Company generated total revenues of
Achieved
New Drug Application for rosacea treatment candidate DFD-29 accepted for
Company to hold conference call today at
Financial Results:
- Total revenues were
$79.2 million for the full year 2023, representing 7% growth compared to total revenues of$73.7 million for the full year of 2022. The increase is primarily due to the Company’s entry into a license agreement withMaruho resulting in$19.0 million of revenue in 2023. Total net product revenues decreased$11.3 million , or 16%, compared to$71.0 million for 2022, mainly due to lower unit volumes from our legacy products, Targadox®, Ximino® and Exelderm® specifically due to continued generic competition for Targadox and the discontinuation of Ximino during the third quarter of 2023. - Cost of goods sold decreased by
$4.1 million , or 13%, to$26.7 million for the full year 2023, from$30.8 million for the full year 2022. The decrease is mainly due to lower-than-prior-year product royalties driven by lower sales of products from period-to-period, and a permanent contractual decrease in the Qbrexza royalty percentage from the prior-year period. - Selling, general and administrative expenses were
$43.9 million for the full year 2023, compared to$59.5 million for 2022. The decrease is mainly due to our expense reduction efforts primarily in sales and marketing and other SG&A areas. During the fourth quarter of 2022, we began the implementation of a cost reduction initiative designed to improve operational efficiencies, optimize expenses and reduce overall costs. - Research and development costs were
$7.5 million for the full year 2023, compared to$10.9 million for the full year 2022. The decrease is due to lower clinical trial expenses for DFD-29 given the completion of the Phase 3 clinical trial program. - Net loss was
$(3.9) million , or$(0.21) per share basic and diluted for the full year 2023, compared to net loss of$(29.6) million or$(1.69) per share basic and diluted for the full year 2022. The$25.8 million decrease in net loss from period-to-period was driven by our expense optimization efforts and theMaruho upfront payment. - The Company’s non-GAAP results in the table below reflect Adjusted EBITDA of
$15.6 million , or$0.85 per share basic and$0.75 per share diluted for the full year 2023. This compares to Adjusted EBITDA of$(7.3 million) , or$(0.42) per share basic and diluted for the full year 2022. Adjusted EBITDA, Adjusted EBITDA per share basic and Adjusted EBITDA 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 “Use of Non-GAAP Measures.” - At
December 31, 2023 , Journey Medical’s cash and cash equivalents totaled$27.4 million , compared to$24.8 million onSeptember 30, 2023 , and$32.0 million onDecember 31, 2022 , an increase of$2.6 million for the quarter and a decrease of$4.6 million from the prior-year period. - In
December 2023 ,Journey Medical entered into a$20.0 million credit facility with SWK Holdings Corporation (“SWK”), a specialized finance company with a focus on the global healthcare sector. The credit facility provides for an initial term loan of$15.0 million that the Company intends to use for general corporate purposes, including to support the potential launch of DFD-29. The Company also has the option to draw an additional tranche of$5.0 million under the credit facility within one year.
