Earnings call transcript Q4 2022

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Operator

Ladies and gentlemen, thank you for standing by. Good afternoon, and welcome to the Journey Medical's Fourth Quarter and Fiscal Year 2022 Financial Results and Corporate Update Conference Call. [Operator Instructions]. Participants of this call are advised that the audio of this conference call is being broadcast live over the internet and is also being recorded for playback purposes. A webcast replay of the call will be available approximately 1 hour after the end of the call for approximately 30 days. to IR, call firm. the like Blazei to now CORE of company's would turn over the Matt I Investor Relations go ahead, Please sir.

Matt Blazei

in Good you Anthony. and today's participating you, conference Thank call. afternoon, for thank

and Alloush, Medical of Journey Research Vice Interim are Co-Founder, Joseph leadership Joining and Chief Officer; Dr. from Officer; Ramsey Corporation's Executive Financial President Counsel; Claude and team Maraoui, Development. President General Chief Sidgiddi, Benesch, Srini

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

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

For with more most statements risk recently risks, SEC company's the the the XX-K that refer Medical's factors reports periodic to XX-Q, on Form today this cautionary and information the the about release call, these particularly filed and in press Journey filed described accompanies X-K in it. Form please Form

Today's conference be financial evaluating can non-GAAP in its that believes Medical measures Journey call includes performance. useful

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

information reconciliation this March of this comparable reflect press accurate net directly The only earnings most after please the this a financial disclaims of any contains as time-sensitive update events XXXX. in that occur measure Medical call financial content is measure, required located its the GAAP or that call. of XX, loss, to to law, publicly as revise release. to or Journey today, circumstances company's by information Except any to obligations reconciliation non-GAAP table For

Maraoui, Chief Officer Co-Founder, pleasure to turn and of It call Executive the to my is Claude over now Journey Medical. President

Claude Maraoui

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

a year XXXX. accomplishments revenue of with during in number growth continued although many as challenges, faced we of full We are public look we to company. pleased forward And a first our our

DFD-XX. are We III clinical clinical evaluating Phase milestones approaching our trial significant also for

the expect which of filing second the XXXX, an trials by enrollment XXXX, the NDA followed with half readout XXX% be We have beginning in expected XXXX. we of topline to clinical the as of of achieved in quarter in an data January second

In treatment on flora I significant during impact microbial of with the completion Phase safety recently addition, in assessing the trial DFD-XX the issues clinical no of we study. announced noted our

We also of second product ninth marketed be which product. Medical's an launching anticipate additional in half the Journey XXXX, dermatology will

Fourth $XX XXXX, for revenue a revenues the is the less Looking on million, fiscal of from year XX% Journey fourth back year the was reported reported record $XX.X $X.X the which was million, quarter increase revenue of $XX.X million. million prior for of XXXX. which quarter than

reflecting the of XXXX, sector, addition to macroeconomic continued faced year growth revenue compared which throughout the against year the when generic limited the XXXX, challenges full declined by for competition by our Targadox million $XX.X In our impact brand. for the

this However, ZILXI, AMZEEQ revenue. ACCUTANE, QBREXZA, shortfall of and year-to-date was of XX% which increases our offset by represented

are ZILXI marketed XXXX, AMZEEQ and footprint we beginning unique including we from At acquisition complement noteworthy of of dermatologic QBREXZA. products prescription-based year, achieved our our expanded topical that ZILXI Therapeutics. X VYNE the the with products, currently and During highlights. some the AMZEEQ

come. QBREXZA, We patented covering ZILXI, solidify grow patents to products ZILXI the provide and Padagis which the clear also agreements AMZEEQ AMZEEQ to exclusivity will to sales pathway settlement for executed QBREXZA, the these years with help and of enforce a and of

matter Teva we of Additionally, patent that filed in the infringement settled QBREXZA December XXXX. we against

and net Japan. of payment Journey the Dermira the to asset for agreement approval partner our triggered 'XX, terms in treatment exclusive receipt $X.X of of purchase milestone a established primary Maruho between QBREXZA pursuant out-licensing notice Rapifort million our to for This hyperhidrosis the X.X%, presence equivalent from the In January ex-U.S. of Wipes Limited, approved Japan, in that upon Japanese QBREXZA. we axillary us was

is On reiterate, trial an of and million suffering people of XXX% second the XXXX. according the DFD-XX market in the estimated to of enrollment achieved in XXXX. million rosacea worldwide. opportunity second U.S. as our for in expected immense. an as With data. previously To million January half from Phase market we XXXX clinical and the filing III had XXX X.X million Symphony development XXXX, in the product expected as quarter in front, NDA prescriptions DFD-XX prescriptions in X.X mentioned, With topline XX have and as rosacea many XXXX data readout The

