Eton Pharmaceuticals Reports Fourth Quarter 2021 Financial Results

  • Fourth Quarter 2021 Revenue of $6.1 million
  • Fourth Quarter 2021 Net Income of $1.0 million and EPS of $0.04

DEER PARK, Ill., March 16, 2022 (GLOBE NEWSWIRE) — Eton Pharmaceuticals, Inc (Nasdaq: ETON), an innovative pharmaceutical company focused on developing and commercializing treatments for rare diseases, today reported financial results for the fourth quarter ended December 31, 2021.

“Our business has never been stronger. The carglumic acid launch is tracking ahead of our initial expectations, the recently implemented co-promotion partnership with Tolmar has accelerated growth of ALKINDI SPRINKLE®, and just this week we launched another new product, Rezipres,” said Sean Brynjelsen, CEO of Eton Pharmaceuticals. “In addition, we continue to make progress with our four additional products that have been submitted to the FDA, which should lead to even more product launches in the coming quarters,” added Brynjelsen.

Major Business Updates

  • Launch of Carglumic Acid tablets. In late December, Eton launched the first and only generic alternative to Carbaglu®. Initial adoption of the product is ahead of Eton’s original expectations.
  • Implementation of ALKINDI SPRINKLE® co-promotion partnership with Tolmar Pharmaceuticals. By the end of January, Tolmar’s 62-person commercial sales force was fully trained and promoting ALKINDI SPRINKLE. Eton has already seen an increase in new ALKINDI SPRINKLE prescriptions, and March is on pace to be the company’s best month ever for new patient adds.
  • Launch of EPRONTIA™ (topiramate) oral solution. In December, Azurity Pharmaceuticals launched EPRONTIA, the first and only liquid formulation of topiramate. The launch of the product triggered a $5 million milestone payment from Azurity to Eton.
  • Launch of Rezipres® (ready-to-use ephedrine injection). The market for ephedrine injection in the United States was $86 million in 2021 according to IQVIA. Rezipres will be promoted by XGen Pharmaceutical DJB’s hospital sales force.

Commercial Update

Eton launched carglumic acid in late December 2021. The product is the first and only generic version of Carbaglu®. Eton’s product has been awarded Competitive Generic Therapy (CGT) designation by the U.S. Food and Drug Administration (FDA) which provides additional market exclusivity. The company’s sales force is actively promoting the product to physicians and will be exhibiting in the coming weeks at the annual meetings for the American College of Medical Genetics and Genomics (ACMG) and the Society for Inherited Metabolic Disorders. Initial interest in the product has been strong, with patients, physicians, and payers expressing excitement about carglumic acid’s lower price and more convenient room temperature storage. Current adoption of the product has exceeded the company’s original forecast.

During the fourth quarter, Eton announced that it had entered into a co-promotion agreement with Tolmar Pharmaceuticals, under which Tolmar’s 62-person pediatric endocrinology sales force would promote ALKINDI SPRINKLE. Tolmar’s sales force became fully trained and started promoting ALKINDI SPRINKLE in the second half of January. Tolmar’s sales force has greatly increased the number of in-person physician visits taking place, and Eton has already seen a significant increase in new patient prescriptions for the product. The company expects the month of March to produce the highest number of monthly new patient prescriptions since the launch of ALKINDI SPRINKLE.

Portfolio Update

Eton now has six FDA-approved commercial products in launch phase. The company also has four additional products that have been submitted to the FDA, which are expected to be approved and launched in the coming quarters.

Biorphen & Rezipres Vial Conversions. Biorphen and Rezipres registration batches have successfully been manufactured in vials. Eton plans to submit the supplement applications for both products to the FDA in the second quarter of 2022, which should allow for a launch of vial presentations of both products in 2022.

Dehydrated Alcohol Injection. Eton is actively working to prepare a resubmission to the FDA that addresses all of the FDA’s questions from the Complete Response Letter and items discussed during its meeting with the FDA that took place in the fourth quarter. Eton is confident that it will be able to fully address all of the FDA’s requests and expects to have the response submitted in the coming weeks.

Zonisamide Oral Suspension. The UK-based contract manufacturing site was inspected by the FDA at the end of January. Eton believes the inspection was successful and should allow for the approval of the application, however no decision timeline has been communicated to Eton. Eton will receive a $5 million milestone payment upon the approval and launch of zonisamide.

Lamotrigine for Suspension. Eton’s partner submitted results of the product’s human factor study to the FDA in the fourth quarter of 2021 and the application has been assigned a target action date in May 2022. Eton will receive a $5 million milestone payment upon the approval and launch of lamotrigine.

