Journey Medical Q4 2025 Earnings Call Transcript

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Provided by Quartr
March 25, 2026

Key Takeaways

  • Positive Sentiment: EMROSI achieved ~53,000 prescriptions in nine months, Q4 scripts rose ~50% sequentially, and >3,500 unique prescribers drove an exit annualized run-rate above 126,000 scripts.
  • Positive Sentiment: Full‑year 2025 revenue was $61.9M (+10%), gross margin improved to 66.2%, GAAP net loss narrowed to $11.4M, and the company reported positive adjusted EBITDA of $2.9M while ending the year with ~$24.1M cash.
  • Neutral Sentiment: Market access is progressing—~100 million commercial covered lives and contracts with two of the top three GPOs (third expected soon)—but downstream payer formulary timing means prescription demand currently outpaces recognized revenue.
  • Negative Sentiment: Legacy products, notably the Accutane franchise, faced pressure from generic competition, weighing on the base business revenue in 2025.
  • Positive Sentiment: Management expects to remain adjusted EBITDA positive in 2026, plans a modest salesforce increase and the launch of one to two additional dermatology products, and sees reimbursement gains as the key driver of revenue conversion this year.
AI Generated. May Contain Errors.
Earnings Conference Call
Journey Medical Q4 2025
00:00 / 00:00

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Operator

Ladies and gentlemen, thank you for standing by. Good afternoon, and welcome to Journey Medical's Full Year 2025 Financial Results and Corporate Update Conference Call. At this time, all participants are in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. 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. As 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 call over to Jaclyn Jaffe, the company's Senior Director of Corporate Operations. Please go ahead, Jaclyn.

Jaclyn Jaffe
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. 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 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
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. 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, March 25, 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
Claude Maraoui
Co-Founder, President, and CEO at Journey Medical

Thank you, Jaclyn, and good afternoon to everyone on the call today. 2025 was a milestone year for Journey Medical as we successfully launched EMROSI, our internally developed best-in-class oral treatment for the inflammatory lesions of rosacea. EMROSI was made available to pharmacies in late March of last year, and our promotional activities began in early April. I am pleased to report that during the three quarters of 2025 in which EMROSI was commercially available, the product achieved $14.7 million in net sales. With regard to our full year 2025 performance, we delivered total net product revenue growth of 11%, and we improved our gross margin by nearly 3.5 percentage points compared to the 2024 period. Importantly, our business was able to make solid financial progress despite pressure on our Accutane franchise and other legacy products due to generic competition.

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

With regards to our focus on improving profitability of the business, I am pleased to report that we generated positive adjusted EBITDA as well as positive EBITDA in the fourth quarter of 2025. Given our expectation for continued sales growth and additional leverage from our established commercial sales organization, we expect to remain adjusted EBITDA positive in 2026 and the foreseeable future. With our solid cash position of approximately $24 million, I believe that Journey is well positioned to execute on our business plan and grow sales and profitability with the resources that we have in place. One of the key highlights for 2025 is the strong prescription volume that we generated with EMROSI. Total EMROSI prescriptions were approximately 53,000 since promotion began in April of last year, which we believe is a very strong start.

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

In the fourth quarter alone, total prescription volume for EMROSI grew nearly 50% sequentially compared to the third quarter last year, and growth is continuing in Q1 of this year. Our sales organization continues to promote the superior efficacy of EMROSI compared to the only other branded oral rosacea treatment, ORACEA, in addition to EMROSI's placebo-like safety and tolerability profile. Notably, the extremely positive head-to-head results against ORACEA and placebo in EMROSI's phase III clinical trials are playing out in the real world. Physician feedback continues to be very positive, and the rising refill rate for EMROSI continues to demonstrate that patients are pleased with the results. EMROSI's superior efficacy and rapid onset of action compared to ORACEA, with effects seen in as little as two weeks, are key benefits that we believe are supporting the demand and patient refill behavior.

