Journey Medical (DERM) Q2 2026 earnings call transcript

Good afternoon, and thank you for participating in today's conference call. Joining me from Journey Medical's leadership team are Claude Morale, co-founder, president, and chief executive officer, Joseph Benesh, chief financial officer, and Ram Diolouche, chief operating officer and general counsel, who will participate in the Q&A portion of the call. During this call, management will be making forward-looking statements, including statements that address, among other things, Journey Medical's expectations for future performance, operational results, financial condition, and the receipt of regulatory approvals.

Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For information about these risks, please refer to the risk factors described in Journey Medical's most recently filed periodic reports on Form 10-K and Form 10-Q. The Form 8-K files with the SEC today and accompanies press release that accompanies this call, particularly the cautionary statements in it. Today's conference call includes non-GAAP financial measures that Journey Medical believes can be useful in evaluating its performance. You should not consider this additional information in isolation or as a substitute for results prepared in accordance with GAAP. For a reconciliation of this non-GAAP financial measure to net loss, its most directly comparable GAAP financial measure, please see the reconciliation table located in the company's earnings press release.

The content of this call contains time-sensitive information that is accurate only as of today, Wednesday, August 12, 2026. Except as required by law, Journey Medical disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. It is now my pleasure to turn the call over to Claude Morali, co-founder, president, and chief executive officer of Journey Medical.

Thank you, Jacqueline, and good afternoon to everyone on the call today. We continued to make solid progress in our business in the second quarter as we delivered strong revenue growth and improved profitability during the period. MROC revenues were $8.1 million in Q2, up significantly year over year and sequentially from the first quarter, on higher prescription volume, improving payer reimbursement, and a significant step up in the number of dermatology writers prescribing the brand. These metrics not only trended positively, but also showed acceleration, and we expect this progress to continue in the coming quarters.

Our total net product revenues for the second quarter rose by 23% year-over-year, while operating expenses increased by less than 1% compared to Q2 of last year. We remain focused on delivering strong top-line growth and leveraging our proven dermatology commercial infrastructure. We are executing on these initiatives, and as a result, we generated positive EBITDA in the second quarter. With this performance, we continue to believe that 2026 will be a breakout year for Journey Medical with respect to both revenue growth and profitability.

MROSI prescriptions totaled approximately 36,000 in the second quarter, up from about 30,000 total prescriptions in the first quarter of this year. This represents approximately 20% sequential quarterly growth for the product, which is up from the 11% sequential quarterly prescription growth seen last quarter. Importantly, the growth is being driven by new prescriptions in addition to refills, with successive increases in NRXs on a monthly basis. In June, we saw a strong increase with over 5,300 new prescriptions filled, up from an average of 4,700 NRXs in the preceding three months.

This was an all-time monthly high for the product. We reported last quarter that approximately 3,700 unique dermatology prescribers had written a prescription of MROSI. Today, I am pleased to report that there are now over 4,500 unique prescribers writing for the brand. This is more than a 40% increase in Amrosi prescribers from the 3,200 prescribers that we had at the end of 2025. We believe that these accelerating trends are encouraging and demonstrate that as more prescribers and patients gain experience with MROSI, product loyalty will increase and the franchise value will continue to compound. As we had planned, we hired an additional five dermatology sales professionals into our commercial organization during the second quarter.

These experienced representatives joined the company in late July and were recently deployed into the field. The time to fill these relatively large sales territories couldn't be better, and we expect that contributions from these new representatives will add to our already strong market penetration efforts. With over 15,000 dermatologists in the United States, there is significant room for us to grow our base of prescribers.

We are increasing our peer-to-peer marketing activities, and we remain active at key dermatology medical conferences to expand awareness of MROSI's superior clinical benefits in the treatment of rosacea. The superior head-to-head efficacy results demonstrated in our Phase III clinical trials comparing MROSI to the only other branded oral rosacea treatment, or RACIA, continue to be central in driving adoption throughout the dermatology community. Amrosi's placebo-like safety and tolerability profile is proving to be durable, which is another important factor in recruiting new prescribers.