Cysteine Hydrochloride Injection. Eton’s paragraph IV bench trial is taking place this week in Delaware. While no timeline has been provided for the judge’s ruling, Eton expects to have a decision later this year. The 30-month stay for Eton’s application expires in August 2022.

Zeneo Hydrocortisone Autoinjector. Development activities are ongoing and the product remains on pace for an expected New Drug Application submission in 2023.

Financial Results

Revenue: Eton reported revenue of $6.1 million for the fourth quarter of 2021. Revenue in the quarter included a $5.0 million milestone payment from Azurity Pharmaceuticals triggered by the commercial launch of EPRONTIA. Eton reported no material revenue in the fourth quarter of 2020.

Research and Development (R&D) Expenses: R&D expenses for the fourth quarter of 2021 were moderate at $0.7 million compared to $3.4 million in the prior-year period. R&D expenses in the fourth quarter of 2020 were elevated due to a $1.4 million FDA filing fee for topiramate oral solution, a milestone fee for the FDA filing acceptance of Rezipres, and expenses related to the Biorphen® vial and other products in development.

Selling, General and Administrative (SG&A): SG&A expenses were $3.8 million in both the fourth quarters of 2021 and 2020. Fourth quarter 2021 expenses were slightly higher for increased compensation expenses and market research consulting along with FDA product fees for Rezipres, offset by lower sales and marketing expenses associated with the fourth quarter 2020 launch of ALKINDI SPRINKLE. SG&A expenses for the fourth quarter of 2021 included $0.8 million of non-cash expenses.

Net Income: Eton reported net income of $1.0 million for the fourth quarter of 2021, compared to a net loss of $7.7 million in the prior-year period. Eton reported diluted earnings per share (EPS) of $0.04 in the fourth quarter of 2021, compared to ($0.32) in the prior year period.

Cash Position: Cash and cash equivalents were $14.4 million as of December 31, 2021. Eton received the $5.0 million EPRONTIA commercial launch milestone payment in early January.

Conference Call and Webcast Information:
Eton Pharmaceuticals will host a conference call and webcast today at 7:00 p.m. ET (6:00 p.m. CT). To access the conference call, please dial 1-866-795-8473 (domestic) or 1-470-495-9161 (international) and refer to conference ID 1318317. The webcast can be accessed under “Events & Presentations” in the Investors section of the company’s website at The webcast will be archived and made available for replay on the company’s website approximately two hours after the call and will be available for 30 days.

About Eton Pharmaceuticals
Eton Pharmaceuticals, Inc. is an innovative pharmaceutical company focused on developing and commercializing treatments for rare diseases. The company currently owns or receives royalties from six FDA-approved products, including ALKINDI SPRINKLE®, Carglumic Acid, Biorphen®, Alaway® Preservative Free, Rezipres®, and Eprontia™, and has four additional products that have been submitted to the FDA for approval.

Forward-Looking Statements
Statements contained in this press release regarding matters that are not historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements associated with the expected ability of Eton to undertake certain activities and accomplish certain goals and objectives. These statements include but are not limited to statements regarding Eton’s business strategy, Eton’s plans to develop and commercialize its product candidates, the safety and efficacy of Eton’s product candidates, Eton’s plans and expected timing with respect to regulatory filings and approvals, and the size and growth potential of the markets for Eton’s product candidates. Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Words such as “believes,” “anticipates,” “plans,” “expects,” “intends,” “will,” “goal,” “potential” and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based upon Eton’s current expectations and involve assumptions that may never materialize or may prove to be incorrect. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of various risks and uncertainties, which include, without limitation, risks associated with the process of discovering, developing and commercializing drugs that are safe and effective for use as human therapeutics, and in the endeavor of building a business around such drugs. These and other risks concerning Eton’s development programs and financial position are described in additional detail in Eton’s filings with the Securities and Exchange Commission. All forward-looking statements contained in this press release speak only as of the date on which they were made. Eton undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made.

Eton Pharmaceuticals, Inc.
Statements of Operations
(In thousands, except per share amounts)

