Good afternoon and welcome to Journey Medical's first quarter 2026 Financial Results Incorporated Update Conference Call.

At this time, all participants are in the listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. Participants of this call advise that the audio of this conference call is being broadcasted 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 call over to Jacqueline Jaffe, the company's senior director of corporate operations. Please go ahead, Jacqueline.

Good afternoon, and thank you for participating in today's conference call. Joining me from Journey Medical's leadership team are Claude Morawi, co-founder, president, and chief executive officer, Joseph Binesh, Chief Financial Officer, and Ramzi Alouche, Chief Operating Officer and General Counsel. During this call, management will be making forward-looking statements, including statements that address, among other things, journey medicals, 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 files 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 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 13, 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 Morawi, Co-Founder, President, and Chief Executive Officer of Journey Medical.

Thank you, Jacqueline, and good afternoon to everyone on the call today. We made solid progress in the first quarter of 2026, marking a strong start to what we believe will be a breakout year for Amrosi and Journey Medical. We delivered Amrosi revenues of $6.3 million in Q1, up significantly year over year, and sequentially from the fourth quarter, as prescription volumes continue to grow and payer reimbursement improves. We are pleased with this performance, especially given the severe winter weather that occurred on the East Coast in the U.S. during Q1. Our total net product revenues for the first quarter increased by 21% year-over-year, while operating expenses rose by just 6% compared to the first quarter of last year. With MROSI still early in its launch trajectory, steady revenue contributions anticipated from our other dermatology brands, and ongoing disciplined investment in our commercial organization, we expect that operating leverage for our business will continue to increase as the year progresses. We also delivered another quarter of positive adjusted EBITDA, and we added to our cash balance during the first quarter, solidifying our strong financial position. MROSI prescriptions totaled approximately 30,000 in the first quarter, up from about 27,000 prescriptions in the fourth quarter of last year. This represents approximately 11% sequential prescription volume growth for the product, despite the typical seasonality that occurs in the beginning of each calendar year. Notably, MROSI revenues increased by approximately 26% from Q4 to Q1, as revenue per prescription increased sequentially. We remain focused on the twin objectives of growing MROSI prescription volumes and increasing the mix of scripts reimbursed by health plans in order to accelerate revenue growth over the next several quarters. Recognition of MROSI and its benefits continues to increase as we work toward establishing the brand as standard of care in the treatment of rosacea. Promotion of OMROSI reached its one-year anniversary in early April, and currently, over 3,700 unique dermatology prescribers have written a prescription for the product. This compares to approximately 3,200 prescribers that were writing for OMROSI at the end of 2025 and demonstrates the effectiveness of our sales organization and prescribing momentum building behind the brand. The superior head-to-head efficacy results demonstrated in our phase three clinical trials comparing Amrosi to the only other branded oral rosacea treatment, or ratio, are becoming widely known throughout the dermatology community. And with the product on the market now for a little over a year, Amrosi's placebo-like safety and tolerability profile is providing to be durable, which is another important factor in recruiting new prescription writers. From the patient perspective, Ambrosi's rapid onset of action and superior skin clearing effects compared to Oratia are creating loyal users of the product. The ratio to refills to new prescriptions is now approaching 1.5 to 1, an increase from the one-to-one ratio observed at the end of 2025. We believe this metric is a good indicator of new patient satisfaction with the product, and we expect the refill-to-new prescription ratio to continue to increase going forward. With a significant number of dermatology practices and patients gaining experience with MROSI in its first year on the market, we believe that critical mass is being established and that the product is on track to become a significant brand in the dermatology space. The solid one-year efficacy and safety track record with MROSI, as well as the critical mass elements that we are generating in terms of strong prescription volumes and the high number of dermatology riders, are also important to the payer community. As a result, we believe that we are making good progress in our efforts to ramp reimbursement for OMROSI. In April, we announced that we entered into an agreement with the third of the three largest PBM-owned or affiliated group purchasing organizations in the United States. The three GPOs, known as Zinc Health Services, MSR Pharma Services, and the Ascent Health Services, collectively negotiate prescription drug pricing for approximately 85% of commercial lives in the United States. With the big three contracts in place for EMROSI, over 169 million of the 192 million commercial lives in the nation now have access to EMROSI. EMROSI. Importantly, these GPO agreements serve as a framework for broader downstream payer adoption as many individual health plans conduct their own internal review and P&T evaluations before including EMROSI on their formularies. As mentioned on our fourth quarter earnings call, we are actively engaged with downstream health plans on both national and regional level to broaden formulary inclusion for MROSI this year. Not only are we focused on the breadth of coverage, but also on the quality of coverage, including tier positioning, step edit requirements, and prior authorization criteria to ensure that the value of MROSI's differentiated clinical profile is recognized. We believe that MROSI's rapid onset of action, placebo-like safety and tolerability, and superior lesion reduction profile position it well for broad formulary inclusions. Our discussions with the downstream plans are also supported by the published Phase 3 Efficacy and Safety Results for MROSI and JAMA Dermatology, as well as the updated treatment algorithms published by the National Rosacea Society, which also cites MROSI's benefits as a safe, effective, and convenient oral treatment for the condition. These third-party validations and MROSI strong clinical results are meaningful to plans that are assessing the clinical differentiation and long-term health economic impact of prescribing MROSI. We expect to announce up to three new journal publications on MROSI this year, and we also believe that MROSI has potential to be incorporated into the consensus treatment guidelines for rosacea, which should further support market and health plan adoption. In addition, we remain active at key dermatology medical congresses, as well as managed care conferences across the United States to expand awareness and reimbursement for MROSI. In late April, we attended the Assembia Summit, a premier industry conference focused on the specialty pharmaceutical ecosystem, including pharmaceutical distribution, patient access, reimbursement dynamics, and commercialization strategies. With MROSI now on the market for over a year, the conference was timely and enabled us to have productive discussions with payer representatives to broaden MROSI's formulary adoption. Operationally, we plan to add up to five new sales professionals to our commercial team this year with the goal of having these representatives trained and in the field in early Q3. We believe the additional resources will increase our productivity in areas such as the promotion of our broad dermatology portfolio, the potential launch of up to two new niche dermatology products later this year, and importantly, the establishment of MROSI as standard of care in the treatment of rosacea. And with that, I'll now turn the call over to our CFO, Joe Binesh, to review our first quarter financial results.