current total efficacy co-primary The inflammatory respect Phase endpoints Oracea the and the standard had Journeys' second, the which exceed in in to lesion first, which context, to able will Global of which II in DFD-XX $XX.X XXXX. be reduction prescription overall of trial launched, put results annually, is $XXX approximately million demonstrated according care. year XXXX study, and net nearly in success. the approved would count Assessment in leader ratio, Investigator double With both $XXX data. in total market for sales DFD-XX Once in were: million of excess fiscal sales believe we million Symphony and to revenue achieve to

efforts revenue growth of With we expect ACCUTANE, operations optimization. anti-itch to commercial maximize to expense profitability. Through QBREXZA, and continued and our AMZEEQ growth, of to and product later of year the combination launch this expected and our internal the momentum ZILXI, anticipated the return ongoing efficiencies,

Journey XXXX. to for fiscal be Our non-GAAP adjusted EBITDA goal for is positive

our candidates novel portfolio strategic Our products our acquiring product be future on industry-leading developing to in-licensing, of product growth. the sales dermatology and cornerstone force and continues with focus our through expansion combined continued of future the

call over I'll full year. that, results the and financial quarter now fourth to for our review the will With Joe, who turn

Joseph Benesch

now financial Claude, fourth full results I year hello, for Thank review you, and XXXX. and quarter the will everyone.

XXXX million acquired second QBREXZA, and QBREXZA, and XXXX. $XX.X mainly and of of our ACCUTANE, product revenues. net and XX% quarters AMZEEQ revenue first the XXXX, Our to in respectively, our in full the and due from January net incremental AMZEEQ represent acquired launched products, revenue XXXX. increased and of approximately million XX% ZILXI year Increase revenues acquired were net full an which year now $XX.X for total to million for ZILXI or from $XX.X newly growth ACCUTANE the by is

Our fourth XXXX. XXXX million decrease net in began X% fourth of for the the of generic of for million quarter $X.X fourth or quarter quarter Targadox, $XX.X $XX mainly related from to which decreased is revenues The for by million competition to the XXXX.

increased XXXX prior costs gross Our fourth included The from year for have the respectively. step-up profit XX% X%, margins and and inventory full higher acquisition year QBREXZA. quarter by

during lead will XX% In Sun contractual Furthermore, our in in XX% for May A to in XXXX. QBREXZA QBREXZA decreased. reduction $X.X development by have $X.X of the million further the R&D DFD-XX. continuing Increase expenses XXXX. million another our full is fourth million XXXX, royalty clinical million for XXXX fourth addition, royalty from full in increased the expenses royalty ended and of $X.X $X May occurred quarter million to obligations XXXX These our royalty Research XXXX. forward our royalty the XXXX XIMINO of to XXXX and EXELDERM XXXX. of quarter decrease for going for margins trial the for to periods million and quarter increased for reductions development in year to through December $X.X will $XX.X SUN contractual fourth from the improvement for year for to related both ends of of XXXX.

compliance and quarter or selling, to fourth The XXXX the to efforts is $XX.X development focus $XX.X our the general Looking DFD-XX. the we million to efficiencies headcount full administrative $XX.X million XXXX. our portfolio, our expenses held to associated company XX% while decrease million ensuring not November full expenses. from to in a additional is SG&A X% mainly continue and privately force costs, including for a other product incur as and associated now SG&A to public expanding our for due our or as the prior by our year million related for we commercialization and the increased year to litigation fees decreased expansion from continued compensation, of and post-IPO, Increase $XX.X $XX legal did on improve with for XXXX. expense the expenses company patent operational professional optimization IPO million marketing sales $X.X noncash million mainly stock of of being XXXX. to fourth quarter due with that

to to Net year loss to periods. our for decrease as common diluted will basic quarter SG&A $X.XX diluted basic compared Net that of the of optimization. million fourth year XXXX full to shareholders common of $XX.X common was per million the net for common $X.XX expense XXXX, $XX.X diluted full per diluted to loss $X.XX continue the on basic XXXX. share a Continuing fourth quarter or for per and shareholders net shareholders anticipate focus for loss we to for a to loss $XX the share of or $XX.X and was We share basic and and net million XXXX compared per the loss for our million or shareholders share $X.XX to or XXXX. of

Focusing now non-GAAP our on results.

