Journey Medical (DERM) Q1 2026 Earnings Transcript

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DATE

May 13, 2026

CALL PARTICIPANTS

• Co-Founder, President and Chief Executive Officer — Claude Maraoui
• Chief Financial Officer — Joseph Benesch
• Chief Operating Officer and General Counsel — Ramsey Alloush
• Vice President, Investor Relations — Jaclyn Jaffe

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TAKEAWAYS

• Total Revenue -- $16 million, up 21% compared to $13.1 million in the same period last year.
• AAMROCI Net Revenue -- $6.3 million, increasing from $2.1 million in the prior year period and also rising sequentially from the prior quarter due to gains in prescription volume and improved payer reimbursement.
• AAMROCI Prescription Volume -- 30,000 prescriptions, up from 27,000 in the prior quarter, representing approximately 11% sequential growth despite seasonally lower first-quarter demand.
• AAMROCI Revenue Growth QOQ -- About 26% sequential increase, reflecting higher revenue per prescription over the previous quarter.
• Gross Margin (Reported) -- 61%, down from 63.5% last year due to a $1.3 million non-cash API inventory write-down for QBREXZA; excluding the charge, gross margin would have been approximately 69%, showing improvement both sequentially and year over year.
• SG&A Expenses -- $10.1 million, compared to $10.6 million last year, driven primarily by lower launch costs for AAMROCI as the company transitions to ongoing commercial operations.
• GAAP Net Loss -- $2.2 million, or $0.08 per share (basic and diluted), compared to a net loss of $4.1 million, or $0.18 per share last year, reflecting higher revenue and cost discipline.
• Adjusted EBITDA (Non-GAAP) -- Positive $600,000, or $0.02 per share, up from negative $900,000, or $0.04 per share, last year.
• Ending Cash Balance -- $27.2 million, up from $24.1 million at year-end, reinforcing liquidity for growth initiatives.
• Unique AAMROCI Prescribers -- Over 3,700, up from 3,200 at year-end, highlighting expanding market adoption among dermatologists.
• AAMROCI Refill-to-New-Prescription Ratio -- Approaching 1.5-to-1 in the first quarter, an increase from 1-to-1 at year-end and a measure management views as an indicator of sustained patient satisfaction.
• Commercial Access Milestones -- All three major PBM-led group purchasing organizations (Zynq Health, MSR, and Ascent) now contracting for AAMROCI, securing access to over 169 million of the 192 million U.S. commercial covered lives.
• Quality Coverage Penetration -- 34% of U.S. commercial covered lives, or about 60 million, now have access to AAMROCI with a single step edit or better, as described by management.
• Sales Force Expansion -- Plan to add up to five new sales professionals, increasing headcount from 35 to 40, with new training set for June and expanded field presence expected by early third quarter.
• Product Pipeline -- Company aims to launch up to two new niche dermatology products in 2026, in addition to ongoing investments in established brands.

SUMMARY

Journey Medical Corporation (NASDAQ:DERM) reported double-digit revenue growth, underscored by accelerating contributions from AAMROCI and disciplined cost management, resulting in both improved profitability and a growing cash balance. Management emphasized that completed PBM contracting for AAMROCI secures access to the vast majority of commercial insured lives, which enables downstream negotiations with health plans for formulary adoption and positions the company for sequential gains in both breadth and quality of coverage. The ratio of AAMROCI refills to new prescriptions rose materially, which management interprets as a key leading indicator for patient loyalty and product stickiness. Strategic plans include both geographic sales force growth and the anticipated launch of new products—initiatives intended to further leverage the company’s commercial infrastructure and support ongoing progress toward sustainable EBITDA positivity.