FY 2023 and Recent Corporate Highlights:
- In
March 2024 , the FDA accepted the NDA for DFD-29 (Minocycline Hydrochloride Modified Release Capsules, 40 mg) and set a PDUFA goal date ofNovember 4, 2024 . If approved, DFD-29 will be the lowest-dose oral minocycline on the market and has the potential to be the new treatment paradigm for the millions of patients suffering from rosacea. The Company had submitted the NDA to the FDA seeking approval for DFD-29 for the treatment of inflammatory lesions and erythema of rosacea in adults inJanuary 2024 . - In
October 2023 ,Journey Medical announced data from a comparative bioavailability (bridging) study of DFD-29 vs. Solodyn® (Minocycline Hydrochloride Extended-Release Tablets, 105 mg), which were presented at the 43rd AnnualFall Clinical Dermatology Conference . The data demonstrated that systemic exposure of DFD-29 was significantly lower than that of Solodyn and that DFD-29 was safe and well tolerated throughout the study. - In
September 2023 ,Journey Medical entered into an exclusive license agreement withMaruho . Under the terms of the Agreement,Journey Medical received a$19.0 million non-refundable upfront payment and grantedMaruho an exclusive license to develop and commercialize Qbrexza (glycopyrronium tosylate hydrate) for the treatment of hyperhidrosis inSouth Korea ,Taiwan ,Hong Kong ,Macau ,Thailand ,Indonesia ,Malaysia ,Philippines ,Singapore ,Vietnam ,Brunei ,Cambodia ,Myanmar andLaos (the “Territory”).Maruho is responsible for all development and commercialization costs for the product throughout the Territory. - In
July 2023 ,Journey Medical announced positive topline results from the two DFD-29 Phase 3 clinical trials (MVOR-1 & MVOR-2) for the treatment of rosacea. Both randomized controlled trials achieved their co-primary and all secondary endpoints with subjects completing the 16-week treatment with no significant safety issues. DFD-29 demonstrated statistical superiority compared to both Oracea capsules and placebo for Investigator’s Global Assessment (IGA) treatment success and the reduction in the total inflammatory lesion count in both clinical trials. The Company also announced results from the DFD-29 Phase 3 studies on a secondary endpoint related to erythema (redness) assessment. DFD-29 showed significantly superior reduction in Clinicians Erythema Assessment (CEA) compared to placebo in both of the Phase 3 clinical trials. - In
June 2023 ,Journey Medical announced positive topline results from the Phase 1 clinical trial assessing the impact of DFD-29 on the microbial flora of healthy adults and also evaluated the safety and tolerability of DFD-29. The study achieved all primary objectives and no significant safety issues were noted during the study. The results indicate that DFD-29 can be safely used for up to 16 weeks with no significant risk of microbiota suppression or development of resistance.
Conference Call and Webcast Information
To listen to the conference call, interested parties within the
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
Forward-Looking Statements
This press release may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. As used below and throughout this press release, the words “the Company”, “we”, “us” and “our” may refer to
Company Contact:
(781) 652-4500
ir@jmcderm.com
Media Relations Contact:
Tony Plohoros
6 Degrees
(908) 591-2839
tplohoros@6degreespr.com
Unaudited Consolidated Balance Sheets ($ in thousands except for share and per share amounts) | |||||||
2023 | 2022 | ||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 27,439 | $ | 32,003 | |||
Accounts receivable, net of reserves | 15,222 | 28,208 | |||||
Inventory | 10,206 | 14,159 | |||||
Prepaid expenses and other current assets | 3,588 | 3,309 | |||||
Total current assets | 56,455 | - | 77,679 | ||||
Intangible assets, net | 20,287 | 27,197 | |||||
Operating lease right-of-use asset, net | 101 | 189 | |||||
Other assets | 6 | 95 | |||||
Total assets | $ | 76,849 | $ | 105,160 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities | |||||||
Accounts payable | $ | 18,149 | $ | 36,570 | |||
Due to related party | 195 | 413 | |||||
Accrued expenses | 20,350 | 19,388 | |||||
Accrued interest | 22 | 160 | |||||
Income taxes payable | 53 | 35 | |||||
Line of credit | - | 2,948 | |||||
Deferred cash payment, net of discount | - | 4,991 | |||||
Installment payments – licenses, short-term | 3,000 | 2,244 | |||||
Operating lease liability, short-term | 99 | 83 | |||||
Total current liabilities | 41,868 | 66,832 | |||||
