Journey Medical (US:DERM)2023-05-21 16:00Financial Performance - Total revenue for the three-month period ended March 31, 2023, was $12.2 million, a decrease of $11.1 million or 48% compared to $23.3 million in the same period of 2022[99]. - Product revenue, net, decreased by $8.6 million or 42% to $12.2 million for the three-month period ended March 31, 2023, from $20.8 million for the same period in 2022[100]. - The company reported a net loss of $10.1 million for the three-month period ended March 31, 2023, compared to a net loss of $1.4 million in the same period of 2022, representing an increase in loss of $8.8 million or 636%[99]. - The loss from operations increased by $8.7 million or 977% to $9.6 million for the three-month period ended March 31, 2023, compared to a loss of $888,000 in the same period of 2022[99]. Revenue Breakdown - Other revenue decreased by $2.5 million for the three-month period ended March 31, 2023, reflecting year-to-date royalties of $48,000 compared to a milestone payment of $2.5 million in the same period of 2022[101]. - The company’s product revenue for Qbrexza® decreased by $3.3 million or 44% to $4.1 million for the three-month period ended March 31, 2023, compared to $7.4 million in the same period of 2022[100]. Expenses - Research and development expenses increased by $767,000 or 61% to $2.0 million for the three-month period ended March 31, 2023, compared to $1.3 million in the same period of 2022[99]. - Selling, general and administrative expenses decreased by $1.4 million, or 10%, to $13.3 million for the three-month period ended March 31, 2023, from $14.7 million for the same period in 2022, due to reduced legal costs and expense reduction initiatives[106]. - The company experienced a significant increase in interest expense, rising by $261,000 or 67% to $650,000 for the three-month period ended March 31, 2023, compared to $389,000 in the same period of 2022[99]. - Interest expense increased by $0.3 million to $0.7 million for the three-month period ended March 31, 2023, from $0.4 million for the same period in 2022, primarily due to cash interest paid under the EWB Facility term loan[108]. Cash Flow - Cash and cash equivalents decreased to $26.1 million at March 31, 2023, from $32.0 million at December 31, 2022, with $8.8 million reclassified to restricted cash[109]. - Net cash used in operating activities changed from $0.9 million provided in Q1 2022 to $1.0 million used in Q1 2023, reflecting a $1.8 million decrease[117]. - Net cash used in investing activities decreased by $15.0 million, with $5.0 million paid in Q1 2023 related to the VYNE Product Acquisition, compared to a $20.0 million upfront payment in Q1 2022[118]. - Net cash provided by financing activities was $0.1 million for the three-month period ended March 31, 2023, compared to $11.4 million for the same period in 2022, reflecting net proceeds from the EWB revolving line of credit[119]. Future Projections - The company implemented a cost reduction initiative expected to reduce annual selling, general, and administrative costs by over $12.0 million[112]. - The company expects to make total interest payments of $1,390,000 in 2023 and $507,000 in 2024 under the EWB Facility[120]. - Principal payments are projected to be $23,000,000 in 2023 and $10,000,000 in 2024[120]. - Total cash payments for 2023 are estimated at $24,390,000, with $13,883,000 in 2024[120]. - Product revenue projections include $3,000,000 for Ximino in 2023 and $1,500,000 in 2024, and $1,000,000 for Accutane in 2023[123]. - Total product revenue is expected to be $4,000,000 in 2023 and $1,500,000 in 2024[123]. - The company is contractually obligated to make sales-based royalty payments to Dermira, Sun Pharmaceutical Industries, and PuraCap Caribe, but the amounts are contingent and cannot be predicted[123]. Cost of Goods Sold - Cost of goods sold decreased by $1.8 million to $6.4 million for the three-month period ended March 31, 2023, from $8.2 million for the same period in 2022, mainly due to a $2.0 million decrease in royalties related to Qbrexza and Targadox[104]. - Gross-to-net sales accruals increased to $11.6 million as of March 31, 2023, compared to $11.4 million at December 31, 2022, primarily due to higher reserves for coupons, managed care rebates, and government rebates[103].