- Earnings call transcript Q3 2022

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Operator

Ladies and gentlemen, thank you for standing by. Good afternoon, and welcome to the Journey Medical’s Third Quarter 2022 Financial Results and Corporate Update Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Participants of this call are advised that the audio of this conference call is being broadcast live over the Internet and it’s also being recorded for playback purposes. the end be approximately of of hour approximately XX replay the after the webcast call available will one days. A call for over CORE now Matt Relations would like turn conference I to firm. Blazei the IR, call of Company’s Investor the to ahead. Please go

Matt Blazei

Good participating today’s you conference for thank afternoon, call. and in

Clinical Alloush, Corporation’s Sidgiddi, today Officer; Chief Paolantonio, Ernie Claude from and General and Co-Founder, Srinivas Maraoui, Development Ramsey Dr. Counsel; me of will session. Joining us leadership President Affairs, Journey VP De the Financial Medical for are be and Executive Medical Officer; Chief joining Q&A

During making future that performance statements management this for results. address operational call, will forward-looking statements or expectations be Journey Medical’s including

those factors and involve Forward-looking statements. may statements from other that actual results cause risks to materially differ

please the Form XX-K the Form filed about the Medical’s SEC For to today, Journey in that X-K risks, Journey and in risk and Medical on recently described the that more evaluating filed reports, with release most be conference press believes information measures it. refer its XX-Q, company’s call, Form periodic can accompanies useful factors cautionary these includes financial Today’s in statements call non-GAAP performance. particularly this

results in GAAP. not additional should this substitute accordance or in information consider a as for You prepared with isolation,

Journey occur to Co-Founder, turn Thank reflect my or you. any the XX, reconciliation sensitive in of events publicly XXXX. as time GAAP the company’s It its is financial to is contain of earnings to financial contents November now For of release. revise Medical. President Executive information Journey this call reconciliation measure after that law, required call. comparable Medical call located non-GAAP press Except update disclaims loss, most accurate measure, the to today, Officer Chief directly this to Maraoui, over this net table by please or of and Claude information see circumstances that as only The pleasure any obligation

Claude Maraoui

joining for conference to afternoon, Thanks, Matt. thanks our call. XXXX third Good everyone and quarter

third for of we revenues meet did financial million, the XX, our million. record report months for revenues nine $XX.X quarter than the ended XX% $XX.X nine results year the September expectations, of While ended greater is of prior not months which continue to XXXX

Third $XX.X less million of than was quarter third million, which revenue was $X.X XXXX. the quarter

to the for growth impact by challenges the addition the In the faced of against sector, million our compared prior for limited macroeconomic brand. the $X reflecting less was Targadox year, quarter, continued the quarter which generic when of revenue quarter third our third in competition

a was $X.X in this Accutane an partially year. the prior of offset increase million However, versus shortfall third revenue of by or XX% quarter increase the

flagship with $XX.X products, represented contributions and launched year-to-date million products, of revenue. and our Qbrexza the along Amzeeq or Accutane Zilxi of newly XX% our Our

and for products, continued believe to contribution year Further future. runway an do total prescription and the launch our once estimated with X, count one nearly prescription overall we in of in have Padagis, April to in the pleased double the and an the believe successful according Amzeeq, inflammatory X line demonstrated to current trials our million million. dermatology from half net XXXX prescription approved annually, with our sales to expected million of To of XXXX. the XXXX reduction in our context to and Paragraph from robust rosacea in are Medical studies, IGA for candidate were success. date study, anti-itch MVOR-X MVOR-X an the is enrolled we will to product, co-primary entry to Symphony product and enrollment first adults. our papulopustular in settlements earlier for revenue leader growth resulted to XXXX, ability sales product standard an no NDA with lesion We and clinical people data, Qbrexza that X is achieve efficacy our the XX excess filing so launched for ratio, year’s expanding strengthening treatment plus completing trial Phase the and for in in than Oracea being for of contribution three of the together both revenue had the market positions expect respect of and following: the in billion second $XX.X Journey DFD-XX, Litigation XXXX; revenue sales fiscal company. On with commercial rosacea. expected which IV reiterate, portfolio in two that We care according XXXX Symphony anticipate able our an entry no data. with was DFD-XX estimated To results growth earlier announce the are with provide date meaningful U.S. XXX half and equates for of endpoints United be two that in for which in earlier evaluated XXXX in DFD-XX the of XXXX. with providing market $XXX DFD-XX front, opportunity by approximately throughout patients of with top the million August Europe the entry than This than development July opportunity data date total XX% an X clinical the DFD-XX our The suffering end XXXX; in XX, of X, the to significant clinical Zilxi Phase States achieve DFD-XX no continued near-term in

