Eton Pharmaceuticals, Inc (Nasdaq: ETON), a specialty
pharmaceutical company focused on developing and commercializing
innovative treatments for rare pediatric diseases, today reported
financial results for the third quarter ended September 30, 2020
and provided an update on business progress.
“In recent weeks we submitted the last of our nine product
candidates to the FDA. This is a tremendous accomplishment by our
team after years of hard work. We are now turning our focus to
building out a leading orphan drug commercial organization,” said
Sean Brynjelsen, CEO of Eton Pharmaceuticals. “Early interest in
ALKINDI SPRINKLE from physicians and caregivers has been very
strong and has reiterated the significant need for the
product.”
Recent Business Milestones
- FDA approval of orphan product ALKINDI®
SPRINKLE. In September, ALKINDI SPRINKLE was approved by
the FDA as a replacement therapy for Adrenocortical Insufficiency
in patients under 17 years of age. Eton expects to have the product
commercially available by the end of November.
- FDA approval of Alaway Preservative Free®.
During the quarter, Alaway Preservative Free was approved by the
FDA. Bausch Health plans to launch the product by the Spring of
2021 and Eton will receive a royalty on sales of the product.
- Four additional NDAs submitted to the FDA.
Eton, or its partners, have submitted four NDAs in the second half
of 2020. Dehydrated alcohol injection, zonisamide oral suspension,
and ephedrine injection have all been accepted for filing and
assigned PDUFA dates of May 27, 2021; May 29, 2021; and June 18,
2021, respectively.
- Successful completion of equity financing. In
October, Eton closed an oversubscribed common stock offering which
resulted in gross proceeds of approximately $22.5 million. The
proceeds are expected to be sufficient to allow Eton to launch its
current pipeline products and reach profitability.
ALKINDI SPRINKLE
Eton anticipates having commercial availability of ALKINDI
SPRINKLE by the end of November. The company’s ALKINDI SPRINKLE
sales representatives have been hired, fully trained, and have
begun engaging with pediatric endocrinologists. Initial interest
from physicians, caregivers, and patients has been very strong and
Eton expects the product to exceed the company’s original sales
forecast for 2021.
Biorphen
The company remains on schedule to file a Prior Approval
Supplement for Biorphen vials in the fourth quarter of 2020, which
should allow for a launch of the vial product in the first half of
2021. Customer feedback continues to show aversion to the ampule
format but strong interest in the product in vial form.
Pipeline Update
Product |
Regulatory Status |
Biorphen® |
Commercial |
ALKINDI® SPRINKLE |
Approved |
Alaway Preservative Free® |
Approved |
Dehydrated Alcohol Inj. (DS-100) |
Filed |
Lamotrigine Oral Susp. (ET-105) |
Filed |
Zonisamide Oral Susp. (ET-104) |
Filed |
Cysteine Inj. (DS-300) |
Filed |
Ephedrine Injection (ET-203) |
Filed |
Topiramate Oral Soln (ET-101) |
Submitted |
Dehydrated Alcohol Injection (DS-100). During
the quarter, Eton submitted an NDA for the product and the
application was accepted for filing. The application has been
assigned a PDUFA date of May 27, 2021.
Lamotrigine Oral Suspension (ET-105). The
product’s human factors study is ongoing. One of the three
requested arms has been completed, and the two remaining arms are
ongoing. Eton expects the study to be completed and submitted to
the FDA in the coming months, allowing for potential FDA approval
as early as the first half of 2021.
Zonisamide Oral Suspension (ET-104). During the
quarter, Eton submitted an NDA for the product and the application
was accepted for filing. The application has been assigned a PDUFA
date of May 29, 2021.
Cysteine Injection (DS-300). In October, Eton’s
Abbreviate New Drug Application received a complete response letter
from the FDA with only minor deficiencies. Eton expects to respond
to the request in December, which should allow the application to
receive tentative approval as early as the first quarter of 2021.
The company’s paragraph IV litigation and post grant review (PGR)
challenges are ongoing. Eton remains confident the innovator’s
patents will be invalidated, and the company believes its product
could launch as early as November 2021 if the PGR process is
successful or August 2022 when the 30-month stay expires.
