Journey Medical Corporation (DERM) Q4 2025 Earnings Call Transcript
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Overview
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.
Key Financial Performance
Net Sales of Emrosi $14.7 million in 2025, achieved during the 3 quarters it was commercially available. This was the result of its successful launch and promotional activities.
Total Net Product Revenue $61.9 million in 2025, a 10% increase compared to $56.1 million in 2024. The increase was driven by the successful U.S. commercial launch of Emrosi.
Gross Margin 66.2% in 2025, compared to 62.8% in 2024, an improvement of nearly 3.5 percentage points. This reflects a favorable product mix with higher margin contributions from Emrosi and QBREXZA, along with lower overall inventory period costs.
SG&A Expenses $44.4 million in 2025, up approximately 10% from $40.2 million in 2024. The increase reflects additional operating activities to support the launch and continued expansion of Emrosi.
GAAP Net Loss $11.4 million in 2025, compared to $14.7 million in 2024. This improvement reflects higher revenues and improved margins.
EBITDA Loss of $4 million in 2025, compared to a loss of $9.2 million in 2024, an improvement of $5.2 million. This reflects progress towards sustainable profitability.
Adjusted EBITDA Positive $2.9 million in 2025, compared to $800,000 in 2024. This reflects further progress towards sustainable profitability.
Cash Position $24.1 million at the end of 2025, compared to $20.3 million at the end of 2024. This reflects a healthy cash position to support ongoing operations and commercial growth.
Working Capital $29.4 million at the end of 2025, up from $13 million at the end of 2024, an increase of $16.4 million. This reflects improved financial health.
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Operating Highlights
Launch of Emrosi: Emrosi, an oral treatment for rosacea, was launched in March 2025. It achieved $14.7 million in net sales within three quarters and generated approximately 53,000 prescriptions in 2025. The product demonstrated superior efficacy and safety compared to Oracea, with rapid onset of action in as little as 2 weeks.
Future product launches: The company plans to launch 1-2 additional dermatology products in 2026 to complement its portfolio.
Market penetration of Emrosi: Emrosi reached 3,500 unique dermatology prescribers by early 2026, surpassing the initial target of 3,200. Approximately 100 million commercial covered lives have access to Emrosi, with contracts in place with 2 of the top 3 U.S. group purchasing organizations.
Market expansion efforts: Efforts are underway to contract with a third major GPO by early Q2 2026. The company is also focusing on improving tier positioning and reimbursement rates for Emrosi.
Financial performance: Total revenues grew by 10% to $61.9 million in 2025, driven by Emrosi's launch. Gross margin improved to 66.2%, and adjusted EBITDA turned positive at $2.9 million.
Cash position: The company ended 2025 with $24.1 million in cash, up from $20.3 million in 2024, and working capital increased by $16.4 million.
Focus on Emrosi: The company is prioritizing the growth of Emrosi, aiming to increase prescriber adoption and improve health plan coverage. It also plans to leverage Emrosi's clinical data to enhance market access.
Portfolio diversification: Plans to launch additional niche dermatology products in 2026 to augment revenue and leverage existing infrastructure.
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Risk or Challenges
Generic Competition Impact: Pressure on the Accutane franchise and other legacy products due to generic competition, which could impact revenue and market share.
Health Plan Coverage Delays: Prescription demand for Emrosi is ahead of reported revenue due to the timing of downstream health plan coverage decisions and formulary implementation cycles, potentially delaying revenue realization.
Reimbursement and Pricing Challenges: Dependence on improved reimbursement rates and reduced reliance on co-pay bridging programs for Emrosi, which could affect operating margins and profitability.
Market Penetration and Adoption: The need to expand Emrosi's adoption among dermatology practices and health plans, which is critical for achieving revenue growth and market share.
Regulatory and Formulary Inclusion: Dependence on achieving broader downstream payer adoption and favorable formulary positioning, which could impact Emrosi's market access and sales.
Competitive Pressures: Challenges from existing branded products like Oracea and potential new entrants in the dermatology market, which could affect Emrosi's market position.
Operational Costs: Increased SG&A expenses to support Emrosi's launch and expansion, which could strain financial resources if revenue growth does not meet expectations.
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Guidance & Outlook
Adjusted EBITDA: The company expects to remain adjusted EBITDA positive in 2026 and the foreseeable future, driven by continued sales growth and leverage from the established commercial sales organization.
