Q2 2023 Fortress Biotech Inc Earnings Call

Speaker 1: Ladies and gentlemen, thank you for standing by. Good afternoon and welcome to Journey Medical's second 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 0.

Ladies and gentlemen, thank you for standing by good afternoon, and welcome to journey Medical's second 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 conference specialist by pressing the Starkey followed by zero.

Speaker 1: 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.

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 Mr. Matt Blasi of core.

Speaker 1: 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 Mr. Matt Blasi of Core IR, the company's investor relations firm. Please go ahead.

I or the company's Investor Relations firm. Please go ahead Sir.

Speaker 2: Good afternoon and thank you for participating in today's conference call. Joining me from Journey Medical Corporation's leadership team are Claude Morawe, co-founder, president, and chief executive officer, Joe Benesch, interim chief financial officer, Dr. Srini Sijidhi, vice president research and development, and joining us for the Q&A session will be Dr. Neil Bhatia, director of clinical dermatology at Therapeutics Clinical Research.

Good afternoon, and thank you for participating in today's conference call. Joining me from journey Medical Corporation's leadership team, our Quad Murali co founder President and Chief Executive Officer, Joe Burnish interim Chief Financial Officer, Dr. Serena, Sydney, Vice President Research and development and joining us for the Q&A session will be Dr. <unk>.

But yeah director of clinical Dermatology Therapeutics clinical research.

Speaker 2: During this call, management will be making forward-looking statements, including statements at address, among others.

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 as we see.

Speaker 2: Journey Medical's expectations for future performance, operational results, financial conditions, and the receipt of regulatory approvals. Forward-looking statements involves risks and other factors and may cause actual results to differ materially from those statements.

The 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 his journey Medical's. Most recently filed periodic reports on Form 10-K and Form 10-Q.

Speaker 2: For more information about these risks, please refer to the risk factors as 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.

Form 8-K filed with the SEC today, and the company's press release that accompanies this call, particularly the cautionary statements yet.

Speaker 2: It is common to call on 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.

Today's conference call includes non-GAAP financial measures to the journey medical believes can be useful in evaluating its performance you should not consider this additional information in isolation or as a substitute results prepared in accordance with GAAP.

Reconciliation of this non-GAAP financial measure to net loss its most directly comparable GAAP financial measure please.

The reconciliation table located in the company's earnings press release.

Speaker 2: The content of this call contains time-sensitive information that is accurate only as of today, August 8, 2023. Accept as required by law, the attorney medical disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call.

The content of this call contains time sensitive information that is accurate only as of today August eight 2023.

As required by law or any medical disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur. After this call.

Speaker 2: It is now my pleasure to turn the call to the Claude Marawi co-founder, president, and chief executive officer of Dermud Medical.

It is now my pleasure to turn the call their clubs in Raleigh, Co founder President and Chief Executive Officer of <unk> Medical.

Speaker 3: Thanks, Matt. Good afternoon, and thanks to everyone for joining our second quarter, 2023 conference call and corporate update.

Thanks, Matt Good afternoon, and thanks to everyone for joining our second quarter 2023 conference call and corporate update.

Speaker 3: This is an exciting time for Journey Medical. Our commercial business has seen a strong rebound this quarter. And as we recently announced, our phase 3 trials for DFD29 treatment for rosacea achieved the co-primary and all secondary endpoints with no significant safety issues.

This is an exciting time for journey medical our commercial business has seen a strong rebound this quarter.

And as we recently announced our phase III trials for D. F. D twenty-nine treatment for rosacea achieved the co primary and all secondary end points with no significant safety issues.

Speaker 3: I will begin by making some brief comments on the clinical trials and will then be joined by our Vice President of Research and Development, Dr. Shreene Sijidi, who will present this clinical data in greater detail.

I'll begin by making some brief comments on the clinical trials and will then be joined by our Vice President of research and development. Dr. <unk> <unk>, who will present this clinical data in greater detail.

Speaker 3: Immediately following the presentation, we will review our second quarter results and open the line for questions.

Immediately following the presentation, we will review our second quarter results and open the line for questions.

Speaker 3: For the benefit of those on the call who are following our slides, please note that those slides will only be used in the section of the call, where Dr. Sigidi is reviewing the data from the Phase 3 trials.

For the benefit of those on the call who are following our slides. Please note that those slides will only be used in the section of the call where doctors <unk> is reviewing the data from the phase III trials.

Speaker 3: We are very pleased with the positive results of our two phase three clinical trials evaluating DFD-29 for the treatment of rosacea.

We are very pleased with the positive results of our two phase III clinical trials evaluating D. F. D 29 for the treatment of rosacea, which demonstrated statistical superiority over both a ratio and placebo.

Speaker 3: which demonstrated statistical superiority over both Aracia and placebo.

Speaker 3: This is a significant milestone for journey medical, and potentially the broader dermatology.

This is a significant milestone for journey medical and potentially the broader dermatology community.

Speaker 3: There were approximately four million prescriptions written for Rosacea in 2022, according to Symphony Health Prescription Day.

There were approximately 4 million prescriptions written for rosacea in 2022 according to Symphony health prescription data.

Speaker 3: Based on these positive study results, we plan on submitting a new drug application for DFT 29 in the second half of 2020.

Based on these positive study results, we plan on submitting a new drug application for D. F. D 29 in the second half of 2023.

Speaker 3: If approved by the FDA, we believe that DFT 29 has annual peak sales potential of $300 million Glo...

If approved by the FDA, we believe the DFT twenty-nine has annual peak sales potential of $300 million globally.

Speaker 3: With these clinically meaningful outcomes, DFT29 has the potential to become the new treatment paradigm for the millions of patients suffering from rosacea as the lowest dose oral minocycline on the mark.

With these clinically meaningful outcomes D. F. D 29 has the potential to become the new treatment paradigm for the millions of patients suffering from rosacea as the lowest dose oral minocycline on the market.

Speaker 3: The success of the program is a direct result of the exceptional collaboration between journey medical, doctor retis, the investigators, and all the others that have been involved.

The success of the program is a direct result of the exceptional collaboration between journey medical Doctor readiness, the investigators and all the others that have been involved.

Speaker 3: We believe the potential approval of DFD 29 will be a transformational event for journey.

We believe the potential approval of D. F. D 29 will be a transformational event for journey.

Speaker 3: At this point, I would like to turn the call over to Dr. Cigede to discuss the results of the Phase 3 data in more detail.

At this point I would like to turn the call over to doctors to Judy to discuss the results of the phase III data in more detail.

