Eton Pharmaceuticals Reports Third Quarter Financial Results
DEER PARK, Ill., Nov. 15, 2021 (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 third quarter ended September 30, 2021.
“Over the last month we have made tremendous advancements to our commercial portfolio. We gained two more FDA-approved products, EPRONTIA and carglumic acid, both of which should launch in the fourth quarter, and we are increasing ALKINDI SPRINKLE’s commercial footprint more than ten-fold through an attractive co-promotion arrangement with Tolmar Pharmaceuticals. These events put us in an even stronger position to deliver significant revenue and reach sustained profitability in 2022,” said Sean Brynjelsen, CEO of Eton Pharmaceuticals.
Major Business Updates
- Acquired marketing rights to FDA-approved carglumic acid tablets. Eton’s product is the first and only generic alternative to Carbaglu® and is indicated for acute and chronic hyperammonemia due to N-acetylglutamine Synthase (NAGS) deficiency. Carbaglu® is widely believed to be one of the most expensive treatments in the world and Eton looks forward to offering a lower-cost alternative to patients and caregivers.
- FDA Approval of EPRONTIA™ (topiramate) oral solution. Earlier this month, the U.S. Food and Drug Administration (FDA) approved EPRONTIA™, the first oral liquid formulation of topiramate. EPRONTIA™ is now Eton’s sixth approved product. The product will be marketed by Azurity Pharmaceuticals and is expected to be available before the end of the year. The product’s launch will trigger a $5 million milestone payment to Eton, and Eton will also receive a royalty on sales of the product and potential future commercial milestone payments.
- Significantly expanded ALKINDI SPRINKLE®’s commercial footprint through a co-promotion partnership with Tolmar Pharmaceuticals. Tolmar’s 62-person commercial sales force is expected to be fully trained and promoting ALKINDI SPRINKLE® in December. The transaction is expected to significantly accelerate product adoption and ALKINDI SPRINKLE® sales growth.
ALKINDI SPRINKLE® Commercial Update
In a separate press release issued this morning, Eton announced that it has entered into a co-promotion arrangement with Tolmar Pharmaceuticals for the promotion of ALKINDI SPRINKLE®.
ALKINDI SPRINKLE® sales continued to grow month-over-month in the third quarter and in October. During the quarter, Eton held an advisory panel with key opinion leaders in the pediatric endocrinology community and product feedback continues to be overwhelmingly positive as doctors appreciate the critical importance of precisely dosing pediatric patients when treating adrenal insufficiency. Eton believes in-person meetings have proven to be effective at driving adoption, and as a result, is drastically increasing ALKINDI SPRINKLE®’s commercial footprint through the co-promotion arrangement.
Portfolio Update
Eton now has six FDA-approved products, three of which (carglumic acid, EPRONTIA®, and Rezipres®) are expected to launch in the fourth quarter of 2021. The company also has four additional products that have been submitted to the FDA and could be approved and launched in 2022.
Biorphen® & Rezipres® Vial Conversions. Biorphen® and Rezipres® registration batches have successfully been manufactured in vials, and Eton will submit the supplement applications to the FDA as soon as the necessary stability data is available. Eton expects the vial format of both products to be approved and launched in 2022.
Dehydrated Alcohol Injection. Eton recently held a meeting with the FDA to discuss the dehydrated alcohol product application’s complete response letter and Eton’s proposed responses. Based on the positive outcome of the meeting, Eton believes the FDA’s requests are fully addressable, and the company expects to submit its response as an amendment in the coming months.
Zonisamide Oral Suspension. Eton continues to believe the only item holding up FDA approval of the zonisamide oral suspension product application is the FDA inspection of the product’s European manufacturer. The FDA has assigned the product application a new target action date of January 29, 2022, but the FDA has yet to conduct or schedule the onsite inspection. Eton will receive a $5 million milestone payment upon the approval and launch of zonisamide.
Lamotrigine for Suspension. The product’s human factor study was successfully completed during the quarter. Eton’s partner intends to submit the results to the FDA later this month. The submission should allow for a potential approval of the product in the first half of 2022. Eton will receive a $5 million milestone payment upon the approval and launch of lamotrigine.
