Fortress Biotech, Inc. (FBIO) Q2 2026 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. Good afternoon, and welcome to Journeys Medical's Second Quarter 2026 Financial Results and Corporate Update Conference Call. [Operator Instructions] 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 1 hour after the end of the call for approximately 30 days. I would now like to turn the call over to Jaclyn Jaffe, the company's Senior Director of Corporate Operations. Please go ahead, Jaclyn.

Good afternoon, and thank you for participating in today's conference call. Joining me from Journey Medical's leadership team are Claude Maraoui, Co-Founder, President and Chief Executive Officer; Joseph Benesch, Chief Financial Officer; and Ramsey Alloush, Chief Operating Officer and General Counsel, who will participate in the Q&A portion of the call. 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 the receipt of regulatory approvals. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For 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 content of this call contains time-sensitive information that is accurate only as of today, Wednesday, August 12, 2026. 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 Maraoui, Co-Founder, President and Chief Executive Officer of Journey Medical.

Thank you, Jaclyn, and good afternoon to everyone on the call today. We continue to make solid progress in our business in the second quarter as we delivered strong revenue growth and improved profitability during the period. Emrosi revenues were $8.1 million in Q2, up significantly year-over-year and sequentially from the first quarter on higher prescription volume, improving payer reimbursement and a significant step-up in the number of dermatology writers prescribing the brand. These metrics not only trended positively, but also showed acceleration, and we expect this progress to continue in the coming quarters. Our total net product revenues for the second quarter rose by 23% year-over-year, while operating expenses increased by less than 1% compared to Q2 of last year. We remain focused on delivering strong top line growth and leveraging our proven dermatology commercial infrastructure. We are executing on these initiatives and as a result, we generated positive EBITDA in the second quarter. With this performance, we continue to believe that 2026 will be a breakout year for Journey Medical with respect to both revenue growth and profitability. Emrosi prescriptions totaled approximately 36,000 in the second quarter, up from about 30,000 total prescriptions in the first quarter of this year. This represents approximately 20% sequential quarterly growth for the product, which is up from the 11% sequential quarterly prescription growth seen last quarter. Importantly, the growth is being driven by new prescriptions in addition to refills with successive increases in NRxs on a monthly basis. In June, we saw a strong increase with over 5,300 new prescriptions filled, up from an average of 4,700 NRxs in the preceding 3 months. This was an all-time monthly high for the product. We reported last quarter that approximately 3,700 unique dermatology prescribers had written a prescription of Emrosi. Today, I am pleased to report that there are now over 4,500 unique prescribers writing for the brand. This is more than a 40% increase in Emrosi prescribers from the 3,200 prescribers that we had at the end of 2025. We believe that these accelerating trends are encouraging and demonstrate that as more prescribers and patients gain experience with Emrosi, product loyalty will increase and the franchise value will continue to compound. As we had planned, we hired an additional 5 dermatology sales professionals into our commercial organization during the second quarter. These experienced representatives joined the company in late July and were recently deployed into the field. The time to fill these relatively large sales territories couldn't be better, and we expect that contributions from these new representatives will add to our already strong market penetration efforts. With over 15,000 dermatologists in the United States, there is significant room for us to grow our base of prescribers. We are increasing our peer-to-peer marketing activities, and we remain active at key dermatology medical conferences to expand awareness of Emrosi superior clinical benefits in the treatment of rosacea. The superior head-to-head efficacy results demonstrated in our Phase III clinical trials comparing Emrosi to the only other branded oral rosacea treatment, Oracea, continue to be central in driving adoption throughout the dermatology community. Emrosi placebo-like safety and tolerability profile is proving to be durable, which is another important factor in recruiting new prescribers. From the patient perspective, Emrosi rapid onset of action and superior skin clearing effects compared to Oracea are key and real-world patient experiences are supporting a growing base of loyal end users. Helping us to further broaden awareness of Emrosi in the market, we expect to announce new journal publications for the product in the coming quarters, and we believe that Emrosi has potential to be incorporated into the consensus treatment guidelines for rosacea. The payer community is also taking note of Emrosi's early success in the market, and we are continuing to make progress with the downstream health plans. Importantly, the calculated average selling price for Emrosi based on prescriptions increased in Q2 over Q1. After increasing previously in Q1 over Q4, as reimbursed prescriptions are becoming an increasing part of the business mix. As Emrosi's formulary status improves, we believe that our ASP will continue to rise. Earlier this year, we completed our agreements with all the top 3 GPOs in the nation, bringing plan access for Emrosi to over 169 million of the 192 million covered commercial lives in the U.S. With those agreements in place, our focus is to pursue high-quality formulary coverage with the downstream health plans, meaning a single step edit or better. We made good progress in the second quarter as the percentage of commercial lives with high-quality formulary coverage increased from 34% in Q1 to approximately 38% currently. Supporting this positive trend, a large national health plan placed Emrosi on its formulary in early August, and we expect to see traction from that addition this quarter. And now I will turn the call over to our CFO, Joe Benesch, to review our second quarter financial results.