Speaker 3: I will follow up to discuss this market opportunity and our strategy on becoming the market leader in this space.

I will follow up to discuss this market opportunity and our strategy on becoming the market leader in this space.

Thank you Claude.

Speaker 4: I would like to begin by reviewing the highlights from the Phase 3 for DS-29 Top Line Data Readout.

I would like to begin by losing the highlights from the phase three or do you have to do any nine topline data readout.

Speaker 4: I would also like to refer investors to the investor presentation on our website, which will have slides supporting my comments here in more detail.

I'd also like to refer investors to the Investor presentation on our web site, which will have slides supporting my comments in more detail.

Speaker 4: Journey Medical in Collaboration with Dr. Reddy has conducted two phase three studies for DFT 29.

Germany medical in collaboration with Dr. Reddy has conducted two phase III studies for the FDA 29.

Speaker 4: The phase 3 studies had the following key design elements.

The phase III studies had the following key design elements.

Speaker 4: Each study enrolled approximately 320 patients with moderate to severe papillopastular rosacea in a three is to three is to two randomization to DFT 29 or Asia plus e-bore.

Each study enrolled approximately 320 patients with moderate to see be a popular postulate rosacea and are pleased to at least two randomization to DFT 29 or ACR placebo.

Speaker 4: The first study, MBOR-1, enrolled all patients in the USA while the second study, MBOR-2, enrolled patients in a ratio of approximately 70s to 30 in the US and Germany.

The first study and the old one enrolled all patients in the U S. C. While the second study MBR to enroll patients in a ratio of approximately 17 to therapy in the U S and Germany.

Speaker 4: of the total of approximately 640 patients in the two trials.

Of the total of approximately 640 patients in the two trials.

Speaker 4: Approximately 5 body patients were white Caucasians, while approximately 100 patients were of darker skin colour.

Approximately 540 patients who had a white caucasians.

Proximately 100 patients van or darker skinned tell us.

Speaker 4: All the subjects had an IGA grade of 3 or 4 and an inflammatory lesion count of 15 to 16 at study entry.

All the subjects had an idea grade of three Oh God.

And in inflammatory lesion count of 15 to 16 at study entry.

Speaker 4: subjects were adequately washed out of any previous medication they were taking before starting the study treatment.

Subjects were adequately washed out of any previous medication. They were taking before starting this study treatments.

Speaker 4: Thus, the efficacy seen in these studies can be attributed to the study medication and not to any confounding or previous medication.

Does the efficacy seen in these studies can be attribute it to this study medication and not do any confounding or previous medication.

Speaker 4: The study treatments were assessed on two co-primary end points.

The study treatment assessed on two co primary endpoints.

Speaker 4: First, proportion of subjects with IGA treatment structures.

Well its proportion of subjects with Iga treatment success.

Speaker 4: second reduction in total inflammatory lesion count.

Second reduction in total inflammatory lesion count.

Speaker 4: The results show that DF-T29 was statistically, significantly superior to both placebo and ORA-SIA with 16 weeks treatment duration.

The results show that DFT 29 was statistically significantly superior to both placebo and or this year with 16 weeks treatment duration.

Speaker 4: The proportion of subjects that showed IGA treatment success was 65% for the FT29, 46.1% for ORACIA, and 31.2% for placebo in MBOR1.

The proportion of subjects that showed Iga treatment success was 65% for the IP 29, 46, 1% for this year and 31, 2% for placebo in M. B a lot of one.

Speaker 4: the p value for the difference between DFT 29 and O ratio was 0.01 core while it was less than 0.001 against placebo.

The P value for the difference between DFT 29, and or ACR was 0.014, while it was less than point Zealand's it'll one against placebo.

Speaker 4: In MUR2, the proportion of subjects that showed IGA treatment's faxes was 60.1% for DFT29, 31.4% for Orescia, and 26.8% for placebo.

And then they are to the proportion of subjects that showed idea treatment sepsis was 61% for the IP 29, that'd be one 4% for this year and 26, 8% for placebo.

Speaker 4: The p-values were less than 0.001 for DFT 29 against both ORA-Shia and Procebo.

The P values less than point is it is it a one for DFT 29 against both our Asia and placebo.

Speaker 4: In MUR1, the reduction in total inflammatory lesion count was

And MBR one the reduction in total inflammatory lesion count was.

Speaker 4: 21.3 lesions for the F229 15.9 for ORACIA and 12.2 lesions for placebo. The P values were less than 0.001 for the F229 against both ORACIA and placebo.

Randy 1.3 lesions for the FY, 'twenty, 915.94, or Asia, and 12.2 lesions what placebo.

The P values were less than points. It is it'll one for DFT 29 against both our Asia and placebo.

Speaker 4: In MVOR2, the reduction in total inflammatory lesion count was 18.4 lesions for DFT29, 14.9 lesions for oracia, and 11.1 lesions for placebo.

And then we are towards the reduction in total inflammatory lesion count was 18.4 lesions for the IP 29, 14.9 lesions for or is she up 11.1 lesion slipped placebo.

Speaker 4: The P-values were less than 0.001 for DFT29 against both Oreshia and placebo.

The P values were less endpoints. It is it'll one for DFT 29 against both our Asia and placebo.

Speaker 4: As can be seen from the data, DFT29 has consistently outperformed both Oresia and Procebo on the two key endpoints in both studies.

As can be seen from the data DSD 29 has consistently outperformed both our Asia and placebo on the two key endpoints in both studies.

Speaker 2: BFT 29 has shown statistically significant reduction of aridema in both studies compared to placebo.

DFT 29 has shown statistically significant reduction of EDA demand in both studies compared to placebo.

Speaker 2: DFT 29 has also demonstrated statistically significant improvement in quality of life against placebo with regards to two very commonly used quality of life tools.

DFT 29 has also demonstrated that has taken a significant improvement in quality of life against placebo with regards to two very commonly used quality of life tools.

Speaker 2: The DLQI, Dermatology Quality of Life Index, which is a general quality of life tool used across Dermatology trials.

The <unk> dermatology quality of life index, which is a general quality of life tool used across dermatology trials.

Speaker 2: And a Rosesha specific quality of life tool, Rosacol, that is Rosesha quality of life.

And although this yes specific quality of life tool Rosa called that is rosacea quality of life.

Speaker 2: Finally, we are pleased to say that DFT 29 also has shown rapid onset of action. That is, it has shown statistically superior Ezeker C or placebo on both IGA success and lesion count reduction from week two onwards, which is a very significant achievement considering these were monotherapy studies.

Finally, we are pleased to say that the FDA 29 also has shown rapid onset of action that is it has shown statistically superior efficacy or placebo on both idea's success and lesion count reduction from week two onwards.