Cysteine Hydrochloride Injection. Eton’s paragraph IV litigation and FDA application review remain on going. Eton expects to receive tentative approval from the FDA in advance of the 30-month stay expiration in August 2022.
Zeneo Hydrocortisone Autoinjector. Development activities are ongoing and the product remains on pace for an expected NDA submission in 2023.
Financial Results
Revenue: Eton reported revenue of $0.8 million for the third quarter of 2021. Eton reported no material revenue in the third quarter of 2020.
General and Administrative (G&A) Expenses: G&A expenses for the third quarter of 2021 were $3.3 million compared to $3.4 million in the prior-year period. Decrease was largely due to elevated spending in the prior year period related to launch preparation activities for ALKINDI SPRINKLE®. The third quarter of 2021 included $0.9 million of non-cash expenses.
Research and Development (R&D) Expenses: R&D expenses for the third quarter of 2021 were $2.7 million compared to $2.8 million in the prior-year period. R&D expenses in the third quarter of 2021 were elevated due to expenses related to the development of Biorphen® and Rezipres® vial container conversion. R&D expenses in the third quarter of 2020 included a one-time $1.5 million NDA filing fee.
Net Income: Eton reported a net loss of $6.1 million for the third quarter of 2021, compared to a net loss of $6.5 million in the prior-year period. Eton reported diluted earnings per share (EPS) of ($0.24) in the third quarter of 2021, compared to ($0.31) in the prior year period.
Cash Position: Cash and cash equivalents were $22.7 million as of September 30, 2021.
Conference Call and Webcast Information:
Eton Pharmaceuticals will host a conference call and webcast today at 4:30 p.m. ET (3:30 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 1875678. The webcast can be accessed under “Events & Presentations” in the Investors section of the Company’s website at https://ir.etonpharma.com. 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.
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.
Condensed Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
| For the three months ended | For the nine months ended | |||||||||||||||
| September 30, | September 30, | September 30, | September 30, | |||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Revenues: | ||||||||||||||||
| Licensing revenue | $ | — | $ | — | $ | 14,000 | $ | — | ||||||||
| Product sales and royalties | 775 | (161 | ) | 1,739 | (42 | ) | ||||||||||
| Total net revenues | 775 | (161 | ) | 15,739 | (42 | ) | ||||||||||
| Cost of sales: | ||||||||||||||||
| Licensing revenue | — | — | 1,500 | — | ||||||||||||
| Product sales and royalties | 617 | (144 | ) | 843 | (14 | ) | ||||||||||
| Total cost of sales | 617 | (144 | ) | 2,343 | (14 | ) | ||||||||||
| Gross profit (loss) | 158 | (17 | ) | 13,396 | (28 | ) | ||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 2,678 | 2,826 | 5,554 | 10,703 | ||||||||||||
| General and administrative | 3,327 | 3,429 | 10,651 | 8,960 | ||||||||||||
| Total operating expenses | 6,005 | 6,255 | 16,205 | 19,663 | ||||||||||||
| Loss from operations | (5,847 | ) | (6,272 | ) | (2,809 | ) | (19,691 | ) | ||||||||
| Other (expense) income: | ||||||||||||||||
| Interest and other (expense) income, net | (247 | ) | (232 | ) | (731 | ) | (592 | ) | ||||||||
| Gain on PPP loan forgiven | — | — | 365 | — | ||||||||||||
| Gain on equipment sale | — | — | 181 | — | ||||||||||||
| Loss before income tax expense | (6,094 | ) | (6,504 | ) | (2,994 | ) | (20,283 | ) | ||||||||
| Income tax expense | — | — | — | — | ||||||||||||
| Net loss | $ | (6,094 | ) | $ | (6,504 | ) | $ | (2,994 | ) | $ | (20,283 | ) | ||||
| Net loss per share, basic and diluted | $ | (0.24 | ) | $ | (0.31 | ) | $ | (0.12 | ) | $ | (1.01 | ) | ||||
| Weighted average number of common shares outstanding, basic and diluted | 25,276 | 21,052 | 25,181 | 20,070 | ||||||||||||
Eton Pharmaceuticals, Inc.
