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01/11 11:30
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
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.
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.
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.
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.
The selected topic was not discussed during the call.
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.
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.
The earnings call highlights strong financial performance, with improved gross margins and reduced net loss. The launch of Ambrosi has shown promising initial sales and market acceptance, supported by positive clinical validation and increased market access. Despite competitive pressures and challenges in legacy business, management's strategic focus on expanding access and prescription volume is evident. The Q&A session reveals analyst concerns about legacy business trends, but positive feedback on Ambrosi's efficacy. Overall, the company's solid cash position and growth potential for Ambrosi suggest a positive outlook, likely leading to a stock price increase of 2% to 8%.
The earnings call reflects a positive sentiment overall. Emrosi's launch into a $1 billion market, strong clinical results, and increasing market access are promising. Financials show improved revenue and margins, despite a net loss. The Q&A reveals confidence in continued revenue growth and positive prescriber feedback. While there are risks like regulatory and competitive pressures, the company's strategic focus on expanding market access and improving financial health supports a positive outlook. The lack of specific guidance is a concern, but not enough to outweigh the positive factors.
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