Thank you, Claude, and good afternoon to everyone on the call. I'll now review our financial results for the second quarter of 2026. Total revenue for the quarter was $18.5 million compared to $15 million in the second quarter of 2025, reflecting a 23% increase from period to period. This growth was primarily driven by momentum from continued commercial demand for Emrosi which generated $8.1 million in net revenue for the quarter. Turning to gross margin. We reported a 67% margin for the second quarter of 2026, consistent with the prior year quarter. SG&A expenses were $10.9 million for the quarter compared to $11.9 million in the second quarter of 2025. The decrease was primarily due to the impact of launch-related spending for Emrosi in the prior year quarter. Our GAAP net loss narrowed to $300,000 or $0.01 per share basic and diluted compared to a net loss of $3.8 million or $0.16 per share basic and diluted for 2Q 2025. On a non-GAAP basis, both EBITDA and adjusted EBITDA were positive for the 3- and 6-month periods ended June 30, 2026. EBITDA reflected net income of $1.4 million and $1.1 million for the second quarter and the 6-month period ended June 30, 2026, respectively, compared to net losses of $1.9 million and $4.1 million for the prior year quarter and the prior year-to-date period, respectively. Adjusted EBITDA, which is generally our EBITDA number less noncash share-based compensation expense, reflected net income of $2.9 million and $3.5 million for the second quarter and the 6-month period ended June 30, 2026, respectively, compared to net losses of $500,000 and $1.4 million for the prior year quarter and the prior year-to-date period, respectively. We ended the quarter with $25.6 million in cash compared to $24.1 million as of December 31, 2025. In summary, our second quarter results reflect the continued execution of our plan to become sustainably EBITDA positive through revenue growth, margin improvement and expense optimization, which we intend to remain focused on. Thank you very much. I will now turn the call back over to Claude.

Thank you, Joe. The second quarter was another productive period for Journey Medical with clear progress made on our business objectives. We are delivering on our goal to generate positive EBITDA for the remainder of the year and with our net product sales growing significantly faster than our expenses. We are making solid progress toward becoming sustainably earnings and cash flow positive. Emrosi continues to gain market share in the rosacea treatment segment with prescription growth accelerating in Q2 and our base of new prescribers increasing at an impressive rate. With total prescriptions growing by 20% sequentially from the first quarter of this year, we believe that the promise of Emrosi is beginning to be realized broadly in the market. Importantly, patient experiences are validating that the superior benefits in our Phase III clinical trials are highly clinically meaningful. We remain focused on achieving high prescriber and patient satisfaction rates as this is the cornerstone of our efforts to build a strong base and deliver compounding growth for the brand. With market momentum building, our payer coverage continues to improve as well. The trends of higher ASPs since the beginning of the year is a reflection of that progress. Emrosi was added to the formulary of a major national health plan earlier this month and with other payer initiatives in various stages of progress, we continue to expect our ASP to improve throughout the back half of the year, fueling Emrosi sales growth. With our business moving in the right direction, we believe it was the perfect time to expand our commercial organization, and we did so by recently hiring and deploying 5 new sales professionals to fill new territories. We also executed on launching a niche dermatology product late in the second quarter called Eurax Cream. Our new sales professionals and this new addition to our product lineup are expected to augment our efforts to grow company revenues with Emrosi remaining as high priority detail in the Journey portfolio. With regards to business development activities, we continue to explore out-licensing opportunities for the commercial rights to our patented products in non-U.S. territories. in addition to the potential to in-license assets to expand our dermatology product offering and increase value for the company. We continue to expect that 2026 will be a breakout year for Journey Medical, and we will remain committed to delivering on our core objectives to improve the lives of patients, offer innovative treatment options to dermatology health care providers and to create long-term value for our shareholders. Thank you. Operator, we are now ready to open the lines for Q&A.

