Ladies and gentlemen, thank you for standing by. Good afternoon and welcome to Journey Medical's First Quarter 2025 Financial Results and Corporate Update Conference Call. At this time, all participants are in a listen-only mode. Participants of this call are advised that the audio of this conference call is being broadcast live over the internet and it’s 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 call over to Jaclyn Jaffe, the Company's Senior Director of Corporate Operations. Please go ahead, Jaclyn.

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; and Joseph Benesch, Chief Financial Officer. Joining for the Q&A portion of the call will be Ramsey Alloush, Chief Operating Officer and General Counsel; Dr. Srini Sidgiddi, Vice President of Research and Development; and Louis Donati, Director of Market Access. 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. 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 14, 2025. 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.

Thank you, Jaclyn, and good afternoon to everyone on the call today. The first quarter of 2025 represented a major milestone for Journey Medical as we introduced Emrosi, our best-in-class oral rosacea treatment into the market. Today, I am pleased to report that our first quarter 2025 net product sales of $13.1 million included approximately $2 million of initial Emrosi revenue and the launch is off to a great start. Additionally, our inline products continue to perform and remain contribution positive, providing a strong foundation as Emrosi gains market traction. We believe that the positive initial response that we are seeing with Emrosi’s market introduction gives us even more confidence that Emrosi will become our flagship product and enable us to become sustainably EBITDA positive later this year. Ahead of the launch, we showcased Emrosi at the 2025 American Academy of Dermatology Annual Meeting or the AAD, which attracts over 20,000 attendees including top dermatology KOLs and high prescribing physicians, nurse practitioners, and physician assistants. We hosted a productive exhibit booth at the conference educating attendees about Emrosi's superior head-to-head Phase 3 results against ORACEA as well as the product's favorable safety and tolerability profile. Attendees were especially drawn to before and after photos from our clinical trials illustrating the efficacy of Emrosi's unique 40 mg modified release formulation which is comprised of 10 mg immediate release and 30 mg extended release minocycline. We believe that the AAD meeting helped prime the market for the Emrosi launch, showcasing the product's superior clinical profile and key benefits. On March 5, we announced that the Phase 3 clinical trial results for Emrosi in the treatment of rosacea were published in the Journal of the American Medical Association or JAMA Dermatology. The publication featured data from our two Phase 3 clinical trials which demonstrated statistical superiority of Emrosi overall ratio and placebo for the two co-primary endpoints in the studies, IgA treatment success and total lesion count reduction. The article also noted positive and statistically significant results on secondary endpoints such as the reduction in erythema compared to placebo in both studies. JAMA Dermatology has a high impact factor among dermatologists and we are very pleased that our strong Phase 3 results were peer-reviewed and published in this prestigious journal. We also welcomed the March update from the National Rosacea Society, which revised its clinical treatment algorithms to include Emrosi. These updated guidelines were distributed to approximately 7,500 dermatology professionals across the U.S. and marked an important step toward broad clinical adoption. We view this as a strong signal of confidence from the dermatology community and a catalyst for increased market uptake. As we discussed on our Emrosi Commercial Launch Plan conference call in February, we actively called on approximately 83% of dermatology offices that prescribe oral rosacea treatments. In addition, the vast majority of prescriptions written for oral rosacea treatments come from dermatology offices that already prescribe Journey Medical products. This high reach and strong brand equity have accelerated Emrosi's penetration and we will expect this trend to continue. Emrosi represents a strategic fit into our product portfolio. We are already demonstrating strong uptake based on the initial script volumes. As we work to generate strong brand awareness and positive prescription trends for Emrosi, it is equally important to ensure that payer coverage is also expanding so that we can translate prescribing momentum into product sales. On our fourth quarter 2024 earnings call in March, we noted that approximately 20% of the 188 million lives in the commercial payers segment had access to Emrosi through their health insurance plans. Today, I am pleased to report that approximately 30% of covered commercial insured lives now have access to Emrosi. As we build demand, we are also making steady progress in securing market access as we recently contracted with one of the largest commercial GPOs to include access to Emrosi for the multimillions of members through its customer health plans, which will begin July 1st. Additional payer agreements are expected in the coming months, further advancing our market access strategy. And with that I will now turn the call over to our CFO, Joe Benesch to review our financial results for the first quarter.

