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Company generated total revenues of $79.2 million for the full year ended December 31, 2023, a 7% increase from the $73.7 million reported in 2022

Achieved $15.6 million in operating cost savings in 2023, ahead of initial guidance of $12.0 million

New Drug Application for rosacea treatment candidate DFD-29 accepted for U.S. FDA review; PDUFA goal date of November 4, 2024

Company to hold conference call today at 4:30 p.m. ET to discuss the financial results and provide a business update

SCOTTSDALE, Ariz., March 21, 2024 (GLOBE NEWSWIRE) -- Journey Medical Corporation (Nasdaq: DERM) (“Journey Medical” or “the Company”), a commercial-stage pharmaceutical company that primarily focuses on the selling and marketing of U.S. Food and Drug Administration (“FDA”)-approved prescription pharmaceutical products for the treatment of dermatological conditions, today announced financial results and recent corporate highlights for the full year ended December 31, 2023.

Claude Maraoui, Journey Medical’s Co-Founder, President and Chief Executive Officer, said, “2023 was a year of growth and development for Journey Medical. Our full-year revenue reflected a record high for the Company, attributed primarily to our efforts to expand the reach of Qbrexza^® in additional territories in Asia through a licensing agreement with Maruho Co., Ltd. (“Maruho”), as well as continued sales of our four core dermatology branded products. We also significantly streamlined our cost infrastructure, positioning the Company to realize improved operating leverage from our future sales and anticipated growth. Another key highlight of the year was the progress that we made in advancing DFD-29 (Minocycline Hydrochloride Modified Release Capsules, 40 mg) through late-stage clinical development. Based on the results of our two Phase 3 trials, DFD-29 has the potential to become the only oral, systemic therapy to address inflammatory lesions and erythema (redness) from rosacea, differentiating it as a potential best-in-class solution. Based on the positive results, we submitted a New Drug Application (“NDA”) to the U.S. Food and Drug Administration in January 2024 for the potential approval of DFD-29. The FDA accepted the NDA this month and has set a Prescription Drug User Fee Act (“PDUFA”) goal date of November 4, 2024. Given our portfolio of recognized dermatology brands, our proven sales force and streamlined cost infrastructure, and the potential to launch DFD-29 in early 2025, we believe Journey is well-positioned for growth and to bring significant value to patients, our physician customers, and our shareholders.”

Financial Results:

• Total revenues were $79.2 million for the full year 2023, representing 7% growth compared to total revenues of $73.7 million for the full year of 2022. The increase is primarily due to the Company’s entry into a license agreement with Maruho resulting in $19.0 million of revenue in 2023. Total net product revenues decreased $11.3 million, or 16%, compared to $71.0 million for 2022, mainly due to lower unit volumes from our legacy products, Targadox^®, Ximino^® and Exelderm^® specifically due to continued generic competition for Targadox and the discontinuation of Ximino during the third quarter of 2023.
  
  
• Cost of goods sold decreased by $4.1 million, or 13%, to $26.7 million for the full year 2023, from $30.8 million for the full year 2022. The decrease is mainly due to lower-than-prior-year product royalties driven by lower sales of products from period-to-period, and a permanent contractual decrease in the Qbrexza royalty percentage from the prior-year period.
  
  
• Selling, general and administrative expenses were $43.9 million for the full year 2023, compared to $59.5 million for 2022. The decrease is mainly due to our expense reduction efforts primarily in sales and marketing and other SG&A areas. During the fourth quarter of 2022, we began the implementation of a cost reduction initiative designed to improve operational efficiencies, optimize expenses and reduce overall costs.
  
  
• Research and development costs were $7.5 million for the full year 2023, compared to $10.9 million for the full year 2022. The decrease is due to lower clinical trial expenses for DFD-29 given the completion of the Phase 3 clinical trial program.
  
