On August 9, 2022 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, reported financial results and recent corporate highlights for the second quarter and six months ended June 30, 2022 (Press release, Fortress Biotech, AUG 9, 2022, View Source [SID1234618063]).
Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
Claude Maraoui, Journey Medical’s Co-Founder, President, and Chief Executive Officer said, "We generated net revenues of $18.3 million in the second quarter of 2022, which represents an increase of 20% from the same quarter last year. Additionally, the settlement agreements executed with Padagis US LLC ("Padagis") earlier this quarter assisted in solidifying Journey Medical’s exclusivity of our three newest products, QBREXZA, AMZEEQ and ZILXI, and provide a clear pathway that we expect will allow us to grow the sales of these products for years to come."
"Enrollment in our two DFD-29 Phase 3 studies is progressing well in the U.S. and we are currently enrolling patients in Europe. Looking ahead, we expect to announce top-line data from our DFD-29 program for the treatment of papulopustular rosacea in the first half of 2023. A New Drug Application ("NDA") filing is subsequently expected in the second half of 2023. We also anticipate launching an additional product in the second half of 2022, which will be Journey Medical’s tenth marketed dermatology product," concluded Mr. Maraoui.
Financial Results:
Net revenues were $18.3 million for the second quarter of 2022, compared to net revenues of $15.3 million for the second quarter of 2021, representing 20% growth versus the second quarter of 2021. The 20% growth was limited due to reduced revenue from Targadox and its authorized generic as a result of continued generic competition and supply chain delays causing a backorder for the XIMINO and EXELDERM brands. The supply chain delays have been resolved as of July and product orders are now being fulfilled.
Selling, general and administrative expenses were $15.2 million for the second quarter of 2022, compared to $7.8 million for the second quarter of 2021, with the increase primarily resulting from the expansion of the salesforce from 42 to 84 sales representatives, marketing expense related to the expanded product portfolio of four products (ACCUTANE, QBREXZA, AMZEEQ and ZILXI) and public company costs.
Research and development costs were $2.6 million in the second quarter of 2022, compared to $29,000 in the second quarter of 2021, reflecting ongoing clinical trial expenses to develop DFD-29. These expenses will increase with the ongoing enrollment of additional patients in the two Phase 3 trials.
Net loss was $7.5 million, or $0.43 per share basic and diluted, for the second quarter of 2022, compared to a net loss of $11.9 million, or $1.30 basic and diluted per share, for the second quarter of 2021.
Non-GAAP Adjusted EBITDA (Adjusted Operating Net Income (loss)) was $(2.6) million, or $(0.15) per share basic and diluted, for the second quarter of 2022, compared to Non-GAAP Adjusted EBITDA (Adjusted Operating Net Income (loss)) of $(11.5) million, or $(1.25) per share basic and diluted, for the second quarter of 2021. Non-GAAP Adjusted EBITDA (Adjusted Operating Net Income (loss)) and Non-GAAP Adjusted EBITDA (Adjusted Operating Net Income (loss)) per share basic and 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 (loss))."
At June 30, 2022, cash and cash equivalents totaled $38.1 million, compared to $49.1 million on December 31, 2021.
Recent Corporate Highlights:
In March 2022, the first patient was dosed in the Phase 3 clinical program of DFD-29 for the treatment of papulopustular rosacea. Topline data are anticipated in the first half of 2023 with an NDA filing expected in the second half of 2023.
In May 2022, Journey Medical entered into three separate settlement agreements (the "Settlement Agreements") with Padagis for the patent infringement lawsuits that we filed to enforce the patents covering QBREXZA, AMZEEQ, and ZILXI. Pursuant to the terms of the Settlement Agreements, Padagis is prohibited from launching generic versions of QBREXZA, AMZEEQ and ZILXI until August 15, 2030, July 1, 2031, and April 1, 2027, respectively.
Additionally in May 2022, Journey Medical received notice from its exclusive out-licensing partner in Japan, Maruho Ltd. ("Maruho"), that its commercial launch of Rapifort (Japanese equivalent of QBREXZA), which was recently approved in Japan, was initiated in the second quarter of this year. Journey Medical began receiving royalty payments from Maruho of 10% of net sales of Rapifort in Japan in the second quarter.
In August 2022, $5.0 million was drawn from the Company’s term loan facility with East West Bank. The additional $5.0 million is part of the Company’s operating plan supporting the DFD-29 clinical program and additional working capital.
Regarding the previously disclosed cybersecurity breach, which resulted in losses of $9.5 million, the Company has received some encouraging news from the FBI, who along with the Department of Homeland Security, has been conducting the investigation. They have alerted Journey Medical that they have been able to seize a significant amount of cryptocurrency associated with the breach and will soon begin the liquidation process of the funds for their eventual return to Journey Medical. The Company is not yet able to estimate the exact amounts it may receive. Under the current timetable it will take some time to complete this process.
Conference Call and Webcast Information
Journey Medical management will conduct a conference call and audio webcast at 4:30 p.m. ET on August 9, 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 10 minutes prior to the scheduled start time and ask to be joined into the Journey Medical conference call. Participants can register for the conference here: View Source 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.