From the patient perspective, Amrosi's rapid onset of action and superior skin clearing effects compared to Oratia are key, and real-world patient experiences are supporting a growing base of loyal end users. Helping us to further broaden awareness of MROSI in the market, we expect to announce new journal publications for the product in the coming quarters, and we believe that MROSI has potential to be incorporated into the consensus treatment guidelines for rosacea. The payer community is also taking note of MROSI's early success in the market, and we are continuing to make progress with the downstream health plans.

Importantly, the calculated average selling price for MROSI based on prescriptions increased in Q2 over Q1. After increasing previously in Q1 over Q4, as reimbursed prescriptions are becoming an increasing part of the business mix, as MROSI's formulary status improves, we believe that our ASP will continue to rise. Earlier this year, we completed our agreements with all the top three GPOs in the nation, bringing plan access for OMROSI to over 169 million of the 192 million covered commercial lives in the U. S. With those agreements in place, our focus is to pursue high-quality formulary coverage with the downstream health plans, meaning a single-step edit or better.

We made good progress in the second quarter as the percentage of commercial lives with high-quality formulary coverage increased from 34% in Q1 to approximately 38% currently. Supporting this positive trend, a large national health plan placed MROC on its formulary in early August, and we expect to see traction from that addition this quarter. And now I will turn the call over to our CFO, Joe Binesh, to review our second quarter financial results.

Thank you, Claude, and good afternoon to everyone on the call. I will now review our financial results for the second quarter of 2026. Total revenue for the quarter was $18.5 million, compared to $15 million in the second quarter of 2025, reflecting a 23% increase from period to period. This growth was primarily driven by momentum from continued commercial demand firm Rossi which generated million in net revenue for the quarter Turning to gross margin we reported a 67 margin for the second quarter of 2026 consistent with the prior year quarter SG&A expenses were $10.9 million for the quarter, compared to $11.9 million in the second quarter of 2025. The decrease was primarily due to the impact of launch-related spending for MROSI in the prior quarter.

Our gap net loss narrowed to $300,000, or $0.01 per share basic and diluted, compared to a net loss of $3.8 million, or $0.16 per share, basically diluted for QQ 2025. On a non-GAAP basis, both EBITDA and adjusted EBITDA were positive for the three- and six-month periods ended June 30, 2026. EBITDA reflected net income of $1.4 million and $1.1 million for the second quarter and the six-month period ended June 30, 2026, respectively, compared to net losses of $1.9 million and $4.1 million The Pension Net Loss is a $500,000 and $1.4 million for the Pension Net Loss. The prior year quarter and the prior year-to-date period, respectively.

We ended the quarter with $25.6 million in cash compared to $24.1 million as of December 31, 2025. In summary, our second quarter results reflect the continued execution of our plan to become sustainably EBITDA positive through revenue growth, margin improvement, and expense optimization, which we intend to remain focused on. Thank you very much. I will now turn the call back over to Clyde.

Thank you, Joe. The second quarter was another productive period for Journey Medical, with clear progress made on our business objectives. We are delivering on our goal to generate positive EBITDA for the remainder of the year, and with our net product sales growing significantly faster than our expenses. We are making solid progress toward becoming sustainably earnings and cash flow positive.

MROSI continues to gain market share in the rosacea treatment segment, with prescription growth accelerating in Q2 and our base of new prescribers increasing at an impressive rate. With total prescriptions growing by 20% sequentially from the first quarter of this year, we believe that the promise of MROSI is beginning to be realized broadly in the market.

Importantly, patient experiences are validating that the superior benefits in our Phase III clinical trials are highly clinically meaningful. We remain focused on achieving high prescriber and patient satisfaction rates, as this is the cornerstone of our efforts to build a strong base and deliver compounding growth for the brand.

With market momentum building, our payer coverage continues to improve as well. The trends of higher ASPs since the beginning of the year is a reflection of that progress. MROSI was added to the formulary of a major national health plan earlier this month, and with other payer initiatives in various stages of progress, we continue to expect our ASP to improve throughout the back half of the year, fueling MROSI sales growth. With our business moving in the right direction, we believed it was the perfect time to expand our commercial organization, and we did so by recently hiring and deploying five new sales professionals to fill new territories.

