second
quarter of 2023. The decrease is due to the Company’s expense
reduction efforts initiated in 2023.
- The Company significantly reduced
its net loss by $5.0 million, from a net loss of $8.4 million or
$(0.46) per share basic and diluted, for the second quarter of
2023, to a net loss of $3.4 million or $(0.17) per share basic and
diluted, for the second quarter of 2024.
- The Company’s
non-GAAP results in the table below reflect positive Adjusted
EBITDA of $0.3 million, or $0.02 per share basic and $0.01 per
share diluted, for the second quarter of 2024. This compares to
negative Adjusted EBITDA of $(0.6 million), or $(0.04) per share
basic and diluted, for the second quarter of 2023. Adjusted EBITDA,
Adjusted EBITDA per share basic and Adjusted EBITDA per share
diluted are non-GAAP financial measures, each of which is
reconciled to the most directly comparable financial measures
calculated in accordance with GAAP below under “Use of Non-GAAP
Measures.”
- At June 30, 2024, the Company had
$23.9 million in cash and cash equivalents, as compared to $24.1
million at March 31, 2024, and $27.4 million at December 31,
2023.
Recent Corporate
Highlights:
- In March 2024,
the FDA accepted the Company’s NDA filing for DFD-29 and set a
PDUFA goal date of November 4, 2024. If approved, DFD-29 has
the potential to be the only oral, systemic therapy to address both
inflammatory lesions and erythema (redness) from rosacea,
differentiating it as a potential best-in-class solution for the
millions of patients suffering from rosacea. Journey Medical
submitted its NDA to the FDA seeking approval for DFD-29 in January
2024.
- In April 2024,
Journey Medical appointed Joseph M. Benesch as its Chief Financial
Officer. Mr. Benesch served as Journey Medical’s Interim Chief
Financial Officer since January 2023 and previously, he was
Corporate Controller at the Company since November 2021.
- In July 2024,
Journey Medical appointed Michael C. Pearce to its Board of
Directors. Mr. Pearce is an accomplished executive, with
substantial strategic, business and financial experience across
many industries, including healthcare.
Conference Call and Webcast
InformationJourney Medical management will conduct a
conference call and audio webcast on August 12, 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/10190841/fd0fed9bae.
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
CorporationJourney 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 StatementsThis
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.
Company Contact:Jaclyn Jaffe (781)
652-4500ir@jmcderm.com
Media Relations Contact:Tony Plohoros6
Degrees(908) 591-2839tplohoros@6degreespr.com
JOURNEY
MEDICAL CORPORATIONUnaudited Consolidated Balance
Sheets($ in thousands except for share and per share
amounts) |
|
|
|
|
|
June 30, |
|
December 31, |
|
|
2024 |
|
|
|
2023 |
|
ASSETS |
|
|
|
Current
assets |
|
|
|
Cash and cash equivalents |
$ |
23,912 |
|
|
$ |
27,439 |
|
Accounts receivable, net of reserves |
|
10,465 |
|
|
|
15,222 |
|
Inventory |
|
9,687 |
|
|
|
10,206 |
|
Prepaid expenses and other current assets |
|
2,406 |
|
|
|
3,588 |
|
Total
current assets |
|
46,470 |
|
|
|
56,455 |
|
|
|
|
|
Intangible assets, net |
|
18,658 |
|
|
|
20,287 |
|
Operating lease right-of-use asset, net |
|
55 |
|
|
|
101 |
|
Other assets |
|
6 |
|
|
|
6 |
|
Total assets |
$ |
65,189 |
|
|
$ |
76,849 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
Current
liabilities |
|
|
|
Accounts payable |
$ |
14,604 |
|
|
$ |
18,149 |
|
Due to related party |
|
260 |
|
|
|
195 |
|
Accrued expenses |
|
15,972 |
|
|
|
20,350 |
|
Accrued interest |
|
251 |
|
|
|
22 |
|
Income taxes payable |
|
- |
|
|
|
53 |
|
Installment payments – licenses, short-term |
|
3,000 |
|
|
|
3,000 |
