8-K: Journey Medical Corporation Set to Join Prestigious Russell 2000 and Russell 3000 Indexes

Journey Medical Corporation (Nasdaq: DERM) announced its inclusion in the small-cap Russell 2000 Index and the broad-market Russell 3000 Index, effective June 27, 2025, a move anticipated to boost investor visibility and institutional interest.

Summary

• Journey Medical Corporation will be added to the Russell 2000 Index and the Russell 3000 Index.
• The inclusion is effective after the close of U.S. equity markets on June 27, 2025.
• This addition is a result of the 2025 annual Russell Index reconstitution.
• Management anticipates that joining these indexes will increase the company's visibility with investors and institutions.
• The company's FDA-approved product, Emrosi (40 mg Minocycline Hydrochloride Modified-Release Capsules), for inflammatory lesions of rosacea, is reported to be off to a strong start.
• Journey Medical is focused on expanding access, growing prescription volume, and publishing additional peer-reviewed data for Emrosi.
• The company believes 2025 could be a transformational year for Journey Medical.

Sentiment

Score: 7

Explanation: The announcement of index inclusion is a positive development for visibility and potential liquidity. Management's comments on Emrosi's strong start and a 'transformational year' are optimistic. However, the document also lists numerous significant risks, including a 'substantial doubt about our ability to continue as a going concern' and the 'potential need to raise additional capital', which temper the overall sentiment.

Positives

• Inclusion in the Russell 2000 and Russell 3000 Indexes is expected to increase the company's visibility among investors and institutions.
• Approximately $10.6 trillion in assets are benchmarked against Russell U.S. Indexes, suggesting potential for increased investment flow.
• The launch of Emrosi, an FDA-approved treatment for rosacea, is reported to be off to a strong start.
• Management expresses optimism for 2025, anticipating it to be a 'transformational year'.

Risks

• Products and product candidates are subject to time and cost intensive regulation and clinical testing, and may never be successfully developed or commercialized.
• A substantial portion of sales derive from products that may become subject to third-party generic competition, new competitor products, or increased market share of existing competitor products, which could significantly impact operating income.
• Operating in a heavily regulated industry, the company cannot predict the impact of future legislation or administrative/executive action.
• Revenue is mainly dependent upon sales of dermatology products, and any setback could impair operating results.
• Competition could limit commercial opportunity and profitability, including from manufacturers of generic versions of products.
• Risk that products do not achieve broad market acceptance, including by government and third-party payors.
• Reliance on third parties for several aspects of operations.
• Dependence on the ability to identify, develop, and acquire or in-license products and integrate them into operations, at which the company may be unsuccessful.
• The success of the business, including the ability to finance the company and generate additional revenue, depends on the successful commercialization of Emrosi and any future product candidates.
• Clinical drug development is very expensive, time consuming, and uncertain, and clinical trials may fail to adequately demonstrate the safety and efficacy of current or future product candidates.
• Competitors could develop and commercialize products similar or identical to the company's.
• Risks related to the protection of intellectual property and potential inability to maintain sufficient patent protection for technology and products.
• Business and operations could suffer in the event of computer system failures, cyber-attacks, or deficiencies in cybersecurity.
• Substantial doubt about the company's ability to continue as a going concern.
• The effects of major public health issues, epidemics or pandemics on product revenues and any future clinical trials.
• Potential need to raise additional capital.
• Fortress Biotech controls a voting majority of common stock, which could be detrimental to other shareholders.
• Other risks described in Part I, Item 1A, Risk Factors, in the Annual Report on Form 10-K for the year ended December 31, 2024, subsequent Reports on Form 10-Q, and other SEC filings.

Future Outlook

Journey Medical Corporation anticipates that its inclusion in the Russell 2000 and Russell 3000 Indexes will enhance its visibility among investors and institutions. The company is focused on expanding access and growing prescription volume for its FDA-approved product, Emrosi, and expects 2025 to be a transformational year.

Management Comments

• "We are very pleased to be included in the Russell 2000 and Russell 3000 Indexes, which we anticipate will increase the company's visibility with investors and institutions." Claude Maraoui, Journey Medical's Co-Founder, President and Chief Executive Officer.
• "The launch of Emrosi (40 mg Minocycline Hydrochloride Modified-Release Capsules, 10 mg immediate release and 30 mg extended release), our FDA-approved treatment for inflammatory lesions of rosacea in adults, is off to a strong start, and we are focused on expanding access, growing prescription volume, and publishing additional peer-reviewed data that further supports Emrosi's clinical value." Claude Maraoui.
• "We believe 2025 could be a transformational year for Journey Medical." Claude Maraoui.

Industry Context

The inclusion of Journey Medical in the Russell Indexes reflects its growing market capitalization and recognition within the U.S. public company landscape. For a commercial-stage pharmaceutical company focused on dermatology, increased visibility through index inclusion can attract broader investor interest, potentially facilitating capital access and enhancing liquidity, which is crucial in the competitive and capital-intensive pharmaceutical sector.

Related Party Transactions

• Journey Medical Corporation was founded by Fortress Biotech, Inc. (Nasdaq: FBIO).
• Fortress Biotech, Inc. controls a voting majority of Journey Medical's common stock, which is noted as a potential detriment to other shareholders.

Stakeholder Impact

• Shareholders: Potential for increased visibility and liquidity due to index inclusion, but also subject to risks including Fortress Biotech's majority control and potential need for capital raise.
• Investors and Institutions: Increased visibility and potential for inclusion in index funds and active investment strategies benchmarked against Russell Indexes.
• Customers (patients): Continued focus on expanding access to Emrosi and publishing additional clinical data.
• Employees: Continued focus on commercialization efforts for Emrosi.

Next Steps

• Effective inclusion in the Russell 2000 and Russell 3000 Indexes after the close of U.S. equity markets on June 27, 2025.
• Continue expanding access and growing prescription volume for Emrosi.
• Publish additional peer-reviewed data supporting Emrosi's clinical value.

Key Dates

Keywords

Journey Medical Corporation, DERM, Russell 2000 Index, Russell 3000 Index, Index Reconstitution, Pharmaceutical, Dermatology, Emrosi, FDA-approved, Commercial-stage, Small-cap, Nasdaq