anti-itch of commercial and maximize efficiencies, we our products, With the internal of launched our growth operations expect continued our newly product to launch return our to profitability. ability expected expected to the

and With with future CFO, of now our De leading the that, on focus combined products developing growth. future strategic will candidates our third who turn financial Paolantonio, through force, acquisition be the product to our industry novel review for Our to over the cornerstone dermatology quarter. the of I’ll Ernie in-licensing, our and continues results continued product our expansion sales portfolio call

Ernie De Paolantonio

results. by and result decrease reduction a generic $X.X contributing a September a by during Other period from $X revenue million in XXXX. Cost $X.X reduction quarter due Zilxi. XXXX. or period was a sold of The as a of of third in partially primarily revenue the royalty goods points newly $XX.X ended quarter the by million acquired from increase the third XXXX. in million by financial of royalties percentage products May and same review XX Claude, revenue million Accutane Qbrexza offset decrease a competition primarily for to million September I Thanks, an three-month versus lower launched rate of decrease goods the cost of XXXX sold to of to decreased $X.X royalty generic was period due of XX% Targadox driven product $X.X $X.X XXXX, three-month and Amzeeq in competition. result XXXX. was The million $XX.X Targadox third Total reduction quarter for $XX.X the our as XX, to the of the for everyone. hello of XXXX was driven expense incremental of million Also $X.X XX, September million in contractual that occurred revenue million was decrease the ended that three-month XXXX XX, in ended the was now for period will million versus of

result share third common resulted Net company. patients from and diluted million quarter for the to September quarter three-month Amzeeq other the began by higher fees $XX.X for portfolio associated $X.XX period same as slightly candidate offset for compared R&D three-month the decrease third of in and related inventory Total XX, additional the cost The shareholders of goods XXXX XXXX In period up two XXXX the our units for a Selling, approximately product reflect cost million our the expansion $X.XX products, development professional the million expenses sold cost marketing is of finished and amortization product addition, Qbrexza well of our public development third expenses for common the primarily sales $X.X of and loss of of being and the included XXXX. $XX.X prior four period million an and $X launched $X.X $X.X dosing shareholders Qbrexza, to related of costs to Phase testing were general attributable of related samples, freight non-cash million enrollment associated quarter expenses to the the sold in trial Amzeeq as related diluted in basic attributable and the approximately were for which goods quarter increase primarily expanded or per XXXX. million force, a of sold DFD-XX million to of to products in ended of XXXX of development basic XXXX, $XX.X Zilxi, of of XX, September goods program. of the loss Zilxi increased a year. for was with The and and licenses the from acquired clinical additional administrative of and increase X XXXX. million share expenses million. higher newly as the charges $XX.X Research step or trials, increase MVOR-X, an $X March to MVOR-X of Dermira of to per to third Accutane, to in the with ended compared expenses a additional inventory of and related for acquired from net

in had million loss per cash September of for versus $X.X and at equivalents the Our $XX.X XXXX. R&D XX, as in per to for $XX.X quarter non-GAAP million adjusting basic per XXXX of XX, we $X.XX diluted adjusted EBITDA to a share compared diluted. or net or resulted of $X profit and a At after December cash related million share share and expenses $X.XX basic million DFD-XX, net third $X.XX

a a September that the cryptocurrency Journey receive that, XXXX. initiate been been back of $X.X back company. able Once losses of associated And of cryptocurrency will to long letter as in federal Finally, could with months an amount notification the the more or complete. return update breach. to has it turn into seize take with to I’ll process Medical as cash Claude. resulted U.S. of government to The the the The dollars, million to in six breach converted has significant cryptocurrency to

Claude Maraoui

you, Ernie. Thank

remain our into pivot over have future product Our Targadox heading and the we XXXX. with quarters newly to that products challenges launched performance portfolio few during with has the last been our cycle expansion the strategy life about we of optimistic faced designed

