Journey Medical Corporation

Ladies and gentlemen, thank you for standing by. Good afternoon, and welcome to the Journey Medical first quarter 2022 financial results and corporate update conference call. At this time, all participants are in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Participants on this call are advised that the audio of the conference call is being broadcast live over the internet and is also being recorded for playback purposes. A webcast replay of the 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 over to Jules Abraham of Core IR, the company's investor relations firm. Please go ahead, sir.

Thank you. Good afternoon, and thank you, everyone, for participating in today's conference call. Joining me today from Journey Medical Corporation's leadership team are Claude Morali, co-founder, president, and chief executive officer, Ernie DiPalantonio, chief financial officer, and Ramzi Aloush, general counsel, who will be joining for the question and answer session. During this call, management will be making forward-looking statements, including statements that address Journey Medical's expectations for future performance or operational results. 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 8K filed with the SEC today, and the company's press release that accompanies this call, particularly the cautionary statements with that. 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, nor as a substitute for results prepared in accordance with GAAP. For reconciliation of this, this non-GAAP financial measure for net loss, its most direct 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's accurate only as of today, May 10, 2022, and except as required by law, journey medical, this claims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. It's now my pleasure to turn the call over to Claude Morawi, co-founder, president, and chief executive officer. Claude.

Thanks, Jules. Good afternoon, and thanks to everyone for joining our first quarter 2022 conference call. The journey has made notable progress on several fronts during the first quarter, which we believe positions the company for yet another year of record growth and results. With the acquisitions of two Vine Therapeutics FDA-approved products, Amzik and Zilxy, our portfolio has now grown to nine marketed prescription dermatology products, and we anticipate launching one additional prescription product in the second half of 2022. The continued expansion of our product portfolio through in-licensing, acquiring, and developing new dermatology products combined with our industry-leading sales force is the foundation for our future growth. Net product revenues of 20.8 million, an increase of 94% when compared to the first quarter of 2021. was driven primarily by strong results for Cubrexa and Accutane, with combined revenue of $12.3 million. These products were both launched during the first half of 2021. In addition, we acquired and launched two new prescription dermatology products, Amzeek and Zilxy, which combined contributed an incremental $4.2 million in revenues for the quarter. We expect to see continued momentum with these products in 2022. In January, our exclusive licensing partner in Japan, Maruho, announced that Japan's Ministry of Health, Labor, and Welfare approved Rappaport Wipes 2.5%, the Japanese equivalent of Kubrixa. for the treatment of primary axillary hyperhidrosis. This approval triggered a net milestone payment of $2.5 million earned by Journey Medical when included in our net revenue for the first quarter. This gives us a total of 23.3 million or an increase of 117% over the first quarter of 2021. These excellent results are representative of our strategy to acquire, license, and transform Journey Medical into a fully integrated and leading dermatology company, including R&D that will manage its overall product lifecycle. While our new products continue to build momentum and growth, we expect that TargetOx, which has seen rising generic competition since Q4 of 2021, may encounter future price competition and a decline in growth. Importantly, our commercial operations continue to generate positive cash flow with non-GAAP adjusted EBITDA of $2.3 million in the quarter after adjusting for R&D expenses related to the development of DFD 29. This compares favorably to the 1.2 million of reported adjusted EBITDA in the first quarter of 2021. During the first quarter, we dosed our first patient in our pivotal Phase III clinical program for DFD29, which is being evaluated for the treatment of papulopustular rosacea. This is a significant milestone for our company and our expectation is to reach 640 patients in the trial by the end of this year. The market opportunity for DFD29 is significant. As an estimated 16 million patients suffer from rosacea, which correlated to an estimated 1 billion in TRX sales in 2021. Phase II data of DFD29 demonstrated nearly double the efficacy over Oratia, the current market leader with 340 million TRX sales in 2021. As you can see, we are very excited about the opportunities already in our pipeline, and we will continue to look for additional products to develop and acquire. We believe our financial foundation is strong as we ended the quarter with 41.3 million in cash. In addition to this balance, we expanded our credit agreement, allowing us to borrow up to $30 million with EastWest Bank, of which $15 million remains available. Q1 was Journey's first full quarter as a public company, and I am very pleased to say that we are executing on the strategic growth plan we have presented to shareholders since our IPO. With the continued momentum of our new products and another product launch scheduled in the second half of this year, and the financial flexibility to make accretive acquisitions, we believe that Journey Medical is well positioned for continued growth in 2022 and beyond. With that, I'll now turn it over to Ernie, who will review our financial results for the first quarter.