We also executed on launching a niche dermatology product late in the second quarter called Urax Cream. Our new sales professionals and this new addition to our product lineup are expected to augment our efforts to grow company revenues, with MROC remaining as high-priority detail in the Journey portfolio. With regards to business development activities, we continue to explore out-licensing opportunities for the commercial rights to our patented products in non-U. S. territories. In addition to the potential to end license assets to expand our dermatology product offering and increase value for the company.

We continue to expect that 2026 will be a breakout year for Journey Medical, and we will remain committed to delivering on our core objectives. To improve the lives of patients, offer innovative treatment options to dermatology healthcare providers, and to create long-term value for our shareholders.

Thank you, Operator. We are now ready to open the lines for Q&A.

None.

That's correct. I think you'll see good progress from really from Q4 last year, Q1 to Q2, and our expectation is that we'll continue to gain better ASPs as more reimbursement from our payer strategy gets implemented And more reimbursements happening through the insurance companies.

Yeah, it's a good question, fair question. You know, as I'm looking at market data and just looking the past six, seven quarters of the total market, pretty consistent throughout. You anticipate from, you know, summer going into winter with the cold weather coming into play in the next several months that there are some changes. It's minimal, and I would not put a lot of seasonality to it. Now, we've had good growth consistent throughout the whole year. You'll see some weeks, Scott, that there's maybe several weeks that are the same level, and then we get a bump up. And that's what we've seen with this brand on a consistent basis as we've launched it here in 2026.

So, you know, we just got Symphony numbers, for example, for July. So we had about 13,000 prescriptions for Omrosi in June, and now we have approximately 14,000. So we've increased it in a good fashion. New prescriptions are up. The trends are very strong. We hit about 5,300 new prescriptions. The last three months preceding that was about 4,700. So the trends are very positive. And in my opening remarks, we talked about unique prescribers. I will tell you, you know, from closing out 2025, we had about 3,200 prescribers. We moved that up to approximately 3,700 prescribers, ending Q1. And we're close to 4,500-plus prescribers right now. So more physicians are jumping on, and it's really looking positive.

Yeah, sure. Now Cubrexa is a fantastic product very meaningful to the company Right now it second out of the bag in terms of promotion with our field sales force Obviously MROSI is first out of the bag And you know we have great contribution from Qbrexa very consistent over the time that we had it It brings in roughly about million to million You'll see some up and down quarters with the brand, and this past one was a little bit light.

You know, I would contribute that to probably a few things. You know, one is patient mix, payer mix, right? We don't control that blend that's happening during the quarter, so that's certainly a big part of it. I think you'll have some residual effects from insurance deductible resets from the beginning of the year that leak into Q2. We are going into a very good, strong season for hyperhidrosis, the hotter summer months.

And again, we had an extremely strong month of June. We hit over 14,000-plus prescriptions, about 14,500 to be exact. As I mentioned with Amrosi, we just got the July numbers, and we're just shy of the 15,000 mark. So demand is increasing. Patient satisfaction with the brand is extremely high. And, you know, it's just very convenient. You can use this brand any time of the day or evening. There's no restrictions, and the simple use of it, Scott, makes it very friendly. The fact there's no aluminum-containing ingredients in the brand makes it very appealing to a lot of people. So the brand is growing, and we see great contributions. So I would expect with consistency that you've seen over the last couple years with this.

Thank you.

Sure. Joe, would you like to take that one?

Yeah, sure. So my – the answer is yes, somewhat, right? You're not going to see any surprises, but, you know, we do have some marketing programs, some advertising programs that will probably implement the third, fourth quarter. But overall, I expect to see the percentage of revenue from SG&A pretty consistent.

Sure. I'll start with the latter two parts of your question there. You know, refill rates are very important. We have been very committed on being on message in terms of our Phase III clinical trials. Our commercial team is executing, talking about four-month trials, and I think it's resonating extremely well with our prescribers. So, you know, if they are prescribing MROSI, which, again, we continue to see more and more prescribers each quarter, and then depending on how they are giving the refills, if it's one prescription plus three refills, that's according to our Phase III clinical trials. But, you know, dermatologists are artists. Patients come in and present their rosacea in different parts, phases to the physician.