• Joseph Benesch stated, "Including this 1-time noncash item, the gross margin would have been approximately 69% reflecting a favorable product mix and continued sequential and year-over-year improvement."
• The company signaled intent to provide detailed financial guidance later in the year, focusing near-term on continued operating leverage and revenue conversion efficiency as key drivers of margin expansion.
• Ramsey Alloush disclosed that, while broad coverage is achieved, only about 34% of the commercial covered lives currently access AAMROCI with preferred prior authorization and step edit terms—"about 60 million or so have access to AMROCI, coverage for AMROCI with a single step or better."
• Claude Maraoui highlighted incremental SG&A investment for targeted switching programs and tactical marketing in the second half, with the goal of boosting adoption among both prescribers and patients who have yet to transition from competitors.
• Management described base business revenues outside of AAMROCI as "very steady and consistent," and expects pipeline product launches to deliver incremental value with no planned reduction in AAMROCI sales focus.

INDUSTRY GLOSSARY

• PBM (Pharmacy Benefit Manager): An entity that administers prescription drug benefit programs for commercial health plans, negotiating pricing and access with manufacturers and group purchasing organizations.
• GPO (Group Purchasing Organization): Organizations that aggregate drug purchasing power—often owned by PBMs—to negotiate preferential pricing and formulary access with pharmaceutical manufacturers on behalf of health plans.
• Step Edit: A health plan requirement that patients try one or more specified lower-cost or preferred medications before coverage is granted for a newer agent such as AAMROCI.
• Prior Authorization: Pre-approval process imposed by insurers requiring detailed justification before a prescription drug is covered.
• API (Active Pharmaceutical Ingredient): The biologically active component of a pharmaceutical drug product.
• ASP (Average Selling Price): The average price a company receives for a product, net of rebates and discounts, often referenced when discussing reimbursement trends.

Full Conference Call Transcript

Jaclyn Jaffe: 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 Benesch, Chief Financial Officer and Ramsey Alloush, Chief Operating Officer and General Counsel. During this call, management will be making forward looking statements including statements that address, among other things, Journey 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 more 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, 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, May 13, 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.

Claude Maraoui: Thank you, Jacqueline, and good afternoon to everyone on the call today. We made solid progress in the first quarter of 2026. Marking a strong start to what we believe will be a breakout year for AAMROCI and Journey Medical. We delivered AAMROCI revenues of $6.3 million in the first quarter, up significantly year over year. And sequentially from the fourth quarter. As prescription volumes continue to grow and payer reimbursement improves. We are pleased with this performance, especially given the severe winter weather that occurred on the East Coast in the U.S. during the first quarter.

Our total net product revenues for the first quarter increased by 21% year over year while operating expenses rose by just 6% compared to the first quarter of last year. With AAMROCI still early in its launch trajectory, steady revenue contributions anticipated from our other dermatology brands and ongoing disciplined investment in our commercial organization, we expect that operating leverage for our business will continue to increase as the year progresses. We also delivered another quarter of positive adjusted EBITDA and we added to our cash balance during the first quarter solidifying our strong financial position. Amrozi prescriptions totaled approximately 30 thousand in the first quarter up from about 27 thousand prescriptions in the fourth quarter of last year.

This represents approximately 11% sequential prescription volume growth for the product despite the typical seasonality that occurs in the beginning of each calendar year. Notably, Amrozi revenues increased by approximately 26% from the fourth quarter to the first quarter. As revenue per prescription increased sequentially. We remain focused on the twin objectives of growing Amrozi prescription volumes and increasing the mix of scripts reimbursed by health plans in order to accelerate revenue growth over the next several quarters. Recognition of Amrozi and its benefits continues to increase. As we work toward establishing the brand as standard of care in the treatment of rosacea.

Promotion of Amrozi reached its 1-year anniversary in early April and currently, over 3.7 thousand unique dermatology prescribers have written a prescription for the product. This compares to approximately 3.2 thousand prescribers that were writing for Amrozi at the 2025 and demonstrates the effectiveness of our sales organization and prescribing momentum building behind the brand. The superior head to head efficacy results demonstrated in our Phase 3 clinical trials comparing Amroste to the only other branded oral rosacea treatment, Oracea, are becoming widely known throughout the dermatology community. And with the product on the market now for a little over 1 year, AMROCI's placebo like safety and tolerability profile is proving to be durable.