We for our to add year portfolio. both Phase trials launch excited about also revenues are record the a now of our DFD-XX product and continued enrollment With with clinical you. this and financial to prescription expect calendar over operator of X completing call for questions. the to new another the achieve year XXXX. to momentum I for we in will foundation products, another Thank strong turn

Operator

from ahead. Instructions] Henry [Operator Capital. Scott ROTH comes with Please question go Our first

Scott Henry

Thank force on mean, the you’re some tracking because necessarily it you’ve sort much sales good thoughts you end, macro got I and end. you’d investment, that were are return the not and you’re you the adjustments? of plays may make getting so out. your is, I adjustments make Do of question I guess, since be added to environment afternoon. but within you the as get thought low it from to that sometimes that? What at the expectations, thought you a kind results granted issue. at low the

Claude Maraoui

that Hi, Scott. This Yes. take I’ll Claude. is one.

yes, third on our was revenue So, million side. quarter lower the $XX.X

think, I think ramping here. things we’re QX, I enter up we as

organization our So to that’s expenses ways of efficiencies up to marketing various team coming already so operating good and from a We’ve is capability throughout to expect here. cause and commercial certainly and care But of has taken looking our October. forth. plan do we are our ability the at to a whole grow number that positive. and the prescription expenses we And base things

everything So and consideration. take many we’ll look we’ll at things into

Scott Henry

Okay. Fair enough.

be do this pretty will sequential QX? from that to you if feel confident heard Now, QX there you I of growth year –

Claude Maraoui

looking I so know the say, did just QX, this I pointing start any We Like, haven’t I question the to are than haven’t QX to a repeatedly, better right I we in And we’re guidance trends yet. in think I get off as you – certainly that’s know, think direction. better. we and given did

so, see quarter. understanding now where to assets good and last end the four the within or starting of XX end up get the XX, we’ll at So We’ve months the of launched we landscape. a we’re

they than Some we the a Zilxi, new are products of as originally, also the rate competition we such assets are not had and picking to Amzeeq having only but enter lower anticipated up much those marketplace. at competition,

and job a organization is I traction. doing marketing good So sales getting commercial again, think the

see growth those We’re year and now of out seeing some we’ll the end good goes. how

Scott Henry

Okay.

I it Just product, we’re up over great about you brand on do Accutane, one of was that in here. quarter? there’s plateau but to where a to you third was we’re think do that regardless, even room think at looking mean, for is sequentially. Or specific $X I down yes, product? Or last match, growth it guess, million know How number it’s kind quarter, but do you the that’s maybe million think just million that big from $X I $X per a been range.

Claude Maraoui

down, year, did said, a we’ve first held plus as right, came we about it’s share market mean, new million, in $X.X quarter. about like quarter we the $X.X for you Revenues $X.X this and about I quarter, look was at Isotretinoin for XX.X%. historically, still about relatively averaging, we I Accutane Yes. market million did QX, product, million our the been second in

as rates move So at The is $XX share. more we XX% run close market and opportunity forward see we Do to the XXXX? year, $XX into for looking absolutely. we’re the answer million million to

with entering seventh have out we when to marketplace now zero position position, last climbed from the position. already in third We the prescriptions. have gone up We started

there moving marketplace, perspective. is to XXXX. strategies made really good in programs fashion up a my that four already but in certainly in down great more brand execution, in the come got think lot we’ve some gains in tactical we’ve comes and positions strong So to room as It good and I

Scott Henry

And two just small Okay. very questions.

that out? money to you where price given it price out you? come what on what you million back less but First, situation, fraud know assume think of much it that can what than How even don’t wire I cryptocurrency. in color $X.X in, that you Any get it’s that, came about went back it’s do you think – could how transaction?