|
Operating lease liability, short-term |
|
59 |
|
|
|
99 |
|
Total
current liabilities |
|
34,146 |
|
|
|
41,868 |
|
|
|
|
|
Term loan,
long-term, net of debt discount |
|
19,748 |
|
|
|
14,622 |
|
Operating
lease liability, long-term |
|
- |
|
|
|
9 |
|
Total liabilities |
|
53,894 |
|
|
|
56,499 |
|
|
|
|
|
Stockholders' equity |
|
|
|
Common stock, $.0001 par value, 50,000,000 shares authorized,
14,018,146 and 13,323,952 shares issued and outstanding as of June
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 June 30,
2024 and December 31, 2023 |
|
1 |
|
|
|
1 |
|
Additional paid-in capital |
|
97,451 |
|
|
|
92,703 |
|
Accumulated deficit |
|
(86,158 |
) |
|
|
(72,355 |
) |
Total stockholders' equity |
|
11,295 |
|
|
|
20,350 |
|
Total liabilities and stockholders' equity |
$ |
65,189 |
|
|
$ |
76,849 |
|
|
|
|
|
JOURNEY
MEDICAL CORPORATIONUnaudited Consolidated
Statements of Operations($ in thousands except for share
and per share amounts) |
|
|
Three-Month
Periods Ended |
|
Six-Month
Periods Ended |
|
June 30, |
|
June 30, |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Revenue: |
|
|
|
|
|
|
|
Product revenue, net |
$ |
14,855 |
|
|
$ |
16,961 |
|
|
$ |
27,885 |
|
|
$ |
29,126 |
|
Other revenue |
|
- |
|
|
|
211 |
|
|
|
- |
|
|
|
259 |
|
Total
revenue |
|
14,855 |
|
|
|
17,172 |
|
|
|
27,885 |
|
|
|
29,385 |
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
Cost of goods sold – product revenue |
|
6,541 |
|
|
|
7,767 |
|
|
|
13,357 |
|
|
|
14,216 |
|
Research and development |
|
913 |
|
|
|
1,774 |
|
|
|
8,797 |
|
|
|
3,807 |
|
Selling, general and administrative |
|
10,328 |
|
|
|
12,141 |
|
|
|
18,748 |
|
|
|
25,433 |
|
Loss on impairment of intangible assets |
|
- |
|
|
|
3,143 |
|
|
|
- |
|
|
|
3,143 |
|
Total
operating expenses |
|
17,782 |
|
|
|
24,825 |
|
|
|
40,902 |
|
|
|
46,599 |
|
Loss from
operations |
|
(2,927 |
) |
|
|
(7,653 |
) |
|
|
(13,017 |
) |
|
|
(17,214 |
) |
|
|
|
|
|
|
|
|
Other expense (income) |
|
|
|
|
|
|
|
Interest income |
|
(161 |
) |
|
|
(79 |
) |
|
|
(378 |
) |
|
|
(201 |
) |
Interest expense |
|
563 |
|
|
|
756 |
|
|
|
1,111 |
|
|
|
1,406 |
|
Foreign exchange transaction losses |
|
32 |
|
|
|
33 |
|
|
|
53 |
|
|
|
80 |
|
Total other
expense (income) |
|
434 |
|
|
|
710 |
|
|
|
786 |
|
|
|
1,285 |
|
Loss
before income taxes |
|
(3,361 |
) |
|
|
(8,363 |
) |
|
|
(13,803 |
) |
|
|
(18,499 |
) |
|
|
|
|
|
|
|
|
Income tax
expense |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Net
loss |
$ |
(3,361 |
) |
|
$ |
(8,363 |
) |
|
$ |
(13,803 |
) |
|
$ |
(18,499 |
) |
|
|
|
|
|
|
|
|
Net loss per
common share: |
|
|
|
|
|
|
|
Basic and diluted |
$ |
(0.17 |
) |
|
$ |
(0.46 |
) |
|
$ |
(0.69 |
) |
|
$ |
(1.03 |
) |
Weighted
average number of common shares: |
|
|
|
|
|
|
|
Basic and diluted |
|
19,993,858 |
|
|
|
18,005,055 |
|
|
|
19,875,653 |
|
|
|
17,906,671 |
|
|
|
|
|
|
|
|
|
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, 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:
- Share-Based
Compensation Expense: We exclude share-based compensation from our
adjusted financial results because share-based compensation
expense, which is non-cash, fluctuates from period to period based
on factors that are not within our control, such as our stock price
on the dates share-based grants are issued.
- Non-core and
Short-term Research and Development Expense: We exclude research
and development costs incurred in connection with our DFD-29
product candidate, including the filing fee payment made to the FDA
and contractual milestone payments, which is the only product in
our portfolio not currently approved for marketing and sale,
because we do not consider such costs to be normal, recurring
operating expenses that are core to our long-term strategy.
