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Journey Medical Corp (DERM)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 printed soft top-line but a large bottom-line upside: revenue of $12.62M*, down sequentially and year over year, versus S&P Global consensus of $14.21M*, while diluted EPS was approximately $0.07*, dramatically above the consensus loss of $(0.35)*; the EPS surprise was aided by a one-time “loss recovery” realized in December and recognized in 2024 financials .
  • Emrosi (40 mg minocycline MR) received FDA approval in November; initial distribution began, first prescriptions were filled, and payer coverage had reached ~20% of commercial lives and ~4% of Medicare lives by the March 26 call; full promotion targeted for April 2025 .
  • Management met all FY24 guidance ranges (Product revenue $55.1M, SG&A $40.2M, R&D $9.9M) and ended the year with $20.3M cash, positioning for the Emrosi launch ramp .
  • 2025 guidance was deferred until after early launch data and further payer contracting; near-term stock catalysts include payer coverage wins, prescription velocity, additional Emrosi publications, and potential ex-U.S. out-licensing progress .

What Went Well and What Went Wrong

What Went Well

  • Emrosi approval and launch readiness: “We delivered a solid performance in 2024…received first cycle FDA approval for Emrosi…we have begun distribution…first prescriptions have been dispensed…with full promotion expected in April 2025.”
  • Early market access and KOL engagement: Coverage reached ~20% of 188M commercial lives and ~4% of 58M Medicare lives; AAD engagement was strong, with interest in head-to-head superiority versus Oracea and favorable safety/tolerability profile .
  • FY24 execution: Met all 2024 guidance ranges; cash of $20.3M at 12/31/24 supports launch; Adjusted EBITDA positive for FY24 despite R&D and launch investments .

What Went Wrong

  • Top-line softness in Q4 and miss vs revenue consensus: Q4 revenue of $12.62M* trailed the $14.21M* S&P Global consensus; sequential down from Q3 ($14.63M) and YoY decline vs Q4 2023 ($15.26M). Drivers across 2024 included higher rebates and lower unit volumes in legacy products .
  • Quality of EPS beat: Q4’s positive EPS was supported by a one-time “loss recovery” booked in 2024 (cash received in December), and capitalization of a $15M approval milestone to intangibles (to be amortized), limiting read-through to core earnings power .
  • Guidance and reimbursement visibility still evolving: No 2025 guidance; coverage remains in early innings with peak coverage expected 12–18 months post-launch and some step edits likely through generic oral agents .

Financial Results

Quarterly performance vs prior periods

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$14.86 $14.63 $12.62*
Diluted EPS ($)$(0.17) $(0.12) $0.07*

Notes: Values with an asterisk (*) are retrieved from S&P Global.

Q4 2024 actual vs S&P Global consensus

MetricActualConsensusSurprise
Revenue ($USD Millions)$12.62*$14.21*Miss
Primary EPS ($)$0.07*$(0.35)*Beat

Notes: Values with an asterisk (*) are retrieved from S&P Global.

Additional FY context (reported with Q4 timing)

  • FY24 results and balance sheet: Product revenue $55.1M; SG&A $40.2M; R&D $9.9M; cash $20.3M at 12/31/24; Adjusted EBITDA $0.8M for FY24 .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Product revenue, net ($M)FY 2024$55–$60$55.1 (actual)Met
SG&A ($M)FY 2024$39–$42$40.2 (actual)Met
R&D ($M)FY 2024$9–$10$9.9 (actual)Met
Company guidanceFY 2025—Not provided (to be given later in 2025 after initial launch data)Deferred

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3 2024)Current Period (Q4 2024)Trend
Emrosi approval/launchQ2: PDUFA 11/4; launch late Q1/early Q2 2025; strong prescriber/payer survey interest . Q3: FDA approval achieved; launch expected late Q1/early Q2 2025 .Approved (Nov 2024), distribution started, first Rx dispensed; full promotion April 2025 .Execution moving from planning to launch.
Payer coverageQ2: Coverage target ~200M lives; 6–12+ months to broad coverage per survey .~20% commercial, ~4% Medicare covered at call; peak coverage 12–18 months post-launch .Early access in place; timeline extended to 12–18 months.
Base business performanceQ2: QBREXZA/Accutane growth and share gains; core brands >90% revenue . Q3: QBREXZA +29% YoY; gross margin +600 bps YoY .QBREXZA “continues to perform”; Accutane stabilized despite new competition .Core stable; legacy erosion continues to be a headwind.
SG&A/cost disciplineQ2: Right-sized; SG&A ~$9M/qtr run-rate . Q3: SG&A higher on pre-launch .FY24 SG&A came in within guide; no big 2025 SG&A ramp expected .Controlled, with launch spend managed.
Publications/clinicalQ2: Differentiated Phase 3 incl. erythema; plan for strong positioning . Q3: PK data vs doxycycline presented .JAMA Dermatology Phase 3 publication timed to launch; two more publications anticipated .Strengthening scientific narrative.
Business development (ex-U.S.)Q2: Out-licensing a priority (e.g., Maruho deal precedent) .Targeting out-licensing of Emrosi; mgmt sizes peak sales at ~$200M U.S./$100M international .BD optionality highlighted alongside launch.