Which is another important factor in recruiting new prescription writers. From the patient perspective, AMROCI's rapid onset of action and superior skin clearing effects compared to Oracea are creating loyal users of the product. The ratio to refills to new prescriptions is now approaching 1.5-to-1. An increase from the 1-to-1 ratio observed at the end of 2025. We believe this metric is a good indicator of new patient satisfaction with the product, and we expect the refill to new prescription ratio to continue to increase going forward.

With a significant number of dermatology practices and patients gaining experience with Amrozi, in its first year on the market we believe that critical mass is being established and that the product is on track to become a significant brand in the dermatology space. The solid 1-year efficacy and safety track record with AAMROCI as well as the critical mass elements that we are generating in terms of strong prescription volumes and the high number of dermatology writers are also important to the payer community. As a result, we believe that we are making good progress in our efforts to ramp reimbursement for AMROCI.

In April, we announced that we entered into an agreement with the third of the 3 largest PBM owned or affiliated group purchase organizations in the United States. The 3 GPOs known as Zynq Health, MSR and the Ascent collectively negotiate prescription drug pricing for approximately 85% of commercial lives in the United States. With the big 3 contracts in place for Amrosi, over $169 million of the 192 million commercial lives in the nation now have access to Amrozi. Importantly, these GPO agreements serve as a framework for broader downstream payer adoption as many individual health plans conduct their own internal review and P&T evaluations before including AAMROCI on their formularies.

As mentioned on our fourth quarter earnings call, we are actively engaged with downstream health plans on both national and regional level to broaden formulary inclusion for this year. Not only are we focused on the breadth of coverage, but also on the quality of coverage. Including tier positioning, step edit requirements, and prior authorization to ensure that the value of AMROCI's differentiated clinical profile is recognized. We believe that Amrozi's rapid onset of action placebo like safety and tolerability and superior lesion reduction profile position it well for broad formulary inclusions.

Our discussions with the downstream plans are also supported by the published Phase 3 efficacy and safety results for AAMROCI in JAMA Dermatology as well as the updated treatment algorithms published by the National Rosacea Society which also cites AMROCI's benefits as a safe, effective and convenient oral treatment for the condition. These third party validations and AMROCI's strong clinical results are meaningful to plans that are assessing the clinical differentiation and long term health economic impact of prescribing Amrozi. We expect to announce up to 3 new journal publications on Amrozi this year and we also believe that Amrozi has potential to be incorporated into the consensus treatment guidelines for rosacea.

Which should further support market and health plan adoption. In addition, we remain active at key Dermatology Medical Congresses As Well As Managed Care Conferences The United States to expand awareness and reimbursement for Amrozi. In late April, we attended the Asembia Summit. A premier industry conference focused on the specialty pharmaceutical ecosystem, including pharmaceutical distribution, patient access, reimbursement dynamics, and commercialization strategies. With AAMROCI now on the market for over a year, the conference was timely and enabled us to have productive discussions with payer representatives to broaden AMROCI's formulary adoption.

Operationally, we plan to add up to 5 new sales professionals to our commercial team this year with the goal of having these representatives trained and in the field. We believe the additional resources will increase our productivity in the field in the early third quarter. in areas such as the promotion of our broad dermatology portfolio, the potential launch of up to 2 new niche dermatology products later this year and importantly, the establishment of Amrozi as standard of care in the treatment of rosacea. And with that, I will now turn the call over to our CFO, Joe Benesch, to review our first quarter financial results.

Joseph Benesch: Thank you, Claude, and good afternoon to everyone on the call. I will now review our financial results for the 2026. Total revenue for the quarter was $16 million representing a 21% increase compared to $13.1 million in the 2025. This growth was primarily driven by continued strength in AAMROCI which generated $6.3 million in net revenue up from $2.1 million in the prior year period. These results reflect sustained demand and reinforce in ROCE's role as a key driver of our growth. Turning to gross margin, we reported a 61% margin for the 2026. Compared to 63.5% in the prior year period.

The decrease resulted from a $1.3 million non cash charge to cost of sales related to a write down of API inventory associated with the 2021 QBREXZA acquisition. Including this 1-time noncash item, the gross margin would have been approximately 69% reflecting a favorable product mix and continued sequential and year over year improvement. SG&A expenses were $10.1 million for the quarter. Compared to $10.6 million in the 2025. The decrease was driven primarily by lower IAMROCI launch related expenses as we transition from our initial launch investment to ongoing commercial execution.