Thank you, Claude, and good afternoon to everyone on the call. Our net revenue for the first quarter of 2025 was $13.1 million compared to $13 million for the first quarter of 2024. First quarter of 2025 includes $2 million of incremental net product revenue related to the U.S. commercial launch of Emrosi. Our gross margin increased to 64% for the first quarter of 2025 from 54% in the prior period due to lower overall product cost of goods mainly related to product sales mix and nonrecurring charges in the prior year. R&D costs were nil in the first quarter of 2025 compared to $7.9 million in the first quarter of 2024. First quarter of 2024 includes Emrosi related preapproval and milestone payments. Now turning to our SG&A expenses, SG&A increased by $2.1 million to $10.6 million for the first quarter of 2025 from $8.4 million for the first quarter of 2024. The increase primarily reflects investments in incremental commercial infrastructure to support the Emrosi launch. Continuing to our net loss for the periods, the net loss to common shareholders was $4.1 million or $0.18 per share, basic and diluted for the first quarter of 2025. This compares to a net loss to common shareholders of $10.4 million or $0.53 per share, basic and diluted for the first quarter of 2024. We ended the first quarter of 2025 with $21.1 million in cash compared to $20.3 million at December 31, 2024. Thank you very much. I will now turn the call back to Claude.

Thank you, Joe. The first quarter marked the launch of Emrosi in addition to several momentum-building activities to support adoption of the product, such as our exhibit booth at the AAD Conference, the JAMA Dermatology publication of Emrosi's Phase 3 clinical trial results, inclusion of Emrosi in the National Rosacea Society's treatment algorithms and establishment of payer coverage for a significant percentage of commercial lives, all less than two months into Emrosi's launch. Our dermatology-focused sales force has been fully trained and is in the field building Emrosi's brand and prescription demand with existing and new customers in addition to continuing to generate demand with the other prescription dermatology products. Early indicators are encouraging. With over 660 unique healthcare providers writing prescriptions for Emrosi to date, this is a testament to the effectiveness of our team and the unmet need Emrosi is addressing. We are confident the launch will continue to build momentum throughout the year. With strong initial revenue, improving margins, and a solid cash position, we are on track to accelerate our path to profitability. Looking ahead, we are focused on expanding access, growing prescription volume and publishing additional peer-reviewed data that further supports Emrosi's clinical value. We remain committed to creating long-term value for patients, providers, and shareholders and we believe 2025 is shaping up to be a transformational year for Journey Medical. Thank you. Operator, we are now ready to open the lines for Q&A.

Thank you. At this time we will pause momentarily to assemble our roster. Today's first question comes from Scott Henry with AGP. Please go ahead.

Thank you and good afternoon. Certainly a lot going on. I guess first, it sounds like the Q1 revenues for Emrosi were largely stocking. Going forward, would you expect revenues to reflect demand? And any thoughts on how we should think about 2Q, if there will be a lag at all, or just trying to get a sense of how we should expect revenues to be reported.

Thanks, Scott. This is Claude. I appreciate the question. Yes, we wanted to make sure that we had ample supplies to stock our distribution channel, and that's what we really did in that last week and a half of March. And we wanted to make sure that the dermatology offices that we called on have sufficient supplies into the pharmacies that they typically utilize with their patients. So we were able to do that and that's the $2 million that you're referencing there. So they're stocked. Our national sales meeting with our team, our sales force took place, and their first official day of really launching the brand started on April 7th. So from that point on, Scott, they are certainly pulling product through the distribution channel. And of course, we expect additional revenues in Q2 to come from that as well. We just have not decided to give any particular expectations as to what revenues could look like in Q2. For example, we're in our fourth, fifth week of launch. We love the way things are going, and we look forward to giving some hopefully very good news at the end of Q2 regarding Emrosi.

Okay, great. And then one question on the legacy business. If I pull out the $2 million, it looks like the legacy business was down about 10% to 15%. Do you think that was a quarterly, perhaps some noise in the first quarter, or is that more of a trend? And really, can you just talk to Qbrexza and Accutane as the biggest drivers there?