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

Along with the high satisfaction rate that we are seeing with our current customers, we continue to expand adoption of EMROSI in more dermatology practices. We ended 2025 with approximately 3,200 unique prescribers of EMROSI, reaching our initial goal of prescribers in the top deciles that routinely write for ORACEA and similar products. While we were able to meet our initial prescriber target quite rapidly, we continue to increase this number, and today we are disclosing that over 3,500 unique dermatology prescribers have now written at least one script for EMROSI. I'll now provide some additional color on our managed care and market access progress for EMROSI, as this is an important component of the value inflection that we expect in 2026. Prescription demand continues to track ahead of reported revenue.

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

That dynamic is primarily driven by the timing of downstream health plan coverage decisions and formulary implementation cycles, which are progressing as expected for a newly launched branded dermatology product. At present, approximately 100 million commercial covered lives have access to EMROSI. This includes contracts in place with two of the top three group purchasing organizations in the United States. These agreements provide the framework for broader downstream payer adoption as individual health plans complete their internal review and P&T processes. As we mentioned on our third quarter earnings call, we anticipate contracting with the third major GPO by late Q1 or early Q2 of this year, and we remain on track to meet this objective.

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

Importantly, we are not solely focused on breadth of coverage, but also the quality of coverage, including tier positioning, step edit requirements, and prior authorization criteria to ensure that the value of EMROSI's differentiated clinical profile is appropriately recognized. As coverage expands and formulary policies mature throughout 2026, we expect to see improved reimbursement rates, reduced reliance on our co-pay bridging program, and an increase in EMROSI sales and overall operating margin expansion. Our sales professionals continue to focus on building new prescription demand for EMROSI as we believe it is important to broadly develop positive physician and patient experiences with the brand. In addition, critical mass and prescription volume also factors into the evaluation of reimbursement and pricing policies with the downstream health plans. Along with the strong prescription demand, our market access discussions are supported by several important clinical and publication milestones.

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

These are EMROSI's head-to-head superiority data versus ORACEA, the publication of EMROSI's phase III efficacy and safety results in JAMA Dermatology, and the updated treatment algorithms from the National Rosacea Society. These third-party validations are meaningful in payer evaluations, particularly as they assess clinical differentiation and long-term health economic impact. We believe that EMROSI's rapid onset of action, placebo-like tolerability, and superior facial clearing and lesion reduction profile position it well for continued formulary inclusions. As these initiatives materialize, we expect a meaningful inflection in revenue conversion relative to prescription demand. While we have commented on our expectations for positive EBITDA this year, we plan to offer more detailed financial guidance later in the year once we have better clarity on the downstream health plan adoption of EMROSI.

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

I mentioned earlier that EMROSI's positive phase III clinical trial results were published in JAMA Dermatology and that the National Rosacea Society updated their treatment algorithms, highlighting EMROSI's position as an effective therapy for rosacea treatment. Both of these publications were issued in the first half of 2025 and support EMROSI's superior clinical efficacy in treating rosacea, its favorable safety profile, and the product's convenient once-daily oral dosing. This year, we expect to announce up to three new journal publications on EMROSI. We also believe that EMROSI has potential to be incorporated into the consensus treatment guidelines for rosacea, which should support further market and health plan adoption. In addition, we remain active at key dermatology medical conferences across the United States to build awareness and momentum behind the EMROSI brand.

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

Last year, we presented clinical data at two medical conferences. The Society of Dermatology Physician Associates Summer Conference in June and the 2025 Fall Clinical Dermatology Conference in October. We plan to attend and exhibit at this year's American Academy of Dermatology meeting at the end of this month, where we kicked off EMROSI's launch last year. Given the market penetration that we have achieved so far with rosacea prescribers, we believe that this large-scale conference will help us further increase brand awareness and prescriber adoption of EMROSI. Additionally, we expect to exhibit and potentially present clinical data later this year at other dermatology conferences. With regard to our broader product offering, we plan to launch one or two additional incremental dermatology products later this year.

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

We believe that the launch of these products can also benefit from our dermatology conference presence in addition to direct promotion by our sales organization. With that, I'll turn the call over to our CFO, Joe Benesch, to review our 2025 financial results.