It is a very significant achievement considering these monotherapy studies.

Speaker 2: On the safety front, the FT29 was found to be safe and well tolerated in both the studies with the adverse event rates being close to Dr. Sibho.

On the safety front BMT 29 was found to be safe and well tolerated in both the studies with adverse event rates being close to placebo.

Speaker 2: These results indicate the possibility of TFT-29 being the new standard of care in Rosacea and also being the best in class therapy.

These results indicate the possibility of DFT 29, being the new standard of care in rosacea and also be the best in class therapy.

Speaker 2: it is likely to be perceived as a safe minocycline formulation compared to other formulations because of the low and fixed doors.

It is likely to be perceived as a safe minocycline formulation.

The other formulations.

Cause of the law and fixed dose.

Speaker 2: We anticipate DFT 29 to capture significant market share upon its launch. Based on the significant differentiators, it brings to the table.

We anticipate that the 29 to capture significant market share upon its launch based on the significant differentiator as it brings to the table.

Speaker 2: I will now hand it back to Claude to discuss our second fiscal quarter results in more detail. Thank you.

I will now hand, it back to Claude to discuss our second fiscal quarter results in more detail. Thank.

Thank you.

Yeah.

Speaker 3: Thank you, Dr. Sijidi. I would like now to turn our attention to the improving results in our commercial operations for the second quarter.

Thank you Doctor surgery, I would like now to turn our attention to the improving results in our commercial operations for the second quarter.

Speaker 3: As discussed on our last call with investors, our objective was to see continued sequential growth in revenues throughout this year and to achieve positive non-gap adjusted EBITDA for fiscal year 2020.

As discussed on our last call with investors. Our objective was to see continued sequential growth in revenues throughout this year and to achieve positive non-GAAP adjusted EBITDA for fiscal year 'twenty two 'twenty three.

Speaker 3: The key metrics for the second quarter surpassed our internal expectation.

The key metrics for the second quarter surpassed our internal expectations generating $17 2 million in net revenue, which corresponds to a remarkable 41% sequential gain over Q1 'twenty two 'twenty three.

Speaker 3: generating 17.2 million in net revenue.

Speaker 3: which corresponds to a remarkable 41% sequential gain over Q1 2023. Some key highlights.

Some key highlights note worthy of mentioning.

Speaker 3: Our leading core product, Cuebrexa, led the way with net sales of $8 million in Q2 compared to 4 million in Q1, which is an outstanding 97% increase in addition to achieving a new quarterly all-time high for the brand.

Our leading core product Q Brecksville led the way with net sales of $8 million in Q2 compared to $4 million in Q1.

Which is an outstanding 97% increase in addition to achieving a new quarterly all time high for the brand.

Speaker 3: Accutane currently, our second highest volume core product in our portfolio, had an impressive gain as well. Accutane had net sales of $5.5 million in Q2 versus net sales of $4.6 million in Q1 of 2023, which is a 20% increase.

Accutane currently our second highest volume core product in our portfolio had an impressive gain as well.

<unk> had net sales of $5 $5 million in Q2 versus net sales of $4 6 million in Q1 of 2023.

Which is a 20% increase.

Speaker 3: In our third and fourth position of priority, we saw sequential increases in Amzecnet revenue of 15% and Zilxie of 82% versus their Q1 results.

And our third and fourth position of priority, we saw sequential increases in <unk> net revenue of 15% and zilkha she of 82% versus their Q1 results.

Speaker 3: We expect these trends to continue as we build momentum.

We expect these trends to continue as we build momentum.

Speaker 3: Our legacy brands, which are Exselderm, Targetox, and Zemino, continue to see anticipated erosion and combined only account for 8% of our total revenue in Q2 2023.

Our legacy brands, which are actual derm target ox Enzo Minto continue to see anticipated erosion and combined only account for 8% of our total revenue in Q2 2023.

Speaker 3: I'd like to congratulate our commercial sales and marketing teams for remaining focused and executing our strategic plan.

Like to congratulate our commercial sales and marketing teams for remaining focused and executing our strategic plan.

Speaker 3: Journey continues making great strides towards the guidance that we gave during our 2022 10K earnings call, in which is achieving non-GAP adjusted EBITDA positive for calendar year 2023.

Yeah.

Journey continues making great strides towards the guidance that we gave during our 2022 10-K earnings call and which is achieving non-GAAP adjusted EBITDA positive for calendar year 2023.

Speaker 3: Our entire organization has taken the necessary steps in becoming more efficient in optimizing our business goals.

Our entire organization has taken the necessary steps and becoming more efficient and optimizing our business goals.

Speaker 3: A key example of this suffer is limiting our SGNA spec.

A key example of this effort is limiting our SG&A spend.

Speaker 3: Journey has successfully reduced SGNA expenses in Q2 2023 by over $3 million compared to Q2 2022.

Journey has successfully reduced SG&A expenses in Q2 2023 by over $3 million compared to Q2 2022.

Speaker 3: We remain steadfast in our efforts and well on track of achieving a projected reduction of over $12 million in S-GNA spend this calendar year.

We remain steadfast in our efforts and well on track of achieving a projected reduction of over $12 million in SG&A spend this calendar year.

Speaker 3: Important to note, not only have we been able to implement the appropriate expense reduction efforts, we also were able to achieve revenue growth in parallel.

Important to note not only have we been able to implement the appropriate expense reduction efforts. We also were able to achieve revenue growth in parallel.

Speaker 3: We are certainly training towards meeting our financial objectives and continue to expect the strength to continue into the second half of 2023.

We are certainly trending towards meeting our financial objectives and continue to expect this trend to continue into the second half of 'twenty to 'twenty three.

Speaker 3: Finally, I am pleased to announce that we have paid off the entire debt facility we had with East West Bank. Journey now has...

Finally, I am pleased to announce that we have paid off the entire debt facility, we had with east West Bank.

Journey now has zero bank debt.

Speaker 3: With that, I'll now turn the call over to Joe, who will review our financial results for the second quarter.

With that I'll now turn the call over to Joe who will review our financial results for the second quarter.

Speaker 5: Thank you, Claude, and hello, everyone. I will now review the second quarter financial results for 2023.

Thank you Claude and Hello, everyone I will now review, our second quarter financial results for 2023.

Speaker 5: Clod mentioned total net revenues for the second quarter of 2023 were $17.2 million.

As Claude mentioned total net revenues for the second quarter of 2023 were $17 $2 million.

Speaker 5: 41% increase in $12.2 million in the first quarter.