So they're going to vary on how many refills they get and what they're comfortable with. So that's going to go up and down. And as we get these new prescribers on board, once they get those patients back, they're going to get more and more comfortable with the brand. So refill rates are important. The month of July that just came in, again, an all-time high with 14,000 prescriptions. Our refill rate for that particular month, for example, is at 1.5, plus the regular fill. So you're at about 2.5 right now, if you think about it. But you can also see a surge in new prescriptions. As I mentioned, we were averaging about 4,700 new prescriptions a month.

Now we move that up to about 5,300 prescriptions. So the refill rate, even though that's compounding now with more physicians using this and giving refills to their patients, the refill rate is important, but I think you have to look at total prescriptions, and that line continues to demonstrate very strong positive growth.

So I would tell you that that's how I would think about it, Myank. In terms of the new national health care plan, I'm going to ask Ramsey to jump in here and talk about that a little bit and then potential for the rest of the year.

Sure. Hi, Mayank, and thanks for the question. And I think the question was, you know, with this new national formulary on board, you know, what is our sort of expectation from improvement on ASP? Obviously, it's an upward trajectory. It's a very large national plan. As you know, as of April, we had signed all three major GPOs. So in the second quarter, we did have some number of lives come over from that third GPO. This will be in addition to that. This is a separate national formulary in which we were able to get M. R. O. Z. on formulary for. So we do expect improvement. We talk about, you know, 38% quality of the 192 million lives having access to Amrosi with a single-step therapy or better.

And so, you know, adding this new national formulary is going to increase that number, right? So from the 70-plus million lives, it's going to go up from there. We think that's the least amount of friction that a patient really should have to be able to get a prescription through the adjudication process and pick up their prescription. We do have a number, and we've said this previously, a number of other sort of negotiations and presentations going on with other large national formularies. We think the fact that we are able to be successful with a positive add with the one we were just recently added to should help us in our momentum going forward.

And, yeah, we expect good milestones to be hit throughout Q3, into Q4, and obviously into 2028 as well.

Yeah, and Claude, if you don't mind, I can take the outlicensing question as well. You know, as you may know, Amro, Z, Cubrex, Amzeek, Zilci, those are our patented brands in which we acquired. We acquired Global Rights. We maintain global patent portfolio for all of those brands. Cubrex is available in Japan with our partners Maruho, and we did additional outlicensing in Korea, Taiwan, and other ASEAN countries. Amzeek is available in China with our partners, QD, commercially available. They launched about a year ago. We continue to have additional conversations without licensing with those brands, but more importantly, Amarose, right? And in terms of ongoing negotiations, what I can tell you is that they are happening on a consistent basis.

We do have IP, as I mentioned, globally, which includes Europe, Canada, Australia, New Zealand, Japan, and other parts of Asia. So in terms of the robustness of the IP and the market opportunity, it's there. But as you kind of mentioned, it does take some time, right, to get to the meeting of the minds, to have the right structure in place, to make sure all the right political climate is in place, given, you know, certain new legislative or administrative executive order actions that are kind of ongoing. Obviously, our primary focus is making AMROZI the standard of care, the gold standard in the U. S. for rosacea. We certainly think, and we have ongoing discussions with other companies, that there's great opportunity in those regions as well.

Brandon, we want, and you nailed it, Urax is the correct name, 10% Cortamaton. This is an anti-itch, anti-pheretic product. It's non-steroidal, non-histaminic, and fragrance-free. We worked diligently to change this formula. This is a brand that we picked up a number of years ago from another pharmaceutical company, and we really believe it's an enhanced formulation, and it will be welcomed in the dermatology community for their patients that suffer from significant itching. We trained our commercial team in June, and we launched the brand in July. So brand new out there. When you take a look at our portfolio, this is coming in right behind Qbrexa in the third position. So MROSI first, Qbrexa second, and then followed by Urex right now.