    For the three months ended     For the years ended  
    December 31,     December 31,     December 31,     December 31,  
    2021     2020     2021     2020  
Licensing revenue   $ 5,000     $     $ 19,000     $  
Product sales and royalties, net     1,093       81       2,832       39  
Total net revenues     6,093       81       21,832       39  
Cost of sales:                                
Licensing revenue                 1,500        
Product sales and royalties     280       300       1,123       286  
Total cost of sales     280       300       2,623       286  
Gross profit (loss)     5,813       (219 )     19,209       (247 )
Operating expenses:                                
Research and development     681       3,401       6,235       14,104  
General and administrative     3,818       3,800       14,469       12,760  
Total operating expenses     4,499       7,201       20,704       26,864  
Income (loss) from operations     1,314       (7,420 )     (1,495 )     (27,111 )
Other (expense) income:                                
Interest and other expense, net     (275 )     (267 )     (1,006 )     (859 )
Gain on PPP loan forgiveness                 365        
Gain on equipment sale                 181        
Income (loss) before income tax expense     1,039       (7,687 )     (1,955 )     (27,970 )
Income tax expense                        
Net income (loss)   $ 1,039     $ (7,687 )   $ (1,955 )   $ (27,970 )
Net income (loss) per share, basic   $ 0.04     $ (0.32 )   $ (0.08 )   $ (1.33 )
Net income (loss) per share, diluted   $ 0.04     $ (0.32 )   $ (0.08 )   $ (1.33 )
Weighted average number of common shares outstanding, basic     25,285       23,809       25,207       21,010  
Weighted average number of common shares outstanding, diluted     25,957       23,809       25,207       21,010  

Eton Pharmaceuticals, Inc.
Balance Sheets
(In thousands, except share and per share amounts)

    December 31, 2021     December 31, 2020  
Current assets:                
Cash and cash equivalents   $ 14,406     $ 21,295  
Accounts receivable, net     5,471       48  
Inventories     550       1,242  
Prepaid expenses and other current assets     3,177       2,116  
Total current assets     23,604       24,701  
Property and equipment, net     115       811  
Intangible assets, net     3,621       575  
Operating lease right-of-use assets, net     104       192  
Other long-term assets, net     21       40  
Total assets   $ 27,465     $ 26,319  
Liabilities and stockholders’ equity                
Current liabilities:                
Accounts payable   $ 1,774     $ 2,344  
Current portion of long-term debt     1,418        
PPP loan, current portion           280  
Accrued liabilities     1,366       1,170  
Total current liabilities     4,558       3,794  
Long-term debt, net of discount and including accrued fees     5,262       6,532  
Long-term portion of PPP and EIDL loans           231  
Operating lease liabilities, net of current portion     15       99  
Total liabilities     9,835       10,656  
Stockholders’ equity                
Common stock, $0.001 par value; 50,000,000 shares authorized; 24,626,004 and 24,312,808 shares issued and outstanding at December 31, 2021 and 2020, respectively     25       24  
Additional paid-in capital     111,718       107,797  
Accumulated deficit     (94,113 )     (92,158 )
Total stockholders’ equity     17,630       15,663  
Total liabilities and stockholders’ equity   $ 27,465     $ 26,319  

Eton Pharmaceuticals, Inc.
Statements of Cash Flows
(In thousands)

    Year ended
December 31, 2021
    Year ended
December 31, 2020
Cash flows from operating activities                
Net loss   $ (1,955 )   $ (27,970 )
Adjustments to reconcile net loss to net cash used in operating activities:                
Stock-based compensation     3,381       2,576  
Common stock issued for product candidate licensing rights           1,264  
Depreciation and amortization     462       651  
Debt discount amortization     148       121  
Gain on forgiveness of PPP loan     (365 )      
Gain on sale of equipment     (181 )      
Changes in operating assets and liabilities:                
Accounts receivable     (5,423 )     425  
Inventories     692       (862 )
Prepaid expenses and other assets     (1,026 )     (20 )
Accounts payable     (570 )     1,769  
Accrued liabilities     116       (300 )
Net cash used in operating activities     (4,721 )     (22,346 )
Cash used in investing activities                
Proceeds from sale of equipment     700        
Purchases of property and equipment     (9 )     (50 )
Purchase of product licensing rights     (3,250 )      
Net cash used in financing activities     (2,559 )     (50 )
Cash flows from financing activities                
Proceeds from sales of common stock, net of offering costs           28,782  
Proceeds from issuance of long-term debt, net of issuance costs           1,965  
EIDL loan payoff     (150 )      
Proceeds from PPP and EIDL loans           511  
Proceeds from employee stock purchase plan and stock option exercises     541       367  
Net cash provided by financing activities     391       31,625  
Change in cash and cash equivalents     (6,889 )     9,229  
Cash and cash equivalents at beginning of period     21,295       12,066  
Cash and cash equivalents at end of period   $ 14,406     $ 21,295  
Supplemental disclosures of cash flow information                
Cash paid for interest   $ 815     $ 797  
Cash paid for income taxes   $     $  
Supplemental disclosure of non-cash investing and financing activity                
Relative fair value of common stock warrants issued in connection with debt   $     $ 94  
Right-of-use assets obtained in exchange for lease liabilities   $     $ 195  

Investor Contact:
David Krempa


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