Journey Medical Corporation (NASDAQ: DERM) (“Journey Medical” or
the “Company”), a commercial-stage pharmaceutical company that
focuses on the development and commercialization of pharmaceutical
products for the treatment of dermatological conditions, today
announced financial results and recent corporate highlights for the
first quarter ended March 31, 2022.
Claude Maraoui, Journey Medical’s Co-Founder,
President and Chief Executive Officer, said, “Journey Medical had a
solid start in the first quarter of 2022 positioning us for another
year of continued growth. Financially, we generated record revenue
of $23.3 million, a 117% increase from the first quarter of 2021.
In addition to this financial achievement, we expanded our
available dermatologic product line, with the acquisition and
launch of two prescription dermatology products, Amzeeq® and
Zilxi®; our product portfolio now has a total of nine marketed
prescription dermatology products. We also dosed the first patient
in our pivotal Phase 3 clinical program for DFD-29, which is being
evaluated for the treatment of papulopustular rosacea. Looking
ahead, we plan to launch one additional prescription product in the
second half of 2022. We believe Journey Medical remains poised for
ongoing success, given our financial and commercial progress
coupled with our development pipeline.”
Financial Results:
- Net Product Sales
Performance:
- Journey Medical products generated
net product revenues of $20.8 million for the first quarter of
2022, compared to net product revenues of $10.7 million for the
first quarter of 2021, representing 94% growth from the first
quarter of 2021.
- Other revenue:
- Other revenue for the first quarter
ended March 31, 2022 reflects a net $2.5 million milestone payment
from our exclusive out-licensing partner in Japan, Maruho Co., Ltd.
(“Maruho”). In January 2022, Maruho received manufacturing and
marketing approval in Japan for Rapifort® Wipes 2.5% (Japanese
equivalent to U.S. FDA approved QBREXZA®). The Company acquired
global rights to QBREXZA® from Dermira, Inc. (“Dermira”), a wholly
owned subsidiary of Eli Lilly and Company, in 2021. The Maruho
out-licensing agreement also provides for future product sales
royalties to be paid to the Company.
- Selling, general and administrative
expenses were $14.7 million for the first quarter of 2022, compared
to $6.2 million for the first quarter of 2021, primarily
representing the expansion of our salesforce, marketing expense
related to our expanded product portfolio, and legal expenses.
- Research and development costs were
$1.3 million in the first quarter of 2022, compared to zero in the
first quarter of 2021 reflecting our ongoing clinical trial
expenses to develop our DFD-29 product. We expect these expenses to
increase as additional patients are enrolled in the trials.
- Net loss was $1.4 million, or $0.08
per share basic and diluted, for the first quarter of 2022,
compared to net income of $0.3 million, or $0.03 basic and $0.02
diluted per share, for the first quarter of 2021.
- The Company’s Adjusted EBITDA
(Adjusted Operating Net Income) was $2.3 million, or $0.13 per
share basic and $0.11 per share diluted, for the first quarter of
2022, compared to Adjusted EBITDA (Adjusted Operating Net Income)
of $1.2 million, or $0.13 per share basic and $0.11 per share
diluted, for the first quarter of 2021. Adjusted EBITDA (Adjusted
Operating Net Income), Adjusted Operating Net Income per share
basic and Adjusted Net Income per share diluted are non-GAAP
financial measures, each of which are reconciled to the most
directly comparable financial measures calculated in accordance
with GAAP below, under the heading “Reconciliation of GAAP to
Non-GAAP Adjusted EBITDA (Adjusted Operating Net Income).”
- As of March 31, 2022, Journey
Medical’s cash and cash equivalents totaled $41.3 million, compared
to $49.1 million on December 31, 2021.
Recent Corporate
Highlights:
- In March 2022, Journey Medical
dosed the first patient in the Phase 3 clinical program of DFD-29
for the treatment of papulopustular rosacea. Topline data are
anticipated in the first quarter of 2023 with an NDA filing
expected in the second half of 2023.