We reported a GAAP net loss of $2.2 million or $0.08 per share basic and diluted compared to a net loss of $4.1 million or $0.18 per share basic and diluted in the prior year period. This improvement reflects higher revenues and continued expense discipline. On a non-GAAP basis, adjusted EBITDA was positive $600 thousand or $0.02 per share, compared to negative adjusted EBITDA of $900 thousand or $0.04 per share in the 2025. This improvement highlights the operating leverage in the business as AAMROCI continues to scale. We ended the quarter with $27.2 million in cash. Compared to $24.1 million as of December 31, 2025. Providing solid liquidity position to support our commercial and operational priorities.

In summary, our first quarter results demonstrate strong revenue growth improving profitability and disciplined execution. We remain focused on expanding Ambrose's commercial reach optimizing our cost structure and progressing towards sustainable profitability in the coming quarters. Thank you very much. I will now turn the call back over to Claude.

Claude Maraoui: Thank you, Joe. Our first quarter results demonstrate continued execution on our business plan and position us well for a year of strong financial performance. Our total net product sales grew significantly faster than our expenses during the quarter. And we expect that this trend will continue. Based on the quarterly results and the opportunities ahead, we believe that operating leverage for the company is now starting to come through in a meaningful way. Additionally, our cash position increased to $27 million at the end of the first quarter up from roughly $24 million at the end of last year.

As a result, we believe that the company is well positioned to grow sales and profitability with the resources that we have in place. While we plan to offer detailed financial guidance later this year, we are confident that the business will not only deliver positive adjusted EBITDA, but will also generate positive EBITDA for the remainder of this year and for the foreseeable future. Importantly, AAMROCI continues to gain market share in the rosacea treatment segment. With revenue per prescription improving as we make progress on our payer reimbursement initiatives.

We now have pricing agreements with all of the major PBM led group purchasing organizations in the United States and we are working to leverage these contracts to increase downstream health plan formulary access for Amrozi throughout the year. As our payer strategy gains additional traction, we expect a meaningful inflection in revenue conversion relative to the growing prescription demand. The ratio of Amrozi refills to new prescriptions continues to increase in addition to the number of unique prescribers writing for the product. We believe that these key metrics demonstrate the brand's continued momentum in the market.

Our decision to add headcount in our commercial organization underscores the opportunity that we see to grow product sales and our operating cash flow. And is also well timed given our plans to launch up to 2 new niche dermatology products later this year. With regard to business development activities, we continue to explore out licensing opportunities for the commercial rights to our patented products in non U. S. Territories. In addition to the potential to in license assets to expand our dermatology product offering to increase shareholder value.

As we continue to execute on our strategic plan, we believe that 2026 will be a breakout year for Journey Medical enabling us to deliver significant value for patients, our physician customers and our shareholders. Thank you. Operator, we are now ready to open the lines for Q&A.

Operator: Thank you. We will now begin the question and answer session. We have the first question from the line of Thomas Flaten from Lake Street Capital Markets. Please go ahead.

Analyst: Hey, this is Thomas on for Thomas. Congrats on all the progress. Maybe just want to start and understand you are not providing more detailed formal guidance till maybe later in the year, maybe directionally as we look across the portfolio and for the balance of the year, can you help frame just how to think about that trajectory both for AAMROCI as coverage matures and for the legacy products?

Claude Maraoui: Sure. Hi, Thomas. Yeah. First, let's talk about our base business. So our base business really is everything outside of AMROCI. We see that as very steady and consistent in 2026. We also believe that adding up to 2 new niche products this year will add incremental value in terms of revenue. So we feel very good about that. Even though we have had to take, for example, QBREXZA from the p 1 position and putting it in p 2, We have done a really good job from a commercial organization of keeping on track our expectations. The real key driver and what the majority of our time and efforts and the resources are going in behind the AMROCI.