41% increase from $12 $2 million in the first quarter and.

Speaker 5: And a slight decrease of $1.1 million from the prior year course.

And a slight decrease of $1 $1 million from the prior year quarter.

Speaker 5: The decrease on the prior quarter is primarily due to lower unit volume from our legacy products, target ox, zimino, and excellent arm. Substantially driven by continued-

The decrease from the prior year quarter is primarily due to lower unit volumes from our legacy products target, the Minto and Axel Daragh.

Substantially driven by continued generic competition for target ox.

Speaker 5: These results were offset by an increase in net product revenues from our four core products.

These results were offset by an increase in net product revenues from our four core products you Brexit <unk>.

Speaker 5: Acubrexa, Accutane, Anzek, and Zilker.

Accutane <unk> zinc C P.

Speaker 5: Primarily due to increased unit volumes, as a result of our focused sales and marketing emphasis on these products.

Primarily due to increased unit volumes as a result of our focused sales and marketing emphasis on these products.

Speaker 5: which led to 19% growth for these products combined. From

Which led to 19% growth for these products combined.

From the prior year quarter.

Speaker 5: These products combined reflect approximately 92% or $15.6 million of the company's total product revenues for the second quarter of 2023.

These products combined reflect approximately 92% or $15 $6 million of the company's total product revenues for the second quarter of 2023.

Speaker 5: R&D expenses decreased by 32% in the prior year quarter related to lower clinical trial expenses for DFD 29. The project winds down. SGA expenses decreased by 32% in the previous year quarter related to lower clinical trial expenses for DFD 29.

R&D expenses decreased by 32%.

In the prior year quarter related to lower clinical trial expenses for <unk> 29.

Project wind down.

SG&A expenses decreased by 20% from the prior year quarter.

Speaker 5: Decreases mainly due to our expense reduction efforts for Maryland sales and marketing.

The decrease was mainly due to our expense reduction efforts, primarily in sales and marketing.

Speaker 5: During the last quarter of 2022, we implemented a cost reduction initiative designed to improve operational efficiencies, optimize expenses, and reduce overall costs.

In the last quarter of 2022, we implemented a cost reduction initiative designed to improve operational efficiencies optimize expenses and reduce overall costs.

Speaker 5: The initiative is intended to reduce SGNA expenses to better line costs for the revenues being generated.

The initiative is intended to reduce SG&A expenses to better align costs with revenues being generated.

Speaker 5: And connection with this cost reduction initiative, we executed, they had that head count reduction to our sales force and implemented more.

In connection with this cost reduction initiative, we executed on a head to head count reduction to our Salesforce.

Implementing marketing and other cost cuts.

Speaker 5: The impact of this cost reduction initiative is expected to result, as Claude mentioned, in a reduction of greater than $12 million of annual SG&A.

The impact of this cost reduction initiative and expect it to result, as Claude mentioned and a reduction of greater than $12 million of annual SG&A expenses.

Speaker 5: In the second quarter of 2023, we recorded a $3.1 million non-cash in payment loss towards the Mino Intangible last.

In the second quarter of 2023, we recorded $3 $1 million noncash impairment loss towards the Minto intangible asset.

Speaker 5: Based on Zaminno's current net product revenue and gross profit levels, we revised the financial outlook for Zaminno, resulting in lower projected sales and net cash loss for future periods.

Based on <unk> current net product revenue and gross profit levels, we revised our financial outlook for the nano, resulting in lower projected sales and net cash flows for future periods.

Speaker 5: We assess this revised forecast in determine that the revision constituted a triggering of

We assessed this revised forecast and determined that the revision constituted a triggering event.

Speaker 5: We reviewed the undiscounted future cash loads identified for Zemino, and the results of the analysis indicated that the carry amount of the Zemino intangible asset on our balance sheet was not expected to be recovered.

We reviewed the undiscovered future cash flows identified personnel.

And the results of the analysis indicated that the carrying amount of this intangible asset on our balance sheet was not expected to be recovered.

Speaker 5: Gap Nut Loss, Common Showholders, was $8.4 million for 46 cents per share, basic and deluded for the second quarter of 2023.

GAAP net loss common shareholders was $8 $4 million or <unk> 46 per share basic and diluted for the second quarter of 2023.

Speaker 5: Compared to a gap net loss of $10.1 million, or 57 cents per share basic and diluted for the first quarter of 2020.

Compared to a GAAP net loss of $10 1 million.

Or <unk> 57 per share basic and diluted for the first quarter of 2023.

Speaker 5: from $7.5 million or 43 cents per share basic and diluted for the second quarter of 2022.

$7 $5 million or <unk> 43 per share basic and diluted for the second quarter of 2022.

Speaker 5: Our non-gap adjusted EBITDA for the second quarter of 2023 resulted in a net loss of $600,000 or $4 per share basic and diluted compared to an adjusted EBITDA net loss of $5.3 million or $0.30 per share basic and diluted for the first quarter of 2023. And an adjusted EBITDA net loss of $2.6 million or $15 per share basic and diluted for the second quarter of 2020.

Our non-GAAP adjusted EBITDA for the second quarter of 2023, resulting in a net loss of $600000 or four cents per share basic and diluted compared to an adjusted EBITDA net loss of $5 $3 million or <unk> 30 per share basic and diluted for the first quarter of 2023.

And an adjusted EBITDA net loss of $2 $6 million or <unk> 15 per share basic and diluted for the second quarter of 2022.

Speaker 5: We are well on our way to becoming non-GAAP adjusted EBITDA positive in 2020.

We are well on our way to becoming non-GAAP adjusted EBITDA positive in 2023.

Speaker 5: At June 30th, 2023, we had $17 million in cash to cash equivalents and restricted cash.

At June 30th 2023, we had $17 million in cash and cash equivalents and restricted cash as compared to $26 1 million at March 31 2023.

Speaker 5: as compared to $26.1 million at March 31, 2023.

Speaker 5: At December 31st, 2022, we had $32 million in cash and cash.

At December 31, 2022, we had $32 million in cash and cash equivalents.

Speaker 5: From the cash burn perspective, in May 2023, we paid down $10 million of our term loan and our $3 million revolver with East West.

From a cash burn perspective.

May 2023 we paid down $10 million of our term loan.

There are $3 million revolver with east West Bank.

Speaker 5: So, consequently, in July of 2023, we voluntarily paid off the entire $10 million outstanding East West Bank term loan, effectively terminating the entire East West Bank facility. We therefore have no further-

Subsequently in July of 2023, we voluntarily paid off the entire $10 million outstanding East West Bank term loan effectively terminated the entire east West Bank facility.

