Journey Medical Corporation

Ladies and gentlemen, thank you for standing by. Good afternoon and welcome to Journey Medical's first quarter 2023 financial results and corporate update conference call. At this time, all participants are in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. 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 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 Matt Blasey of Core IR, the company's investor relations firm. Please go ahead, sir.

Good afternoon, and thank you for participating in today's conference call. Joining me from Journey Medical Corporation's leadership team are Claude Merawi, co-founder, president, and chief executive officer, and Joseph Benesch, Interim Chief Financial Officer. 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 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 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, May 22, 2023. 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 Marawi, co-founder, president, and chief executive officer of Journey Medical.

Thanks, Matt. Good afternoon, and thanks to everyone for joining our first quarter 2023 conference call. Since Journey's inception, we have made significant investments and have committed to enhancing our commercial product portfolio and infrastructure to position ourselves for future revenue growth. For the first quarter of 2023, our total revenues were $12.2 million, which is lower than expected. Despite higher unit sales volumes and gross sales from period to period for Accutane, Amzeek, Xiloxi, and ExelDerm, our net product revenues for first quarter were unfavorably impacted by higher gross-to-net adjustments and lower unit sales volumes for Cubrexa, Targetox, and Ximil. However, in April, we have already seen a bounce back in our product net revenues and lower gross to net adjustments from the isolated occurrences from the first quarter, particularly for Cubrexa. For the remainder of 2023, we plan on achieving major clinical milestones in our Phase III clinical trials evaluating DFD29 for the treatment of papulopustular rosacea. During the first quarter of 2023, we made significant progress in achieving our goal of commercializing DFD29. We achieved 100% enrollment in the clinical trials in January 2023 and reached the last patient out milestone in May of 2023. We expect a top-line data readout from the DFD29 Phase III clinical trials in June of 2023 and anticipate filing a new drug application in the second half of 2023. In addition, we announced completion of treatment in our phase one clinical trial, assessing the impact of DFD29 on the microbial flora with no significant safety issues noted during the study. 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 continues to grow and had 3.6 million prescriptions in 2022, up from 3.4 million prescriptions in 2021, according to Symphony data. The phase two trial results for DFD29 demonstrated nearly double the efficacy over Oratia, 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 of inflammatory lesion count, and second, the investigator global assessment success. Oratia had approximately 300 million in prescription sales in 2022, according to Symphony data. Once approved and launched, we believe that DFD29 will be able to achieve U.S. net sales in excess of $100 million annually, which, to put in context, would eclipse Journey's total revenue of $73.7 million in fiscal year 2022. With anticipated sequential revenue growth beginning in the second quarter, and ongoing efforts to maximize internal efficiencies, we expect our commercial operations to return to operating 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 plan on reducing SG&A is currently on track to exceed $12 million. beating our previous guidance of 5 to 7 million. 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 first quarter.