Thank you, Claude, and good afternoon to everyone on the call. I will now review our financial results for the first quarter of 2026. Total revenue for the quarter was $16 million, representing a 21% increase compared to $13.1 million in the first quarter of 2025. This growth was primarily driven by continued strength in MROSI, which generated $6.3 million in net revenue, up from $2.1 million in the prior year period. These results reflect sustained demand and reinforce MROSI's role as a key driver of our growth. Turning to gross margin, we reported a 61% margin for the first quarter of 2026 compared to 63.5% in the prior year period. The decrease resulted from a $1.3 million non-cash charge to cost of sales related to a write-down of API inventory associated with the 2021 QBREX acquisition. Including this one-time non-cash item, the gross margin would have been approximately 69%, reflecting a favorable product mix and continued sequential and year-over-year improvement. SG&A expenses were $10.1 million for the quarter, compared to $10.6 million in the first quarter of 2025. The decrease was driven primarily by lower MROSI launch-related expenses, as we transitioned from our initial launch investment to ongoing commercial execution. We reported a gap net loss of $2.2 million, or $0.08 per share basic and diluted, compared to a net loss of $4.1 million, $0.18 per share basic and diluted in the prior year period. This improvement reflects higher revenues and continued expense discipline. On a non-GAAP basis, adjusted EBITDA was positive $600,000 with $0.02 per share, compared to negative adjusted EBITDA of $900,000 or $0.04 per share in the first quarter of 2025. This improvement highlights the operating leverage in the business as MROSI continues to scale. We ended the quarter with $27.2 million in cash compared to $24.1 million as of December 31, 2025, providing a solid liquidity position to support our commercial and operational priorities. In summary, our first quarter results demonstrate strong revenue growth, improving profitability, and disciplined execution. We remain focused on expanding Amrosi's commercial reach, optimizing our cost structure, and progressing towards sustainable profitability in the coming quarters. Thank you very much. I will now turn the call back over to Claude.