- In January 2022, Journey Medical
received notice from its exclusive licensing partner in Japan,
Maruho, that Japan’s Ministry of Health, Labor and Welfare approved
Rapifort® Wipes 2.5% (glycopyrronium tosylate hydrate) for the
treatment of primary axillary hyperhidrosis. This approval
triggered a milestone payment of $10.0 million to Journey Medical,
$7.5 million of which was paid to Dermira pursuant to the terms of
the Asset Purchase Agreement between Journey Medical and Dermira,
with net proceeds of $2.5 million paid to Journey Medical.
- Also, in January 2022, Journey
Medical acquired two FDA-approved topical minocycline products,
Amzeeq® and Zilxi®, and a Molecule Stabilizing Technology™ platform
from VYNE Therapeutics, Inc. for an upfront payment of $20.0
million and an additional $5.0 million on the one (1)-year
anniversary of the closing. Journey Medical will also be obligated
to pay additional amounts to VYNE Therapeutics, Inc. upon the
occurrence of certain net sales milestones beginning at $100
million of product revenue per product annually.
- Additionally, in January 2022,
Journey Medical expanded the borrowing capacity of the East West
Bank credit agreement to $30.0 million, which includes an increase
to the working capital revolving line of credit to $10.0 million
and the addition of a $20.0 million term loan.
Conference Call and Webcast
InformationJourney Medical management will conduct a
conference call and audio webcast at 4:30 p.m. ET on May 10,
2022.
To listen to the conference call, interested
parties within the U.S. should dial 1-866-777-2509 (domestic) or
1-412-317-5413 (international). All callers should dial in
approximately ten minutes prior to the scheduled start time and ask
to be joined into the Journey Medical conference call. Participants
can register for the conference by navigating to
https://dpregister.com/sreg/10166245/f268802ed7.
Please note that registered participants will receive their dial in
number upon registration.
A live audio webcast can be accessed on the News
and Events page of the Investors section of Journey Medical’s
website, www.journeymedicalcorp.com, and will remain available for
replay for approximately 30 days after the meeting.
About Journey Medical
CorporationJourney Medical Corporation (NASDAQ: DERM)
(“Journey Medical”) is focused on identifying, acquiring,
developing and strategically commercializing innovative,
differentiated dermatology products through its efficient sales and
marketing model. The company currently markets nine products that
help treat and heal common skin conditions. The Journey Medical
team is comprised of industry experts with extensive experience
commercializing some of the most successful prescription
dermatology brands. Journey Medical is located in Scottsdale,
Arizona and was founded by Fortress Biotech, Inc. (NASDAQ: FBIO).
Journey Medical’s common stock is registered under the Securities
Exchange Act of 1934, as amended, and it files periodic reports
with the U.S. Securities and Exchange Commission (“SEC”). For
additional information about Journey Medical, visit
www.journeymedicalcorp.com.
Forward-Looking StatementsThis
press release may contain “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934, as amended. As used
below and throughout this press release, the words “we”, “us” and
“our” may refer to Journey Medical. Such statements include, but
are not limited to, any statements relating to our growth strategy
and product development programs and any other statements that are
not historical facts. The words “anticipate,” “believe,”
“estimate,” “may,” “expect,” “will,” “could,” “project,” “intend”
and similar expressions are generally intended to identify
forward-looking statements. Forward-looking statements
are based on management’s current expectations and are subject to
risks and uncertainties that could negatively affect our business,
operating results, financial condition and stock price. Factors
that could cause actual results to differ materially from those
currently anticipated include: risks relating to our growth
strategy; our ability to obtain, perform under and maintain
financing and strategic agreements and relationships; risks
relating to the results of research and development activities;
uncertainties relating to preclinical and clinical testing; risks
relating to the timing of starting and completing clinical trials,
including disruptions that may result from hostilities in Europe;
our dependence on third-party suppliers; risks relating to the
COVID-19 outbreak and its potential impact on our employees’ and
consultants’ ability to complete work in a timely manner and on our
ability to obtain additional financing on favorable terms or at
all; our ability to attract, integrate and retain key personnel;
the early stage of products under development; our need for
substantial additional funds; government regulation; patent and
intellectual property matters; competition; as well as other risks
described in Part I, Item 1A, “Risk Factors,” in our Annual Report
on Form 10-K filed on March 28, 2022, subsequent Reports on Form
10-Q, and our other filings we make with the SEC. We expressly
disclaim any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements contained
herein to reflect any change in our expectations or any changes in
events, conditions or circumstances on which any such statement is
based, except as may be required by law, and we claim the
protection of the safe harbor for forward-looking statements
contained in the Private Securities Litigation Reform Act of
1995.
