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Derm Biopharma Named Top Growth Pick For 2022
Research Report

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The Quick Take

  • ROTH Capital Partners has a Buy rating and a $17 per share price target on Journey Medical Corp.
  • ROTH reiterates its Buy on Journey Medical after choosing it as a Top Growth Pick for 2022.
  • ROTH expects Journey Medical to increase revenue in both 2022 and 2023 by at least 30%, reported analyst Scott Henry in a Jan. 13 research note.
  • Journey Medical develops and commercializes pharmaceutical products and markets generic prescription drugs, for the treatment of dermatological conditions.
  • Factors that will help Journey Medical achieve the forecasted growth are:
    • A seasoned management team that includes many former Medicis employees.
    • Low near-term execution risk in light of strong Q3/21 results.
    • A better business model due to leverage and diversification gained via certain product acquisitions.
    • Pipeline advancement starting in Q1/22 with a DFD-29 clinical program.
  • Journey Medical's shares are trading at a discount, making this an appealing entry point.

Journey Medical Corp. (DERM:NASDAQ) should increase revenue this year and next by 30% or more, purported H.C. Wainwright & Co. analyst Scott Henry, and various factors should help the company achieve that growth.

"We expect significant multiple expansion in the coming year, particularly as revenue growth drives shrinking losses," Henry wrote. "We target profits in 2024."

He noted most of the revenue growth this year will come from annualizing H2/21 results and from Journey Medical's acquisitions of Qbrexza, Accutane, Amzeeq and Zilxi, which are low risk in terms of execution.

"Amzeeq and Zilxi adds leverage to the dermatology salesforce as well as diversification to smooth out any roadblocks for individual products," Henry wrote.

The analyst also highlighted Journey Medical has a pipeline for the long term, particularly with its newly acquired drug candidate, DFD-29, which it intends to imminently advance in the clinic for rosacea. According to H.C. Wainwright, DFD-29 could have peak sales of greater than $100 million.


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Disclosures for ROTH Capital Partners LLC, Journey Medical Corp., Jan. 13, 2022

Within the last twelve months, ROTH Capital Partners, or an affiliate to ROTH Capital Partners, has received compensation for investment banking services from Journey Medical Corporation.
ROTH makes a market in shares of Journey Medical Corporation and as such, buys and sells from customers on a principal basis.
Within the last twelve months, ROTH Capital Partners, or an affiliate to ROTH Capital Partners, has managed or co-managed a public offering for Journey Medical Corporation.
ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months. The material, information and facts discussed in this report other than the information regarding ROTH Capital Partners, LLC and its affiliates, are from sources believed to be reliable, but are in no way guaranteed to be complete or accurate. This report should not be used as a complete analysis of the company, industry or security discussed in the report. Additional information is available upon request. This is not, however, an offer or solicitation of the securities discussed. Any opinions or estimates in this report are subject to change without notice. An investment in the stock may involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Additionally, an investment in the stock may involve a high degree of risk and may not be suitable for all investors. No part of this report may be reproduced in any form without the express written permission of ROTH. Copyright 2022. Member: FINRA/SIPC.

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