per basic non-GAAP versus year a per net net $X.XX and loss for full full in a and XXXX of for the resulted or million diluted basic million $XX.X Our of EBITDA or share adjusted the loss $X.X share $X.XX diluted year XXXX. of

fourth of share quarter and non-GAAP share fourth XXXX diluted basic $X.X $X.XX of or XXXX. or versus the net basic diluted EBITDA reflects $X.XX million of loss and $X quarter per per loss Our the net of for for adjusted a a million

We for adjusted EBITDA XXXX. expect work EBITDA sequential to improvement our non-GAAP be adjusted and towards goal as we fiscal year non-GAAP XXXX through our in progress positive

had XX, $XX equivalents. to cash. and Moving in we our December cash XXXX, cash At million

it and turn much, I'll back very you Thank to now Claude.

Claude Maraoui

Thank you, Joe.

by XXXX. was like past faced our with $XX.X which revenue product cycle strategy the Our future of performance in over life during declined challenges Targadox, million remain to our about optimistic with designed year in have this the products into heading portfolio pivot We launched newly we XXXX. expansion

goal add year the year for products, to and be expenses, another launch clinical onetime after XXXX are non-GAAP as about revenue stock-based backing prescription such for And another to trials in for is we adjusted expect strong financial III full certain R&D other and XXXX. new momentum expenses. excited We a product the to both achieve portfolio. to with DFD-XX fiscal expense of similar positive also foundation our nonrecurring of and product With EBITDA growth Phase compensation our continued our enrollment

throughout in XXXX growth anticipate beginning revenue we our sequential quarter. second net Additionally,

year. our by $XX range SG&A expect the full million fiscal we million reduced targeting million, expense $XX $X for XXXX to to $X for million Finally, to a between be

I to will now turn you. operator the call Thank the over for questions.

Operator

Instructions]. [Operator

Our Folkes Fitzgerald. with first will Cantor from question come Brandon

Brandon Folkes

the a XXXX. big for me. on the on XXXX. in Seem starting all business. prescriptions uptake progress commercial just in just ACCUTANE Maybe Congratulations Maybe quite X in

in It's DFD-XX, different of resonating in of that you this differentiating the color to the at differentiating look very then on terms obviously, hold. obviously think be of commercial any what's you're when looking what's And at think just driving efficacy to what factors should factor. So But attention a strength? we or factors product, going doing terms differentiating there? we strong about data that pay you there's maybe Or and landscape? the other to any

Claude Maraoui

Okay. voice. Brandon. Great. you, to And hear your good Thank

regarding Symphony off by trends here. The very indicating the first to XXXX, the a prescription in question gotten strong months ACCUTANE. in have of X XX,XXX-plus we per anywhere absolutely. data XX,XXX-plus to month are Yes, range start, first and

we where we are like headed. So

making I to think pay our aggressiveness this are really efforts marketing dividends. our force, in started And headway. have our area sales some

XXXX, is anywhere opportunity percent. more of So most all share about share XX-plus able for market XXXX believe to to in our here. that market we for we that grow were ample in there hold to, between And the XX.X% part

our focuses. So of it key one is

is flagship QBREXZA Our ACCUTANE. followed secondly brand to

of team on terms sales in focused is So commercial their it our priorities.

And far, we're say with ACCUTANE. in stride so I'd

terms or -- -- your are Oracea second mention I'd endpoints the their are In there's first. to couple of key The they approval. of way DFD-XX exactly got question, a had like done things co-primary the to when trials almost

mimic So Oracea. also the that going with doing well as placebo, against we decided as thing head-to-head but same to not only

enough you to really fact want is have against do our of to and for advantage, allow as placebo go marketing that commercial is not said, additional this package The take part we in about just team robust of payers, these the efficacy. terms What myself, a insert, days. is to it's the

contracts co-primary So results and both will Phase standard up I think, head-to-head the double end payer and efficacy what the, showing is the in care help going considered of that really with we II negotiating. endpoints against where the

also I'd the more give pass like Dr. differentiation on Sidgiddi question same to DFD-XX. surrounding some to to

Srinivas Sidgiddi

on as is significant lesion significant well Thanks, thanks, success, mentioned, count at also IGA quality those differentiators. multiple if We Claude study additional be be we get do on the handles might impact Claude, expect, based said, Eridama, that points are going secondary going on going additional there to we are superiority as end end be those for on II the the of efficacy. to Brandon, you question. impact we endpoints like of might points. to couple significant going good that And of be life, is look and get the treatment Brandon the that as results as The a to co-primary Phase differentiator, X results,