[Operator Instructions] The first question today comes from Scott Henry with Alliance Global Partners.

Claude, you gave a lot of color on ASP. I'm just going to ask a couple of follow-up questions. So bear with me. Were there any inventory movements in the quarter that can sometimes inflate or even deflate that ASP on a specific quarter?

None. No.

Okay. So I mean, oftentimes, I'll see this where the ASP is drifting up, but it's not a straight line, but you sound pretty confident that we could get -- because this was about a 10% boost over first quarter, which is fantastic. But it sounds like you're looking for sequential gains in the next couple of quarters as well. Is that the correct interpretation?

That's correct. I think you'll see good progress from -- really from Q4 last year, Q1 to Q2, and our expectation is that we'll continue to gain better ASPs as more reimbursement from our payer strategy gets implemented and more reimbursements happening through the insurance companies.

Okay. Great. And I don't know if you can speak to the season -- I mean the Q2 was great, and you had some significant gains, but it's kind of plateaued for the past couple of weeks around 3,000 a week. Is there any seasonality where we may get a boost coming out of the summer months? Any thoughts on that?

Yes. It's a good question. Fair question. As I'm looking at market data and just looking in the past 6 quarters, 7 quarters of the total market, pretty consistent throughout. You would anticipate from summer going into winter with the cold weather coming into play in the next several months that there's some changes. It's minimal, and I would not put a lot of seasonality to it. Now we've had good growth consistent throughout the whole year. You'll see some weeks, Scott, that there's maybe several weeks that are at the same level and then we get a bump up. And that's what we've seen with this brand on a consistent basis as we've launched it here in 2026. So we just got Symphony numbers, for example, for July. So we had about 13,000 prescriptions for Emrosi in June, and now we have approximately 14,000. So we've increased it in a good fashion. New prescriptions are up. The trends are very strong. We had about 5,300 new prescriptions. The last 3 months preceding that was about 4,700. So the trends are very positive. And in my opening remarks, we talked about unique prescribers. I will tell you, from closing out 2025, we had about 3,200 prescribers. We moved that up to approximately 3,700 prescribers ending Q1, and we're close to 4,500-plus prescribers right now. So more physicians are jumping on, and it's really looking positive.

Okay. So some great momentum going there. Just shifting gears, a couple of the other products. QBREXZA was down a little bit in the quarter. That's kind of the second product that really matters here now. How do you see that product? Is that a flattish product? Or should we think about that as a declining product? Just wanted to hear your thoughts on the big picture long-term view on QBREXZA in these next 4 quarters to 6 quarters?