Company Contacts:Jaclyn Jaffe
and Bill Begien(781) 652-4500ir@jmcderm.com
Media Relations Contact:Tony
Plohoros6 Degrees(908)
591-2839tplohoros@6degreespr.com
JOURNEY MEDICAL CORPORATION
Unaudited Condensed Consolidated Balance
Sheets(Dollars in thousands except for share and per share
amounts)
|
|
|
|
|
|
March
31, |
|
December
31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
ASSETS |
|
|
|
|
Current
assets |
|
|
|
|
Cash and cash equivalents |
$ |
41,331 |
|
|
$ |
49,081 |
|
|
Accounts receivable, net of reserves |
|
31,183 |
|
|
|
23,112 |
|
|
Inventory |
|
16,137 |
|
|
|
9,862 |
|
|
Prepaid expenses and other current assets |
|
1,608 |
|
|
|
2,438 |
|
|
Total
current assets |
|
90,259 |
|
|
|
84,493 |
|
|
|
|
|
|
|
Intangible assets, net |
|
30,457 |
|
|
|
12,552 |
|
|
Operating lease right-of-use asset, net |
|
67 |
|
|
|
89 |
|
|
Other assets |
|
118 |
|
|
|
150 |
|
|
Total assets |
$ |
120,901 |
|
|
$ |
97,284 |
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
Current
liabilities |
|
|
|
|
Accounts payable |
$ |
26,959 |
|
|
$ |
22,812 |
|
|
Due to related party |
|
511 |
|
|
|
641 |
|
|
Accrued expenses |
|
25,885 |
|
|
|
22,733 |
|
|
Accrued interest |
|
66 |
|
|
|
- |
|
|
Income taxes payable |
|
112 |
|
|
|
8 |
|
|
Line of credit |
|
- |
|
|
|
812 |
|
|
Deferred payment (net of discount of $206) |
|
4,794 |
|
|
|
- |
|
|
Installment payments – licenses, short-term (net of debt discount
of $431 and $490 as of March 31, 2022 and December 31, 2021,
respectively) |
|
2,569 |
|
|
|
4,510 |
|
|
Operating lease liabilities, short-term |
|
74 |
|
|
|
98 |
|
|
Total
current liabilities |
|
60,970 |
|
|
|
51,614 |
|
|
|
|
|
|
|
Term loan
(net of debt discount of $223) |
|
14,777 |
|
|
|
- |
|
|
Installment
payments – licenses, long-term (net of debt discount of $284 and
$373 as of March 31, 2022 and December 31, 2021, respectively) |
|
3,716 |
|
|
|
3,627 |
|
|
Total liabilities |
|
79,463 |
|
|
|
55,241 |
|
|
|
|
|
|
|
Stockholders' equity |
|
|
|
|
Common stock, $.0001 par value, 50,000,000 shares authorized,
11,318,344 and 11,316,344 shares issued and outstanding as of March
31, 2022 and December 31, 2021, respectively |
|
1 |
|
|
|
1 |
|
|
Common stock - Class A, $.0001 par value, 50,000,000 shares
authorized, 6,000,000 shares issued and outstanding as of March 31,
2022 and December 31, 2021 |
|
1 |
|
|
|
1 |
|
|
Additional paid-in capital |
|
81,688 |
|
|
|
80,915 |
|
|
Accumulated deficit |
|
(40,252 |
) |
|
|
(38,874 |
) |
|
Total stockholders' equity |
|
41,438 |
|
|
|
42,043 |
|
|
Total liabilities and stockholders' equity |
$ |
120,901 |
|
|
$ |
97,284 |
|
|
|
|
|
|
|
JOURNEY MEDICAL
