Journey Medical Corporation

Ladies and gentlemen, thank you for standing by. Good afternoon and welcome to the Journey Medical's second 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 start 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 of this call are advised that the audio of this 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 like now to turn the call over to Jules Abram of Courier, the company's investor relations firm. Please go ahead, sir.

Thank you, Carolyn. Good afternoon, everyone, and thank you for participating in today's conference call. Joining me from Journey Medical Corporation's leadership today are Claude Merawi, co-founder, president, and chief executive officer, Ernie DiPalantonio, chief financial officer, Ramzi Aloush, General Counsel, and Dr. Srinivas Sigidi, Vice President of Clinical Development and Medical Affairs, who will also be joining us for the question and answer session. During this call management, we'll 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 8-K filed with the SEC today, and the company's press release that accompanies this call, particularly the cautionary statements within. 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 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 contents of this call contain time-sensitive information that is accurate only as of today, August 9, 2022. 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's now my pleasure to turn the call over to Claude Morawi, co-founder, resident, and chief executive officer. Claude. Thanks, Jules.

Good afternoon, and thanks to everyone for joining our second quarter 2022 conference call. Journey continued to show solid growth in the second quarter of 2022 despite the challenge of supply chain delays during the quarter that reduced the availability of product for sale. However, this was a temporary setback as these delays were resolved in July and we feel confident that we will recover a significant portion of these lost revenues over the remainder of the year. Our flagship products, Cubrexa and Accutane, continue to gain momentum in the market and the additional contributions of our recently acquired products, Hamzeek and Zilxy. coupled with the launch of one additional prescription product in the second half of this year, positions us for yet another year of record revenue growth. We achieved net sales of $18.3 million, an increase of 20% when compared to the second quarter of 2021, which was driven primarily by the strong performance of Cubrexa and Accutane. We began selling these products in the second quarter of 2021, which achieved combined net sales of 6.5 million versus this quarter's combined net sales of 11.3 million, which represents a growth rate of 74%. This growth was slightly offset by product shortages in the quarter for Zemino and Exel Derm. as well as the continued generic competition for TargetOx, which was $3 million less than the prior year's period. Looking forward, we will continue executing our strategy of supporting and growing our newly acquired and launched products, Cubrexa, Accutane, Amzeek, and Zilxy. The second quarter was also impacted by an update to our managed care claim estimates. particularly for the recently acquired assets of Amzeek and Zilxy, as the actual managed care claim experience emerged greater than expected. On the development front, we continue to be excited about the ongoing progress of our pivotal Phase III clinical program for DFD29, which is being evaluated for the treatment of papulopustular rosacea in adults. Patient enrollment is tracking according to plan, and with the recent addition of nine sites this quarter, we have already achieved and reached 45% of our targeted enrollment of 640 patients in the two trials. We anticipate announcing top line data from the trials in the first half of 2023, with the submission of our new drug application in the second half of 2023. To reiterate, the market opportunity for DFD29 is immense, as an estimated 16 million patients in the U.S. suffer from rosacea, which equated to an estimated 1 billion in prescription sales in 2021. The Phase II clinical data for DFD29 demonstrated nearly double the efficacy over Oratia, the current market leader, with 340 million prescription sales in 2021. We estimate that our peak net sales for this product will be in excess of $100 million. While we face some unforeseen challenges this quarter, we are confident that these issues have been resolved and we look forward to another record year of growth in sales. The foundation of our future growth continues to be the expansion of our product portfolio through in-licensing and acquiring of commercial and late-stage development assets that will allow us to continue to leverage our industry-leading sales force. With that, I'll now turn the call over to Ernie, our Chief Financial Officer, who will review our financial results for the second quarter.