  
• Net loss was $(3.9) million, or $(0.21) per share basic and diluted for the full year 2023, compared to net loss of $(29.6) million or $(1.69) per share basic and diluted for the full year 2022. The $25.8 million decrease in net loss from period-to-period was driven by our expense optimization efforts and the Maruho upfront payment.
  
  
• The Company’s non-GAAP results in the table below reflect Adjusted EBITDA of $15.6 million, or $0.85 per share basic and $0.75 per share diluted for the full year 2023. This compares to Adjusted EBITDA of $(7.3 million), or $(0.42) per share basic and diluted for the full year 2022. Adjusted EBITDA, Adjusted EBITDA per share basic and Adjusted EBITDA per share 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 “Use of Non-GAAP Measures.”
  
  
• At December 31, 2023, Journey Medical’s cash and cash equivalents totaled $27.4 million, compared to $24.8 million on September 30, 2023, and $32.0 million on December 31, 2022, an increase of $2.6 million for the quarter and a decrease of $4.6 million from the prior-year period.
  
  
• In December 2023, Journey Medical entered into a $20.0 million credit facility with SWK Holdings Corporation (“SWK”), a specialized finance company with a focus on the global healthcare sector. The credit facility provides for an initial term loan of $15.0 million that the Company intends to use for general corporate purposes, including to support the potential launch of DFD-29. The Company also has the option to draw an additional tranche of $5.0 million under the credit facility within one year.
  

FY 2023 and Recent Corporate Highlights:

• In March 2024, the FDA accepted the NDA for DFD-29 (Minocycline Hydrochloride Modified Release Capsules, 40 mg) and set a PDUFA goal date of November 4, 2024. If approved, DFD-29 will be the lowest-dose oral minocycline on the market and has the potential to be the new treatment paradigm for the millions of patients suffering from rosacea. The Company had submitted the NDA to the FDA seeking approval for DFD-29 for the treatment of inflammatory lesions and erythema of rosacea in adults in January 2024.
  
  
• In October 2023, Journey Medical announced data from a comparative bioavailability (bridging) study of DFD-29 vs. Solodyn^® (Minocycline Hydrochloride Extended-Release Tablets, 105 mg), which were presented at the 43rd Annual Fall Clinical Dermatology Conference. The data demonstrated that systemic exposure of DFD-29 was significantly lower than that of Solodyn and that DFD-29 was safe and well tolerated throughout the study.
  
  
• In September 2023, Journey Medical entered into an exclusive license agreement with Maruho. Under the terms of the Agreement, Journey Medical received a $19.0 million non-refundable upfront payment and granted Maruho an exclusive license to develop and commercialize Qbrexza (glycopyrronium tosylate hydrate) for the treatment of hyperhidrosis in South Korea, Taiwan, Hong Kong, Macau, Thailand, Indonesia, Malaysia, Philippines, Singapore, Vietnam, Brunei, Cambodia, Myanmar and Laos (the “Territory”). Maruho is responsible for all development and commercialization costs for the product throughout the Territory.
  
  
• In July 2023, Journey Medical announced positive topline results from the two DFD-29 Phase 3 clinical trials (MVOR-1 & MVOR-2) for the treatment of rosacea. Both randomized controlled trials achieved their co-primary and all secondary endpoints with subjects completing the 16-week treatment with no significant safety issues. DFD-29 demonstrated statistical superiority compared to both Oracea capsules and placebo for Investigator’s Global Assessment (IGA) treatment success and the reduction in the total inflammatory lesion count in both clinical trials. The Company also announced results from the DFD-29 Phase 3 studies on a secondary endpoint related to erythema (redness) assessment. DFD-29 showed significantly superior reduction in Clinicians Erythema Assessment (CEA) compared to placebo in both of the Phase 3 clinical trials.
  
  
• In June 2023, Journey Medical announced positive topline results from the Phase 1 clinical trial assessing the impact of DFD-29 on the microbial flora of healthy adults and also evaluated the safety and tolerability of DFD-29. The study achieved all primary objectives and no significant safety issues were noted during the study. The results indicate that DFD-29 can be safely used for up to 16 weeks with no significant risk of microbiota suppression or development of resistance.
  