We therefore have no further obligations to east West Bank.

Speaker 5: We were able to pay off all of our USWES bank debt without any additional delusions to the company. Thank you very much.

We were able to pay off all of our east West Bank debt without any additional dilution to the company.

Thank you very much and now I'll turn it back to Claude.

Thank you Jeff.

Speaker 3: In summary, I'd like to recap the highlights discussed on today's call. First,

In summary, I'd like to recap the highlights discussed on today's call first.

Speaker 3: DFD-29 achieved outstanding results. DFD-29 showed superiority the current standard of treatment oration.

DFT twenty-nine achieved outstanding results.

29 showed superiority to current standard of treatment a ratio.

Speaker 3: We met all primary and secondary endpoints.

We met all primary and secondary endpoints.

Speaker 3: The NDA filing in Q4 2023 is on schedule.

The NDA filing in Q4, 2023 is on schedule.

Speaker 3: Our phase one sub antimicrobial data suggests suitable long-term use.

Our phase one sub anti microbial data suggests suitable long term usage.

Speaker 3: And if approved, DFD 29 has sales potential over $300 million global.

And if approved D. F D twenty-nine has sales potential over $300 million globally.

Speaker 3: Second, our Q2 2023 financial results rebounded from Q1.

Second our Q2 2023 financial results rebounded from Q1.

Speaker 3: Q2 we were up 41% over Q1 net sales.

In Q2, we were up 41% over Q1 net sales.

Speaker 3: over 90% of revenue in our core for promoted products.

Over 90% of revenue in our core four promoted products.

Third.

Speaker 3: East West Bank full debt payoff happened in July .

The East West Bank full debt pay off happened in July .

Speaker 3: We are confident in our ability to have enough cash to see DFT 29 through approval.

We are confident in our ability to have enough cash to see DFT 29 through approval.

Fourth.

Speaker 3: We are targeting operational profitability, non-GAP adjusted by end of this year 2023.

We are targeting operational profitability non-GAAP adjusted by end of this year 2023.

Speaker 3: The R&D expense is winding down with completion of our phase III study.

The R&D expenses winding down with completion of our phase III studies.

Speaker 3: And finally, in fifth, our BD team continues to be opportunistic in looking at various commercial stage assets to add to our portfolio. Plus, we look forward in continuing to work on out licensing efforts with our current product portfolio and as well as with DFD29 and its successful Phase 3 trials.

And finally in fifth.

Our BD team continues to be opportunistic and looking at various commercial stage assets to add to our portfolio plus we look forward and continuing to work on out licensing efforts with our current product portfolio and as well as with DFT 29.

And its successful phase III trials.

Speaker 3: We look forward to sharing our ongoing progress for both our commercial and clinical business when we report our third quarter results in November . Thank you.

We look forward to sharing our ongoing progress for both our commercial and clinical business. When we report our third quarter results in November .

Thank you and have a good day.

Speaker 1: We will now begin the question and answer session. To ask a question, you may press star then one on your touch-itone phone. If you're using a speaker phone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our rust.

We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone, if you're using a speakerphone. Please pick up your handset before pressing the keys to withdraw your question. Please press Star then two at this time, we will pause momentarily to assemble.

Gimbal our roster.

Speaker 1: Our first question today comes from Scott Henry of Roth Capital. Please go ahead.

Our first question today comes from Scott <unk>.

<unk> of Roth capital. Please go ahead.

Speaker 6: Thank you. Good afternoon. Tremendous improvement from the first quarter. I'm sure it was tough making a lot of those cuts, but I do think.

Thank you good afternoon.

Tremendous improvement from the first quarter I'm sure with.

It was tough, making a lot of those cuts, but I do think.

Speaker 6: It was instrumental to making the company viable in the long term. So I commend you and your team on that clock.

He was instrumental to making the company viable in the long term. So I commend you and your team on that Claude.

Speaker 6: shifting gears and I'm going to start with a quarter that I do with some DFT 29 questions. First, my assumption would be that when you paid off the loan that was all out of restricted cash, is that correct?

Shifting gears I'm going to start with the quarter, then I do have some D. F. T 29 questions first my assumption would be that when you paid off the loan that was all out of restricted cash is that correct.

Joe would you like to take that please.

Speaker 5: Yes Scott, we had $8.75 million of a script to cash on the books and it was definitely paid off with that. Okay, excellent.

Yes, Scott, we had $8 $75 million of his script restricted cash on the books and it was definitely paid off with that.

Okay excellent.

And then.

Speaker 6: You're a target of being EBITDA positive for the year.

Your you got your target of being EBITDA positive for the year.

Speaker 6: uh... you know still requires a lot of work because you gotta you gotta make money in the second half of the health of the work down some of the loss you started within the first quarter uh... to do that you expect that to be driven by higher revenues or lower expenses or a little bit of both

It still requires a lot of work because you've got a you've got to make money in the second half, but you also have to work down some of the loss he started with in the first quarter.

To do that do you expect that to be.

Driven by higher revenues.

Or lower expenses or a little bit of both.

Speaker 3: Yeah, it's gone. It's gone. Go ahead, Joe. Please. It's going to be a little bit of...

Yeah got it got it.

Go ahead please.

It's going to be a little bit of both Scott so.

Speaker 5: The second quarter still had some residual.

The second quarter still had some residual.

Speaker 5: expenses in there from from the cuts, right? So April and May still had some higher expenses in there. So the third quarter, fourth quarter are going to show the true cuts. And also from a revenue standpoint, we expect to be, you know, sequentially better.

Expenses in there from from the cuts right. So April and May still had some higher expenses in there. So third quarter fourth quarter are going to show the true cuts and also from a revenue standpoint, we expect to be.

Sequentially better.

Speaker 6: Great. Now I just want to shift to DFD29. You told us what your peak sales would be. Could you comment on how long you expected to take to reach peak sales? Is this category does it tend to be rapid uptake? Or what kind of trajectory do we do?

Okay, Great now I, just want to shift to DSD twenty-nine you you told us what your peak sales would be could you comment on how long you expect it to take to reach peak sales I. This category does it tend to be rapid uptake or you know what kind of trajectory do we typically see.

Speaker 3: Sure, Scott. Yeah. In terms of uptake and launching DFD29, we plan on doing that in early 2025, a few months after we get approval, hopefully, from the FDA. In terms of how quickly to the peak sales numbers, typically you're going to be looking between two to three years as the peak annual sales ramp up.

Sure Scott Yeah.