CORPORATIONUnaudited Condensed Consolidated
Statements of Operations(Dollars in thousands except for
share and per share amounts)
|
|
Three-Month
Periods Ended |
|
|
|
March 31, |
|
|
|
2022 |
|
|
2021 |
|
Revenue: |
|
|
|
|
|
|
Product revenue, net |
$ |
20,796 |
|
|
$ |
10,719 |
|
Other revenue |
|
2,500 |
|
|
|
- |
|
Total
Revenue |
|
23,296 |
|
|
|
10,719 |
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
Cost of goods sold – product revenue |
|
8,203 |
|
|
|
3,908 |
|
Research and development |
|
1,266 |
|
|
|
- |
|
Selling, general and administrative |
|
14,715 |
|
|
|
6,226 |
|
Total
operating expenses |
|
24,184 |
|
|
|
10,134 |
|
(Loss)
income from operations |
|
(888 |
) |
|
|
585 |
|
|
|
|
|
|
|
|
Other expense |
|
|
|
|
|
|
Interest income |
|
(3 |
) |
|
|
- |
|
Interest expense |
|
389 |
|
|
|
221 |
|
Total other
expense |
|
386 |
|
|
|
221 |
|
Net
(loss) income before income taxes |
|
(1,274 |
) |
|
|
364 |
|
|
|
|
|
|
|
|
Income tax
expense |
|
104 |
|
|
|
96 |
|
Net
(loss) income |
$ |
(1,378 |
) |
|
$ |
268 |
|
|
|
|
|
|
|
|
Net (loss)
income per common share – basic |
$ |
(0.08 |
) |
|
$ |
0.03 |
|
Net (loss)
income per common share – diluted |
$ |
(0.08 |
) |
|
$ |
0.02 |
|
|
|
|
|
|
|
|
Weighted
average shares outstanding – basic |
|
17,318,344 |
|
|
|
9,158,333 |
|
Weighted
average shares outstanding – diluted |
|
17,318,344 |
|
|
|
10,897,096 |
|
|
|
|
|
|
|
|
Use of Non-GAAP Measures:
In addition to the GAAP financial measures as
presented in our Form 10-Q that will be filed with the Securities
and Exchange Commission (“SEC”), the Company has, in this press
release, included certain non-GAAP measurements, including Adjusted
EBITDA (Adjusted Operating Net Income), Adjusted Operating Net
Income per share basic and Adjusted Net Income per share diluted.
We define Adjusted EBITDA (Adjusted Operating Net Income) as net
income (loss) plus interest, taxes and depreciation, less certain
other non-cash items, namely, stock-based compensation expense,
amortization of acquired intangible assets, inventory step-up, as
more fully described as follows:
- Share-Based Compensation
Expense: We exclude share-based compensation from our
adjusted financial results because share-based compensation
expense, which is non-cash, fluctuates from period to period based
on factors that are not within our control, such as our stock price
on the dates share-based grants are issued.
- Non-core and Short-term Research
and Development Expense: We exclude costs associated with
non-core and short-term related research and development because we
do not consider such costs to be normal, recurring operating
expenses that are core to our long-term strategy.
