Journey Medical Corporation (DERM) Q3 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals strong revenue growth driven by EMROSI, improved EBITDA, and positive cash flow. The Q&A section highlights successful prescriber expansion and revenue per script improvements, although there are concerns about gross-to-net revenue guidance and prescriber retention data. Despite these uncertainties, the overall sentiment is positive due to the strong financial metrics, optimistic guidance, and strategic focus on expanding EMROSI's market presence.
Key Financial Performance
Total revenues $17.6 million, representing a 21% increase compared to $14.9 million in the third quarter of 2024. This growth reflects incremental net product revenue related to the successful U.S. commercial launch of Emrosi.
Emrosi contribution to revenue $4.9 million in Q3, an increase of 75% compared to Q2. This growth is attributed to strong execution on the commercial plan and initial success in payer strategy.
Revenue from legacy and core products Declined 16% year-over-year, mainly due to the impact from Accutane generic competition.
Overall product revenue growth Increased by more than 16% compared to the same period last year, driven by the launch of Emrosi and leveraging the dermatology commercial infrastructure.
Gross margin 67.4% in Q3 compared to 69.4% in Q3 2024. The decrease is due to favorable nonoperational adjustments and product mix in Q3 2024. However, there is steady quarter-over-quarter improvement in 2025, driven by higher revenues from Emrosi and Qbrexza and lower inventory costs.
SG&A expenses $12.1 million, up approximately 6% from $11.4 million in Q3 2024. The increase reflects additional operating activities tied to the launch and commercialization of Emrosi.
GAAP net loss $2.3 million or $0.09 per share, compared to $2.4 million or $0.12 per share in Q3 2024. The improvement is due to increased revenues and better cost management.
EBITDA Improved by $500,000 from a loss of $1 million in Q3 2024 to a loss of $500,000 in Q3 2025. This improvement is attributed to higher revenues and operational efficiencies.
Adjusted EBITDA Positive $1.7 million in Q3 2025 compared to $300,000 in Q3 2024, reflecting improved profitability from the launch of Emrosi.
Cash and cash equivalents $24.9 million at the end of Q3 2025, compared to $20.3 million at December 31, 2024, indicating improved cash flow management.
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Operating Highlights
Emrosi launch and performance: Emrosi contributed $4.9 million in Q3 revenue, a 75% increase from Q2. Total prescriptions grew 146% from Q2 to Q3, with 18,198 prescriptions in Q3. Over 2,700 unique prescribers have written Emrosi prescriptions, up 50% from the previous quarter. Emrosi is expected to achieve peak annual net sales of over $200 million in the U.S. and $300 million globally.
Clinical and market positioning of Emrosi: Emrosi's Phase III clinical trials data presented at key dermatology conferences highlighted its safety, efficacy, and tolerability. It is positioned as a best-in-class rosacea therapy with superior efficacy compared to Oracea.
Market access for Emrosi: Over 100 million of 187 million commercial lives have access to Emrosi. Contracts with 2 of the 3 largest GPOs have been secured, with the third expected early next year. Downstream health plan formulary adoption is ongoing.
Revenue and expense management: Total Q3 revenue was $17.6 million, a 21% increase year-over-year. Operating expenses rose by 9%, highlighting operational leverage. Gross margin improved to 67.4% in Q3 from 63.5% in Q1 2025.
EBITDA improvement: EBITDA improved from a loss of $1 million in Q3 2024 to a loss of $500,000 in Q3 2025. Adjusted EBITDA was $1.7 million in Q3 2025, up from $300,000 in Q3 2024. The company expects to become sustainably EBITDA positive in Q4 2025.
Strategic focus on Emrosi: The company is focusing on making Emrosi the standard of care for rosacea treatment. Efforts include increasing prescriber base, enhancing market access, and driving formulary adoption.
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Risk or Challenges
Revenue decline in legacy products: Revenue for legacy and core products, including Qbrexza, Accutane, AMZEEQ, and ZILXI, declined 16% year-over-year due to generic competition for Accutane. This poses a risk to the company's overall revenue stability.
Health plan formulary adoption delays: While contracts with two of the three largest GPOs have been secured for Emrosi, downstream health plan formulary adoption and implementation can take up to three quarters, delaying broader market access and revenue realization.
Reliance on co-pay assistance program: Due to delays in health plan coverage, the company is relying on a co-pay assistance program to bridge the gap, which could impact profitability until broader coverage is achieved.
Gross margin pressure: Gross margin decreased from 69.4% in Q3 2024 to 67.4% in Q3 2025, reflecting unfavorable product mix and non-operational adjustments, which could affect profitability.
Increased SG&A expenses: SG&A expenses rose by 6% year-over-year, driven by costs associated with the Emrosi launch and commercialization. This increase could strain financial resources if revenue growth does not keep pace.
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Guidance & Outlook
Revenue Growth: The company expects Emrosi to achieve peak annual net sales of over $200 million in the United States and over $300 million globally. Additionally, the company anticipates sustained revenue growth over the coming quarters.
EBITDA Projections: Journey Medical expects to become sustainably EBITDA positive in the fourth quarter of 2025, with continued quarter-over-quarter improvement in EBITDA.
Market Access for Emrosi: The company plans to complete contracting with the remaining GPO for Emrosi early next year, which will broaden access. Downstream health plan formulary adoption and implementation are expected to take up to three quarters on average once contracts are secured.
Prescription Growth: The company anticipates continued growth in new prescriptions for Emrosi, with an increasing ratio of refills to new prescriptions, which should accelerate total prescription growth.
Prescriber Base Development: Journey Medical aims to develop the current prescriber base into consistent writers over the next several months, further driving adoption of Emrosi.