So, it's brand new. It's just starting out. We're starting to see some traction. We're getting some positive feedback from our dermatology base of physicians. So, we like what we're hearing so far, but again, it's relatively early, and we think it's going to be a good, strong contributor to our base business. Nothing in terms of giving any guidance here, but we're going to be obviously tracking prescriptions and physician counts and all the major KPIs that you would think regarding the brand. So that's where it's at right now. It is in the compensation plan for our commercial team, so there is focus and attention and promotion happening behind it. But in terms of – I believe you wanted to maybe look at more managed care and some of the points that we're having in the discussions with the various payers.

Is that correct?

Ramsey, did you want to jump back in here for that, please?

Yeah, and I think more specifically, Brandon, you were looking at where the friction is out in the market in terms of, you know, barriers, if you will, UMs. And we talk, again, we talk about what the quality of lives are, and that's that 72 million, that 38%. But we also talked about access, which is pathway to a prescription, and that's more like 169 million lives. So if you look at the delta between the two, you're going to see that, you know, the, let's call it 80, 90 more million lives, right, that potentially have access to M-ROSI might have a larger barrier, right, in terms of that friction. That could be, for example, a prior auth or a double step that's in place, right?

So our job is identifying where those bottlenecks are, and we've been doing that on a consistent basis, And speaking with those plans to see what it takes to get M-Rosy down to sort of our benchmark, which is that quality single-step therapy or better. Obviously, from a clinical perspective, we have a strong value proposition. There are other drugs obviously available to them in the market from a rosacea, you know, treatment standpoint.

And, you know, our category, again, we're saying a single step through any of those either oral or topical agents. Typically, when prescribers do prescribe for a rosacea, they're using an oral, and they also may supplement with a topical. But again, with our head-to-head data, the fact that our drug works in essentially half the time as Oratia, right, eight weeks, we achieve the results greater than what Oratia did in our study in 16 weeks, with strong value proposition not only from a clinical perspective but from a financial perspective. And this is resonating very well with the payers, but this isn't a very highly managed category, right, in terms of rosacea and kind of what the payers have on their plates, right, when you think of GLP-1s, other oncology, rare disease, orphan drugs.

So, you know, it takes a little bit more time. We are having, again, we have great contacts with the important plans that we think are going to make the difference that, for example, may have a double step or a PA and why we think it's not appropriate to have sort of that UM in place for our drug, given the data and the financial profile for it. And so, yeah, I'd say, you know, the strict scripts that are going through with those are still going to continue to grow through, but they could go through at a higher rate, which, you know, covered, which is going to improve our reimbursement if we're able to remove and reduce those barriers.

And that's what we're going to continue to do through Q3, Q3, Q4, and into 2028 as well.

Yeah, Brandon, you know, in terms of negotiation, that's what our market access team is doing. I think Ramsey, you know, set it up very well here, but, you know, we're negotiating potential lookbacks. It could be six months, 12 months, a year plus. Those, you know, if they've tried a topical or if they've tried an oral, you know, we're playing with the and or part of it here. So, again, I think where we stand today at about 38% quality, one step at it or less, is a good position. We could certainly increase that number significantly, but we are holding to our strategy of trying to get the least resistance and to simply get the patients on what we believe to be the best treatment for rosacea orally right now.

So those are the types of things that we go back and forth with, and we think taking that time is important, and it makes a lot of business sense.

So, you know, out of the five, most of them are in white space, but we do have some areas where, you know, the number of dermatologists and the penetration is better well served with splitting it. So you have a little mix of both, Tom.

You know, in terms of just physician feedback, it is astounding how they are looking at the efficacy. The superiority factor that we have that the FDA gave us is resonating well with patients, and when the physicians are seeing them back a month or two after their initial prescription, The reinforcement from the patient and what the clearance rate is rather incredible. Again, we're doing what Oratia did in half the time, and I think that's really a major part of it. Plus, you know, the other factor is you're talking about a fantastic safety profile, very tolerable. They're not getting that pushback that they could have had. For example, with acne and immediate release minocycline, they're not getting that same pushback with this proprietary formulation of MROSI.

So they like what they're getting, and I think they're building confidence.

Well, we're indicated for papulopustular rosacea, so certainly, you know, that severe, moderate to severe, our indication allows us to go broader, but you're talking about moderate and severe patients, I would say, are what they're putting in that category. I'm generalizing here, but I would tell you that that would be where the niche is for the brand right now.