Yes, sure. First of all, the legacy business, what we qualify that as are our old brands that do have generic competition; they include TARGADOX, they include EXELDERM, and there's been a reduction almost on a quarterly basis for that. And we would expect some of that to continue with the legacy brands. In reference to Qbrexza, we are extremely pleased with how the product performance continues to be. As you're well aware, a competitor came out to Qbrexza called Sofdra. They started their launch back in January of this year. They have a full sales force and they're working on their telemedicine platform. We are looking at prescriptions all the way through March and we actually just got prescriptions of April as of today. And what we're seeing is exactly what we had expected. Sofdra and Botanix is bringing more awareness to the disease state of primary axillary hyperhidrosis and we are benefiting, I believe, from that, including what our marketing and commercial team is doing. So for example, in March we were 15% above in prescriptions compared to last year 2024, and I'm pleased to say in April, again, hot off the presses, we continue to see a 15% growth month-over-month when you look at April 2025 versus April 2024. So it's really continuing to ramp-up for us. I think patient compliance is a key factor and people are looking for something that's highly efficacious. So even with a competitor out there, we're seeing some solid growth from the brand. And I think lastly, you mentioned Accutane. Last year I mentioned several times that there were two new competitors that fell into the isotretinoin market, which is where Accutane is, and they entered competitively with lower pricing to gain market share as quickly as possible. So just as a quick reminder, last year in Q1 we did about 93,000 prescriptions of Accutane and this year, same quarter, Q1 of 2025, we came in at about 66,000 prescriptions. So there was definitely a hit from that incredible first quarter from last year. But when you look at Q4 of 2024 versus Q1 of 2025, we've actually grown Accutane by about 10%. And we feel that we have stabilized it and that we're starting to grow the brand again. I will let you know that in Q2 last year, again, very solid quarter, about 93,000, 94,000 prescriptions. So we're not going to be at that with Accutane in Q2, but when Q3 and Q4 come around, I think you'll see that we're going to be stable there with the revenues of Accutane as well as perhaps growing that in the second half of the year.

Okay, great. Thank you for taking those questions. I'll jump back into the queue. Thanks again.

Thank you. The next question comes from Kalpit Patel with B. Riley Securities. Please go ahead.

Hey, good afternoon and thanks for taking the questions. I had one more on the inventory part of this, you know, until the end of March, can you comment on what the day supply is in the distribution channel and how you anticipate that changing? Is it two weeks right now? Do you expect it to go to four weeks, or what exactly are you looking to keep in the channel?

Okay, so yes. Going back to the distribution in March, Kalpit, absolutely. You know, we have a number of pharmacies that are our customers that dermatologists utilize on a consistent basis. We focused on that group of pharmacies. We call them specialty pharmacies. In terms of the amount of inventory with a brand new launch, that’s a particularly difficult answer to give back with a concrete position. But I think your estimation of two weeks, maybe a little bit longer again, depending on how the ramp-up goes. But I would tell you that it's typically between two to four weeks is what you see out there, typically in a launch, because it's brand new; there's an unknown to it, so it's hard to come up with a specific core number for that.

Okay, and then do you have any early, real-world feedback from the prescribers that are using it? I think you mentioned 660 unique doctors. Any feedback from those doctors? And then as a follow-up, is there a good proportion of patients? Is it fragmented or is it a certain group of doctors that are prescribing most of the prescriptions that you’re seeing today?

Sure. I mean, going back to the product profile, Emrosi's product profile, the Phase 3 clinical trial results, we've done numerous advisory boards. The feedback from the field, myself and my colleagues on this call could attest really tremendous positive feedback in terms of how well the product did compared to the current standard of care ORACEA. You're talking about almost a 60% greater improvement in IgA success, as well as approximately a 30% greater lesion reduction. And when our sales team is introducing that data, that really makes them pause. So I don't want to take anything away from that. That is really critical and meaningful to these HCPs. And the tolerability profile, that's equal to placebo, I think that whole proposition value really makes doctors pause. Now, they have been consistently using ORACEA now for almost two decades. Here we are coming out and introducing this new product, new formulation, lowest strength minocycline out on the market. We have a unique proprietary 10 mg immediate release, 30 mg extended release. There's a lot there, and I think that's really eye-catching. About two days ago, a dermatologist from New Jersey sent me before and after pictures. I couldn't see the patient's name or anything private about the patient; but they showed me when they walked into their practice certainly were designated for rosacea treatment. And four weeks later when he saw this patient back, it is remarkable and it certainly has reinforced him in particular to continue to prescribe Emrosi moving forward. So really fast pickup. I love watching because we have incredible before and after pictures from the Phase 3 clinical trials. But when someone shares a real clinical practice office here, post our launch, it’s dramatic.

