Journey Medical Corporation Common Stock 2026 Q2 Earnings Call

Please go ahead, Jaclyn. Good afternoon, and thank you for participating in today's conference call.

Joining me from Journey Medical's leadership team are Claude Maraoui, Co-founder, President, and Chief Executive Officer, Joseph Benesh, Chief Financial Officer, and Ramsey Alloush, 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 filed with the SEC today, and the company's 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 Maraoui, Co-founder, President, and Chief Executive Officer of Journey Medical.

Thank you, Jaclyn, 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. EMROSI 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. EMROZI 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 NRx 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 NRx 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 EMROZI. 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 EMROZI 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 EMROZI, 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 EMROZI's superior clinical benefits in the treatment of rosacea. The superior head-to-head efficacy results demonstrated in our phase III clinical trials comparing EMROZI to the only other branded oral rosacea treatment, Oracea, continue to be central in driving adoption throughout the dermatology community. EMROZI'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, EMROZI's rapid onset of action and superior skin clearing effects compared to Oracea are key, and real-world patient experiences are supporting a growing base of loyal end users. Helping us to further broaden awareness of EMROZI in the market, we expect to announce new journal publications for the product in the coming quarters, and we believe that EMROZI has potential to be incorporated into the consensus treatment guidelines for rosacea. The payer community is also taking note of EMROZI'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 EMROZI 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 EMROZI'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 EMROSI 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 EMROSI on its formulary in early August, and we expect to see traction from that addition this quarter. I will turn the call over to our CFO, Joe Benesh, 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 for EMROSI, which generated $8.1 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 EMROSI in the prior quarter.

Our GAAP 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 basic and diluted for Q2 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 reflects a 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 for the prior year quarter and the prior year-to-date period, respectively. Adjusted EBITDA, which is generally our EBITDA number less non-cash share-based compensation expense reflected net income of $2.9 million and $3.5 million for the second quarter and the six-month period ended June 30, 2026, respectively.

Comparatively net losses of $500,000 and $1.4 million for 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 Claude.

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. EMROSI 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 EMROSI 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.