Thank you, Joe. Our first quarter results demonstrate continued execution on our business plan and position us well for a year of strong financial performance. Our total net product sales grew significantly faster than our expenses during the quarter, and we expect that this trend will continue. Based on the quarterly results and the opportunities ahead, we believe that operating leverage for the company is now starting to come through in a meaningful way. Additionally, our cash position increased to approximately $27 million at the end of the first quarter, up from roughly $24 million at the end of last year. As a result, we believe that the company is well-positioned to grow sales and profitability with the resources that we have in place. While we plan to offer detailed financial guidance later this year, we are confident that the business will not only deliver positive adjusted EBITDA, but will also generate positive EBITDA for the remainder of this year and for the foreseeable future. Importantly, MROSI continues to gain market share in the rosacea treatment segment, with revenue per prescription improving as we make progress on our payer reimbursement initiatives. We now have pricing agreements with all of the major PBM-led group purchasing organizations in the United States, and we are working to leverage these contracts to increase downstream health plan formulary access for MROSI throughout the year. As our payer strategy gains additional traction, we expect a meaningful inflection in revenue conversion relative to the growing prescription demand. The ratio of Amrosi refills to new prescriptions continues to increase, in addition to the number of unique prescribers writing for the product. We believe that these key metrics demonstrate the brand's continued momentum in the market. Our decision to add headcount in our commercial organization underscores the opportunity that we see to grow product sales and our operating cash flow, and is also well-timed given our plans to launch up to two new niche dermatology products later this year. 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 to increase shareholder value. As we continue to execute on our strategic plan, we believe that 2026 will be a breakout year for Journey Medical, enabling us to deliver significant value for patients, our physician customers, and our shareholders. Thank you. Operator, we are now ready to open the lines for Q&A.

Thank you. We will now begin the question and answer session. Participants who wish to ask a question may press star and one on your touchstone telephone.

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 would like to withdraw your question, please press star and then two. At this time, we will pause momentarily to assemble our roster. We have the first question from the line of Nelson Cox from Lake Street Capital. Please go ahead.

Hey, yeah, this is Nelson on for Thomas. Congrats on all the progress. Maybe you just want to start and understand you're not providing more detailed formal guidance until maybe later in the year, but maybe directionally as we look across the portfolio and for the balance of the year, can you help frame just how to think about that trajectory, both for MROSI as coverage matures and for kind of the legacy products?

Hi, Nelson. Yeah. You know, first let's talk about our base business. So our base business really is everything outside of Ambrose. We see that as very steady and consistent in 2026. We also believe that adding up to two new niche products this year will add incremental value in terms of revenue. So we feel very good about that. even though we have had to take, for example, Qbrexa from the P1 position and putting it in P2, we've done a really good job from a commercial organization of keeping on track with our expectations. The real key driver and what the majority of our time and efforts and the resources are going in behind EMROSI. So I would continue to take a look at EMROSI moving forward. You know, we did $61 million plus in revenues last year, and obviously we'll go north of that. But that's about as far as I can tell you at this point.

Thank you for the color there. And then maybe just, you know, an update on insurance coverage, specifically how the conversation from access to quality coverage is progressing and where you stand on tier positioning, step edits, prior auths, and criteria with major plans.

