Journey Medical Corporation

Ladies and gentlemen, thank you for standing by. Good afternoon and welcome to the Journey Medical's fourth quarter and fiscal year 2022 financial results and corporate update conference call. At this time, all participants are in the listen-only mode. Should you need assistance, please signal conference questions 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 can 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 now like to turn the call over to Matt Blasey of CoreIR, the company's investor relations firm. Please go ahead, sir.

Thank you, Anthony. Good afternoon, and thank you for participating in today's conference call. Joining from Journey Medical Corporation's leadership team are Claude Murawi, co-founder, president and chief executive officer, Joe Benesch, interim chief financial officer, Ramzi Aloush, general counsel, and Dr. Srini Sigidi, vice president of research and development. 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 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 contents of this call contain time-sensitive information that is accurate only as of today, March 29, 2023. Except as required by law, Journey Medical disclaims any obligations 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 Marawi, co-founder, president, and chief executive officer of Journey Medical.

Thanks, Matt. Good afternoon, and thanks to everyone for joining our fourth quarter and fiscal year 2022 conference call. We are pleased with many of our accomplishments during our first full year as a public company. And although we faced a number of challenges, we look forward to continued revenue growth in 2023. We are also approaching significant clinical milestones for our Phase III clinical trial evaluating DFD29. We have achieved 100% enrollment in the clinical trials as of the beginning of January 2023. with an expected top-line data readout in the second quarter of 2023, which we expect to be followed by an NDA filing in the second half of 2023. In addition, we recently announced completion of treatment in our Phase I clinical trial assessing the impact of DFD29 on the microbial flora with no significant safety issues noted during the study. We also anticipate launching an additional product in the second half of 2023, which will be Journey Medical's ninth marketed dermatology product. Looking back on 2022, Journey reported record revenues for the fiscal year of $73.7 million, which is a 17% increase from the revenue reported for the prior year of $63.1 million. Fourth quarter revenue was $16 million, which was $1.6 million less than the fourth quarter of 2021. In addition to the macroeconomic challenges faced by our sector, which limited our growth throughout 2022, TargetOx revenue for the year declined by $14.4 million when compared against the full year 2021. reflecting the continued impact of generic competition for the brand. However, this shortfall was offset by increases of Cubrexa, Accutane, Amzik, and Zilxy, which represented 77% of our year-to-date revenue. During 2022, we achieved some noteworthy highlights. At the beginning of the year, we expanded our dermatologic footprint with the acquisition of Amzik and Xilxi from Vine Therapeutics. Amzik and Xilxi are two unique topical products that complement our currently marketed prescription-based products, including Cubrexa. We also executed settlement agreements with Patagas to enforce the patents covering Cubrexa, Amzik, and Xilxi, which will help solidify the exclusivity of Cubrexa, Amzik, and Xilxi and provide a clear pathway to grow the sales of these patented products for years to come. Additionally, we settled the Kebrexa patent infringement matter that we filed against Teva in December of 2022. In January 22, we established our ex-US presence upon receipt of notice from our exclusive out-licensing partner in Japan, Maruho Limited, that Rapafort Wipes 2.5%, the Japanese equivalent of Q-Brexa, was approved for the treatment of primary axillary hyperhidrosis in Japan. This approval triggered a net $2.5 million milestone payment to us pursuant to the terms of the asset purchase agreement between Journey and Dermira for Q-Brexa. On the product development front, As previously mentioned, we have achieved 100% enrollment in our Phase III DFD29 clinical trial as of January 2023, with top-line data readout expected in the second quarter of 2023 and an expected NDA filing in the second half of 2023. To reiterate, the market opportunity for DFD29 is immense. with an estimated 16 million people in the U.S. suffering from rosacea and as many as 415 million worldwide. The rosacea market had 3.6 million prescriptions in 2022 and 3.4 million prescriptions in 2021, according to Symphony data. The phase two trial results for DFD29 demonstrated nearly double the efficacy overall ratio, which is the current market leader and standard of care, with respect to both co-primary endpoints in the study, which were, first, the reduction in total inflammatory lesion count, and second, investigator global assessment success. Horatio had approximately $300 million in prescription sales in 2022, according to Symphony data. Once approved and launched, we believe DFD29 will be able to achieve net sales in excess of $100 million annually, which, to put in context, would exceed Journey's total revenue of $73.7 million in fiscal year 2022. With the anticipated continued growth and momentum of Cubrexa, Accutane, Amzeek, and Zilxy, the expected launch of our anti-itch product later this year, and ongoing efforts to maximize internal efficiencies, we expect our commercial operations to return to profitability. Through the combination of revenue growth and expense optimization, our goal for Journey is to be non-GAAP adjusted EBITDA positive for fiscal 2023. Our strategic focus on the continued expansion of our product portfolio through in-licensing, acquiring, and developing novel dermatology products and future product candidates combined with our industry-leading sales force, continues to be the cornerstone of our future growth. With that, I'll now turn the call over to Joe, who will review our financial results for the fourth quarter and full year.