Fortress Biotech Q3 2026 Earnings Results & Report

Fortress Biotech EPS Results

• Actual EPS: -$0.23
• Consensus EPS: -$0.27
• Beat/Miss: Beat by +$0.04
• One Year Ago EPS: N/A
• EPS Beat Rate: 6 of last 8 quarters

Fortress Biotech Revenue Results

• Actual Revenue: $19.16 million
• Expected Revenue: $21.58 million
• Beat/Miss: Missed by -$2.42 million
• YoY Revenue Growth: N/A

Fortress Biotech (NASDAQ:FBIO) (NASDAQ: FBIO) is a biopharmaceutical company that develops and commercializes prescription medicines through a network of subsidiary companies and strategic partnerships. Its research and development activities have focused on areas including dermatology, immunology, oncology, rare diseases and other conditions with significant unmet medical needs.

The company’s portfolio has included dermatology products such as ZILXI, a topical minocycline foam for the treatment of inflammatory lesions associated with rosacea, and Qbrexza, a topical treatment for primary axillary hyperhidrosis. Fortress has also advanced clinical-stage therapies through affiliated companies, with development programs spanning specialty pharmaceuticals and targeted treatments.

Fortress was founded in 2014 and is headquartered in New York. Rather than operating as a single traditional drug manufacturer, the company uses an integrated model that combines internal drug development, subsidiary operations and licensing or commercialization partnerships. Its products and development programs are primarily directed toward the U.S. healthcare market, with selected opportunities for broader international commercialization.

Fortress Biotech Q3 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Journey Medical reported $19 million in Q3 revenue, 11% year-over-year growth in net product sales, and a 69% gross margin. GAAP net loss narrowed to $1.3 million from $3.9 million a year earlier, while EBITDA was positive for a second consecutive quarter.
• Positive Sentiment: EMROSI generated $9 million in Q3 net sales, with about 40,000 prescriptions and more than 5,000 unique prescribers. Management attributed demand to stronger refill activity, growing prescriber adoption, and favorable patient experience.
• Positive Sentiment: EMROSI had high-quality formulary access for 40% of commercial lives, and a national plan covering more than 25 million people is expected to add the drug in January 2027. Management expects improved coverage to support prescription reimbursement and ASP, though deductible resets may delay the benefit early in the year.
• Negative Sentiment: A copay-program change from $35 to $50 contributed to prescription volatility in late September and October. Management said activity was recovering, but expected the transition to weigh on prescriptions temporarily before stabilizing.
• Neutral Sentiment: The company ended the quarter with $22.3 million in cash, down from $24.1 million at year-end 2025, and paid $1.7 million to settle a former-vendor dispute. Management described the payment as a one-time expense and said it is continuing to weigh additional investment in EMROSI against spending discipline.

Presentation

[Operator]

Ladies and gentlemen, thank you for standing by. Good afternoon and welcome to Journey Medical's third quarter 2026 financial results and corporate update conference call. At this time, all participants are in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.

[Operator]

Participants of this call are advised that the audio of this conference call is being broadcast live over the internet and is also being recorded for playback purposes. A webcast replay of this call will be available approximately one hour after the end of the call for approximately 30 days. I would now like to turn the conference over to Jaclyn Jaffe, the company's Senior Director of Corporate Operations. Please go ahead, Jaclyn.

[Jaclyn Jaffe, Senior Director of Corporate Operations at Journey Medical]

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, who will participate in the Q&A portion of the call.

[Jaclyn Jaffe, Senior Director of Corporate Operations at Journey Medical]

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.

[Jaclyn Jaffe, Senior Director of Corporate Operations at Journey Medical]

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, and the company's press release that accompanies this call, particularly the cautionary statements in it.

[Jaclyn Jaffe, Senior Director of Corporate Operations at Journey Medical]

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.

[Jaclyn Jaffe, Senior Director of Corporate Operations at Journey Medical]

For 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, Thursday, November 12th, 2026.