Sure. You know, we're just really thrilled that in the one year of launch, it was just a year in April that we finished our one-year anniversary. We were very successful in completing all three GPOs, which now really allows us the full gamut of going out and reaching to the downstream healthcare companies. I'm going to have Ramsey give you some more color behind that.

Thanks, Claude. And thanks, Nelson, for the question. So just to kind of look back a little bit, first year we launched in April. We really focused on GPO contracting. And as you mentioned, that's really just getting access to the brand. not necessarily converting into coverage. So we've now passed that one year new to market block. We've signed all three GPOs. We just signed the third one April 1st of 2026. We did see an incremental bump in our coverage numbers. So that was positive. But you'll have auto adopters in terms of some of the plans, and then you'll have more of the custom plans. And those are the large national formularies. And now that we have contracts in place to pull from, we're able to have those deeper discussions. And so, you know, from a clinical perspective, when you look at our drug versus Oratia and any of the other oral therapies, the comparable oral therapies, the doxy-40s on the market, you can see that we have the superior efficacy. We have solid safety. So from a clinical standpoint, it makes a lot of sense. And we work in about half the time. So from a financial perspective, you know, we've provided all of the financial detail in terms of their modeling and what net price needs to look like to get that quality coverage up. And when we talk about quality coverage in terms of prior auth criteria, step edit criteria, and any utilization management control, we look at a benchmark of about a single step edit through any oral or topical agent with a look back of one year or greater. And so we think that's the right place for us to be in terms of positioning. And we've been pretty successful in having those discussions. We're, you know, not ready to announce anything yet, but we're in very deep discussions and far along in discussions with some of the national formularies. So we expect to have some good news throughout 2027 that's really going to help improve our coverage with respect to Amrosi. So from a quality perspective, we talk about 160, 170 million lives that Claude mentioned that have access to Amrosi. But when you look at that single step or better, no step, we're looking at about 34% of the 190 million commercial lives. So, about 60 million or so have access to MROSI, coverage for MROSI with a single step or better.

Appreciate the caller. Thank you, guys.

Thank you. We have the next question. We're right now, Matt Mantani from B-Reilly Securities. Please go ahead.

Good afternoon, Dean. Thanks for taking our questions. and congrats on a very, very strong quarter here. So on the MROC revenue growth accelerating faster than the script volume growth, you know, that you talked about, and especially during the otherwise seasonally challenge 1Q. So would be great to hear, you know, on a go-forward basis as you think about both volume and net price step up and, you know, factoring in the prior comments on, you know, formulary dynamic on prior opt being, being more important than, you know, just having covered lives high level. Are you able to comment on how, you know, quarter date and second quarter you're seeing trends on refills, for example, when you think about volume and then, you know, this net price kind of works back, you know, where you were in 3Q and it was a step down 4Q, you know, what level you're trying to get at maybe at the end of the year,

if you could comment on that. Yeah, sure, Mayank. Thank you for the question. You know, we're pleased and we're meeting our internal expectations in terms of NRX to total prescriptions. When you take a look at 2025, we ended the year with 52,000 total prescriptions. Our new prescriptions were at 26,000, and that's, again, in 2025. So, pretty much a one-to-one ratio. When you take a look at Q1, for example, we ended up getting to a ratio of one new script and 1.4 refills. So, we like how we're trending and how we're moving that accordingly, And we do expect that to increase from quarter to quarter as we continue to gain more momentum with the brand, more prescribers, and so forth. So we think that's doing extremely well for us. Oratia, at the same time, if you take a look at their ratio for Q1, they have about one new prescription to 1.9 refills. Now, with our messaging and our 16-week clinical trials, we do see many dermatologists not just writing for one prescription, but they're also writing for the refills. And we're seeing anywhere between two refills, three refills, four refills, and in some cases, more than that. So we do believe that that will continue to grow. So, switching to, you know, our gains in the managed care coverage and the quality coverage, you know, we do expect that to continue to grow incrementally from quarter to quarter. And when that happens, of course, we'll get more reimbursement on prescriptions that will be profitable for the company. There will be less reliance on our co-pay bridging program. And we believe that that has the capability to enhance our ASPs. I think when you take a look from Q4 to Q1, Q4 of 25 to Q1 of 2026, you'll see a nice growth rate already with the average ASP that you see with MROSI. And we think that that will continue. So, again, without giving any guidance, I think we're showing a great step forward here in Q1. Prescriptions are growing. We went from 27,000 prescriptions to 30,000 prescriptions. I'd like to also add that, you know, I think we're making the right strategic decisions. We're going to be increasing our sales force. We're going to be moving from 35 to 40 salespeople across the United States. Our reach will be better. Our frequency will be better. And I think that will also complement our goal to continue to grow MROSI and become the standard of care.