Emrosi Prescription Growth: Prescription demand for Emrosi is expected to grow, supported by expanded adoption in dermatology practices, improved reimbursement rates, and reduced reliance on co-pay bridging programs as health plan coverage expands and formulary policies mature throughout 2026.
Revenue Conversion: As health plan coverage expands and formulary policies mature, the company anticipates a meaningful inflection in revenue conversion relative to prescription demand for Emrosi in 2026.
New Product Launches: The company plans to launch 1 or 2 additional incremental dermatology products later in 2026 to augment its base business and revenue growth.
Market Access and Coverage for Emrosi: The company expects to contract with the third major GPO by late Q1 or early Q2 of 2026, which will support broader downstream payer adoption and improved market access for Emrosi.
Clinical and Publication Milestones: Up to 3 new journal publications on Emrosi are expected in 2026, which may support further market and health plan adoption. Additionally, the company plans to exhibit and potentially present clinical data at dermatology conferences to increase brand awareness and prescriber adoption.
Financial Guidance: More detailed financial guidance will be provided later in 2026 once there is better clarity on downstream health plan adoption of Emrosi.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:What are the trends in Emrosi prescriptions for Q1, and is there an expectation for growth?
A:Q1 prescriptions were impacted by insurance deductible resets, severe storms, and February being a shorter month. However, March showed strong performance, and Q1 total prescriptions are expected to surpass Q4 numbers. Management anticipates substantial growth for Emrosi moving forward.
Q:Will Q2 show stronger momentum compared to Q1?
A:Yes, management expects a build in momentum, projecting 126,000 scripts for the year based on Q4's annualized rate. They anticipate surpassing this number and highlighted Emrosi's efficacy and proprietary formulation as key drivers.
Q:Why was revenue per script lower in Q4, and what is the outlook for revenue per script?
A:The lower revenue per script in Q4 was due to a mix of reimbursed prescriptions and those under the co-pay bridging program. Management expects improvement in gross to net as reimbursement increases and new-to-market blocks are lifted. They anticipate a breakthrough year for Emrosi in sales and profitability.
Q:What is the gross to net expectation for Emrosi in 2026?
A:Management expects gradual quarter-over-quarter improvement in gross to net as national formularies adopt Emrosi. They anticipate incremental gains as reimbursement increases and co-pay assistance decreases.
Q:What are the expectations for Emrosi's prescription growth and refill rates?
A:Management expects prescription growth to continue, with 4,000 new prescriptions per month currently. They anticipate refill rates to grow, noting that Emrosi treats a chronic condition, leading to recurring prescriptions.
Q:What is the status of publications and presentations for Emrosi?
A:Management expects 2-3 publications related to Emrosi, with at least one expected to be released soon. Details were not disclosed.
Q:What is the inventory status for Emrosi and the broader portfolio at year-end?
A:Inventory levels are on track with demand across the portfolio, and accounts receivable increases were attributed to timing at year-end.
Q:How do gross margins look for 2026 as Emrosi gains better coverage?
A:Gross margins are expected to improve as high-margin products like Emrosi and QBREXZA become a larger part of the revenue mix. Management is also optimizing period costs to enhance margins.
Q:What are the plans for new product launches in 2026?
A:Management plans to launch one or two new products in the second half of 2026. These products are incremental additions to the portfolio, with further details to be disclosed closer to launch.
Q:Review of Unclear Management Responses
A:Management avoided providing specific quantitative details on gross to net expectations for 2026, instead offering general statements about anticipated improvements. Additionally, they did not disclose specifics about the new product launches or the upcoming publications for Emrosi, citing competitive reasons.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
III trial
JAMA Dermatology
Oracea
Phase III
Society
United States
adoption dermatology
cash position
dermatology conference
dermatology product
efficacy rosacea
end
evaluation
focus profitability
future
goal
inflection
leverage
margin expansion
onset action
placebo
plan adoption
policy
prescriber
prescription demand
prescription volume
product mix
promotion
publication
quarter
rate
refill
regard product
reimbursement
result JAMA
safety
DERM Transcript
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.
Earnings call transcript: Journey Medical Q1 2025 reports revenue beat
Positive5-14
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%.
DERM Report
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