Journey Medical (DERM) Q3 2025: Amrosi Prescriptions Jump 146%, Driving Operating Leverage
Amrosi’s accelerated uptake is transforming Journey Medical’s revenue mix and operating leverage, as physician adoption broadens and refill rates strengthen. Despite legacy headwinds, disciplined expense management and payer access progress set up a pivotal inflection in profitability by year-end. Investors should focus on the evolving script-to-revenue dynamic and formulary penetration as key drivers into 2026.
Summary
- Amrosi Launch Momentum: Rapid prescription growth and strong refill rates are reshaping Journey’s commercial trajectory.
- Payer Access and Leverage: Expansion of formulary coverage and disciplined OPEX underpin margin improvement.
- Profitability Inflection: EBITDA positive milestone targeted for Q4 as Amrosi ramps and copay reliance wanes.
Performance Analysis
Journey Medical delivered a 21% revenue increase year-over-year, driven by the rapid adoption of Amrosi, its new oral treatment for rosacea. Amrosi contributed $4.9 million in Q3, up 75% sequentially, and prescriptions more than doubled quarter-over-quarter. This robust launch offset continued pressure in the legacy portfolio, where aggregate revenue declined 16% year-over-year, largely due to Accutane facing generic competition. Cubrexa, the company’s previous top seller, remained stable and continues to show single-digit growth, despite new entrants in its category.
Gross margin improved to 67.4% in Q3, up from 63.5% in Q1, reflecting the higher mix of Amrosi and Cubrexa, both high-margin products. Operating expenses rose just 9% year-over-year, well below revenue growth, signaling early operating leverage from the commercial infrastructure. The company posted a narrower net loss and achieved positive adjusted EBITDA, with management reiterating confidence in reaching sustainable EBITDA profitability in Q4. Cash and equivalents rose to $24.9 million, supporting ongoing commercial execution and product access efforts.
- Amrosi Script Acceleration: Prescriptions surged from 7,394 in Q2 to 18,198 in Q3, with refill rates at a 1-to-1 ratio, indicating strong patient and physician engagement.
- Legacy Portfolio Drag: Accutane revenue stabilized sequentially after declines, while Cubrexa maintained its leading position pending further Amrosi ramp.
- Margin Expansion: Sequential gross margin gains reflect favorable product mix and lower inventory costs, supporting the path to profitability.
Overall, the quarter marks a transition period as Amrosi’s contribution grows and the company pivots away from legacy revenue dependence. The evolving payer landscape and script-to-revenue conversion will be critical to sustaining this momentum.
Executive Commentary
"Ambrosie achieved third quarter total prescription growth of approximately 146%... As our commercial team continues to recruit new MROSI writers, we have now begun to focus on developing the base of prescribers that have already written an MROSI prescription into consistent writers."
Claude Morawi, Co-founder, President and Chief Executive Officer
"Gross margin was 67.4% in the third quarter... This ongoing improvement is driven by higher revenues from Amrosi and Cubrexa, both high margin products, combined with lower overall inventory period costs."
Joseph Benesch, Chief Financial Officer
Strategic Positioning
1. Amrosi Launch Execution and Market Penetration
Amrosi’s launch is redefining Journey’s commercial focus. The company targeted 3,200 key oral rosacea prescribers, with unique Amrosi writers now exceeding 2,700, up 50% since last quarter. Physician feedback and clinical data underscore Amrosi’s early onset of efficacy and superior safety profile, fueling both breadth (new prescribers) and depth (refills and switches from legacy products). Refill ratios are climbing, with expectations of further acceleration as prescribers gain confidence and patient outcomes validate trial data.
2. Payer Access and Formulary Expansion
Payer access is a gating factor for Amrosi’s revenue conversion. Contracts are secured with two of three major group purchasing organizations (GPOs), covering over 100 million commercial lives. The final GPO is expected to contract in early 2026. Downstream adoption by health plans lags initial contracting, typically requiring up to three quarters for full formulary implementation. In the interim, the company’s copay assistance program bridges access, but management expects reliance on this to decline as payer reimbursement broadens.