Yes, sure. Now QBREXZA is a fantastic product, very meaningful to the company. Right now, it's second out of the bag in terms of promotion with our field sales force. Obviously, Emrosi's first out of the bag. And we have great contribution from QBREXZA, very consistent over the time that we've had it. It brings in roughly about $25 million to $26 million. You'll see some up and down quarters with the brand. And this past one was a little bit light. I would contribute that to probably a few things. One is patient mix, payer mix, right? We don't control that blend that's happening during the quarter. So that's certainly a big part of it. I think you'll have some residual effects from insurance deductible resets from the beginning of the year that leak into Q2. We are going into a very good strong season for hyperhidrosis, the hotter summer months. And again, we had an extremely strong month of June. We hit over 14,000-plus prescriptions, about 14,500 to be exact. As I mentioned, with Emrosi, we just got the July numbers, and we're just shy of the 15,000 mark. So demand is increasing. Patient satisfaction with the brand is extremely high. And it's just very convenient. You can use this brand any time of the day or evening. There's no restrictions. And the simple use of it, Scott, makes it very friendly. The fact there's no aluminum containing ingredients in the brand makes it very appealing to a lot of people. So the brand is growing, and we see great contribution. So I would expect with consistency that you've seen over the last couple of years with this.

The next question comes from Mayank Mamtani with B. Riley Securities.

Maybe on the operating leverage, if I could start there. Your SG&A stayed unchanged while obviously, you're reporting on very strong commercial KPIs. I was wondering in second half with all the corporate developments you've talked about, including niche launch, should we expect a step-up in SG&A starting with 3Q? And I have a few follow-ups after that?

Joe, would you like to take that one?

Yes, sure. So Mayank, the answer is yes, somewhat, right? You're not going to see any surprises, but we do have some marketing programs, some advertising programs that will probably implement the third, fourth quarter. But overall, I expect to see the percentage of revenue from SG&A pretty consistent.

Okay. And then, Claude, you talked about the major national plan added in early August. I was obviously wondering how that impacts net ASP in second half or what you've seen already relative to this nice improvement you've seen in first and second quarter. And I was also wondering on the refill rate that continues to climb up. Is there like a year-end number that is in your mind, you can see kind of how trends are telling you? And is there any like how your unique prescriber number also is moving, how many physicians are writing Emrosi? Is there maybe a correlation between these 2 big KPIs you're tracking?

Sure. I'll start with the latter 2 parts of your question there. Refill rates are very important. We have been very committed on being on message in terms of our Phase III clinical trials. Our commercial team is executing, talking about 4-month trials. And I think it's resonating extremely well with our prescribers. So if they are prescribing Emrosi, which, again, we continue to see more and more prescribers each quarter, and then depending on how they are giving the refills, if it's 1 prescription plus 3 refills, that's according to our Phase III clinical trials. But dermatologists are artists, patients come in and present their rosacea in different parts, phases to the physicians. So they're going to vary on how many refills they get and what they're comfortable with. So that's going to go up and down. And as we get these new prescribers on board, once they get those patients back, they're going to get more and more comfortable with the brand. So refill rates are important. The month of July that just came in, again, an all-time high with 14,000 prescriptions. Our refill rate for that particular month, for example, is at 1.5 plus the regular fill. So you're at about 2.5 right now, if you think about it. But you can also see a surge in new prescriptions. As I mentioned, we were averaging about 4,700 new prescriptions a month. Now we moved that up to about 5,300 prescriptions. So the refill rate, even though that's compounding now with more physicians using this and giving refills to their patients, the refill rate is important, but I think you have to look at total prescriptions and that line continues to demonstrate very strong positive growth. So I would tell you that, that's how I would think about it, Mayank. In terms of the new national health care plan, I'm going to ask Ramsey to jump in here and talk about that a little bit and then potential for the rest of the year.

Sure. Mayank, thanks for the question. And I think the question was with this new national formulary on board, what is our sort of expectation from an improvement on ASP. Obviously, it's an upward trajectory. It's a very large national plan. As you know, as of April, we had signed all 3 major GPOs. So in the second quarter, we did have some number of lives come over from that third GPO. This will be in addition to that. This is a separate national formulary in which we were able to get Emrosi on formulary for. So we do expect improvement. We talk about 38% quality of the 192 million lives having access to Emrosi with a single step therapy or better. And so adding this new national formulary is going to increase that number, right? So from the 70-plus million lives, it's going to go up from there. We think that's the least amount of friction that a patient really should have to be able to get a prescription through the adjudication process and pick up their prescription. We do have a number, and we've said this previously, a number of other sort of negotiations and presentations going on with other large national formularies. We think the fact that we were able to be successful with a positive add with the one we were just recently added to should help us in our momentum going forward. And yes, we expect good milestones to be hit throughout Q3, into Q4 and obviously into 2028 as well.

