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Journey Medical (DERM) - 2022 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total net product revenues increased by $10.1 million or 94% to $20.8 million for Q1 2022 compared to $10.7 million for Q1 2021 [7][13] - Net revenues reached $23.3 million, reflecting a 118% increase over Q1 2021, driven by strong sales and a milestone payment from Japan [8][14] - Non-GAAP adjusted EBITDA was $2.3 million for the quarter, up from $1.2 million in Q1 2021 [9][18] Business Line Data and Key Metrics Changes - Revenue from Qbrexza and Accutane combined was $12.3 million, contributing significantly to the overall revenue growth [7][13] - Newly acquired products AMZEEQ and ZILXI contributed an incremental $4.2 million in revenues for the quarter [7][13] - Targadox revenue faced pressure from generic competition, with its contribution to total revenue dropping from nearly 70% in Q1 2021 to 13% in Q1 2022 [23] Market Data and Key Metrics Changes - The Japanese market opportunity for Rapifort is significant, with the product approved for treating primary axillary hyperhidrosis, leading to a $2.5 million milestone payment [8][31] - The market for DFD-29 is estimated to be around $1 billion in TRX sales, with 16 million patients suffering from rosacea [9] Company Strategy and Development Direction - The company aims to expand its product portfolio through acquisitions and in-licensing, with plans to launch an additional prescription product in the second half of 2022 [5][11] - The focus is on integrating recent acquisitions and optimizing product sales, particularly for AMZEEQ and ZILXI [11][38] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving record revenue in 2022, supported by strong momentum in new products [11][20] - The company remains cash flow positive in commercial operations and has no immediate plans to raise capital [18][40] Other Important Information - The company ended Q1 2022 with $41.3 million in cash, down from $49.1 million at the end of 2021, reflecting one-time expenses related to acquisitions [18][10] - Research and development expenses increased due to clinical trial costs for DFD-29, with expectations for further increases as trials progress [17] Q&A Session Summary Question: Impact of competition on Targadox sales - Management acknowledged that Targadox faced increased competition, which was anticipated and planned for, leading to a decrease in its revenue contribution [23] Question: Details on the upcoming product launch - The upcoming product is an antipyretic, non-histamine product, but specific sales guidance was not provided [25][26] Question: Resilience of the portfolio during a recession - Historical performance indicates that dermatology products tend to be resilient during economic downturns, with Journey Medical performing well even during COVID-19 [31] Question: Sales figures for Targadox - Targadox sales were confirmed to be $2.6 million for the quarter [32][33] Question: Future expectations for adjusted EBITDA - Management expects adjusted EBITDA to grow as new products gain traction and as Qbrexza royalties decrease [35][36] Question: Cash balance and capital raising plans - The current cash balance is intended to fund DFD-29 development, with no immediate plans to raise additional capital [40]