In terms of uptake and launching D. F. D 29, we plan on doing that in early 2025, a few months after we get approval hopefully from the FDA in terms of how quickly to the peak sales numbers typically you're gonna be looking between two to three.

Years as the peak annual sales ramp up.

Speaker 3: You know, we're going to be looking at this asset, going head to head using what we hope to be a very rich package insert that FDA has approved, we'll be able to go and start to change the habits of utilizing ORACIA as the gold standard and starts to switch that over to DFD 29. What's key with this asset?

You know, we're going to be looking at this asset going head to head using what we hope to be a very rich package insert that FDA has approved we'll be able to go and start to change the habits of utilizing or ratio as the gold standard and starts to switch that over.

To <unk> 29.

What's key with this asset is the ability of us not just sticking in the oral systemic marketplace, but this drug candidate DFT 29 has the ability to go into the topical market, which has a much greater potential so youre.

Speaker 3: The ability of us not just sticking in the oral

Speaker 3: but this drug candidate, DFT29, has the ability to

Speaker 3: go into the topical market, which has a much greater potential. So you're looking at four million prescriptions written last year, oral and topical, and that market is right in our sweet spot.

Speaker 3: We call on doctors that prescribe ORACIA. We already cover 90% of those that are currently prescribing ORACIA in the last 12 months just to give you some back.

Speaker 6: and and and just following up on that because i think you're correct that i believe the rosacea markets about ninety percent topical and maybe ten percent or all which is oratia you know in the acne market

Speaker 6: Orals have done very well. Do you know if we think about the acting market, what percent is oral versus topical? So we get a sense of the ability to expand into that topical market with a better product off.

Speaker 3: Yeah, in terms of the number off the top of my head, I can get back to you on the exact size of oral versus topical in the acne arena, but you're right about that percentage. It holds true on the rosaceous side. So about 360,000 prescriptions, 400,000 prescriptions.

Instead of the number off the top of my head I can get back to you on the exact size of oral versus topical and the acne.

Arena, but you're you're right about that percentage. It holds true on the Rosaceous side, so about three.

360000 prescriptions 400000 prescriptions for a ratio last year in about $3.6 million of.

Speaker 3: for Aracia last year and about 3.6 million of the topical. So very close to those percentage.

The topical so very close to those percentages.

Speaker 6: Okay, and then just the final question on the balance sheet. You know, how comfortable are you with your cash balance? You know, obviously.

Okay and then just the final question on the balance sheet.

You know how comfortable are you with your cash balance you know obviously he at the right time, you'll you would probably consider raising some more equity, but I'm trying to get a sense of how flexible are you are you comfortable that you don't have to raise it down here and you may have a path to get pretty pretty close to break even from here.

Speaker 6: At the right time, you would probably consider raising some more equity, but I'm trying to get a sense of how flexible are you, are you comfortable that you don't have to raise it down here, and you may have a path to get pretty close to break even from here as well.

Well.

Speaker 3: Yeah, I'll start with this one, Joe. Yeah, so far, like you said, we've had an exceptional second quarter. We've really cut our losses dramatically adjusted to EBITDA at 600,000. So the break even is within a throw away. So we.

Yeah I'll start with this one Joe Yeah. So far like you said, we we've had an exceptional second quarter, we've really cut our losses dramatically you know adjusted EBITDA at 600000, so the breakeven is within a throw away.

So we we we expect to be able to continue with operations, we're not looking to raise any equity fund.

Speaker 3: We expect to be able to continue with operations. We're not looking to raise any equity funding whatsoever. We are looking at debt facilities. Certainly, I think that would be a proper to do. But right now, in terms of being operationally profitable, we're at that point where our revenues and where our S-G-N-A is falling allows us

Funding whatsoever, we are looking at depth facilities.

Certainly I think that would be proper to do but right now in terms of being operationally profitable. We're at the point, where our revenues and where our SG&A SG&A is falling allows us the ability to go for all the way through the end of 2024 as a matter of fact.

Speaker 3: ability to go for all the way through the end of 2024 as a matter of fact.

Scott.

Speaker 6: I'll jump back in the queue. Thank you for taking the question.

Okay, great I'll jump back into the queue. Thank you for taking the questions.

Ooh.

Speaker 1: Our next question comes from CalPit Patel of B. Riley. Please go ahead.

Our next question comes from Calvin Patel, a fee Riley. Please go ahead.

Speaker 7: Yeah, hey, good afternoon and congrats on clearing the phase 3 studies for DFD 29.

Yeah, Hey, good afternoon, and congrats on clearing the phase III studies for D. F D 29.

Speaker 7: Maybe I'll start with a couple questions on this asset. You obviously beat both placebo and oratia in the phase-pring study.

Maybe I'll start with a couple of questions on this asset.

You, obviously b b.

<unk> placebo and or Asia.

The phase III studying.

Speaker 7: Maybe give us a sense of how reflective were the patients enrolled in the trial compared to the real-world population that gets more racial today.

Maybe give us a sense of how reflective I'm worried that patients you know enrolled in the trial compared to the railroad population.

Thank you <unk> today.

Speaker 3: Sure, I'll tell you, I think Dr. Sigide could take that and talk about the inclusion criteria of real world types of patients. And we also have a guest investigator dermatologist, Dr. Neil Batia, and perhaps he can follow up to Dr. Shrinis come.

Sure I'll tell you I I think I think Dr. <unk> could take that and talk about the inclusion criteria.

Real world types of patience and we also have a Augusta investigator dermatologist, Dr. Neil Bhatia, and perhaps he can follow up to Dr. <unk> comments.

Speaker 2: Thanks, Claude. And that's a great question, Carlton.

Thanks, God and that's a great question carpet.

Speaker 2: the inclusion explosion criteria that we had on these studies.

The inclusion exclusion criteria that we had on these studies.

Speaker 2: Very much perfectly Oh three-end Vallahi Chanel

Pretty much <unk>.

Speaker 2: the kind of IgA grades and the lesion counts at baseline that we used. Those are the common kind of patients that providers see when they have to prescribe an oral drug.

The kind of Iga Greens and the <unk> at baseline that be used those are the common kind of patients that provides a C. Then they have to prescribe a drug.

Speaker 2: Having said that, I will transfer the question to Neil. Neil, could you please explain on the remote?

Having said that I'll transfer the question to me <unk> could you please fix minimum anymore.

Yeah, Hi, there can you guys hear me okay.

Speaker 3: Yes, we can. Hi, everybody. I'm Dr. Neil Batem in San Diego. I was one of the investigators for this study. I've worked with Journey as well as Dr. Reddy's labs for many years.

Yes, we can either.

Yeah, I'm talking to you about having San Diego I was one of the.