- Amortization of Acquired Intangible
assets: We exclude the impact of certain amounts recorded in
connection with the acquisitions of intangible assets that are
either non-cash or not normal, recurring operating expenses due to
their nature, variability of amounts, and lack of predictability as
to occurrence and/or timing. These amounts may include non-cash
items such as the amortization of acquired intangible assets and
amortization of step-ups of acquisition accounting adjustments to
inventories.
Adjusted Operating Net Income per share basic
and Adjusted Net Income per share diluted are determined by
dividing the resulting Adjusted EBITDA (Adjusted Operating Net
Income) by the number of shares outstanding on an actual and fully
diluted basis.
Management believes use of these non-GAAP
measures provide meaningful supplemental information regarding the
Company’s performance because (i) it allows for greater
transparency with respect to key measures used by management in its
financial and operational decision-making, (ii) it excludes the
impact of non-cash or, when specified, non-recurring items that are
not directly attributable to the Company’s core operating
performance and that may obscure trends in the Company’s core
operating performance and (iii) it is used by institutional
investors and the analyst community to help analyze the Company's
results. However, Adjusted EBTIDA (Adjusted Operating Net Income),
Adjusted Operating Net Income per share basic, Adjusted Net Income
per share diluted and any other non-GAAP financial measures should
be considered as a supplement to, and not as a substitute for, or
superior to, the corresponding measures calculated in accordance
with GAAP. Further, non-GAAP financial measures used by the Company
and the manner in which they are calculated may differ from the
non-GAAP financial measures or the calculations of the same
non-GAAP financial measures used by other companies, including the
Company’s competitors.
The table below provides a reconciliation from
GAAP to non-GAAP measures:
JOURNEY MEDICAL CORPORATION
Reconciliation of GAAP to Non-GAAP Adjusted EBITDA
(Adjusted Operating Net Income)(Dollars in thousands
except for share and per share amounts)
|
|
Three-Month Periods Ended |
|
|
March 31, |
|
|
|
2022 |
|
|
2021 |
GAAP Net (Loss) income |
|
$ |
(1,378 |
) |
|
$ |
268 |
|
|
|
|
|
EBITDA: |
|
|
|
|
Interest |
|
|
386 |
|
|
|
221 |
Taxes |
|
|
104 |
|
|
|
96 |
Depreciation |
|
|
- |
|
|
|
- |
Amortization of acquired intangible assets |
|
|
1,017 |
|
|
|
584 |
EBITDA |
|
|
129 |
|
|
|
1,169 |
|
|
|
|
|
Non-GAAP Adjusted EBITDA (Adjusted Operating Net
Income): |
|
|
|
Share-based compensation |
|
|
773 |
|
|
|
22 |
Inventory
step-up expense |
|
|
140 |
|
|
|
- |
Non-core
& short-term R&D |
|
|
1,266 |
|
|
|
- |
Non-GAAP Adjusted EBITDA (Adjusted Operating Net
Income) |
|
$ |
2,308 |
|
|
$ |
1,191 |
|
|
|
|
|
Per
common share - basic: |
|
|
|
|
GAAP Net
(loss) income |
|
$ |
(0.08 |
) |
|
$ |
0.03 |
Non-GAAP
Net income |
|
$ |
0.13 |
|
|
$ |
0.13 |
|
|
|
|
|
Per
common share - diluted: |
|
|
|
|
GAAP Net
(loss) income |
|
$ |
(0.08 |
) |
|
$ |
0.03 |
Non-GAAP
Net income |
|
$ |
0.11 |
|
|
$ |
0.11 |
|
|
|
|
|
GAAP
weighted average common shares outstanding - basic |
(1) |
|
17,318,344 |
|
|
|
9,158,333 |
GAAP
weighted average common shares outstanding - diluted |
|
|
20,341,996 |
|
|
|
10,897,096 |
|
|
|
|
|
(1) Reflects both basic and
dilutive for computing the GAAP Net loss EPS as the GAAP Net loss
is antidilutive and the effect would be to reduce the loss per
share.
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