[Jaclyn Jaffe, Senior Director of Corporate Operations at Journey Medical]

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, Co-Founder, President, and CEO at Journey Medical]

Thank you, Jaclyn, and good afternoon to everyone on the call today. We continued to make progress in the third quarter, delivering top-line growth and improved profitability during the period. Our total revenue grew by 8% in Q3, with net product sales increasing 11% year-over-year.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

Net sales of EMROSI were $9 million in the third quarter, up year-over-year and sequentially from the second quarter, driven by higher prescription volume, improving payer reimbursement, and an increase in the number of dermatology writers prescribing the brand. We expect that these key metrics will continue to trend positively in the coming quarters.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

I am pleased to report that we achieved positive EBITDA for the second consecutive quarter. We remain focused on investing in our proven dermatology commercial infrastructure and driving top-line growth to advance the business toward becoming net earnings and cash flow positive.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

EMROSI prescriptions totaled approximately 40,000 in the third quarter, up from about 36,000 total prescriptions in the second quarter of this year. This represents approximately 8% sequential quarterly growth for the product. Importantly, the growth continues to be driven by strong refill demand and the continued ramp in EMROSI prescribers.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

During the third quarter, the number of unique EMROSI prescription writers grew by approximately 500 to over 5,000 unique prescribers of the product. This number was our internal goal for the year, so we have already reached this objective and are continuing to grow the prescriber base further.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

We believe that there is critical mass building behind EMROSI and that the value of the brand is continuing to compound as more prescribers and patients experience the product's clinical benefits. With over 14,000 dermatologists in the United States, there is still significant room for us to grow the number of EMROSI prescribers.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

A recent addition of five new sales territories is intended to further increase the product's market penetration. With our direct sales professionals, ongoing peer-to-peer marketing activities, and our active presence at key dermatology medical conferences, we are continuing to expand the awareness of EMROSI's superior clinical benefits in the treatment of rosacea.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

We recently attended the 26th Annual Fall Clinical Dermatology Conference, where we sponsored a poster highlighting clinical data on EMROSI's superior skin-clearing effects. The post hoc data analysis from our phase III clinical trial showed that nearly 50% of patients that achieved the primary endpoint of investigator global assessment, or IGA success, had complete resolution of their rosacea symptoms at the end of the treatment period with EMROSI.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

This equates to nearly 30% of the mild to moderate rosacea patients achieving clear skin, or an IGA score of zero with EMROSI treatment. In comparison, only 12.8% of patients on Oracea achieved an IGA score of zero or completely clear skin. Notably, clinical research shows that rosacea patients who achieve complete symptom clearance experience a significant delay in their time to relapse, and they remain free of symptoms longer than those who reach only partial clearance.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

With over 2x more patients achieving clear skin with EMROSI compared to Oracea, we believe that these data are compelling and significantly support EMROSI's best-in-class clinical profile. The superior head-to-head efficacy demonstrated in our phase III clinical trials comparing EMROSI to Oracea remains a central message in driving adoption throughout the dermatology community, and these data on complete skin clearance reinforce that message.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

EMROSI's placebo-like safety and tolerability profile continues to be durable, and this is another important factor in expanding the base of new prescribers. Additionally, EMROSI's rapid onset of action and superior skin-clearing effects are resonating with patients. Refill rates for EMROSI remain strong, rising nearly 12% from Q2 to Q3, providing a good indication of the high patient satisfaction with the product.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

In addition to our direct sales efforts, we expect awareness of EMROSI to increase in the market as we plan to announce new journal publications for the product in the coming quarters, and we believe that EMROSI has potential to be incorporated into the consensus treatment guidelines for rosacea.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

Turning to our activities with payers, we are continuing to make progress with the downstream health plans. The calculated average selling price for EMROSI based on prescription units has increased each quarter since the beginning of the year, as reimbursed prescriptions are becoming an increasing part of the business mix.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

In addition to working on adding EMROSI to more health plan formularies, we are also pulling through an increased proportion of prescriptions from regions that have more comprehensive formulary coverage. After completing agreements with all of the top three GPOs in the nation earlier this year, our focus remains on pursuing high-quality formulary coverage with the downstream health plans, meaning a single step edit or better.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

Currently, 40% of commercial lives have high-quality access to EMROSI. Building on our progress, a large national health plan placed EMROSI on its formulary in early August, and we expect another larger national plan to adopt EMROSI on formulary shortly.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

Importantly, national plan adoption can have wide-reaching effects, as many smaller regional plans typically model their prescription coverage based on national health plan formularies. With that, I will turn the call over to our CFO, Joe Benesch, to review our third quarter financial results.

[Joseph Benesch, CFO at Journey Medical]

Thank you, Claude, and good afternoon to everyone on the call. I will now review our financial results for the third quarter of 2026. Total revenue for the quarter was $19 million, compared to $15 million in the third quarter of 2025, an 8% increase from period to period.