Operator

Our next Scott Henry question from will with Capital. come Roth

Scott Henry

in an It couple from but big XXXX in adjusted results $X the targeting in on picture. million mean like a QX. questions, starting minus goal, EBITDA start minus you're I positive, you're I'll of want have sounds the But is million don't Claude $X how albeit QX, admirable but is you for there. I to want I to we're Breakeven now to it, out going -- of year. figure a little just you to -- whole exit you that. get to try have better want commend I not

be sounds that do $X you all almost think out of that you the of had to you sales have way to marketing voice to question $X -- $X said there within XXXX? you XXXX like any I million that then in million will challenges But in million that $X Will same the driven? the million, SG&A are that share present any in gets and there. it

Claude Maraoui

are for of highly and on that a goal It ours, Sure. is that. achieving we Yes. Thank focused Scott, you, question.

think a partly that of commercial we I have. due the structure as ways, mentioned, you to number

when We of force. sales we our in the had size were January, and early sales did we of doubled building taken our force. have size aggressive in portfolio, steps have the reduced what we our And we

of had to If time another some that individuals. our and We to XX. XX we XX you -- total go of XX conversations, back other doubled in

that. as really As we the competition, trends sales Targadox to peak at to then the some continued, and generic with make in and difficulty the that had point we adjustments the

with of you and type your lose and going thing. taken that are we're we So was any those not. But we've the coverage, necessary steps tell And also to reach sales field frequency, targeted, that question force. geography I'd

of we territory actually what our had X So we individuals was each at XX. did in peak when we were

have some look we past, want the come on X have geographic reduced by versus profitability the goals not able coverage all have about decided way now we now territories X all were but suffice profitability, determine that what to basis only quarterly still we we still configuration, monthly feel territory will We've and but and we the individual the and to is really the that we and us in had albeit by at a at get that we we to that just best right to to will that achieve. And a basis. configuration

lower have is the expectations but to expect expectations, being with geography lower we would possibly all before. still And same again, as have the covered. numbers you So the still

have questions doesn't customers. to the and educate to our answer representative same every promote Now portfolio and

we So territory. very that custom each do in styled

the outside optimization bringing And and second efficiencies, used those mentioned, taking that, that by bringing sales and then some force, to internally. really, but we're just other in reduce vendors and we've steps like the not marketing things for you part,

Scott Henry

to as items, the progress. on. the that forward product look Okay. I hit scripts a ACCUTANE great, Great. Shifting question to previous

XX% a growth think expect as. I referred flagship bit that that, as we that should grow. that you as like product, we So about it grower? about to Is ideally, -- big XXXX? believe Can you'd you in X% Or it should QBREXZA a higher to think that How about a is a how -- be we thinking be to -- but I than we should should a to asset? talk it little the think

Claude Maraoui

awareness infringement all settled takes cases we've marketing start brand that. this. QBREXZA into with out exclusivity I'll to the And got of that Yes. and our major good had continue out part I record. out increasing XXXX, I'm means Scott, us to well particular that the think educating hopefully, patent and have in a glad an there. a when that saying XXXX. we achieved XXX,XXX for launched year this last road long by of It our a And success In way and with was say Padagis, QBREXZA, We commercial this teams, and prescriptions. QBREXZA bringing just demand brand, really strategy all-time for hit and we and hit we record over we XXXX,

momentum think I behind some got us. So we've

guidance can product, with that not expectations, of of gain our going high a giving the on I it's each of to we're have majority I have you, we're out sales that. Specifically, what significant necessarily percent force. But #X tell with bag

as to patients marketing has great easy axillary that decided strategies have to able get hyperhidrosis. once be for simple the doctor as the to continue primary We their and product to to prescribe the

So here bring I really brand. we've help into some going got that to are number growth key of items think a this

Scott Henry

when expect Okay. launch? would you And Any anti-itch clarity product the there? to

Claude Maraoui

love and you month. the now, half of I'd it's exact going give that. XXXX. second Right not date to to I'm be positioned to do Yes. able for

and our with been has are times before. from some pushed but out be of we us in very XXXX. the guidance them, and half several working it's We given They've that second going manufacturer, guidance closely again, to good have

Scott Henry

Okay. Great.

we wrap of that But Anything going pretty higher should pretty I'll expect kind and margins? was COGS here. QX. in gears, quick there? on shifting Now to When up high with normalize

Claude Maraoui

to you would Joe, that one, take please? like Sure.