Very comprehensive answer. Thank you. And on the guidance comment you had, you know, for the back half of the year, is that fair to assume that, you know, you'd have both on top line and also, you know, on the bottom line? because you clearly have a profitability goal here. And was this curious how you think about, you know, adding, I think you've talked about one to two products, how that fits in versus maybe also, you know, some of the sales ads, some of the costs that you'll have on the GNA. And is that more a first half loaded where, you know, you can have the benefit on driving more script volume for the back half of the year? Or could you just maybe, you know, fine-tune a little bit of how you're thinking about guidance, top and bottom line? Thanks for taking the question.

Yeah, sure. You know, in due time, we'll come out with that. We're already seeing some variability with ASPs, for example, with Amrosi. You know, honestly, I think we'll see a good range, you know, from launch about 18 to 24 months. So we'll get into a pretty consistent range being stable, but we will continue to increase the profitability as the year progresses. You know, the salespeople, the additional headcount, they're actually due to get trained in June, and then they'll be out in the field in July. So the expenses are more on a second half of the year basis. We've also put some really fantastic tactical programs in place. One of them, MyAnk just really started this past week where we're focused in targeting direct messages via cell as well as emails directly to Oratia patients and including Oratia generic patients. So, there's resource allocations and expenses that are, you know, committed to that, and you'll see that continue throughout the year. Again, more heavily weighted in the second half of this year in 2026. We have other unique programs that are also kicking off in the later half of Q2 into Q3, where we have a switching trial program where we've had some dermatologists who haven't jumped on to the MROSI brand right away. We'll be giving them free trades to put a certain amount of patients when they come in for refills or when they see them. And we've got a really nifty program where we'll be able to get great patient feedback. So all of those types of programs certainly do add to our SG&A, and we think the allocation is wise in how we're doing it. We also have these five additional reps coming on board as our managed care coverage is better. So we think we did that in a timely manner as well. So hopefully that gives you some good information.

Very helpful. Thank you, Grant.

Thank you. We have the next question from the line of Brandon Fuchs from HCVN. Right, please go ahead.

Hi, thanks for taking my question, and congrats on the progress. Can you just talk about, you know, adding these two additional products into the REPS bag potentially this year while MROSI is still in the growth phase? You know, just any color in terms of how promotion-sensitive those products may be and in terms of the share of voice that they may require during the MROSI launch. Thank you.

Sure. Absolutely. Look, these are good additional, you know, niche type of products. First and foremost, our focus is on MROSI. Our second brand will continue to be Qbrexa. and we will pulse these products into the third position as the year continues. So no time will be taken away, no emphasis in terms of how the sales representatives will be compensated, will not change to move their behavior away from those top two products. We do believe that these two additional products will definitely launch one. We're hoping to launch both. are really incremental value that will be into our base business. And that third position product, sometimes it could be Accutane. Another time it could be one of the niche products. But we've got a really good market plan for them. We've got good expectations. And we believe there's going to be good demand for them, a good need in the dermatology community for these types of products. I will tell you, one is, again, in the anti-itch, anti-puritic products, and that's always needed, and they're always looking for something. So that will be a very positive welcome, I believe, by the dermatology community. And the second product is really a strong life cycle management with one of our existing brands that we think will enhance and grow our base business nicely. So, no real distraction from our focus of OMROSI and secondarily from QBREXA.