Great. And my final question on the ex-U.S. out-licensing efforts, including for Emrosi, is there anything IP related or thoughts like that may be also playing a role there? Or is it just these things can take a little while, especially ex-U.S. where our dynamics are very different.

Yes. And Claude, if you don't mind, I can take the out-licensing question as well.

Sure. Yes.

As you may know, Emrosi, QBREXA, AMZEEQ [indiscernible], those are our patented brands in which we acquired. We acquired global rights. We maintain global patent portfolio for all of those brands. QBREXZA is available in Japan with our partners, Maruho, and we did additional out-licensing in Korea, Taiwan and other ASEAN countries. AMZEEQ is available in China with our partners, [ QDIA ], commercially available. They launched about a year ago. We continue to have additional conversations with out-licensing with those brands, but more importantly, Emrosi, right? And in terms of ongoing negotiations, I can -- what I can tell you is that they are happening on a consistent basis. We do have IP, as I mentioned, globally, which includes Europe, Canada, Australia, New Zealand, Japan and other parts of Asia. So in terms of the robustness of the IP and the market opportunity, it's there. But as you kind of mentioned, it does take some time, right, to get to the meeting of the minds to have the right structure in place to make sure all the right political climate is in place given certain new legislative or executive order actions that are kind of ongoing. Obviously, our primary focus is making Emrosi the standard of care, the gold standard in the U.S. for rosacea. We certainly think and we have ongoing discussions with other companies that there's great opportunity in those regions as well. So we'll continue to update as we go. And obviously, once something definitive is available.

The next question comes from Brandon Folkes with H.C. Wainwright.

Maybe just 2 for me, staying on Emrosi you look to be making very good progress here on the gross to net and obviously on volume. But maybe just where is the remaining friction in access today, including paracet, especially that friction that you believe you could remove or loosen over the next 12 months? And then secondly from me, just having to look at your Q, Eurax, I believe that's how you pronounced it, apologies if not. Can you just give us more color on your expectations for that product, maybe when it launched in the quarter? And how you envision that product growing over time?

Yes, certainly. Brandon, we want -- and you nailed it Eurax is the correct name, 10% crotamiton. This is an anti-inch, antipruritic product. It's nonsteroidal, nonhistaminic and fragrance-free. We worked diligently to change this formula. This is a brand that we picked up a number of years ago from another pharmaceutical company, and we really believe it's an enhanced formulation, and it will be welcomed in the dermatology community for their patients that suffer from significant itching. We trained our commercial team in June, and we launched the brand in July. So brand new out there. When you take a look at our portfolio, this is coming in right behind Qbrexza in the third position. So Emrosi first, Qbrexza second and then followed by Eurax right now. So it's brand new. It's just starting out. We're starting to see some traction. We're getting some positive feedback from our dermatology base of physicians. So we like what we're hearing so far. But again, it's relatively early. And we think it's going to be a good strong contributor to our base business. Nothing in terms of giving any guidance here, but we're going to be obviously tracking prescriptions and physician counts and all the major KPIs that you would think regarding the brand. So that's where it's at right now. It is in the compensation plan for our commercial team. So there is focus and attention and promotion happening behind it. In terms of -- I believe you wanted to maybe look at more managed care and some of the points that we're having in the discussions with the various payers. Is that correct?

Yes.

Yes. Ramsey, did you want to jump back in here for that, please?