Joseph Benesch

sure. Sure,

AMZEEQ for at least the have fourth additional testing part. ZILXI not and included we high. as not the will that those costs validation was and That freight, through XXXX some in COGS most COGS. costs, some Our have quarter for

expect and in those to we take. or give be margins of reduction some range, with our the So around royalties the in expenses, the XX% reduction

Scott Henry

maybe those then say, right. complete about on we a if Is And think DVD about the to question trial, me? way Is let's XXX. -- Hopefully, data? should the when think data. Enrollment it I final that be just then month of to slice in should a that think remind got mid-January, trying is that product, to I follow-up was think right timing pipeline follow-up the the letters the dice data and a XX-week I'm and about

Claude Maraoui

on you Yes, Sidgiddi it's will that. and specifics Dr. DFD-XX the give

Srinivas Sidgiddi

we is that last DFD-XX, Scott, thanks XX weeks early of each enrolled to that and the treatment first that last And is for then as duration this there weeks, visit is X subject was weeks said, release, for slicing you be subject January analyzing. with subject, question. the press in mentioned for XX our duration there will the and data treated X is, product. as a

that's towards the around makes XXXX, of June it end first So the what of half somewhere XXXX.

Operator

[Operator Instructions].

Our will Securities. B. with question Kalpit next Patel from come Riley

Andrew Fleszar

It Kalpit. This DFD-XX. like the we Andy of for In on for Oracea, for for how think anticipation starting is market looks potential are to potential should set of of introductions Oracea generic some method Fleszar about opportunity use expire the year. patents next

of you efficacy $XXX million, that the improved it this DFD-XX assume possibility peak over does cannibalization? guided does Specifically, over of sales And Oracea? in generic figure factor the demonstrates

Claude Maraoui

expiry the several have generic Thanks years. December on the it's out is final had product an And now way Claude actually is Galderma question. the the it. asset. Andy, marketplace is this here. Oracea Again, for the for at XXXX into they authorized on looking Yes, we're patent --

safety, type has superb. there. in where XX% The we level of XX% on you If much can approval, product really the achieve out better now results is are it. been believe Phase the more that And doubling actually able we skewed this the you the co-primary in and almost on meaningful, honed I about to DFD-XX II and think endpoints. roughly, the has say for that get exactly example. it's be that, brand. and efficacy that to Again, going efficacy of for the Again, very it's generic study to mix And very generic. comparable on that are So that this

with And the adoption is considerable. way. when why early I believe, goes a long going think again, to our consultants, KOLs discussed we other this that's and quite DFD for be that we've

So those we're see expecting a very getting that's to quick numbers. we us uptake how and

very an again, can or field million have you're a considered generic, mark, So going to a molecules. close on if get have asset has the that's brand of you results, big slam, home grand $XXX to you tremendous that these in dermatology. run small that Anytime

Andrew Fleszar

it. specifically pivotal helpful. then if on you prescribe hearing that That's feedback confidence up what I DFD-XX gives and study? the that community the they would Oracea maybe follow-up And are one the over those of piece the KOLs efficacy from you physician efficacy holds in guess

Claude Maraoui

them analyze simply Sure. is was we have able our product data, that diligence, shared against would do to going we the an make we've to label. them And the approved to a going have sure feedback and we've we What during we've messages be be due Phase all exactly did given approved that, we believe a we it, II that's shared placebo. and once just not the you asked have

to against Oracea. market have leader go and that's You the

what that's II Phase included Phase study. and counting that's III for the fortunately we in on what here us, So the are

secondly, when various very at events, comparable. they And all adverse the looked

relatively with its with So Oracea, satisfied familiar they've efficacy. they're already been

a very introducing minocycline new specifically the that's different doctors we doctors, classes, and and factor time that that with hopefully there's is, were were us the acquiring positive again. we we key doxycycline, we over -- be is that were efficacy. the rosacea what moving licensing and a forward what in going And asset. wouldn't feedback we they really this of lot why to there's doubling to pleased convert that received. there's And was The in right? brand. And to a speak these And very did time indicated this And product for close we're and Now doxycycline quickly question doctors. to getting heard

Operator

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

Claude Maraoui

first and a day, Medical. for everyone our conference their Sure. and sharing progress Journey look have call want in results May. forward participating we report We in today's everyone. interest when their the I ongoing to in good quarter to just Thanks, thank

Operator

has conference for The presentation. today's now you concluded. attending Thank

disconnect. now You may

Journey Medical (DERM) 29 Mar 232022 Q4 Earnings call transcript