[Joseph Benesch, CFO at Journey Medical]

This growth was primarily driven by the continued commercial demand for EMROSI, which generated $9 million in net revenue for the quarter. Turning to gross margin, we reported a 69% margin for the third quarter of 2026, compared to 67% in the third quarter of 2025, due mainly to EMROSI's lower cost impact on cost of sales.

[Joseph Benesch, CFO at Journey Medical]

SG&A expenses were $12.6 million for the quarter, compared to $12.1 million in the third quarter of 2025. The increase was primarily due to a one-time expense of $1.7 million recognized upon the settlement of a dispute with a former vendor.

[Joseph Benesch, CFO at Journey Medical]

This was partially offset by a reduction in launch-related expenses for EMROSI compared to the prior year quarter. Our GAAP net loss narrowed to $1.3 million, or $0.05 per share basic and diluted, compared to a net loss of $3.9 million, or $0.14 per share basic and diluted, for 3Q 2025.

[Joseph Benesch, CFO at Journey Medical]

On a non-GAAP basis, both EBITDA and adjusted EBITDA were positive for the quarter. Notably, adjusted EBITDA, which is generally our EBITDA number, less non-cash share-based compensation expense, reflected net income of $3.5 million for the third quarter, compared to $1.4 million from the prior year quarter. We ended the quarter with $22.3 million in cash, compared to $24.1 million at December 31, 2025.

[Joseph Benesch, CFO at Journey Medical]

Thank you very much. I will now turn the call back over to Claude.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

Thank you, Joe. The third quarter was another period of solid performance for the company, as we continued to generate revenue growth and positive EBITDA. Our net product sales grew significantly faster than our expenses, keeping us on path toward becoming sustainably earnings and cash flow positive.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

EMROSI continues to gain traction in the rosacea treatment market, with growing prescription demand and the base of new prescribers still increasing at an impressive rate. With approximately 40,000 total prescriptions during the third quarter, and now over 5,000 unique prescribers writing for the product, we believe that the brand is becoming widely recognized in the dermatology community.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

Given EMROSI's superior efficacy profile and potential for the drug to be added to the consensus treatment guidelines, we remain focused on making EMROSI the oral standard of care for rosacea treatment.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

Importantly, we believe that the high refill rates seen in the prescription data validate that our phase III clinical results are translating into real-world patient experiences that are highly clinically meaningful.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

Achieving and maintaining high prescriber and patient satisfaction rates are key priorities for us, as they represent the cornerstone of our efforts to build a strong brand franchise. Along with the positive demand trends, we are also continuing to improve EMROSI's payer coverage.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

The trend of higher ASP since the beginning of the year is a reflection of that progress. We continue to expect our ASP to trend higher in the coming quarters, as we focus on pulling through more prescriptions in regions where health plan coverage is favorable, and with the new health plan formularies expected to come online soon.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

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 and increase value for the company.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

We look forward to finishing the year strong, and we remain committed to delivering on our core objectives, which are to improve the lives of patients, offer the innovative treatment options to dermatology healthcare providers, and to create long-term value for our shareholders. Thank you. Operator, we are now ready to open the lines for Q&A.

[Operator]

We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. The first question is from Brandon Folkes with H.C. Wainwright. Please go ahead.

[Brandon Folkes, Analyst at H.C. Wainwright]

Hi, thanks for taking my questions. Congrats on the progress in the quarter. Maybe just two from me. How are you thinking about potential improvements in EMROSI net revenue per prescription through Q4 and in 2027? Then, can you just talk about high-quality formulary coverage, where that stands today versus how you think about that in 2027? Thank you.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

Sure, Brandon. Thank you for the two questions. I will speak in general, and I think we will have Ramsey give you some more details. But really, in the fourth quarter coming up here that we are in currently and heading into 2027, we feel like there is a lot of progress and a lot of momentum that is being built around our market access team and the negotiations that we have been having with any national formulary plans as well as regional plans.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

We have made some good progress. I am going to pass this over to Ramsey. He can give you more details, and we will go from there.

[Ramsey Alloush, COO and General Counsel at Journey Medical]

Yeah. Hi, Brandon. Without giving any sort of guidance, Claude mentioned that we are expecting to be added to the It is the largest national plan in the United States. We expect that to go into effect at the beginning of the year, so 2027. When you think about ASP growth and revenue growth, that is going to be a big contributing factor in having more of our prescriptions go through as covered versus relying on our bridging program.

[Ramsey Alloush, COO and General Counsel at Journey Medical]

That is a really big catalyst for us in a couple of ways. Obviously, one is from the revenue side, but secondarily, it really gives a lot of credence to the brand for EMROSI to be added to this premier plan.