Joseph Benesch
Joseph Benesch
CFO at Journey Medical

Thank you, Claude, and good afternoon to everyone. I will now walk you through our financial results for the full year 2025. Total revenues for the year were $61.9 million, representing a 10% increase compared to $56.1 million for 2024. The increase reflects incremental net product revenue related to the successful U.S. commercial launch of EMROSI. Turning to margins. Gross margins for 2025 was 66.2% compared to 62.8% in 2024. The improvement reflects a favorable product mix with higher margin contributions from EMROSI QBREXZA, along with lower overall inventory period costs. SG&A expenses totaled $44.4 million for 2025, up approximately 10% from $40.2 million for 2024. This increase reflects additional operating activities to support the launch and continued expansion of EMROSI.

Joseph Benesch
Joseph Benesch
CFO at Journey Medical

We reported a GAAP net loss of $11.4 million, $0.47 per share, basic and diluted for 2025, compared to a GAAP net loss of $14.7 million or $0.72 per share in 2024. On a non-GAAP basis, both EBITDA and adjusted EBITDA improved year-over-year. EBITDA improved by $5.2 million, narrowing from a loss of $9.2 million in 2024 to a loss of $4 million in 2025. Adjusted EBITDA was a positive $2.9 million for the full year 2025 compared to $800,000 in 2024, reflecting further progress towards our goal of sustainable profitability. We ended the year with $24.1 million in cash compared to $20.3 million at December 31, 2024.

Joseph Benesch
Joseph Benesch
CFO at Journey Medical

Working capital at year-end was $29.4 million, up from $13 million a year ago, an increase of $16.4 million. In summary, we delivered a year of strong execution. We achieved year-over-year revenue growth driven primarily by the launch and uptake of EMROSI, improved gross margins versus the prior year, reflecting a more favorable product mix and operating leverage, resulting in narrow net losses and positive adjusted EBITDA. Importantly, we closed 2025 with a healthy cash position that we believe supports our ongoing operations and commercial growth into the foreseeable future. Looking ahead, we remain focused on disciplined expense management and margin expansion as we continue to scale EMROSI's commercial footprint and strengthen our product portfolio. This focus, we believe we are well positioned to deliver improved and sustainable profitability over the upcoming quarters. Thank you very much.

Joseph Benesch
Joseph Benesch
CFO at Journey Medical

I will now turn the call back over to Claude Maraoui.

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

Thank you, Joe. To summarize, 2025 was a transformational year for Journey Medical as EMROSI had a strong market debut and became our flagship commercial product. We generated approximately 53,000 total prescriptions for EMROSI in 2025 after launching the product in April, and scripts continue to show strong sequential growth as we head toward the product's first year on the market. Notably, the run rate for EMROSI total prescriptions exiting 2025 calculates to over 126,000 annually. We are continuing to expand the base of unique prescribers for EMROSI after meeting our initial goal of 3,200 dermatology writers in 2025.

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

With approximately 15,000 dermatologists in the U.S., 17 million Americans suffering from rosacea, and over 6 million rosacea prescriptions written in 2025, we believe there is significant room for EMROSI to grow and become a leading dermatology brand. Importantly, the growing base of EMROSI prescribers enables more and more patients to experience EMROSI's best-in-class efficacy and rapid onset of action relative to ORACEA, the only other branded oral rosacea treatment. In the third quarter, we saw approximately one refill for every new prescription written for EMROSI, and at the end of 2025, the ratio was at 1.4 refills to each new prescription. Given the chronic nature of rosacea, characterized by frequent episodes of relapse, the long-term value of each rosacea patient can be significant to our business.

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

We believe the prescription trends so far demonstrate that we are making good progress and that initial patient experiences are converting to long-term brand loyalty. As a result, we expect the ratio of refills to new EMROSI prescriptions to continue to grow. While our base business came under some pressure last year due to competitive challenges, we continue to grow our sales, expand our gross margin, and we achieved our objective of becoming EBITDA positive exiting 2025. In 2026, we expect to continue improving upon the financial performance as adoption of EMROSI grows, downstream health plan coverage increases, and EMROSI sales accelerate and track more closely with prescription growth trends. While we focus on building the EMROSI franchise, we also plan to launch up to two niche dermatology products this year to augment our base business and our revenue growth.