Thank you. We have the next question, Linus Scott Henry from AGP. Please go ahead.

Thank you, and good afternoon. I'm going to start with kind of a specific metrics question just to get your sense. You know, really drilling down on the revenue per script. If we go back, Q3, it was about $271. Then we had the surprise in Q4, it dropped down to $188. In the first quarter of this year, it bounced back. We expected it to bounce back, but all the way to $202, depending, you know, everyone's numbers may be a little different, but they should be similar. My question is, do you think 202, you know, is that all the way back, or do you think that number can grow higher? And sometimes inventory changes can impact that number as well. Was inventory pretty consistent in first quarter?

Yeah, so that's definitely one of the variables, and that's why we've been really, you know, holding back from giving more specific guidance, Scott. We definitely had a nice bump from Q4 to Q1, as you just mentioned. And we believe with the third GPO that we've gotten contracted, as well as what Ramsey was mentioning, lots of serious negotiations where we believe we're going to have some good wins that will help incrementally put quality coverage regarding MROSI on a national and regional level. So that being the case, this certainly has significantly more upside. And, you know, we believe in the dermatology realm, you know, 20 to 40 percent. It's a wide range I'm giving, but 20% to 40% net is the range that we would expect once it's stable for Ambrose to be over time.

Okay. I think that's an interesting point you make. So when you add the third GPO, I think we always think of it adding covered lives, which ultimately drives scripts. But it sounds like as well it can make those scripts you already write potentially more profitable because they have less discounting because they are now covered. Is that a fair statement?

Absolutely. We've really tried to make the path of least resistance for the dermatologist as well as the patient. Once they decide and get a prescription for hemorrhose, we want them to get it. And our copay bridging program, where it's not covered, really fills that and makes it an easy transition. Once coverage comes along, those patients, because this is a chronic condition, whenever they come back for a relapse or an episode and they've had a great experience with MROSI, they'll be back to get more, hopefully, from their physicians. and then hopefully that coverage now is there where prior it was getting picked up by the co-pay. So exactly to your point, Scott.

Okay. And so you've got some really nice underlying trends. What about seasonality? You know, as it gets warmer out, people are outside, they're in the sun, maybe it clears it up a little bit, they see their dermatologist a little less in the summer. You know, how big of a factor is that in the rosacea category?

You know, there is some seasonality. There's no doubt about it. It's not significant in terms of being too specific in what quarter can we see that. Looking historically over the last eight quarters, we see it going up and down, but it's really not that significant for me to point to one specific time. It's not only the warmer months, it's the colder months as well, and it's alcohol consumption, it's spicy foods. There's a number of different factors, and I think that's why it evens out over time, and every patient is different. So, you know, we do expect, you know, prescriptions to continue to grow. We just received Symphony April numbers. I'm glad to let you know that it's an all-time high. We just hit 11,400-plus prescriptions. And, you know, we're seeing strong redemption weeks as we are getting deeper into May. So momentum is picking up. Perhaps it's the warmer months that you're talking about right now, but it's also, I think, the basis of just a highly efficacious product. It's the best product that they have now orally to treat rosacea, and I think, you know, we're up to 3,700 prescribers, right, unique prescribers. And when I look at, for example, the month of March, we had over 2,500 prescribers just in that month alone. So as they start to pick up and as those numbers continue to grow, it's going to be more meaningful for the product. You'll see some good momentum build.

Okay, great. Congratulations on the progress. I know you guys have been working hard at it. And thank you for taking the questions. You're welcome. Thank you.

Thank you. Ladies and gentlemen, that was the last question. The conference has now concluded. Thank you for joining in. You may now disconnect.