FBIO — Fortress Biotech, Inc.

Summary of Journey Medical's Q3 2025 Earnings Call

1. Key Financial Results and Metrics

• Total Revenues: $17.6 million, a 21% increase from $14.9 million in Q3 2024.
• Gross Margin: 67.4%, down from 69.4% year-over-year, but an improvement from 63.5% in Q1 and 67.1% in Q2 2025.
• Operating Expenses: SG&A expenses rose to $12.1 million, up 6% from $11.4 million in Q3 2024, attributed to EMROSI's launch.
• Net Loss: GAAP net loss of $2.3 million ($0.09 per share), slightly improved from a loss of $2.4 million ($0.12 per share) in Q3 2024.
• EBITDA: Improved to a loss of $500,000 from a loss of $1 million in the prior year; adjusted EBITDA was positive at $1.7 million compared to $300,000 in Q3 2024.
• Cash Position: Ended the quarter with $24.9 million in cash and cash equivalents, up from $20.3 million at the end of 2024.

2. Strategic Updates and Business Highlights

• EMROSI Performance: Revenue contribution of $4.9 million in Q3, a 75% increase from Q2; total prescriptions grew by 146% to 18,198.
• Market Access: Successfully contracted with 2 of 3 major GPOs, providing access to over 100 million commercial lives; expected to complete contracts with the final GPO early in 2026.
• Physician Engagement: Increased unique prescribers for EMROSI to over 2,700, a 50% increase since the last earnings call, indicating strong adoption.
• Clinical Feedback: Positive physician feedback on EMROSI's efficacy and safety, with a 1:1 ratio of refills to new prescriptions indicating strong patient satisfaction.

3. Forward Guidance and Outlook

• EBITDA Expectations: Management anticipates becoming sustainably EBITDA positive in Q4 2025.
• Revenue Growth Potential: EMROSI is projected to achieve peak annual net sales of over $200 million in the U.S. and over $300 million globally.
• Operational Focus: Continued emphasis on disciplined expense management and margin expansion, leveraging the commercial infrastructure established for EMROSI.

4. Bad News, Challenges, or Points of Concern

• Generic Competition: Legacy products, particularly Accutane, are facing declining revenues due to generic competition, with a 16% year-over-year decline in aggregate revenue for core products.
• Gross Margin Variability: The decrease in gross margin from the previous year raises concerns about pricing pressures and product mix.
• Payer Adoption Timeline: While initial contracts have been secured, downstream health plan formulary adoption and implementation can take up to three quarters, which may delay revenue realization.

5. Notable Q&A Insights

• Patient Assistance Program: Management expects reliance on the co-pay assistance program to decrease as reimbursement improves, with significant gains anticipated in 2026.
• Launch Curve: The launch curve for EMROSI is viewed positively, with expectations for continued growth in both breadth and depth of prescribing.
• Accutane Outlook: While Accutane has stabilized, there remains uncertainty regarding potential pricing pressures from competitors.
• Refill Data: Anecdotal evidence suggests strong patient retention and refill rates, but concrete data on long-term persistence is still being gathered.

Overall, Journey Medical's Q3 2025 results reflect strong early performance of EMROSI, with positive growth metrics and strategic initiatives in place, although challenges remain from competition and market dynamics.