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

We believe that this year we will demonstrate the leverage that we have in our business given our established dermatology commercial infrastructure and EMROSI's significant growth potential. With our solid balance sheet, we believe that we are in a strong position to deliver on our business plan and execute on our core objectives, which are as follows. To improve the lives of patients, offer dermatology healthcare providers innovative treatment options, and create long-term value for our shareholders. Thank you. Operator, we are now ready to open the lines for Q&A.

Operator

Thank you. We will now begin the Q&A session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you'd like to withdraw your question, please press star then two. First question comes from Scott Henry with Alliance Global Partners. Please go ahead.

Scott Henry
Scott Henry
Managing Director and Senior Research Analyst at Alliance Global Partners

Thank you, and good afternoon. A lot of progress and certainly, you know, profitability is a huge accomplishment, so congratulations for that. I did just want to dig in a little bit on the EMROSI prescriptions. I guess first, just the trends. You know, Q1's been kind of flattish but, you know, it did kind of kick up in December, so I don't know if some people bought ahead of time and the trend's just taking time to flow out. Obviously the copay is reset. I just wanna get your thoughts on Q1 prescriptions. More importantly, do you think you've kinda finally got back up to a steady state where we should expect growth on a weekly basis? Thank you.

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

Yeah. Hi, Scott. Good afternoon. So thanks for the question. Yeah, I think, you know, as we leave Q4 and enter Q1, as you mentioned, there certainly is the new insurance deductible resets, so that typically will slow patient visits to their doctor. I think you add that as well to the severe storms up and down the East Coast. They were pretty brutal and severe. I think that's a factor as well. Then, overall, even, you know, in February, you've got shorter months. So all of these compounded, you know, it's hard to really compare Q4, which typically would be one of the strongest quarters to Q1 as a reset.

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

I can tell you, like you also just mentioned, March has come back in very strong and we still anticipate and expect that our Q1 total prescriptions will surpass our Q4 number. We haven't lost any steam at all, and we continue to expect substantial growth with EMROSI moving forward.

Scott Henry
Scott Henry
Managing Director and Senior Research Analyst at Alliance Global Partners

Do you feel that sequentially your momentum is building, so Q2 should, you know, be well stronger than Q1? Is that your kinda internal feel at this point in time?

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

Yeah. You're gonna see a nice build and momentum with this. If you think about it, 53,000 scripts in just nine months. When we look at Q4 with the 27,000 annualized, you're looking at 126,000 scripts for the year, and we certainly expect to be well past that overall. We've got momentum on our side. This is a phenomenal message. The efficacy is established. We have superiority against ORACEA. We're focused on ORACEA. The fact that it has, EMROSI has rapid onset, not only as early as two weeks, Scott, but we work in half the time that ORACEA does. In eight weeks, we are equivalent to ORACEA in sixteen weeks of therapy.

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

That really catches the attention of HCPs and dermatologists and the fact that we have this great proprietary formulation, the lowest strength minocycline on the market, 25% immediate release, 75% extended release. We call it modified release. It's really working well. It's offering safety like placebo side effects. I think all of that together is really good. I will add one more thing. You know, we are planning to increase our sales force, you know, in single digits here, and that should be ramped up no later than the first part of Q3. We'll also have extra people on the ground across the States.

Scott Henry
Scott Henry
Managing Director and Senior Research Analyst at Alliance Global Partners

Okay. Just one more question, which is a little bit in the weeds. The challenge in predicting revenue for any quarter is heavily dependent on how much revenue comes in per script, which can be a function of inventory and many other things. I think Q2, it was about $380, which was a big inventory build, so we had a lot higher number. Q3 was, using my numbers, about $270, which is, I think, where we thought it would kind of stay, because that's around where you would expect with the gross to net adjustment. Q4, it came in at closer to $180, so a lot lower revenue per script. You know, kind of three questions go into that. One, why do you think it is? Is that the copay?