Yes, I think just in terms of launch trajectory, we're really excited. We look at a few Derm analogs that have taken place more recently, and we're trending ahead. It's very early. It's hard to tell certainly where we'll be at week eight, week twelve, so on and so forth. But we're really pleased with that trajectory in terms of the ramp, we expect that to continue to grow. But to Claude's point, we've received a lot of positive feedback from different advisory board meetings and feedback from the field, from the commercial team in general. So all good news. It's just an execution game on our part and market access. Right? So making sure the coverage is there. Claude mentioned 30%. We're pleased with that number. We expect it to continue to grow. So the demand is being driven. We're making sure on the other side, the coverage is there as well. So thanks.

Okay, got it. And one last, if I may, it might be early for this, but do you have a sense of who these patients are? Are they ORACEA switchers or are they totally new rosacea patients, or do you have any metrics that you can give us in the first two months of launch here?

Yes, I could tell you my understanding of it. It's not an exact science. I don't have hardcore numbers, but from being in the field, talking to physicians, getting their feedback right now, for my opinion is that this is looking right now as Phase 1, trying to get dermatologists and PAs to start prescribing it for their new patients coming in. And then once they get comfortable with that, once they see their patients back again, typically it takes anywhere Kalpit from three calls to up to seven calls to really start to switch a dermatologist prescribing habit that they've been used to for many, many years, like I said, almost two decades. So I think the new patients are the first phase and then as they get comfortable, week four, week eight, week 12, when they see all these patients coming back, then you'll start to see some switching happening from existing ORACEA patients. But that's the way I would probably paint the picture for you at this time.

And Kalpit, just two other quick points I think, which is very important in terms of messaging from a patient as well as a provider perspective, is the early onset of efficacy of Emrosi. Right? Two weeks. Right. You can see results in as little as two weeks. And Derms love that their patients were able to see results as quick as that. And then if you look at the different time points of the two studies, at week eight, I mean, when they come back for that visit, they're going to achieve efficacy results that surpass ORACEA in 16 weeks. So they're going to be very pleased with those early results. And we think that's, you know, that is proof in the pudding for them to continue writing the drug.

Okay, that's very helpful. Thanks for taking the question.

Thank you. The next question comes from Thomas Flatten with Lake Street Capital Markets. Please go ahead.

Hey, guys. I appreciate you taking the questions. Congrats on a good quarter. Claude or Ramsey, any feedback from the docs specifically around erythema? I know it didn't end up in the label and you're being careful about how you promote it, but I'm just curious if there were any spontaneous commentary from docs about erythema.

Yes, it's funny that you say that. Again, this is anecdotal, and we're not focused on that with our core message value that we're bringing to the physicians. But this doctor that I spoke about earlier was extremely impressed with how the erythema reduction took place in that four-week period of time. And I've heard that a few different times, and especially when you're looking at our before and after pictures, you know, some dermatologists are mentioning that back to us and we're taking it in and we're pleased that they're proactively coming to us with that type of messaging.

Got it. And do you have a strategy over time for how to work that data set into the overall messaging, whether it be via MSL or sales rep?

Well, yes, I'm going to ask Dr. Srinivas Sidgiddi here to jump in and perhaps talk about the JAMA Dermatology publication that happened and what it included and how Medical Affairs is handling some of that.

Thank you, Claude. Yes, Thomas. So, as Claude mentioned, the JAMA Derm publication does speak about the data that we have from the Phase 3 studies, which shows that Emrosi has significant superiority over placebo in terms of erythema improvement. That is one data point. The second data point also is that the treatment algorithms that have come out from the National Rosacea Society, they speak of using Emrosi for severe persistent erythema. So there is significant amount of data out there already that talks about the significant impact that Emrosi has on erythema. So that I think we will be building on that going forward and we should be able to make the providers aware of the kind of impact that Emrosi has on erythema.

Super helpful. Thank you. And then one final one. Among the 660 writers that you mentioned, Claude, are any of those guys repeat writers?

Absolutely. Absolutely. So it's all over the board right now. We've got, obviously the most that we have are the onesies. We got people that have written it two times, five times. We've got some writers now that are over 25 times. So it's all over the board.

Thank you. This concludes our question-and-answer session. I would like to turn the call back over to management for closing remarks.

Yes, we thank everyone for coming to the call. We're very pleased and appreciate the hard work that our commercial team, our R&D, getting this fabulous product out into the market now. And it's all about execution, being laser-focused and being very determined to succeed. I'm looking forward to seeing consistent, incremental gains on this, and then we'll really start to see momentum over time. So thank you and we'll talk later.

The conference has now concluded. Thank you for your participation. You may now disconnect your lines.