So I would continue to take a look at Amrozi moving forward. We did $61 million plus in revenues last year and obviously we will go north of that. But that is about as far as I can tell you at this point. All right. Thank you for the color there. And then maybe just an update on insurance coverage, specifically how the conversation from access to quality coverage is progressing and where you stand on tier positioning, step edits, prior auths, and criteria with major plans. Sure. You know, we are just really thrilled that in 1 year of launch, it was just a year in April that we finished our 1-year anniversary.

We were very successful in completing all 3 GPOs, which now really allows us the full gamut of going out and reaching to the downstream health care companies. I am gonna have Ramzi give you some more color beyond that. Ramzi?

Ramsey Alloush: Yeah. Yeah. Thanks, Claude, and thanks, Nelson, for the question. So just to kinda look back a little bit, first year we launched in April, We really focused on GPO contracting. And as you mentioned, that is really just getting to the brand, not necessarily converting into coverage. So we have now passed that 1 year new to market block We have signed all 3 GPOs. We just signed the third 1 April 1st of 26. We did see an incremental bump, in our coverage numbers, so that was positive. But you will have auto adopters in terms of some of the plans, and then you will have more of the custom plans. And those are the large national formularies.

And now that we have contracts in place to pull we are able to have those deeper discussions. And so, from a clinical perspective, when you look at our drug versus Oracea and any of the other oral therapies, the comparable oral therapies, the doxy forties on the market, you can see that we have the superior efficacy we have solid safety. So from a clinical standpoint, it makes a lot of sense and we work in about half the time. So from a financial perspective, you know, we have provided all of the financial detail in terms of their modeling and what net price needs to look like to get that quality coverage up.

And when we talk about quality coverage in terms of prior auth criteria, step edit criteria, and any utilization management control, We look at a benchmark of about a single step edit through any oral or topical agent with a look back of 1 year or greater. And so we think that is the right place for us to be in terms of positioning. And we have been pretty successful in having those discussions. We are, you know, not ready to announce anything yet, but we are in very deep and far along in discussions with some of the national formularies.

So we expect to have some good news throughout 2027 that is really gonna help improve our coverage, respect to Amrozi. So from a quality perspective, we talk about a 160, 170 million lives that Claude mentioned that have access to AMROCI. But when you look at that single step or better, no step, we are looking at about 34% of the 190 million commercial lives. So about 60 million or so have access to AMROCI, coverage for AMROCI with a single step or better.

Analyst: Alright. Appreciate the color. Thank you, guys.

Operator: Thank you. We have the next question from the line of Mayank Mamtani from B. Riley Securities. Please go ahead.

Analyst (Mayank Mamtani): Yes. Good afternoon, team. Thanks for taking our questions on a very strong quarter here. So on the AMROCI revenue growth accelerating faster than the script volume growth, that you talked about, and then especially during the otherwise seasonally challenged first quarter. So would be great to hear on a go-forward basis as you think about both volume and net price step-ups? And factoring in the prior comments on you know, formulary dynamic on prior auths being more important than just having covered lives high level. Are you able to comment on how quarter to date and second quarter you are seeing trends on refills?

Example, when you think about volume and then this net price went back where you were in 3Q and there was a step down 4Q? What level you are trying to get at maybe at the end of the year, if you could comment on? Yes, sure, Mayank.

Claude Maraoui: Thank you for the question. We are pleased and we are meeting our internal expectations. In terms of NRx to total prescriptions. When you take a look at 2025, we ended the year with 52 thousand total prescriptions Our new prescriptions were at 26 thousand. that is again in 2025. So pretty much a 1-to-1 ratio When you take a look at the first quarter, for example, we ended up getting to a ratio of 1 new script and 1.4 refills. So we like how we are trending and how we are moving that accordingly.

And we do expect that to increase from quarter to quarter as we continue to gain more momentum with the brand more prescribers and so forth. So we think that is doing extremely well for us. Oracea at the same time, if you take a look at their ratio for the first quarter, they have about 1 new prescription to 1.9 refills. Now with our messaging and our 16 week clinical trials, we do see many dermatologists not just writing for 1 prescription, but they are also writing for the refills. And we are seeing anywhere between 2 refills, 3 refills, 4 refills and in some cases more than that. So we do believe that will continue to grow.