Management Commentary

  • “We delivered a solid performance in 2024, meeting all of our financial guidance ranges…we have begun distribution of Emrosi, [and] first prescriptions have been dispensed…with full promotion expected in April 2025.”
  • “We believe that Journey is well positioned ahead of the [Emrosi] launch…IMROCI…entering [a] $1 billion+ treatment category with superior Phase 3 clinical results…[and] potential to generate significant operating leverage.”
  • “We…are well prepared to execute on a robust launch in early April…now have coverage of approximately 20% of the 188 million commercial lives and 4% of the 58 million Medicare lives.”
  • “We believe that IMROCI will become a major growth driver…with potential to achieve peak annual sales of an estimated $200 million in the United States and $100 million internationally.”

Q&A Highlights

  • Reimbursement trajectory: Peak coverage targeted 12–18 months post-launch; mix includes some unrestricted access but also step edits (typically through generic oral agents like minocycline/doxycycline) .
  • Early revenue cadence: Expect minimal Q1 2025 revenue contribution; “meaningful revenue” to begin in Q2 2025 as coverage, access, and promotion scale .
  • Accounting clarifications: ~$4.553M “loss recovery” was received in December and flowed through P&L; the $15M Emrosi approval milestone was capitalized to intangible assets and will be amortized through 02/2039 .
  • Base portfolio outlook: QBREXZA holding strong with script growth; Accutane stabilized after competitive entries; legacy product erosion persists .
  • Capital allocation and SG&A: Cash viewed as sufficient for launch; no major SG&A ramp expected near term beyond launch marketing .

Estimates Context

  • Q4 2024 results vs consensus (S&P Global): Revenue $12.62M* vs $14.21M*; Primary EPS $0.07* vs $(0.35); 4 estimates on both revenue and EPS.
  • Forward consensus snapshot (quarterly, S&P Global): Q3 2025 revenue $18.79M* (actual $17.63M*), EPS $(0.04); Q4 2025 revenue $19.34M, EPS $(0.05); Q1 2026 revenue $20.42M, EPS $(0.03); Q2 2026 revenue $24.88M, EPS $0.05*. Target price consensus $13.50* (4 estimates).
    Notes: Values with an asterisk (    ) are retrieved from S&P Global.

Where estimates may adjust:

  • EPS upgrades likely for Q4 2024 “actual” in models due to non-recurring loss recovery; forward EPS may still hinge on Emrosi uptake and coverage ramp phasing .
  • Revenue trajectory for 2025/2026 may be revised with observed Rx momentum, formulary wins, and Medicare coverage expansion cadence .

Key Takeaways for Investors

  • Emrosi is approved, shipping, and entering full promotion in April; early coverage (~20% commercial/4% Medicare) and KOL interest de-risk launch mechanics, but broad access will build over 12–18 months .
  • Q4 revenue softness and a revenue miss versus consensus were offset by a large EPS beat driven by a non-core loss recovery; watch core operating trends as the launch scales .
  • FY24 execution (guidance met; cash $20.3M) provides runway; management expects no major SG&A step-up beyond launch activities .
  • Near-term stock catalysts: quarterly payer coverage updates, Emrosi TRx ramp and unique prescriber counts, additional JAMA/peer-reviewed publications, and any ex-U.S. out-licensing progress .
  • Base portfolio (QBREXZA/Accutane) offers stability but is unlikely to be the growth engine; the thesis hinges on Emrosi’s share gains in a $1B+ oral rosacea category .
  • Expect limited Q1 2025 Emrosi revenue, with meaningful contribution beginning Q2; model phasing accordingly .
  • Risk checks: step edits and reimbursement hurdles; timing to peak coverage; execution on access programs; and competitive responses (e.g., branded/generic doxycycline dynamics) .

Appendices

Additional Q4 2024 Context vs YoY and Sequential

MetricQ4 2023Q3 2024Q4 2024
Revenue ($USD Millions)$15.26*$14.63 $12.62*
Diluted EPS ($)$(0.12)*$(0.12) $0.07*

Notes: Values with an asterisk (*) are retrieved from S&P Global.

FY24 Guidance vs Actual (reported with Q4 timing)

MetricFY 2024 GuidanceFY 2024 Actual
Product revenue, net ($M)$55–$60$55.1
SG&A ($M)$39–$42$40.2
R&D ($M)$9–$10$9.9

Launch/Market Access KPIs (as of March 26, 2025 call)

KPIStatus
Coverage – Commercial~20% of 188M lives
Coverage – Medicare~4% of 58M lives
Launch timingFull promotion in April 2025; meaningful revenue expected in Q2 2025
PublicationsJAMA Dermatology Phase 3 paper published; two additional publications expected in 2025

Disclosures:

  • Values with an asterisk (*) are retrieved from S&P Global.