Claude Maraoui

going Sure. pass Alloush, question. Counsel. I’m Yes. General Great Ramsey to off that to our

Ramsey Alloush

Thanks Yes. Scott. Hi, Great. for question. the

victims in significant they XXXX mentioned. get we could cryptocurrency, you back of September inform converted As The you were recovered theft. into that did a cyber of portion. mentioned, FBI as It us that

is So sitting we are – now right know cryptocurrency. what in we

I U.S. and in as the on the so back that for And dollars, it’ll guess complete which all depend money in the administrative is using proceedings dollars. terms transferred where, at where into the time example, Bitcoin, are of is measurement

Scott Henry

be we’ll guess, just see. I question, product, still it wait quarter near-term on launch? Okay. fourth anti-itch that or, and I that Final very is would track for a a guess,

Claude Maraoui

we’ve That’s Absolutely. Exelderm. had our Ximino us issues We anticipated with in Yes. July rectified past. timetable that and were for supply the the that given in

but to anticipated brand. manufacturer of. to frustrating earlier, there’s care work say glad was lot particular continue potential us. from COVID We’re And now taken someone our with that to back tubes we over if the all XX to get we for line this And that it’s are line XX XX impacts, this We and a take taking for having move the COVID they to various weeks, When that there on are to queue. gets excipients weeks. supposed the on that typically start and

getting So back further seems to the everything and CMO part. on keep pushed back

manufacturing In terms readiness, terms It’s really of waiting to ready marketing we’re the on this for messages, to the the place in training terms just commercial of product. force, sales materials approved go. our of in take

of at are mercy the So we the manufacturer.

been they constant with and of on basis We weekly down. a them. are hit up us setback. communications And feel then We good, in and with a it’s kind

for future, a it’s believe don’t near in date just I the you. here have coming I So very

Scott Henry

forward taking to to soon. Okay. talking you appreciate it for questions. I and you all look the Thank

Operator

question Fitzgerald. Brandon Folkes comes Please go Cantor with next from Our ahead.

Brandon Folkes

commercial you taking you opportunity and or think very then the anything my out U.S. I you about little just million? and in thanks then a congrats much. how you Can this, as Hi, a viewing progress. Thank you to DFD-XX opportunity you maybe for product? incremental And on how questions put missed you there? how the that worldwide? And about need that can viewing of $XXX investment lastly, million Qbrexza you achieve of the commercial have you progress secondly, the product, bit that there, talk maybe may And apologies terms said was for large contextualize just $XXX behind anti-itch just

Claude Maraoui

Sure.

Thanks Okay. you. I Qbrexza. to that Brandon. Good regarding hear will begin

and in So just demand level brand is execution you to doing field of know from terms kind we’re the set give for a generating this is, how that let the of this.

take And time ended year look the prescriptions. year. anywhere months year year, the was over that finished May, up again, at total Qbrexza, that XXX,XXX year approximately last to middle of we the under the if the of the end happen right average we’re in now, months prescriptions be that And were few now asset nine to from a on XXXX, in out and looking XX,XXX, Dermira, of the to part XX% a we hitting data, the last XX,XXX you realm towards was full average, plus were if If XXXX a over using which Lilly. Symphony XXXX, Eli of for at the the prescriptions just through gain prescriptions would acquisition, which of XXX,XXX brought with that at it at

there So and in when sales $X a a on when commercial generating regular terms we’re between in million on $X anywhere lot that front. us cycle, then quarterly million. at that what looking I a tenured look see I progress from revenue of perspective, highly it team, And rely for and to it’s we of

in as that brought full additional add partners our from through million still payment We $XX go from you itself And that at then have million when in million, about in $XX QX. look milestone to well, quarter nine looking in a Japan, has a at Qbrexza So run potential of months. just Maruho of top this milestone months the we we only rate on $X.X a three to take million. revenue receive you’re by $XX

Its that So to doing well. I going our way have brand settlement the with with is dermatologists. We we all a believe to then that’s And that meeting DTC on think our been XXXX, that grow successful out the the engine doing providers had, brand expectations. the optimization, search the we and front effort strong we’ve and time. room this ample offices over very and certainly owning

disease. Qbrexza certainly I some that ramp even they’re not good provided So a to they is is weeks underarm a more. four that is better a well get on aware better aware created, that think market front, in it being much in really moderately has a is position. just that are up They’re patients of typically that’s not to right? Patients this We reporting really can And of want that XX% product utilization. this sweating

So that’s building this time. characteristics than brand significantly has $XX a all of over the more million

terms rights discuss also going it about this DFD-XX, of will that to Ernie talk have there. In exceptions. little then a with we I’m more in globally perhaps a is and have Ramsey regarding to financial jump about the – few DFD-XX, backing a bit