Yes. And I think more specifically, Brandon, you were looking at where the friction is out in the market in terms of barriers, if you will, UMs. And we talk -- again, we talk about what the quality of lives are, and that's that 72 million, that 38%. But we also talked about access, which is pathway to a prescription, and that's more like 169 million lives. So if you look at the delta between the 2, you're going to see that the, let's call it, 80 million, 90 million lives, right, that potentially have access to Emrosi might have a larger barrier, right, in terms of that friction. That could be, for example, a prior auth or a double step that's in place, right? And so our job is identifying where those bottlenecks are, and we've been doing that on a consistent basis and speaking with those plans to see what it takes to get Emrosi down to sort of our benchmark, which is that quality single-step therapy or better. Obviously, from a clinical perspective, we have a strong value proposition. There are other drugs obviously available to them in the market from a rosacea treatment standpoint. And our category, again, we're saying a single step through any of those either oral or topical agents. Typically, when prescribers do prescribe for rosacea, they're using an oral and they may -- they also may supplement with a topical. But again, with our head-to-head data, the fact that our drug works in essentially half the time as rosacea, right, 8 weeks, we achieved the results greater than what rosacea did in our study in 16 weeks with strong value proposition, not only from a clinical perspective, but from a financial perspective. And this is resonating very well with the payers. But this isn't a very highly managed category, right, in terms of rosacea and kind of what the payers have on their plates, right, when you think of GLP-1s, other oncology, rare disease orphan drugs. So it takes a little bit more time. We are having -- again, we have great contacts with the important plans that we think are going to make the difference that, for example, may have a double step or a PA and why we think it's not appropriate to have sort of that UM in place for our drug, given the data and the financial profile for it. And so yes, I'd say the scripts that are going through with those are still going to continue to grow through, but they could go through at a higher rate, which covered, which is going to improve our reimbursement if we're able to remove and reduce those barriers, and that's what we're going to continue to do through Q3, Q3, Q4 and into 2028 as well.

Yes. Brandon, in terms of negotiation, that's what our market access team is doing. I think Ramsey set it up very well here. But we're negotiating potential look backs. It could be 6 months, 12 months, a year plus. Those -- if they've tried a topical or if they've tried an oral, we're playing with the and/or part of it here. So again, I think where we stand today at about 38% quality, one step at it or less, is a good position. We could certainly increase that number significantly, but we are holding to our strategy of trying to get the least resistance and to simply get the patients on what we believe to be the best treatment for rosacea orally right now. So those are the types of things that we go back and forth with. And we think taking that time is important, and it makes a lot of business sense.

[Operator Instructions] The next question comes from Thomas Flaten with Lake Street.

Congrats on the Emrosi performance. Just a few for me. Claude, with respect to the new reps that were hired, can I assume those were white space hires? Or are you already territory splitting?

So out of the 5, most of them are in white space, but we do have some areas where the number of dermatologists and the penetration is better well served with splitting it. So you have a little mix of both, Tom.

Got it. And then with respect to physician utilization, have they queued in on a specific element of your efficacy, I mean, time or overall resolution erythema that's the driving reason for their use?

In terms of just physician feedback, it is astounding, how they are looking at the efficacy. The superiority factor that we have that the FDA gave us is resonating well with patients. And when the physicians are seeing them back a month or 2 after their initial prescription, the reinforcement from the patient and what the clearance rate is rather incredible. Again, we're doing the -- what rosacea did in half the time. And I think that's really a major part of it. Plus the other factor is you're talking about a fantastic safety profile, very tolerable. They're not getting that pushback that they could have had, for example, with acne and immediate release minocycline, they're not getting that same pushback with this proprietary formulation of Emrosi. So they like what they're getting, and I think they're building confidence.

And then back to the physicians again, if I may. Are there specific subtypes of rosacea patients that they're primarily using it on? Or are they kind of using it more broadly than having identified a subtype?

Well, we're indicated for papulopustular rosacea. So certainly, that severe -- moderate to severe, our indication allows us to go broader. But you're talking about moderate and severe patients, I would say, are what they're putting Emrosi in that category. And I'm generalizing here, but I would tell you that, that would be where the niche is for the brand right now.

This concludes our question-and-answer session and concludes the conference call today. Thank you for attending today's presentation. You may now disconnect.