Journey Medical (DERM) Q2 2024 earnings summary

Executive summary

• Net product revenue for Q2 2024 was $14.9 million, down 12–13% year-over-year but up 14% sequentially, mainly due to QBREXZA order timing, generic competition, and product discontinuations.

• Core dermatology brands, especially QBREXZA and Accutane, generated over 90% of revenue, with Accutane revenue up 3% year-over-year.

• Net loss for Q2 2024 was $3.4 million ($0.17/share), a significant improvement from $8.4 million ($0.46/share) in Q2 2023, driven by reduced operating expenses.

• Achieved positive non-GAAP Adjusted EBITDA of $0.3 million for the fourth consecutive quarter.

• DFD-29 NDA accepted by FDA with a PDUFA date of November 4, 2024; launch anticipated in early 2025.

Financial highlights

• Q2 2024 net product revenue was $14.9 million, down from $17 million in Q2 2023, with sequential growth of $1.8 million from Q1 2024.

• Gross profit margin improved year-over-year due to favorable product mix and lower royalties; Q2 2024 gross margin was approximately 56%.

• R&D expenses decreased to $0.9 million as DFD-29 clinical trials concluded.

• SG&A expenses fell to $10.3 million, down 15% year-over-year.

• Cash and cash equivalents at June 30, 2024, were $23.9 million, including a $3 million milestone payment and a $5 million credit facility drawdown.

Outlook and guidance

• On track to meet or exceed 2024 guidance: net product revenue of $55–$60 million, SG&A of $39–$42 million, and R&D of $9–$10 million.

• Targeting sustainable cash flow positivity in coming quarters and EBITDA positivity in 2025.

• DFD-29 launch expected in early 2025, with initial distribution targeted for March and sales execution in Q2.

• Awaiting FDA decision on DFD-29 NDA with PDUFA goal date of November 4, 2024; $5 million additional debt draw contingent on approval.

• Substantial doubt remains about ability to continue as a going concern due to recurring losses and cash burn.