Fortress Biotech, Inc. (FBIO) Q3 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals positive indicators: improved EBITDA, increased cash reserves, and strong EMROSI growth. The Q&A highlights optimistic future prospects with expanding prescriber base and increasing reimbursements. Despite some uncertainties, such as lack of specific guidance and retention rates, the overall sentiment is positive, driven by EMROSI's successful launch and expected revenue growth. The lack of market cap information limits precise prediction, but given the strong product performance and financial health, a positive stock price movement of 2% to 8% is anticipated.
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.
Gross margin 67.4% in the third quarter compared to 69.4% in the same period last year. The decrease reflects favorable nonoperational adjustments and product mix that benefited Q3 2024. However, there is steady quarter-over-quarter improvement in 2025 from 63.5% in Q1 to 67.1% in Q2 and now 67.4% in Q3, driven by higher revenues from EMROSI and Qbrexza and lower inventory period costs.
SG&A expenses $12.1 million, up approximately 6% from $11.4 million in the third quarter of 2024. This increase reflects additional operating activities tied to the launch and commercialization of EMROSI.
GAAP net loss $2.3 million or $0.09 per share basic and diluted for the third quarter of 2025, compared to a GAAP net loss of $2.4 million or $0.12 per share basic and diluted for the same period last year.
EBITDA Improved by $500,000 from a loss of $1 million in the third quarter of 2024 to a loss of $500,000 in the current quarter. Positive adjusted EBITDA of $1.7 million for the third quarter of 2025 compared to $300,000 for the third quarter of 2024.
Cash and cash equivalents $24.9 million at the end of the quarter, compared to $20.3 million at December 31, 2024.
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Operating Highlights
EMROSI launch success: EMROSI contributed $4.9 million in Q3 revenue, a 75% increase from Q2. Total prescriptions grew 146% quarter-over-quarter, with 18,198 prescriptions in Q3. Over 2,700 unique prescribers have written EMROSI prescriptions, up 50% from the prior quarter.
Clinical and market positioning of EMROSI: EMROSI's Phase III clinical trial data showcased superior efficacy and safety compared to Oracea. It is positioned as a best-in-class rosacea therapy with a unique modified release formulation. EMROSI is gaining visibility through presentations at major dermatology conferences.
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% year-over-year increase. Operating expenses rose by 9%, highlighting operational leverage. Gross margin improved to 67.4% in Q3, driven by higher revenues from EMROSI and Qbrexza.
EBITDA improvement: EBITDA improved from a $1 million loss in Q3 2024 to a $500,000 loss in Q3 2025. Adjusted EBITDA was $1.7 million, up from $300,000 in the prior year. The company expects to become sustainably EBITDA positive in Q4 2025.
Strategic focus on EMROSI: The company aims to establish EMROSI as the standard of care for rosacea treatment, targeting peak annual net sales of over $200 million in the U.S. and $300 million globally. Efforts are focused on increasing prescriber base, payer access, and health plan 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.
Dependency on co-pay assistance program: Due to delays in health plan formulary adoption, the company relies on a co-pay assistance program to bridge the gap, which may impact profitability until broader coverage is achieved.
Formulary adoption delays: Health plan formulary adoption for EMROSI takes up to three quarters, delaying broader prescription coverage and potentially slowing revenue growth.
Gross margin pressure: Gross margin decreased from 69.4% in Q3 2024 to 67.4% in Q3 2025, reflecting product mix and non-operational adjustments.
Increased SG&A expenses: SG&A expenses rose 6% year-over-year, driven by costs associated with the launch and commercialization of EMROSI, which could pressure profitability.
Competition in rosacea treatment market: EMROSI faces competition from established products like Oracea, which could impact its market penetration and revenue potential.
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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.
EBITDA Projections: Journey Medical expects to become sustainably EBITDA positive in the fourth quarter of 2025.
Market Access for EMROSI: The company anticipates completing contracting with the remaining GPO for EMROSI early next year, which will broaden access further. Downstream health plan formulary adoption and implementation are expected to take up to 3 quarters on average once contracts are secured.
Prescription Growth: The company expects continued growth in new EMROSI prescriptions and an increase in the ratio of refills to new prescriptions, which should accelerate total prescription growth.
Prescriber Base Development: Journey Medical plans to develop the current prescriber base into consistent writers over the next several months.
Strategic Positioning of EMROSI: The company aims to establish EMROSI as the standard of care for inflammatory lesions of rosacea, leveraging its clinical benefits and positive physician feedback.
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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 significant progress with EMROSI, with revenues increasing by 75% from Q2 to Q3 and prescriptions growing from 7,400 in Q2 to 18,200 in Q3. The co-pay assistance program is expected to see less reliance as more reimbursements come in, particularly after the third GPO joins in early 2026. Improvements are expected more significantly in 2026.
Q:What is the focus between breadth and depth of prescribers for EMROSI in 4Q and 2026?
