Journey Medical (US:DERM)2023-08-12 14:15Financial Data and Key Metrics Changes - Total net revenues for Q2 2023 were $17.2 million, a 41% increase from $12.2 million in Q1 2023, but a slight decrease of $1.1 million from the prior year quarter [41][44] - GAAP net loss for Q2 2023 was $8.4 million or $0.46 per share, compared to a loss of $10.1 million or $0.57 per share in Q1 2023 [55] - Non-GAAP adjusted EBITDA for Q2 2023 resulted in a net loss of $600,000 or $0.04 per share, an improvement from a loss of $5.3 million in Q1 2023 [56] Business Line Data and Key Metrics Changes - Qbrexza led with net sales of $8 million in Q2, a 97% increase from $4 million in Q1 2023, achieving a new quarterly all-time high [39] - Accutane had net sales of $5.5 million in Q2, up 20% from $4.6 million in Q1 2023 [39] - Combined revenue from core products Qbrexza, Accutane, Amzeeq, and Zilxi accounted for approximately 92% or $15.6 million of total product revenues in Q2 2023 [48] Market Data and Key Metrics Changes - Approximately 4 million prescriptions were written for rosacea in 2022, indicating a significant market opportunity for DFD-29 [29] - The rosacea market is predominantly topical, with about 90% of prescriptions being topical and only 10% oral [3][2] Company Strategy and Development Direction - The company plans to submit a New Drug Application for DFD-29 in the second half of 2023, with peak sales potential estimated at $300 million globally [22] - DFD-29 is positioned to become the new treatment paradigm for rosacea, leveraging its safety profile and efficacy compared to existing treatments [42] - The company aims to achieve operational profitability by the end of 2023, supported by reduced SG&A expenses and improved revenue from core products [54][47] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving positive non-GAAP adjusted EBITDA for fiscal year 2023, driven by revenue growth and expense management [44][56] - The successful Phase 3 trials for DFD-29 were highlighted as a transformational event for the company, with expectations for significant market share capture upon launch [30][22] Other Important Information - The company has paid off its entire debt facility with East West Bank, resulting in zero bank debt [40] - R&D expenses decreased by 32% year-over-year due to lower clinical trial expenses for DFD-29 [51] Q&A Session Summary Question: How comfortable is the company with its cash balance? - The company indicated it has sufficient cash to support operations and does not plan to raise equity funding, focusing instead on potential debt facilities [70] Question: What is the expected trajectory for DFD-29's peak sales? - Management expects a ramp-up to peak sales within two to three years post-launch, contingent on FDA approval [66] Question: How reflective were the trial patients of the real-world population? - The inclusion criteria for the trials were designed to reflect the typical rosacea patients seen in clinical practice, ensuring relevance to real-world prescribing [79] Question: What proportion of rosacea patients would be prescribed DFD-29 if approved? - The response indicated a strong likelihood of adoption among dermatologists, with some early adopters likely to prescribe it widely [88]