[Ramsey Alloush, COO and General Counsel at Journey Medical]

We think we're going to have a lot of momentum, and we're going to continue to have momentum with the other national formulary plans that we're continuously working on in terms of formulary adoption. That's the big catalyst for us early on. We expect that to truly improve 2027, with a number of others that we're expecting early on in 2027 as well.

[Ramsey Alloush, COO and General Counsel at Journey Medical]

When you think about high-quality coverage, I think that was the other part of your question. I think the last call, we were in that high 30%s, low 40% range of what we're considering quality coverage. So 40% of the commercial lives, it's about 170 million, 180 million lives that are out there. I think it's been pretty steady at this point. As we said, the next add here should help to bump that number up.

[Ramsey Alloush, COO and General Counsel at Journey Medical]

Just to redefine what quality coverage is, that's a patient being able to get EMROSI with a single step or better. We think that is really where our benchmark is. We think that's appropriate. We've had numerous discussions with a number of plans, and they believe that that's the appropriate positioning for EMROSI, for the category.

[Ramsey Alloush, COO and General Counsel at Journey Medical]

We have no reason to believe that that shouldn't be our benchmark for quality coverage, and that's what we're aspiring to have with these additional formularies that are expected to come online in 2027.

[Brandon Folkes, Analyst at H.C. Wainwright]

Okay. Thank you very much.

[Operator]

Next question is from Scott Henry with A.G.P. Please go ahead.

[Scott Henry, Analyst at A.G.P./Alliance Global Partners]

Thank you, and good afternoon. Some great progress on EMROSI, which I will get into, but I have to ask because I am curious. $1.7 million is a lot for a vendor dispute. Could you give us any color on what happened there?

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

Yeah. I am going to pass that along to Joe Benesch, our CFO. Joe?

[Joseph Benesch, CFO at Journey Medical]

Sure. Scott, really, it reflects a dispute with a former vendor from several years ago. It is non-recurring, one-time payment. We reserved for this settlement previously, and when we settled the payment that we made this quarter, it is now fully resolved. So it was just an addition out to the accrual.

[Scott Henry, Analyst at A.G.P./Alliance Global Partners]

Okay. Is it a cash outlay?

[Joseph Benesch, CFO at Journey Medical]

Yeah, it was a one-time cash outlay of $1.7 million.

[Scott Henry, Analyst at A.G.P./Alliance Global Partners]

Okay. All right, thanks. I will check out the filing as well. More importantly, shifting over to EMROSI, there was some noise in October. I believe it was a switching of the payer coverage situation. It seems to have normalized by now.

[Scott Henry, Analyst at A.G.P./Alliance Global Partners]

My question is, will it impact Q4 numbers in any way? Again, maybe it will be a little lower because of that one month of transition, or do you think you have caught all of it back and picked that up as well? Just trying to think of how we should model that sort of one-time event.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

Sure, Scott. The copay bridging program is real important for us, and it just really gives access to patients that perhaps have insurance coverage, but EMROSI is not there on formulary yet. That is the real purpose of it. To give a little more color, when we launched our program back in April of 2025, when we launched EMROSI, we actually started with a $50 copay program.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

Then a couple months later, we switched over to $0, and then later on, another switch occurred back in January of this year to $35. As Ramsey mentioned, and as in some of my earlier comments, we are getting more plans that are picking up EMROSI, which is fantastic, and we believe that changing this to $50 really optimizes profitability for the company, and more patients now will have coverage under EMROSI with their healthcare plan, so they will still be paying the zero dollars.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

We are still having good, strong access. The copay bridging program is doing its job. We did have volatility towards the end of September into October. Like you said, it is recovering pretty well, but when we have made changes, looking at our history, there is a little bit of a downward trend, and then we bump back up.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

The fourth quarter, I would imagine, in that October, November timeframe, that we are getting close to breakeven, and we will start to see a rise. There is a little volatility, and that is what that was from.

[Scott Henry, Analyst at A.G.P./Alliance Global Partners]

Okay. Thank you for that color, Claude. Earlier, there was mention of the large national plan coming in January 2027. Could you give an idea of how many lives that covers? How should we think about that in terms of magnitude and impact it should have relative to the base? It sounds like a pretty interesting incremental positive, and I just wanted to flesh that out.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

Yeah, no, look, it's a great achievement. I think we landed in a real good spot. The market access team, along with Ramsey, get their credit for this. This is a plan with over 25 million lives. The impact should certainly be felt beginning in Q1. We still don't control patient mix on who's getting the rosacea, with what insurance plans they have when they go in, but we certainly anticipate a good pickup there from non-reimbursed prescriptions to profitable prescriptions.