Investigators for this study I've worked with journey as well as Dr. Readies labs for many years just as.

Speaker 3: I think commercially at the Dermot Hall, as we have not been seeing much support of aeration from Galderma neither their generic nor their branded in the past years, so due to their inability to cover the market.

A side I think you know commercially at the dermatologists, we we have not been seeing much supportive oration from Gal derma, neither there generic northern branded in the past year or so due to their inability to cover the market.

Speaker 3: That in turn led to a downturn in the amount of oral treatments for rosacea that have been considered to be safe or effective. By contrast, we've seen an upturn in the amount of topical products like EpsilA, the demise of Sulatra and Mentioned Eye Resolve. But even those sales are flat.

That in turn led to a downturn in the amount of oil treatments for rose shows that have been considered to be safe.

Or effective by contrast, we've seen an upturn in the amount of topical products like absolutely you know the demise of Sumatra and merchandise is all.

But even those sales are flat.

Speaker 3: And I think to the point that commercially, we see a lot of rosacea patients who are tired of applying bad vehicles to their face, which is already hypersensitive. They're concerned about the photosensitivity of higher doses of antibiotics like docs and cycling.

And I think to the point that commercially we see a lot of rosacea patients who are tired of applying bad vehicles to their face which is already hyper sensitive.

They're concerned about the photo sensitivity of higher doses of antibiotics like doxycycline.

Speaker 3: And minestricling until now, unfortunately a lot of the brands have failed by the waste sites.

In minutes I clean until now.

Unfortunately, a lot of the brands have fell by the wayside.

Speaker 3: So seeing this dose of menacicling come to fruition.

So seeing this dose of minutes cycling come to fruition.

Speaker 3: As well as what we saw in the trials, I think this could actually have a very strong foothold in gaining that spot for oral treatment as a standard

As well as what we saw on the trials I think this could actually have a very strong foothold in gaining that spot for all treatment as a standard I think the other component to realisation patient as many of them are otherwise healthy they're not on other medications.

Speaker 3: I think the other component to rosacea patients is many of them are otherwise healthy, they're not on other medications.

Speaker 3: They again would prefer a pill and something orally to minimize the labor involved with treating topically. So I think some of those would fit very well into the potential for the rosacea market. I know a lot of our trial patients did not want to let this drug go out of their hands. They were so pleased with the way things turned out to them that they were actually...

They again would prefer a pill and something orally to minimize the labor involved with trading topically Ah. So I think some of those would fit very well into the potential for the realisation market I know, but a lot of our trial patients did not want to let this drug gull out of there.

Hands. They were so pleased with the way things turned out to them that they were actually sad the trial ended.

Speaker 7: I understand. And Dr. Baudia, since we have you here today, I guess can you give us an understanding of how, you know, minocycling capsules, you know, maybe used today in the market for rosacea are they used commonly as an off-label treatment or is it more or less preserved just for

Okay understood and a doctor, but since we have you here today I guess can you can.

Can you give us an understanding of how.

Minocycline capsules Ah you know maybe used today in the market for rosacea or they used commonly as an off label treatment or is it is it more or less reserved just for just <unk>, yeah, I mean, the doctors and they let me sit back with tetracycline family as a whole.

Speaker 3: Or Alicia. Yeah, I mean, the doctor's, let me say that, the tetrisisling family is a whore.

Speaker 3: impacts a number of processes that start in inflammatory cascade of rosation. That's been understood for many years.

<unk> <unk>.

Impacts a number of processes that stuff.

Laboratory Cascade of realisation, that's been understood for many years in terms of.

Speaker 3: different proteins that get cleaved, the catholic side and pathway, without getting too scientific, a lot of the cell lines that are progressing the process of rosacea.

Different proteins that get cleaved the capital of fighting pathway and without getting too scientific a lot of the cell lines that are progressing the process of Uprose Asia.

Speaker 3: So both docs of cycling and minocycling have been proven effective at an optimal dose.

So both doxycycline and minutes likely to have been proven effective at optimal dose.

Speaker 3: because for one there's no bacterial target. So there's no action as an antibiotic. It's more an anti-inflammatory dose, but the problem is above a certain threshold, the medication, whether it's toxin, cycline, or minocycline, can have antibiotic properties which can lead to consequence down the road, which is what led to the cultivation of oration.

Because for one there's no bacterial target so there's no action as an antibiotic it's more of an anti inflammatory dose.

But the problem is above a certain threshold the the medication, whether it's doxycycline or minutes cycling.

Can have antibiotic properties, which can lead to consequence down the road, which is what led to the cultivation of erasure.

Speaker 3: at that dosage. Now the way minisikely will work at this dosage in the DFT product.

At that dosage now the way minutes like me will work at this dosage and and the D F. The product.

Speaker 3: you know, with the IMPT29 product, will be in a very similar directed fashion against the process that makes Rosé

You know an empty 29th product will be in a very similar directed fashion against the process that makes rose Asia.

Speaker 3: and the safety of it will allow it to be used, you know, again, year long, if you will. Whatever indication comes from it. The long term studies, you know, for 52 weeks and everything else that goes along with this class of drugs, tells us that we have a safety profile we can rely on. So I think in the end, you know,

And the safety of it will allow it to be used you know again your long if you will whatever it's whatever indication comes from it. The long term studies you know for 52 weeks and everything else that goes along with this class of drugs tells us that we have a safety profile. We can rely on so I think in the end you know rosacea patients.

Speaker 3: You know, you think about your average 30-some-year-old, they have a high copay, high deductible.

You know do you think about your average 30 something year old they have a high co pay high deductible.

Speaker 3: I'd rather treat them with something that I know will work for the long run and not have to see them back in the office to fine tune them and let them do well on the medication that's going to serve the purpose of treating the process of their disease, not just the symptoms.

I'd, rather treat them with something that I know will work for the long run and not have to see them back in the office to fine tune them and let them do well on the medication that's going to serve the purpose of treating the process of their disease not just.

The symptoms.

So I hope that makes sense.

[noise] for Ya.

Speaker 7: No, that's helpful. And this one I believe is an extended release or it's a special formulation of mental cycling. Do you see any advantages here in terms of safety profile or tolerability profile versus just using generic immediate release, mental cycling tablets or capsules? I mean, mental cycling is a synthetic drug compared to the Bossa cycling, which is natural.

No. That's that's helpful and this one I believe is an extended release or you know, it's a special formulation of minocycline do you see any advantages here in terms of the safety profile or Tolerability profile, you know versus just using a generic immediate release minocycline tablets Ah capsule.

