On Friday, Journey Medical Corp (NASDAQ:DERM) received a positive assessment from Roth/MKM as the firm resumed coverage on the company's stock, assigning a Buy rating and setting a price target of $11.00. The endorsement is largely based on the potential of DERM's DFD-29, an oral treatment for rosacea, which is anticipated to become a leading therapy in its class.
Roth/MKM's analysis suggests that DFD-29 stands out for its clinical superiority and the likelihood of an expanded label compared to the current market leader, Oracea. The firm forecasts that by 2028, DFD-29 could generate at least $200 million in annual sales. The treatment is on track for a significant regulatory milestone with a Prescription Drug User Fee Act (PDUFA) date set for November 4.
The analyst's optimism extends to Journey Medical's financial prospects, as the firm anticipates that the successful launch and sales of DFD-29 will drive the company to profitability by 2025. This projection is bolstered by the company's existing dermatology franchise, which is expected to support the commercialization of the new treatment.
The stock's new price target represents a vote of confidence in Journey Medical's strategic positioning within the dermatology space. With the PDUFA date approaching, the company is moving closer to potentially bringing DFD-29 to market and realizing the anticipated financial benefits outlined by Roth/MKM.
In other recent news, Journey Medical Corp. reported a 7% increase in revenue, reaching $13 million in the first quarter of 2024, fueled by strong sales of dermatology products Qbrexza and Accutane. The company's strategic cost-cutting measures have resulted in profitability, with revenues surpassing SG&A expenses. Journey Medical's Qbrexza and Accutane prescriptions saw a significant rise compared to the same period last year.
The company is also preparing for the launch of DFD-29, a novel oral therapy for Rosacea, following positive results in Phase 3 trials. This new therapy is anticipated to secure a considerable market share upon approval. Despite reporting a net loss, Journey Medical's sales and marketing efforts have effectively heightened product demand, suggesting a promising future.
These are the latest developments in Journey Medical's operations, indicating a company that is not only growing but also strategically positioning itself for future success. The company is on track to meet or exceed its financial guidance for the year and is focusing on portfolio expansion, cost management, and advancing DFD-29 toward market approval.
InvestingPro Insights
Following the positive outlook from Roth/MKM on Journey Medical Corp (NASDAQ:DERM), current InvestingPro data provides additional context for investors evaluating the company's potential. The company's market capitalization stands at $102.87 million, signaling a modest size within the pharmaceutical sector. Despite a challenging period with a negative P/E ratio of -21.16, reflecting the company's lack of profitability in the last twelve months, Journey Medical has shown a strong revenue growth of 27.82% over the same period. This indicates a robust increase in sales, which is particularly relevant considering the anticipated success of DFD-29.
InvestingPro Tips highlight a high return over the last year, with the stock delivering 150.73% to investors, showcasing the market's growing confidence in the company's prospects. Additionally, Journey Medical operates with a moderate level of debt, which could provide financial flexibility as the company aims to bring DFD-29 to market. With these insights, investors can better understand the financial landscape of Journey Medical as they await the PDUFA date for DFD-29. For those interested in deeper analysis, InvestingPro offers additional tips that can further guide investment decisions. Use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and discover the full range of expert insights available.
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