[Scott Henry, Analyst at A.G.P./Alliance Global Partners]

Okay, that's great. Final question, I guess, Claude, it's probably best for you, is a lot of times when you see a drug launch that's going well, as EMROSI is, companies will add resources to it, and you have a limited patent duration. If it's going well, sometimes you press it to really harvest that asset.

[Scott Henry, Analyst at A.G.P./Alliance Global Partners]

Do you think that you will explore adding resources in 2027, given the success, given the ability to leverage that investment over a larger base?

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

It's a great question. We certainly are looking at a number of different programs. First and foremost, where we win the battle day in and day out is in front of the dermatology providers. We did increase our sales force from 35 to about 40 reps.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

There is another potential increase that we're looking at from a headcount in 2027, so that certainly will require resources. I think also the market access team has a number of programs to help us with increasing our share with the national formulary plans, et cetera. There's a number of different programs. They are certainly not inexpensive. We believe we're going to put in the right resources to get us to the goals that we want to hit.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

Most importantly, we want to continue to grow that top-line sales number and be thoughtful on our spend and make sure that that corresponds well to the bottom line.

[Scott Henry, Analyst at A.G.P./Alliance Global Partners]

Okay, great. Thank you for taking the questions.

[Operator]

The next question is from Thomas Flaten with Lake Street Capital Markets. Please go ahead.

[Wes Villegas, Analyst at Lake Street Capital Markets]

Hey, guys. Thanks for taking the question. It's Wes on for Thomas. I was wondering if we could just start off. I remember you kicked off a switching trial program for dermatologists who haven't quite adopted EMROSI around mid-year. So, I mean, with this being the first full quarter, what are you seeing for conversions from the trial, and how is the ongoing prescribing?

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

Yeah, I am glad you brought that up. It was a pretty big success. This trial program, really, we looked at doctors, dermatologists, and PAs that have not come on board for whatever the reason was and we were able to provide them monthly trade sizes to really think about patients where they could potentially use EMROSI instead of Oracea or the Oracea generic. I do not have specific numbers for you. I can tell you that there has been really a fair amount of conversion.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

Yeah, we are doing that, and we look on continuing to possibly go to a second trial in 2027 just to continue that momentum.

[Wes Villegas, Analyst at Lake Street Capital Markets]

Awesome. Thank you. And then just a follow-up here. I mean, excluding the one-time vendor item, SG&A was about $10.8 million. With the new reps in the field, how should we think about SG&A as a percentage of revenue coming to the next quarter and into 2027?

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

Joe, would you like to take that one?

[Joseph Benesch, CFO at Journey Medical]

Sure. I think you are going to see, as a percentage of revenue, consistent or a little bit lower as a percentage of revenue. As Claude said, we are going to continue to invest in the portfolio, specifically in the growth of EMROSI, add some sales force and those programs into 2027. There will be some thoughtful spend. But as a percentage of revenue, you should see it actually decrease a little bit or stay consistent.

[Wes Villegas, Analyst at Lake Street Capital Markets]

Awesome. That is helpful. Thank you.

[Operator]

The next question is from Mayank Mamtani with B. Riley Securities. Please go ahead.

[Amine Chaherli, Analyst at B. Riley Securities]

Hey, team. Good afternoon. This is Amine on for Mayank. I wanted to ask, how should we be thinking about gross-to-net exiting 2026 and into 2027 as you kind of have these national formulary wins kind of come online? What is the usual lag between before a win shows up in the net price?

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

Yeah, I will start that out, and then Joe will give you a little time to remark as well. Gross-to-net is real important. As we continue to move forward down the path with negotiating with more plans, the conversion is really important, and there is substantial upside as we get more plans here to increase that gross-to-net.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

That is really key and fundamental for us. I think the changes with the copay bridging program that we have also help in the gross-to-net. One of the primary, actually, the primary growth driver for us is EMROSI. That is a high-margin product for us. I think that is just going to help overall with the company as the revenues continue to increase for that. Joe, go ahead, please.

[Joseph Benesch, CFO at Journey Medical]

Sure. I think, as the business moves from more uncovered business away from the coupon program into reimbursed and rebate-able business, that is where you are going to see most of the growth in gross-to-net. In addition, we are always working to optimize all the other lines of gross-to-net, specifically returns and some of the other lines. That is the way we are thinking about it.