I mean minutes cycling is a synthetic drug compared to doxycycline, which is natural.

Speaker 3: So, doxocycline's effects are more immediate. They cause headaches, photosensitivity, GI distress, menopsychline over the long term, at high doses.

So doxycycline effects.

More immediate thing cause headaches photo sensitivity G I distress.

Ah minutes cycling over the long term at high doses Ken.

Speaker 3: can cause vertigo and lupus-like effects and kidney issues and things that are dose limiting at higher dose.

Ken cause vertigo, and lupus like effects and kidney issues and things that are dose limiting add higher doses.

Speaker 3: So with this dose, we are less likely to see any long-term chronic issue.

So with this does you know we are less likely to see any long term chronic issues that were once a stigma related to higher doses admit it's likely.

Speaker 3: that were once a stigma related to higher doses of miniscikling. So miniscikling...

So many cycling by nature.

Speaker 3: is better absorbed in the fat and the pile of sebaceous unit and the middle layers of the skin which is why it was always a better drug for acne than Dr. Psycling.

Is better absorbed into fat and the pilots sebaceous unit in the middle layers of the skin, which is why I was always a better drug for acne and doxycycline from a logistics standpoint, and this might sound selfish is dermatologist always looked at minutes cycling is our drug.

Speaker 3: from a logistics standpoint and this might sound selfish. As dermatologists always looked at minocyclein as our drug because a lot of the primary care physicians and others who were treating rosacean acne, they were sending the patients to us on doxy and we'd say, well, I...

Because a lot of the primary care physicians and others, who were treating rosacea anatomy. They were sending the patients to us on doxey and we'd say, while I, let's switch it up.

Speaker 3: So there's going to be a little bit of possession that dermatologists will feel.

So there's gonna be a little bit of possession dermatologist will feel.

They get their hands on this.

Speaker 7: Right. And maybe one last market opportunity related question here for you, doctor. If assuming this drug gets approved, what proportion of your rosacea patients will you prescribe this drug? And what proportion will you continue to use or asia? Oh, sure. I mean, I'll be honest, I'm an early adopter. So when I get something new and I get my hands on something, I pretty much flood everybody with it.

Alright, then and maybe one last marketing opportunity related question here for your Doctor if.

If assuming this drug gets approved what proportion of your realisation of patients what he prescribed this drug and in what proportion will you continue to use <unk> Oh sure I mean I'll be honest I'm, an early adopter, so when I get something new and I get my hands on something I I pretty much flood everybody with it.

Speaker 3: There are going to be those who might be tied to a ratio.

There are going to be those who might be tied to a racer.

Speaker 3: There are going to be others who will take a chance on Minus cycling and in all fairness, there's probably going to be a few dermatologists to say, no, I'm not comfortable with miniscik.

They're gonna be others, who will take a chance on minutes cycling and in all fairness, there's probably going to be a few dermatologist to say no I I'm not comfortable with minocycline.

Speaker 3: So all of that will be up to journey to kind of bring all those mindsets forward and approach the marketing that way. As you know, I'm an educator myself. I think it conferences on rosacea published textbooks. I would have no problem talking about safety first and talking about hears and applications approach to the process of rosacea with an oral route.

So all of that will be up to journey to kind of bring all those mindsets forward and approach the marketing that way as in you know I'm uneducated myself I speak at conferences on Rosace I've published textbooks I would have no problem talking about safety first.

And talking about here's a efficacious approach to the process.

Rosacea with an oral route.

Speaker 3: and I would probably work on convincing my colleagues to maybe get off the ledge rather than be concerned with what we used to know about your father's minisight clean if you want to call it.

And I would probably work on convincing my colleagues to maybe get off the ledge rather than be concerned with what we used to know about your father has been a cycling if you Wanna call it that.

Speaker 3: Okay. And maybe one question for the company, the clinical trial itself, how did ARIS-EMA fare in both of your studies? I believe in ORACIA's pivotal studies back in the day, we saw a statistically significant improvement, at least in one of those two studies for ARIS-EMA. Did we see that here as well?

Okay.

Okay, and maybe one question for the company clinical trial itself, how did erythema here in both of your studies I believe in orations pivotal studies back in the day, we saw a statistically significant improvement at least in one of those two studies.

For erythema to receive that here as well.

[noise] shrinks and you take that one please.

Speaker 2: Sure, Claude. So, Calpis, you are right back in those days, Orescia had a

Sure.

So that'll take you right back in those days or these.

Speaker 2: paristical significance against placebo on Errithima in one of their studies while the other one didn't show these significance but during the NDA review process I think the FDA did find out from their own end that there was no significance on both the studies

<unk> significance against placebo on <unk> and one of their studies one the other one didn't show the significance.

But did India, India redo closest I think the F. D. A did find out from their own and that there was no significance on board the studies.

Speaker 2: Now, coming back to our studies, we did study the impact on Eridima as an important secondary endpoint. And we found that both the studies have shown statistical significance against placebo for DFT29. That's going to be one of our key messages on the NDF filing.

Now coming back to all studies B did.

The impact on <unk> as unimportant.

And point and we found that both the studies have shown that is to go to significant against placebo Hood D. F D 29th, but that's going to be one of our key messages on D. N D. A finding.

Speaker 5: If I could add to that just real quick and all of that is correct. You know the clinical erythema assessment that is done when you walk in the door as an investigator is often a marker of overall success. Keep in mind that's the patient. and there are number 0 0 1 FB1 for the facility.

Okay, if I could listen to that cause I could add to that just real quick and all of that is correct.

Clinical erythema assessment that is done when you walk in the door as an investigator.

A marker of overall success.

Keep in mind that the patient their number one concern is looking less red.

Speaker 5: So when you're looking at them, when you walk in the door to assess their grading, the Aratema Assessment is included in your overall grade of improvement, even though the Papu and Pustular Cow does still.

So when you're looking at them when you walk in the door to assess their grading. The erythema assessment is included in your overall grade of improvement even though the popular in popular count is still.

One of the more objective measures.

Speaker 3: so keep in mind if it if people are not getting less read as a result of the post inflammatory erratheum or the background erratheum uh... they're going to let you know

So keep in mind, if it if people are not getting less red as a result of the pulse inflammatory erythema or the background erythema, they're gonna, let you know.

Okay. Thank you very much for taking my questions.

Speaker 1: As a reminder, if you have a question, please press star then one.

As a reminder, if you have a question. Please press Star then one.

Speaker 1: With no further questions, this will conclude our question and answer session. The conference has now concluded. Thank you for attending today's presentation.

With no further questions. This will conclude our question and answer session. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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