Conference Call and Webcast Information
Journey Medical management will conduct a conference call and audio webcast on March 21, 2024, at 4:30 p.m. ET.

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: https://dpregister.com/sreg/10186538/fb9ff440e2. 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.

About Journey Medical Corporation
Journey Medical Corporation (Nasdaq: DERM) (“Journey Medical”) is a commercial-stage pharmaceutical company that primarily focuses on the selling and marketing of FDA-approved prescription pharmaceutical products for the treatment of dermatological conditions through its efficient sales and marketing model. The Company currently markets seven branded and two generic products that help treat and heal common skin conditions. The Journey Medical team comprises industry experts with extensive experience in developing and commercializing some of dermatology’s most successful prescription brands. Journey Medical is located in Scottsdale, Arizona and was founded by Fortress Biotech, Inc. (Nasdaq: FBIO). Journey Medical’s common stock is registered under the Securities Exchange Act of 1934, as amended, and it files periodic reports with the U.S. Securities and Exchange Commission (“SEC”). For additional information about Journey Medical, visit www.journeymedicalcorp.com.

Forward-Looking Statements
This press release may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. As used below and throughout this press release, the words “the Company”, “we”, “us” and “our” may refer to Journey Medical. Such statements include, but are not limited to, any statements relating to our growth strategy and product development programs and any other statements that are not historical facts. The words “anticipate,” “believe,” “estimate,” “may,” “expect,” “will,” “could,” “project,” “intend,” “potential” and similar expressions are generally intended to identify forward-looking statements. Forward-looking statements are based on management’s current expectations and are subject to risks and uncertainties that could negatively affect our business, operating results, financial condition and stock price. Factors that could cause actual results to differ materially from those currently anticipated include: the fact that our products and product candidates are subject to time and cost intensive regulation and clinical testing and as a result, may never be successfully developed or commercialized; a substantial portion of our sales derive from products that may become subject to third-party generic competition, the introduction of new competitor products, or an increase in market share of existing competitor products, any of which could have a significant adverse impact on our operating income; we operate in a heavily regulated industry, and we cannot predict the impact that any future legislation or administrative or executive action may have on our operations; our revenue is dependent mainly upon sales of our dermatology products and any setback relating to the sale of such products could impair our operating results; competition could limit our products’ commercial opportunity and profitability, including competition from manufacturers of generic versions of our products; the risk that our products do not achieve broad market acceptance, including by government and third-party payors; our reliance third parties for several aspects of our operations; our dependence on our ability to identify, develop, and acquire or in-license products and integrate them into our operations, at which we may be unsuccessful; the dependence of the success of our business, including our ability to finance our company and generate additional revenue, on the successful development and regulatory approval of the DFD-29 product candidate and any future product candidates that we may develop, in-license or acquire; clinical drug development is very expensive, time consuming, and uncertain and our clinical trials may fail to adequately demonstrate the safety and efficacy of our current or any future product candidates; our competitors could develop and commercialize products similar or identical to ours; risks related to the protection of our intellectual property and our potential inability to maintain sufficient patent protection for our technology and products; our business and operations would suffer in the event of computer system failures, cyber-attacks, or deficiencies in our or our third parties’ cybersecurity; the substantial doubt about our ability to continue as a going concern; the effects of major public health issues, epidemics or pandemics on our product revenues and any future clinical trials; our potential need to raise additional capital; Fortress controls a voting majority of our common stock, which could be detrimental to our other shareholders; as well as other risks described in Part I, Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2023, subsequent Reports on Form 10-Q, and our other filings we make with the SEC. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations or any changes in events, conditions or circumstances on which any such statement is based, except as may be required by law, and we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Company Contact:
Jaclyn Jaffe
(781) 652-4500
ir@jmcderm.com

Media Relations Contact:
Tony Plohoros
6 Degrees
(908) 591-2839
tplohoros@6degreespr.com