Strategic Positioning of Emrosi: The company believes Emrosi is on track to become the standard of care for inflammatory lesions of rosacea, supported by positive physician feedback and clinical data.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:Can you talk about the usage of your patient assistance program on Emrosi at this stage of the launch and when improvements are expected?
A:The company has seen a 75% increase in revenues from Q2 to Q3 and a rise in prescriptions from 7,400 in Q2 to 18,200 in Q3. Two out of three major GPOs are on board, with the third expected in early 2026. Significant gains and reduced reliance on the co-pay program are anticipated in 2026.
Q:What is the focus between breadth and depth of prescribers for Emrosi in 4Q and 2026?
A:The company initially focused on 3,200 physicians and has reached 2,700 unique prescribers. Emrosi shows superior results compared to Oracea, with over 60% IGA success and 30% better inflammatory lesion reduction. The company aims to expand the number of prescribers and increase prescription depth, with a goal of becoming the standard of care.
Q:What is the expected revenue per script for Emrosi, and are there any factors affecting it?
A:Revenue per script was about $380 in Q2 and $275 in Q3. Gross-to-net will vary as reimbursement improves. The third GPO is expected to join in early 2026, which should improve reimbursement and reduce reliance on the co-pay program. No specific guidance on gross-to-net was provided.
Q:How do you view the launch curve for Emrosi based on the first few months?
A:The launch is meeting internal expectations, with consistent growth in new prescriptions. The company is adding 700-900 new prescriptions monthly and expects momentum to accelerate as refill rates increase.
Q:What is the outlook for the Accutane franchise?
A:Accutane appears stable, with a good start in Q4 and recent uptick in October numbers. The company is monitoring generic competition but believes the product is in a good position due to its strong brand recognition and promotional efforts.
Q:What is the retention rate of the 2,700 prescribers for Emrosi since launch?
A:No specific retention rate was provided. The company is observing prescribers moving from lower to higher prescription volumes over time. No critical feedback on the product has been received.
Q:What impact has the launch of Emrosi had on Qbrexza, and how is the company managing both products?
A:Qbrexza has shown single-digit growth year-over-year despite new competition. The overlap with Emrosi prescribers is managed well, with Qbrexza remaining a key revenue generator. The sales force is incentivized to promote both products effectively.
Q:How do you expect the ratio of paid scripts to evolve with payer updates?
A:The company is making progress with market access and expects better reimbursement as the third GPO joins in early 2026. Incremental gains in payer relationships are anticipated over the next few quarters.
Q:What is the expected duration of therapy for Emrosi, and are there any real-world data on persistence?
A:The company expects 3-4 refills over a 12-month period. Anecdotal feedback indicates positive patient outcomes and good refill rates, but more precise data will be available in 5-6 months.
Q:What are the expectations for operating expenses (OpEx) growth next year?
A:The company plans to leverage its current infrastructure, with incremental expenses offset by revenue growth. Operating expenses are expected to remain consistent, supporting higher revenue and operating leverage.
Q:Review of Unclear Management Responses
A:Management avoided providing specific guidance on gross-to-net revenue for Emrosi, citing the dynamic nature of early-stage reimbursement and the need for more time to observe trends. Additionally, no specific retention rate for prescribers was disclosed, and no detailed data on the duration of therapy or persistence was available yet.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AMZEEQ basis
Accutane AMZEEQ
Ascent
Dermatology Conference
Fall Clinical
GPO
Jaclyn
Journey Medical
Maraoui Co
Oracea
Phase III
SGA
adjustment
adoption
assistance program
contract
efficacy
expense
feedback
leverage
margin
metric
milligram release
phase
podium presentation
prescribers prescription
prescription ratio
product launch
quarter
refill prescription
release milligram
revenue
rosacea treatment
safety
therapy
writer
DERM Transcript
Journey Medical Corporation (DERM) Q1 2026 Earnings Call Transcript
Positive5-13
The earnings call highlights a 12% revenue increase, improved gross margins, and a shift from net loss to net income, indicating strong financial performance. Despite regulatory approval risks, the company's financial health and operational efficiency are promising. The absence of negative insights from the Q&A further supports a positive sentiment. Given the company's growth and improved cash flow, a positive stock price movement between 2% to 8% is likely over the next two weeks.
Journey Medical Corporation (DERM) Q4 2025 Earnings Call Transcript
Positive3-25
The earnings call reveals strong financial performance with a 10% revenue increase and improved margins. Emrosi's launch is successful, and management anticipates significant growth. Despite increased SG&A expenses, financial health is robust, with a positive cash position and working capital. The Q&A section confirms management's optimistic outlook for Emrosi's growth and improved gross margins. Overall, the positive financial metrics, optimistic guidance, and market expansion plans suggest a positive stock price movement over the next two weeks.
Journey Medical Corporation (DERM) Q3 2025 Earnings Call Transcript
Positive11-12
The earnings call reveals strong revenue growth driven by EMROSI, improved EBITDA, and positive cash flow. The Q&A section highlights successful prescriber expansion and revenue per script improvements, although there are concerns about gross-to-net revenue guidance and prescriber retention data. Despite these uncertainties, the overall sentiment is positive due to the strong financial metrics, optimistic guidance, and strategic focus on expanding EMROSI's market presence.
Journey Medical Corporation (DERM) Q2 2025 Earnings Call Transcript
Unknown8-12
The earnings call reflects mixed sentiments. While there is optimism around EMROSI's launch and market access, concerns exist regarding generic competition affecting revenue, increased SG&A expenses, and net losses. The Q&A section highlighted management's reluctance to provide detailed guidance, which could unsettle investors. However, improved gross margins and strong initial revenue from EMROSI provide some optimism. The overall sentiment is neutral, with potential for both positive and negative outcomes depending on EMROSI's future performance.
DERM Report
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