Instead, our long-term strategy is focused on the marketing and
sale of our core FDA-approved dermatological products and the out
licensing our intellectual property and related technologies.
- Amortization
and impairments of Acquired Intangible assets: We exclude the
impact of certain amounts recorded in connection with the
acquisitions of intangible assets that are either non-cash or not
normal, recurring operating expenses due to their nature,
variability of amounts, and lack of predictability as to occurrence
and/or timing. These amounts may include non-cash items such as the
amortization impairments of acquired intangible assets.
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 diluted basis.
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 CORPORATIONReconciliation of GAAP to
Non-GAAP Adjusted EBITDA(Dollars in thousands except for
share and per share amounts) |
|
|
Three-Month
Periods Ended |
|
Six-Month
Periods Ended |
|
June 30 |
|
June 30 |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
GAAP
Net Loss |
$ |
(3,361 |
) |
|
$ |
(8,363 |
) |
|
$ |
(13,803 |
) |
|
$ |
(18,499 |
) |
|
|
|
|
|
|
|
|
EBITDA: |
|
|
|
|
|
|
|
Interest |
|
402 |
|
|
|
677 |
|
|
|
733 |
|
|
|
1,205 |
|
Taxes |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Amortization of acquired intangible assets |
|
814 |
|
|
|
1,069 |
|
|
|
1,629 |
|
|
|
2,138 |
|
EBITDA |
|
(2,145 |
) |
|
|
(6,617 |
) |
|
|
(11,441 |
) |
|
|
(15,156 |
) |
|
|
|
|
|
|
|
|
Non-GAAP Adjusted EBITDA: |
|
|
|
|
|
|
|
Non-Cash Components: |
|
|
|
|
|
|
|
Share-based compensation |
|
1,674 |
|
|
|
873 |
|
|
|
3,080 |
|
|
|
1,519 |
|
Loss on impairment of intangible assets |
|
- |
|
|
|
3,143 |
|
|
|
- |
|
|
|
3,143 |
|
Non-core & Infrequent Components: |
|
|
|
|
|
|
|
Short-term R&D (includes one-time DFD-29 license and milestone
payments) |
|
742 |
|
|
|
1,744 |
|
|
|
8,482 |
|
|
|
3,743 |
|
Foreign exchange transaction losses |
|
32 |
|
|
|
33 |
|
|
|
53 |
|
|
|
80 |
|
Severance |
|
6 |
|
|
|
185 |
|
|
|
147 |
|
|
|
711 |
|
Non-GAAP Adjusted EBITDA |
$ |
309 |
|
|
$ |
(639 |
) |
|
$ |
321 |
|
|
$ |
(5,960 |
) |
|
|
|
|
|
|
|
|
Net
income (loss) & Non-GAAP Adjusted EBITDA per common
share: |
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
|
GAAP Net Loss |
$ |
(0.17 |
) |
|
$ |
(0.46 |
) |
|
$ |
(0.69 |
) |
|
$ |
(1.03 |
) |
Non-GAAP Adjusted EBITDA |
$ |
0.02 |
|
|
$ |
(0.04 |
) |
|
$ |
0.02 |
|
|
$ |
(0.33 |
) |
Diluted |
|
|
|
|
|
|
|
GAAP Net Loss |
$ |
(0.17 |
) |
|
$ |
(0.46 |
) |
|
$ |
(0.69 |
) |
|
$ |
(1.03 |
) |
Non-GAAP Adjusted EBITDA |
$ |
0.01 |
|
|
$ |
(0.04 |
) |
|
$ |
0.01 |
|
|
$ |
(0.33 |
) |
|
|
|
|
|
|
|
|
Weighted average number of common shares: |
|
|
|
|
|
|
|
GAAP - Basic
and Diluted |
|
19,993,858 |
|
|
|
18,005,055 |
|
|
|
19,875,653 |
|
|
|
17,906,671 |
|
Non-GAAP -
Basic |
|
19,993,858 |
|
|
|
18,005,055 |
|
|
|
19,875,653 |
|
|
|
17,906,671 |
|
Non-GAAP -
Diluted |
|
24,298,007 |
|
|
|
18,005,055 |
|
|
|
24,203,162 |
|
|
|
17,906,671 |
|
Journey Medical (NASDAQ:DERM)
Historical Stock Chart
From Oct 2024 to Nov 2024
Journey Medical (NASDAQ:DERM)
Historical Stock Chart
From Nov 2023 to Nov 2024