Scott Henry
Scott Henry
Managing Director and Senior Research Analyst at Alliance Global Partners

Is there something unique that happened? Two, where do you think it goes to in terms of is 270 still an achievable target? Three, you know, when do we think we get to that steady state? Revenue per script, hard to predict in the short term, but easier to predict in the long term. Just so any color you could give there would be appreciated.

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

Sure. Yeah. Absolutely. You know, using your methodology in terms of of calculating what the script level was for Q4, I believe you mentioned 180. That is not a good indicator in terms of our long-term net pricing. Certainly I would not use that number there. You know, as we look at the progress we've made throughout the year, and the first quarter was Q2 for us commercially when we launched. We had about 7,000+ prescriptions. We moved that up in Q3 up to 18,000 prescriptions. Then you know, we hit 27,000 prescriptions in Q4 to close out the year.

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

You know, the commercial team and the marketing team have done an excellent job going out there and getting adoption and so forth with acceptance with our physician base. It's really provided very good patient experiences that dermatologists are seeing. We've really accelerated the ramp on the prescriptions. What you're really seeing is simply a function of reimbursement. The mix of reimbursed prescriptions and those that come under our copay bridging program were, you know, more in proportion of the scripts were not being reimbursed and therefore hit our copay assistance program. That's really what you see there in 2026. We've said that we've signed up two of the three top GPOs.

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

We expect the third GPO here to come on board imminently. That's a good positive for us. Again, reimbursement will change that mix and that gross-to-net. Also, I would tell you that, you know, with the launch in April and our one-year anniversary coming up, a lot of the plans have the new-to-market block or the new-to-market moratorium, and that will be lifted and allow us to have, again, more impact as we move through 2026. You know, we believe coverage is gonna come on this year, and it's gonna be a breakthrough year for EMROSI for sales as well as profitability. That gross-to-net has a lot of upward pressure on it.

Scott Henry
Scott Henry
Managing Director and Senior Research Analyst at Alliance Global Partners

Okay, great. Thank you for the color, and thank you for taking the questions.

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

Sure.

Operator

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

Mayank Mamtani
Mayank Mamtani
Senior Managing Director and Group Head of Healthcare Equity Research at B. Riley Securities

Yes, good afternoon. Thank you for taking our questions. On the last point, Claude, on the gross-to-nets with, you know, two of three GPOs coming on board, and the third, you know, imminently also coming on board, can you maybe just give us a little bit more color like you did on your full year expectation? Again, I understand you may not give us revenue guidance, but like you give us a script volume expectation for this year relative to, you know, what you anticipate in the fourth quarter. What is sort of your base case gross-to-nets for this year, now, you know, that you're sort of gonna get past the one-year mark? It would be helpful if you can maybe bracket something quantitatively.

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

Sure. I guess two parts to your question. In terms of managed care and healthcare plans, I'm gonna have Ramsey Alloush, our Chief Operating Officer, jump in and give you some background on that.

Ramsey Alloush
Ramsey Alloush
COO and General Counsel at Journey Medical

Yeah. Sure, Mayank. Just to briefly answer your question, we expect improvement throughout 2026. Gradual quarter-over-quarter, and as we hit certain milestones with national formularies and getting adoption for EMROSI to become a covered drug on formulary, we expect, again, incremental gain in terms of gross-to-nets. You know, the first year of any launch, as Claude mentioned, you're typically gonna have new-to-market block and these moratoriums where payers and plans are really gonna wanna see the drug play out. They're gonna wanna see how it's looking in the real world, what demand looks like, and they want to assess it financially as well.

Ramsey Alloush
Ramsey Alloush
COO and General Counsel at Journey Medical

Our first 12 months was really focused on what we like to call phase I, which is the GPO contracting, and we contracted with the two largest in 2025, with the third GPO to come on board. That really grants us, if you will, access, which is really the framework, the universe of commercial lives, which once we sign this third GPO, we'll have access to over 150 commercial lives. Now, access and coverage are two different things, right? Access is the framework. Coverage we define a little bit more narrowly. Coverage is where you have these national plans that can now adopt under the GPO contracts and actually do.

