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01/11 03:19
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
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.
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.
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.
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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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.
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.
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.
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