[Amine Chaherli, Analyst at B. Riley Securities]

Yeah. Thank you.

[Ramsey Alloush, COO and General Counsel at Journey Medical]

Sorry, just to add. Let me just add one more point to that. I think your question was just in terms of timing of when you would expect to see something like that, like the big national formulary win that's expected to take place in January.

[Ramsey Alloush, COO and General Counsel at Journey Medical]

One thing to note about the first quarter, as you know, there are the deductible resets. So some of that may take a little bit of time to really flow through to truly see the benefit. Historically, I think that'll show progression in the ASP as quarters progress but we do want to take into account that part of the year where patients will have their deductible resets covered or not, right?

[Ramsey Alloush, COO and General Counsel at Journey Medical]

That's going to come into effect but absolutely, 25 million lives being added to the pool of candidates that can get this drug as covered with a single step or better, it's a large amount. We do expect upward trend on ASP and improving in gross-to-net as the quarters progress in 2027, in addition to any other formulary wins that we expect but we haven't yet discussed.

[Amine Chaherli, Analyst at B. Riley Securities]

Okay. Thank you. That's really helpful. If I may, are you planning to provide any formal 2027, be it revenue or EBITDA guidance? I guess, what are the kind of the key assumptions for EMROSI growth, I guess, versus the base portfolio?

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

Yeah. In terms of giving guidance, we're strongly considering it. As you just heard, this new plan that's taking effect in the first quarter is fantastic, but we're going to see how that really impacts everything. Then we're expecting a number of other wins as well.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

Again, depending on patient mix and how that goes, we're probably going to be somewhat apprehensive here in the first half of next year to give any particular guidance, and we'll see how quickly those wins come and how things stabilize. But it certainly will be going up in our estimation.

[Amine Chaherli, Analyst at B. Riley Securities]

Okay. Thank you. We'll definitely be on the lookout for first half 2027. I guess, just a final question with regards to kind of the script data. The third party kind of shows October TRX running kind of below the 3Q weekly average. I guess, what are you seeing in your own data so far in 4Q, and I guess, how quickly are those newly added reps becoming productive?

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

Yeah. So, we hired five new representatives. Really kind of kickoff for us was July 1 this year. They started, and they're starting to roll. We're giving them time. I think a good two quarters is a fair amount of time, and we should see some substantial, hopefully, profitability from those territories here very shortly.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

They're a great group, and some are doing remarkably well, and some are just getting going. So, it's a mix there. What was the other part of your question?

[Amine Chaherli, Analyst at B. Riley Securities]

In terms of kind of your own data as far as kind of the TRX so far in 4Q.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

Yeah. Sure. I think the way I would look at it is, again, with the copay bridging program moving up the copay from $35-$50, we talked a little bit about the volatility. We're seeing some good comeback right now. I think it'll stabilize here. I think December certainly will be a very good month for us historically, so we expect the same.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

Anytime we've done this, there is a little bit of a downturn. It might take anywhere from four to eight weeks, and then you start seeing the charge back up. So, we're looking at each week closely, as you are, and we feel very good. Take into account 5,000 prescribers, take into account strong refill rates, and take into account the real strong positive patient feedback.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

When patients are on this drug, with the data that I spoke to in my comments earlier, really getting full and complete clearance of your rosacea is just outstanding. We really are becoming the standard oral medication to treat rosacea here. It's just better for the patients.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

We're making it easy for patients to receive the product, and our reps are doing a great job giving the message, dropping the samples off, and talking about our copay program. It's resonating well.

[Amine Chaherli, Analyst at B. Riley Securities]

I appreciate it, team. Thank you so much.

[Claude Maraoui, Co-Founder, President, and CEO at Journey Medical]

Thank you.

[Operator]

This concludes our question and answer session, and it concludes the conference. Thank you for attending today's presentation. You may now disconnect.

Participants

Analysts

• Jaclyn Jaffe, Senior Director of Corporate Operations at Journey Medical
• Claude Maraoui, Co-Founder, President, and CEO at Journey Medical
• Joseph Benesch, CFO at Journey Medical
• Brandon Folkes, Analyst at H.C. Wainwright
• Ramsey Alloush, COO and General Counsel at Journey Medical
• Scott Henry, Analyst at A.G.P./Alliance Global Partners
• Wes Villegas, Analyst at Lake Street Capital Markets
• Amine Chaherli, Analyst at B. Riley Securities