Ramsey Alloush
Ramsey Alloush
COO and General Counsel at Journey Medical

What we like to consider a frictionless type of a transaction where you're likely to get a patient to adjudicate all the way through to a prescription is what we call quality coverage. That's a single step therapy or through any oral and potentially any topical, or not a double step, but a single step through either one of those. Now that we've reached sort of that one year anniversary mark, we've already sort of preempted in terms of these national formularies that we're having discussions with. We have continued negotiations, continued clinical. I think from the clinical side, it's a no-brainer. Where they're assessing it is what is the budget gonna be, you know, what's the budget impact, what does financial modeling look like adding EMROSI?

Ramsey Alloush
Ramsey Alloush
COO and General Counsel at Journey Medical

Of course, it behooves the GPO to have EMROSI on formulary for their plan participants because these are rebate dollars for them. That helps them, you know, and that helps the system. That's the way they look at it. We do expect incremental growth here on the gross-to-net, and that's really a function, as Claude mentioned, of reimbursement, which ultimately will put less and less pressure on the copay. During the launch, of course, you're gonna have demand lag, revenue lag. Your demand, we're focused on wide stream adoption. The commercial team has done an excellent job with the doctors, with new patients, refills and so on and so forth. Our job is on the back end, really, as you mentioned, that gross-to-net and optimizing that. Unfortunately, in the ecosystem, we don't really control timing.

Ramsey Alloush
Ramsey Alloush
COO and General Counsel at Journey Medical

From a timing perspective, phase I is nearly complete here with the third to come on board. Really the hard work will continue getting formulary coverage for EMROSI, and that's where you'll start to see improvement in gross-to-nets in 2026 and throughout 2027 and beyond.

Mayank Mamtani
Mayank Mamtani
Senior Managing Director and Group Head of Healthcare Equity Research at B. Riley Securities

Super helpful. Thank you. Go ahead.

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

Mayank, if I can follow up a little bit too. You know, you're asking for some to quantify a little bit. Look, the run rate annualized out of Q4 is 126,000 prescriptions running into 2026. We certainly expect to be well above that. You know, I think it's important to really look at NRx and TRx. The current ratio in Q4 was for every one new prescription, we were getting 1.4 refills. Together, you know, you're at 2.4 per patient and our 16-week clinical trials, so there was four months of therapy there. We believe and anticipate that the refill rates will continue to grow with this product. I'd like you to remember that this is a chronic condition.

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

As fantastic as EMROSI is, it's still not a cure. Patients will get, you know, symptomatic relief. They'll get their clearing, but then they will relapse and come back and have a flare up. The value of each of these new patients that come on in 2025, we're gonna get a number of those coming back to us in 2026. It's hard to give you and quantify a number of that, but keep that in mind. Additionally, we are going out there as the field force is on a consistent day-to-day basis, asking for new prescriptions for these patients that are coming in that are actually new. It becomes a snowball effect here over time. Time is on our side. Obviously, the long-term view, we've got great IP going out to 2039.

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

In the short term here in 2026, we can already take advantage of that. Those numbers are gonna be real important. Right now, we're doing about 4,000 new prescriptions per month on a basis. We expect that number to rise throughout the year.

Mayank Mamtani
Mayank Mamtani
Senior Managing Director and Group Head of Healthcare Equity Research at B. Riley Securities

Yes. We're definitely closely following that. Then you mentioned some presentation publications for EMROSI. Any ones we should be particularly paying attention to from a health economic standpoint or, you know, things like durability when return patients you're seeing in real world that you just alluded to. Finally, if these two niche derm product launches that you talked about, maybe just put the picture together on how you're thinking of marketing.

Mayank Mamtani
Mayank Mamtani
Senior Managing Director and Group Head of Healthcare Equity Research at B. Riley Securities

You know, overall spend beyond the you know, the sales rep incremental spend that you talked about, just so we understand how first half versus second half looks like from a bottom-line standpoint. Thank you for taking my question.