Term loan, net of discount | 14,622 | 19,826 | |||||
Installment payments – licenses, long-term | - | 1,412 | |||||
Operating lease liability, long-term | 9 | 108 | |||||
Total liabilities | 56,499 | 88,178 | |||||
Stockholders' equity | |||||||
Common stock, | 1 | 1 | |||||
Common stock - Class A, | 1 | 1 | |||||
Additional paid-in capital | 92,703 | 85,482 | |||||
Accumulated deficit | (72,355 | ) | (68,502 | ) | |||
Total stockholders' equity | 20,350 | 16,982 | |||||
Total liabilities and stockholders' equity | $ | 76,849 | $ | 105,160 | |||
Unaudited Consolidated Statements of Operations ($ in thousands except for share and per share amounts) | ||||||||
Years Ended | ||||||||
| ||||||||
2023 | 2022 | |||||||
Revenue: | | | | | | |||
Product revenue, net | $ | 59,662 | | $ | 70,995 | |||
Other revenue | 19,519 | 2,674 | ||||||
Total revenue | 79,181 | 73,669 | ||||||
Operating expenses | | | | | | |||
Cost of goods sold – product revenue | | 26,660 | | | 30,775 | |||
Research and development | | 7,541 | | | 10,943 | |||
Selling, general and administrative | | 43,910 | | | 59,468 | |||
Loss on impairment of intangible assets | 3,143 | - | ||||||
Total operating expenses | | 81,254 | | | 101,186 | |||
Loss from operations | | (2,073 | ) | | | (27,517 | ) | |
Other expense (income) | ||||||||
Interest income | (322 | ) | | | (60 | ) | ||
Interest expense | | 1,698 | | | 2,019 | |||
Foreign exchange transaction losses | 183 | 89 | ||||||
Total other expense (income) | | 1,559 | | | 2,048 | |||
Loss before income taxes | | (3,632 | ) | | | (29,565 | ) | |
Income tax expense | 221 | 63 | ||||||
Net Loss | $ | (3,853 | ) | | $ | (29,628 | ) | |
Net loss per common share: | ||||||||
Basic and diluted | $ | (0.21 | ) | | $ | (1.69 | ) | |
Weighted average number of common shares: | ||||||||
Basic and diluted | 18,232,422 | 17,531,274 | ||||||
Use of Non-GAAP Measures:
In addition to the GAAP financial measures as presented in our Form 10-K that will be filed with the
- 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 research and development costs incurred in connection with our DFD-29 product candidate, which is the only product in our portfolio not currently approved for marketing and sale, because we do not consider such costs to be normal, recurring operating expenses that are core to our long-term strategy. Instead, our long-term strategy is focused on the marketing and sale of our core FDA-approved dermatological products and the out licensing our intellectual property and related technologies.- Amortization and impairments 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 impairments of acquired intangible assets and amortization of step-ups of acquisition accounting adjustments to inventories.
Adjusted EBITDA per share basic and Adjusted EBITDA per share diluted are determined by dividing the resulting Adjusted EBITDA by the number of shares outstanding on an actual and fully diluted basis.
Management believes the 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 EBITDA, Adjusted EBITDA per share basic, Adjusted EBITDA 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:
Reconciliation of GAAP to Non-GAAP Adjusted EBITDA (Dollars in thousands except for share and per share amounts) | |||||||||
Years Ended | |||||||||
2023 | 2022 | ||||||||
GAAP Net Loss | $ | (3,853 | ) | $ | (29,628 | ) | |||
EBITDA: | |||||||||
Interest | 1,376 | 1,959 | |||||||
Taxes | 221 | 63 | |||||||
Depreciation | - | - | |||||||
Amortization of acquired intangible assets | 3,767 | 4,277 | |||||||
EBITDA | 1,511 | (23,329 | ) | ||||||
Non-GAAP Adjusted EBITDA: | |||||||||
Share-based compensation | 2,606 | 4,425 | |||||||
Loss on impairment of intangible assets | 3,143 | - | |||||||
Inventory step-up expense | - | 635 | |||||||
Non-core & short-term R&D | 7,433 | 10,870 | |||||||
Foreign exchange transaction losses | 183 | 89 | |||||||
Severance | 711 | 27 | |||||||
Non-GAAP Adjusted EBITDA | $ | 15,587 | $ | (7,283 | ) | ||||
Net income (loss) & Non-GAAP Adjusted EBITDA per common share: | |||||||||
Basic | |||||||||
GAAP Net Income (Loss) | $ | (0.21 | ) | $ | (1.69 | ) | |||
Non-GAAP Adjusted EBITDA | $ | 0.85 | $ | (0.42 | ) | ||||
Diluted | |||||||||
GAAP Net Income (Loss) | $ | (0.21 | ) | $ | (1.69 | ) | |||
Non-GAAP Adjusted EBITDA | $ | 0.75 | $ | (0.42 | ) | ||||
Weighted average number of common shares: | |||||||||
GAAP - Basic and Diluted | 18,232,422 | 17,531,274 | |||||||
Non-GAAP - Basic | 18,232,422 | 17,531,274 | |||||||
Non-GAAP - Diluted | 20,884,538 | 17,531,274 |
Source:
2024 GlobeNewswire, Inc., source