Condensed Balance Sheets
(in thousands, except share and per share amounts)
| September 30, 2021 | December 31, 2020 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 22,709 | $ | 21,295 | ||||
| Accounts receivable, net | 385 | 48 | ||||||
| Inventories | 334 | 1,242 | ||||||
| Prepaid expenses and other current assets | 2,435 | 2,116 | ||||||
| Total current assets | 25,863 | 24,701 | ||||||
| Property and equipment, net | 134 | 811 | ||||||
| Intangible assets, net | 463 | 575 | ||||||
| Operating lease right-of-use assets, net | 123 | 192 | ||||||
| Other long-term assets, net | 23 | 40 | ||||||
| Total assets | $ | 26,606 | $ | 26,319 | ||||
| Liabilities and stockholders’ equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 3,273 | $ | 2,344 | ||||
| Current portion of long-term debt | 1,092 | — | ||||||
| PPP loan, current portion | — | 280 | ||||||
| Accrued liabilities | 995 | 1,170 | ||||||
| Total current liabilities | 5,360 | 3,794 | ||||||
| Long-term debt, net of discount and including accrued fees | 5,550 | 6,532 | ||||||
| Long-term portion of PPP and EIDL loans | — | 231 | ||||||
| Operating lease liabilities, net of current portion | 36 | 99 | ||||||
| Total liabilities | 10,946 | 10,656 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity | ||||||||
| Common stock, $0.001 par value; 50,000,000 shares authorized as of September 30, 2021 and December 31, 2020; 24,606,175 and 24,312,808 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively | 25 | 24 | ||||||
| Additional paid-in capital | 110,787 | 107,797 | ||||||
| Accumulated deficit | (95,152 | ) | (92,158 | ) | ||||
| Total stockholders’ equity | 15,660 | 15,663 | ||||||
| Total liabilities and stockholders’ equity | $ | 26,606 | $ | 26,319 | ||||
Eton Pharmaceuticals, Inc.
Condensed Statements of Cash Flows
(In thousands)
(Unaudited)
| Nine months ended September 30, 2021 |
Nine months ended September 30, 2020 |
|||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | (2,994 | ) | $ | (20,283 | ) | ||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
| Stock-based compensation | 2,518 | 1,803 | ||||||
| Common stock issued for product candidate licensing rights | — | 1,264 | ||||||
| Depreciation and amortization | 325 | 490 | ||||||
| Debt discount amortization | 110 | 85 | ||||||
| Gain on forgiveness of debt | (365 | ) | — | |||||
| Gain on sale of equipment | (181 | ) | — | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (337 | ) | 473 | |||||
| Inventories | 908 | (1,319 | ) | |||||
| Prepaid expenses and other assets | (283 | ) | 1,305 | |||||
| Accounts payable | 929 | 1,633 | ||||||
| Accrued liabilities | (234 | ) | (615 | ) | ||||
| Net cash provided by (used in) operating activities | 396 | (15,164 | ) | |||||
| Cash provided by (used in) investing activities | ||||||||
| Proceeds from sale of equipment | 700 | — | ||||||
| Purchases of property and equipment | (5 | ) | (6 | ) | ||||
| Net cash provided by (used in) financing activities | 695 | (6 | ) | |||||
| Cash flows from financing activities | ||||||||
| Proceeds from sales of common stock, net of offering costs | — | 7,756 | ||||||
| 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 | 473 | 204 | ||||||
| Net cash provided by financing activities | 323 | 10,436 | ||||||
| Change in cash and cash equivalents | 1,414 | (4,734 | ) | |||||
| Cash and cash equivalents at beginning of period | 21,295 | 12,066 | ||||||
| Cash and cash equivalents at end of period | $ | 22,709 | $ | 7,332 | ||||
| Supplemental disclosures of cash flow information | ||||||||
| Cash paid for interest | $ | 603 | $ | 545 | ||||
| Cash paid for income taxes | $ | — | $ | — | ||||
| Supplemental disclosure of non-cash financing activity | ||||||||
| Relative fair value of warrants to purchase common stock issued in connection with debt | $ | — | $ | 94 | ||||
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