A:The focus is on both breadth and depth. The company started with 3,200 physicians and has reached 2,700 unique prescribers. EMROSI is showing superior results compared to Oracea, with over 60% IGA success and 30% better inflammatory lesion reduction. The company expects a snowball effect as more physicians gain confidence and switch from Oracea to EMROSI. The NRx to TRx ratio is improving and is expected to grow further.
Q:What is the outlook for revenue per script for EMROSI?
A:Revenue per script was $380 in Q2 and $275 in Q3. The gross-to-net ratio is dynamic and expected to improve as reimbursement increases, particularly after the third GPO joins in early 2026. The company is not providing specific guidance on gross-to-net at this time.
Q:How do you view the launch curve for EMROSI?
A:The launch curve is positive and meeting internal expectations. The company is adding new prescribers and seeing consistent growth in new prescriptions. With 700-900 new prescriptions monthly, the company expects momentum to accelerate as patients continue refills and new prescribers join.
Q:What is the status of the Accutane franchise?
A:Accutane appears stable, with $2.8 million in revenue for the quarter. The company is monitoring generic competition but believes the franchise is in a good position with strong brand recognition and promotional efforts.
Q:What is the retention rate of prescribers for EMROSI since launch?
A:The company did not provide specific retention rates but noted that new prescribers are being added and existing prescribers are increasing their prescription volumes over time. No critical feedback has been received from physicians.
Q:What impact has the launch of EMROSI had on Qbrexza?
A:Qbrexza has seen single-digit growth year-over-year despite new competition. The overlap with EMROSI prescribers is managed well, and the sales force is incentivized to maintain Qbrexza's performance. The competition has increased awareness of hyperhidrosis, benefiting Qbrexza.
Q:How do you expect the ratio of paid scripts to evolve with payer updates?
A:The company is executing its market access plan and expects improvements as the third GPO joins in early 2026. Incremental gains in payer relationships are expected over time, leading to better reimbursement and revenue generation.
Q:What is the duration of therapy for EMROSI in the real world?
A:The company is seeing positive trends in refills and expects 3-4 refills over a 12-month period. Patients are experiencing quick results, often within 2 weeks, but the duration of therapy varies based on individual flare-ups and conditions.
Q:What is the expectation for OpEx growth next year?
A:The company expects operating expenses to remain relatively consistent, leveraging its current infrastructure. Any incremental expenses will be offset by revenue growth, supporting higher revenue and operating leverage.
Q:Review of Unclear Management Responses
A:Management avoided providing specific guidance on gross-to-net ratios for EMROSI, citing the dynamic nature of reimbursement and the early stage of the launch. They also did not provide specific retention rates for prescribers or detailed learnings on why some doctors may not have continued prescribing EMROSI. Additionally, no precise data on the duration of therapy for EMROSI was shared, with only anecdotal evidence provided.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Accutane Amzeeq
Accutane competition
Amzeeq basis
Ascent phase
CEO Director
Chief Officer
Conference Instructions
Conference Las
Conference relief
Corporate Jaclyn
Director Jaclyn
FDA safety
GPO contracting
GPOs Ascent
GPOs access
General statement
III podium
III trial
Jaclyn Senior
Journey Medical
Journey prescription
Las Vegas
Medical Founder
Ms
Phase III
adjustment
assistance program
efficacy
feedback
margin
metric
podium presentation
prescribers prescription
prescription ratio
product launch
refill prescription
rosacea treatment
therapy
writer
FBIO Transcript
Fortress Biotech, Inc. (FBIO) Q3 2025 Earnings Call Transcript
Positive11-12
The earnings call reveals positive indicators: improved EBITDA, increased cash reserves, and strong EMROSI growth. The Q&A highlights optimistic future prospects with expanding prescriber base and increasing reimbursements. Despite some uncertainties, such as lack of specific guidance and retention rates, the overall sentiment is positive, driven by EMROSI's successful launch and expected revenue growth. The lack of market cap information limits precise prediction, but given the strong product performance and financial health, a positive stock price movement of 2% to 8% is anticipated.
Fortress Biotech, Inc. (FBIO) Q4 2024 Earnings Call Transcript
Unknown3-26
The earnings call highlights several negative aspects: increased net loss, declining revenues, and reduced EBITDA. Regulatory and market competition risks are significant, with only 20% payer coverage for Emrosi. The Q&A reveals management's reluctance to provide clear guidance, which could worry investors. Despite some cost optimizations, the financial outlook remains weak, and the lack of guidance suggests uncertainty. These factors outweigh any positive aspects like potential sales growth, leading to a negative sentiment.
Fortress Biotech, Inc. (FBIO) Q4 2024 Earnings Call Transcript
Unknown3-26
The earnings call reveals significant challenges: a substantial net loss, decreased revenues, and limited payer coverage for Emrosi. Regulatory risks and supply chain issues further exacerbate concerns. Management's vague responses in the Q&A section and absence of guidance contribute to uncertainty. While there is potential in Emrosi's market, the current financial instability and competitive pressures overshadow optimism, leading to a likely negative stock price movement.
FBIO Report
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