Ramsey Alloush

Hello, Sure. Brandon. Thanks, Claude.

million, peak to that we of question, only. Just in your the answer looking revenues were the U.S. at terms $XXX of

countries and the As includes well know as Eastern of rights India, which some have Russia, – small BRIC what smaller, Brazil, Claude they CIS we few subject call mentioned, China as countries. the do is are a we what exceptions to European older global countries, that

be license and see in co-develop markets to ourselves. well only out as Japan able develop either to or do Europe, other we or not so in but And opportunities

Ernie this and that commercial So was it think to hand think U.S. discuss, the up there’s over spends I the to definitely I get to point. thing running I’ll to potential and question outside of

Ernie De Paolantonio

Hi Yes. good you. with talk to Brandon,

identified additional On that reps as that territories given there running, hadn’t number and side be up for that, guidance. commercial products of addition are once have, would the will get commercial to other we of expenses product it, marketing similar other the the expect identified. be sales we once you the to are will of there And in expenses the to and

be other percentage probably on given one for as know for expenses So sales guidance that the there and in But don’t fact. spend other marketing additional probably, well. we but will that haven’t similar of force things. really brands the we I whatever, MSLs would of introduction some our or

Brandon Folkes

Great. Thank that much very updates. you for

Operator

with from question. Please question your Our comes ahead B. next go Kalpit Riley. with Patel

Unidentified Analyst

Good we’ll really Qbrexza, is expect of aren’t Accutane, on afternoon. you Or but declining growth overcome and commercial see taking the questions. from looking at providing and – time, maybe expect in for wait guys are This Andy for out to growth? revenue at guidance revenue state I revenues DFD-XX sort do maybe from into that legacy Thank you point Kalpit. do you XXXX, this you this for Amzeeq line Zilxi, launch you your steady to top assets? to need know

Claude Maraoui

Claude. is hello. say This Andy. Nice Hi, to Yes.

So really terms think in brunt we’re competition of competition. XXXX with the generic Targadox that this really really I there, of taking out the the

And I So that. we’re getting that’s on the impacted most. we’ve where been and forthright detailed think really

XXXX Targadox base our as material less for revenue brands. becoming see terms the we’ll in So legacy of enters,

Ximino as revenue. really and to the legacy that us, would we of considered as Exelderm XXXX. be taking believe really hold brands Ximino our in quite And well going their the are bulk well Now, actually really the Exelderm remaining for own

declines two not we’re So those anticipating with really assets.

hold strong should base XXXX. with the legacy brands So for

brands, these Now, And plan brands of brand is in our growth newly in get of is to our that certainly each expectations arching strategy. going of our overall it certainly from our terms launched we’re that XXXX. and part

Unidentified Analyst

you saw related helpful. on deeper was something or it market that, market. That’s place dig taking question this little in little product, overall elaborate you then decline a of else a you. one to kind on a the what’s And held that additional there? or mentioned bit Can Thank Accutane, share macro in whether you but your maybe bit

Claude Maraoui

market about in look over the you The a XXXX, Sure. you’re XX% at market QX itself. When looking a itself at down. take is decline QX

I anywhere of the XXX%, there times many tell months on into So people on. lots going necessarily you is but you’re for a from patient attributable, four product, they’re can’t that less it, it on are necessarily patients dermatology This a is lot six new but as months, to once getting what not a office. typically is

like is the mentioned, So that for mentioned it not I our think consistent. we’ve XX.XX% earlier that and been entire sold you get, But XX%-plus, share that just brand. forgot as per into I market, really X.X each quantifies had particular to units back prescription with I And we that has that very mention approximately X.X to month.

that’s very that the positive brand attribute So has. a good also

Unidentified Analyst

Excellent. Thank you very much.

Claude Maraoui

Sure.

Operator

like session. conference the our Claude concludes question-and-answer remarks. closing Maraoui back This for I turn would to over to any

Claude Maraoui

call Yes, your just today’s good you participating wanted look to year-end we for We in all appreciate report thank quarter progress day. have forward ongoing fourth March. results and Thanks, and in Journey when to on Medical. our really it. interest sharing And for a

Operator

The for attending now presentation. conference Thank concluded. today’s is you

disconnect. now may You

Journey Medical (DERM) 12 Nov 222022 Q3 Earnings call transcript