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

Sure. Yeah. Regarding the two products that we can potentially launch here, we're definitely seeing one play out. We see that happening in the second half of 2026 here, and possibly two. That's how that outlook is doing. We're calling that part of the base business and, you know, in the base business in 2025, and that's all business outside of EMROSI. We did about $46 million in revenues. We expect that base business to continue to be stable. We feel like the regression that we saw in Accutane has done its part. That was about $6.5 million or so that we went down in revenues.

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

All prescriptions are looking strong from Q3 to Q4, it's been stable and we have good, you know, trends right now with Accutane in Q1 of 2026. The added product and the launch, we do have expenses already built into our budget. This would be in a P3 position and where we would have pulse promotion with this utilizing our full and entire sales force. We're not taking our eye off of EMROSI. That will be obviously first out of the bag for us, in dominating compensation programs for our representatives. The second product will continue to be QBREXZA, followed by the launch product as we introduce it into the marketplace. Not really giving too much details on that just due to competitive reasons.

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

We'll give you more information as we get closer on that, Mayank.

Mayank Mamtani
Mayank Mamtani
Senior Managing Director and Group Head of Healthcare Equity Research at B. Riley Securities

Any publication presentation for EMROSI?

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

Yeah, we're expecting two to three publications and those we have to, you know, keep in terms of what those aspects are. They're obviously all about EMROSI. But we'll let you know, and we should expect to see at least one of them hit here in the very near future. We'll give you information as we can.

Mayank Mamtani
Mayank Mamtani
Senior Managing Director and Group Head of Healthcare Equity Research at B. Riley Securities

Okay, thank you. I'll hop back in the queue.

Operator

The next question comes from Brandon Folkes with H.C. Wainwright. Please go ahead.

Brandon Folkes
Brandon Folkes
Analyst at H.C. Wainwright

Hi, thanks for taking my questions, and congrats on the progress. Maybe the first one from me, can you help us understand the inventory movement in EMROSI and the broader portfolio in Q4? I know you talked about the overall working capital balance at year-end, so, I'd just be interested in terms of inventory in the channel at year-end across the portfolio. I'll ask the same one now, and it sort of, you know, it tacks on to what's been asked already. You know, how did gross-to-net now at this stage of the launch compare to your expectations prior to launch and when, you know, we had talked about and framed peak sales in the past?

Brandon Folkes
Brandon Folkes
Analyst at H.C. Wainwright

You know, any way to characterize sort of where you are on the gross to net now versus how you thought about gross to net and how that would track before launch? Thank you.

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

Okay, sure. We'll take the first part regarding the inventory. Very much on track with units sold and prescriptions on demand. That's pretty much across the entire line. That is well within standards. On the second part, you mentioned gross to net and where it's come to our expectations. I think we're on track, certainly. You know, so far today's numbers, 280 as the average for 2025. That certainly is in line with expectation. You know, that's certainly meeting our internal expectations. Again, that's what was just mentioned here on the call by another analyst. That's number one because we don't typically give out our gross to net numbers.

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

In terms of where we expect our gross to net, right now, I would tell you that the expectation moving forward is an increase due to the reimbursement progress that we're gonna make with the downstream healthcare plans. The expectation is upward pressure as we move forward into 2026. Joe, if there's anything else you'd like to add on that?

Joseph Benesch
Joseph Benesch
CFO at Journey Medical

No, I think just to expand on what you said, you know, our real goal is to, you know, maximize the gross-to-net and optimize the gross-to-net, optimize the margins, and optimize the overall product contributions from all products, you know, into the EBITDA and adjusted EBITDA numbers. Just to expand on what you said.

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

Yeah. Finally, I think you asked about the peak sales regarding EMROSI. Yeah, look, we're very bullish. We see this product as becoming one of the leading branded dermatology products out there in medical therapeutics. This is a ripe target market. 17 million people suffer from this. Well over 6 million prescriptions are being written for this target market on an annual basis. We're just really getting going here. Our adopter base in terms of where we ended the year, hitting our target of 32 unique prescribers. You know, we've broken our targets into deciles. We've made some really strong penetration in those, especially the decile six through 10. We feel pretty good about how we're moving along here.