Switching to our gains in the managed care coverage and the quality coverage We do expect that to continue to grow incrementally from quarter to quarter. And when that happens, of course, we will get more reimbursement on prescriptions that will be profitable for the company. There will be less reliance on our co pay bridging program and we believe that has the capability to enhance our ASPs. Think when you take a look from Q4 to Q1, 2025 to 2026, you will see a nice growth rate already with the average ASP that you see with Imroci, and we think that will continue.

So again, giving any guidance, I think we are showing a great step forward here in the first quarter. Prescriptions are growing. We went from 27 thousand prescriptions to 30 thousand prescriptions. I would like to also add that you know, I think we are making the right strategic decisions. We are gonna be increasing our sales force. We are gonna be moving from 35 to 40 salespeople across the United States. Our reach will be better, our frequency will be better. And I think that will also complement our goal to continue to grow AMROCI and become the standard of care.

Analyst (Mayank Mamtani): Very comprehensive answer. Thank you. And on the guidance comment you had, for the back half of the year, is that fair to assume that you would have both on top line and also, on the bottom line because you clearly have a profitability goal here. And was just curious how you think about adding I think you have talked about 1 to 2 products, how that fits in versus maybe also, you know, some of the sales adds, some of the costs that you will have on the G and A And is that more of first half loaded where, you know, you could have the benefit on driving more script volume for the back half of the year?

Could you just maybe fine-tune a little bit of how you are thinking about guidance top and bottom line? Thanks for taking the question.

Claude Maraoui: Yeah. Sure. In due time, we will come out with that. We are already seeing some variability with ASPs, for example, with AMROCI. I think honestly, I think we will see a good range from launch, about 18 to 24 months. So we will get into a pretty consistent range being stable. But we will continue to increase the profitability as the year progresses. The salespeople, the additional headcount, they are actually due to get trained in June, and then they will be out in the field in July. So the expenses are more on a second half of the year basis.

We have also put some really fantastic tactical programs in place 1 of them Mayank just really started this past week where we are focused in targeting direct messages via cell as well as emails directly to Oracea patients and including Oracea generic patients. So there is resource allocations and expenses that are committed to that. You will see that continue throughout the year. Again, more heavily weighted in the second half of this year in 2026. We have other unique programs that are also kicking off in the later half of Q2 into Q3. Where we have a switching trial program where we have had some dermatologists who have not jumped on to the AAMROCI brand right away.

We will be giving them free trades to put a certain amount of patients when they come in for refills or when they see them. And we have got a really nifty program where we will be able to get great patient feedback. So all of those types of programs certainly do add to our SG&A, and we think the allocation is wise in how we are doing it. We also have these 5 additional reps coming on board our managed care coverage is better. So we think we did that in a timely manner as well. Hopefully, that gives you some good information.

Analyst (Mayank Mamtani): Very helpful. Thank you, Claude.

Operator: Thank you. We have the next question from the line of Brandon Folkes from H. C. Wainwright. Please go ahead.

Analyst (Brandon Folkes): Hi, thanks for taking my question and congrats on the progress. Can you just talk about adding these 2 additional products into the reps bag potentially this year while AAMROCI is still in the growth phase. Just any color in terms of how promotion sensitive those products may be and in terms of the share of voice that they may require during the MROSI launch? Thank you. Sure.

Claude Maraoui: Absolutely. Look, these are good additional, niche-type of products. First and foremost, our focus is on Amrozi. Our second brand will continue to be QBREXZA. And we will pulse these products into the third position as the year continues. So no time will be taken away, no emphasis in terms of how the sales representatives will be compensated. Will not change to move their behavior away from those top 2 products. We do believe that these 2 additional products will definitely launch 1. We are hoping to launch both. are really incremental value that will be into our base business. And that third position product sometimes it could be Accutane; another time, it could be 1 of the niche products.

But we have got a really good marketing plan for them. We have got good expectations. We believe there is going to be good demand for them, a good need in the

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