3. Operating Leverage and Cost Discipline
Disciplined expense management is amplifying revenue gains. Operating expenses increased only 9% year-over-year, well below the 21% revenue increase. Management expects OPEX to remain stable into 2026, leveraging existing commercial infrastructure as Amrosi scales. This dynamic is driving sequential gross margin improvement and is expected to deliver sustainable EBITDA profitability from Q4 onward.
4. Legacy Portfolio Stability Amid Headwinds
Legacy products face ongoing competitive pressure, particularly Accutane, which has stabilized after generic-driven declines. Cubrexa remains resilient, benefiting from promotional activity and overlap with Amrosi prescribers. Management is actively maintaining engagement with dermatologists to mitigate erosion and maximize cross-sell opportunities.
Key Considerations
This quarter marks a strategic inflection for Journey Medical, with Amrosi’s rapid adoption reshaping the business model and setting the stage for margin expansion and sustainable profitability. The company is now balancing the transition from legacy product dependence to a growth platform anchored by Amrosi, with payer access and physician adoption as central levers.
Key Considerations:
- Script-to-Revenue Conversion: The lag between prescription growth and realized revenue will persist until broader payer adoption is achieved; investors should monitor the evolution of paid scripts versus total scripts.
- Formulary Penetration Timeline: Full revenue impact from GPO contracting will not materialize until late 2026, as downstream health plan adoption is inherently slow.
- OPEX Leverage: Stable expense base positions the company for outsized margin gains as Amrosi scales, but sustained discipline is required as the portfolio mix shifts.
- Legacy Drag and Portfolio Risk: While Accutane and Cubrexa are stabilizing, further generic or promotional activity could pressure revenues; ongoing engagement and cross-sell are essential.
Risks
Key risks include payer access delays, further generic erosion in legacy products, and the potential for slower-than-expected conversion of trialing prescribers into consistent writers. The company’s reliance on its copay assistance program will persist until full formulary adoption is achieved, creating near-term uncertainty in net revenue per script and cash flow dynamics. Additionally, any significant pricing pressure or reimbursement headwinds could disrupt the path to profitability.
Forward Outlook
For Q4 2025, Journey Medical expects:
- Sustainable EBITDA profitability as Amrosi’s contribution increases and OPEX remains flat.
- Further sequential growth in Amrosi prescriptions, with refill ratios expected to improve as patient outcomes reinforce physician confidence.
For full-year 2025, management reiterated:
- Continued revenue growth driven by Amrosi ramp and stable legacy product performance.
- Operating expenses to remain relatively consistent into 2026, supporting further operating leverage.
Management highlighted that full formulary adoption and payer reimbursement for Amrosi will be a multi-quarter process, with the most significant revenue impact expected in late 2026. Investors should monitor both breadth and depth of prescriber engagement and the evolving ratio of paid to total scripts as leading indicators.
Takeaways
Journey Medical’s Q3 results underscore a business in transition, with Amrosi’s rapid uptake offsetting legacy headwinds and driving margin expansion. The company’s disciplined cost structure and progress in payer contracting lay the groundwork for sustainable profitability, though the full revenue impact of Amrosi’s launch will take several quarters to materialize.
- Amrosi Ramp Is the Central Growth Engine: Prescription acceleration, strong refill rates, and broadening prescriber base signal robust product-market fit and commercial execution.
- Payer Access Is the Bottleneck: The pace of formulary adoption and transition from copay assistance to reimbursed scripts will determine revenue realization and cash flow timing.
- Legacy Portfolio Requires Active Management: Accutane and Cubrexa stability is critical to bridging the transition, but ongoing competitive threats remain.
Conclusion
Journey Medical is executing a decisive pivot toward growth and profitability, with Amrosi’s launch fundamentally altering its revenue mix and operating leverage. While near-term script-to-revenue conversion and payer adoption remain gating factors, the company’s strategic focus and disciplined cost management position it well for a step-change in financial performance through 2026.
Industry Read-Through
Journey Medical’s Q3 performance provides a template for specialty pharma launches: rapid physician adoption can drive headline prescription growth, but true revenue acceleration hinges on payer access and formulary integration. The sequential margin expansion and disciplined OPEX reflect the operating leverage available to companies with established commercial infrastructure. For the broader dermatology and specialty pharma sector, the lag between script volume and net revenue realization is a key dynamic that will influence valuation and investor expectations, especially for new product launches targeting entrenched standard-of-care therapies.