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

You know, being added to the potential guidelines of the National Rosacea Society in the upcoming months, I think is just more validation for the brand and acceptance. I think it's looking really positive as we continue to move forward.

Brandon Folkes
Brandon Folkes
Analyst at H.C. Wainwright

Thanks. Just one clarification, if I may. You mentioned upward pressure. Are you talking about net revenue per script going up or gross-to-nets going up?

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

Yeah. Meaning that, you know, as reimbursement goes up, less subsidies from our co-pay assistance program will be utilized, so the profitability of an EMROSI script would be going up. Gross-to-net would be going up in a positive manner.

Brandon Folkes
Brandon Folkes
Analyst at H.C. Wainwright

Okay. I appreciate the clarification. Thanks very much, and congrats on the progress.

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

Thank you.

Operator

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

Thomas Flaten
Senior Research Analyst at Lake Street Capital Markets

Hey, good afternoon. Appreciate you guys taking the questions. Joe, there was a pretty substantial increase in accounts receivable in the fourth quarter. Is that cash we can expect you to recognize as we go through 2026? It was just an unusual number for you guys. Any commentary on that?

Joseph Benesch
Joseph Benesch
CFO at Journey Medical

Yeah. Really, I can tell you subsequently we have collected most, if not all of that cash, so it will impact our first quarter. I think it was just a timing thing at year-end. Nothing major there, just the timing of the orders.

Thomas Flaten
Senior Research Analyst at Lake Street Capital Markets

Got it. Just sticking with Joe, as EMROSI continues to gain better coverage, gross-to-nets improve, and it becomes a bigger component of your revenue line, how should we think about gross margins as we roll through 2026?

Joseph Benesch
Joseph Benesch
CFO at Journey Medical

Yeah. You know, really, really happy with the margins and how they're progressing. You know, of course, the product sales mix is always gonna be the biggest driver. As EMROSI and QBREXZA, our high margin products, become more of that mix, you know, we're gonna continue to see better margins. In addition, you know, we really try to manage and optimize the period costs that go through. You know, the shipping costs, testing costs, et cetera. We've made a lot of leeway into decreasing those costs. Looking forward, you know, I expect there's some really nice margins going forward into 2026 and beyond.

Thomas Flaten
Senior Research Analyst at Lake Street Capital Markets

Great. Claude, the product launches that you mentioned, are these products you already have in-house? Is it in BD on the come? Anything you can do to characterize, you know, kind of conditions they serve, overall market size that you're addressing, and anything just to give us some more context would be great.

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

Yeah. I would look at them as really incremental product additions into the portfolio to really assist in helping the base business, and again, that's defined as everything outside of EMROSI really grow and expand. An internal product that we've been developing as well as an additional licensing deal. In terms of the categories, I'll get into that later in the year as we come closer to launch, Thomas.

Thomas Flaten
Senior Research Analyst at Lake Street Capital Markets

Got it. Appreciate that. Thanks, guys.

Operator

This concludes the Q&A session and Journey Medical's full year 2025 financial results and corporate update conference call. Thank you for attending today's presentation. You may now disconnect.

Executives
    • Claude Maraoui
      Claude Maraoui
      Co-Founder, President, and CEO
    • Jaclyn Jaffe
      Jaclyn Jaffe
      Senior Director of Corporate Operations
    • Joseph Benesch
      Joseph Benesch
      CFO
    • Ramsey Alloush
      Ramsey Alloush
      COO and General Counsel
Analysts
    • Brandon Folkes
      Analyst at H.C. Wainwright
    • Mayank Mamtani
      Senior Managing Director and Group Head of Healthcare Equity Research at B. Riley Securities
    • Scott Henry
      Managing Director and Senior Research Analyst at Alliance Global Partners
    • Thomas Flaten
      Senior Research Analyst at Lake Street Capital Markets
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