Ephedrine Injection (ET-203). Eton’s partner
submitted the product’s NDA during the quarter and the application
has been accepted for filing by the FDA. The NDA has been assigned
a PDUFA date of June 18, 2021.
Topiramate Oral Solution (ET-101). Eton
submitted an NDA for the product in October 2020. If the
application is accepted for filing, Eton would expect it to be
assigned a PDUFA date of Q3 2021.
Financial Results
Revenue: Eton reported revenue of ($0.2)
million for the third quarter of 2020. During the quarter, Eton
lowered the list price of Biorphen, which resulted in a $0.2
million reduction to revenue due to a shelf stock adjustment charge
tied to inventory on hand with wholesale customers. Eton reported
no revenue in the third quarter of 2019.
Selling, General, & Administrative
(SG&A): SG&A expenses in the third quarter of 2020
were $3.4 million compared with $1.6 million in the prior year
period. The increase was driven by higher sales and marketing
spending in advance of the ALKINDI SPRINKLE launch, paragraph IV
litigation expenses related to the company’s cysteine injection
patent challenge, and higher non-cash stock-based compensation in
the period.
Research & Development (R&D): R&D
expenses in the third quarter of 2020 were $2.8 million compared
with $3.4 million in the prior year period. The third quarter of
2020 included a $1.5 million NDA filing fee paid to the FDA. The
third quarter of 2019 included a $2.0 million licensing payment
related to the lamotrigine product.
Net Loss: Eton reported a net loss of $6.5
million in the third quarter of 2020 compared to a net loss of $5.0
million for the same period in 2019.
Cash Position: As of September 30, 2020, Eton
reported cash and cash equivalents of $7.3 million. Subsequent to
the quarter end, Eton closed an equity financing which resulted in
gross proceeds of approximately $22.5 million.
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 5092872. 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 PharmaceuticalsEton Pharmaceuticals,
Inc. is a specialty pharmaceutical company focused on developing
and commercializing innovative treatments for rare pediatric
diseases. The company currently owns or receives royalties from
three FDA-approved products, including ALKINDI® SPRINKLE,
Biorphen®, and Alaway Preservative Free®, and has six additional
products that have been submitted to the FDA.
Forward-Looking StatementsStatements 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, |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Product sales, net |
$ |
(161 |
) |
|
$ |
— |
|
|
$ |
(42 |
) |
|
$ |
— |
|
Licensing revenue |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
500 |
|
Total revenues |
|
(161 |
) |
|
|
— |
|
|
|
(42 |
) |
|
|
500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product sales |
|
(144 |
) |
|
|
— |
|
|
|
(14 |
) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross (loss)
profit |
|
(17 |
) |
|
|
— |
|
|
|
(28 |
) |
|
|
500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
2,826 |
|
|
|
3,418 |
|
|
|
10,703 |
|
|
|
11,322 |
|
General and administrative |
|
3,429 |
|
|
|
1,624 |
|
|
|
8,960 |
|
|
|
5,123 |
|
Total operating
expenses |
|
6,255 |
|
|
|
5,042 |
|
|
|
19,663 |
|
|
|
16,445 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations |
|
(6,272 |
) |
|
|
(5,042 |
) |
|
|
(19,691 |
) |
|
|
(15,945 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (expense)
income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other (expense) income, net |
|
(232 |
) |
|
|
77 |
|
|
|
(592 |
) |
|
|
321 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income tax
expense |
|
(6,504 |
) |
|
|
(4,965 |
) |
|
|
(20,283 |
) |
|
|
(15,624 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(6,504 |
) |
|
$ |
(4,965 |
) |
|
$ |
(20,283 |
) |
|
$ |
(15,624 |
) |
Net loss per share,
basic and diluted |
$ |
(0.31 |
) |
|
$ |
(0.28 |
) |
|
$ |
(1.01 |
) |
|
$ |
(0.88 |
) |
Weighted average number of
common shares outstanding, basic and diluted |
|
21,052 |
|
|
|
17,878 |
|
|
|
20,070 |
|
|
|
17,706 |
|
Eton Pharmaceuticals,
Inc.Condensed Balance Sheets(in
thousands, except share and per share amounts)
|
September 30, 2020 |
|
|
December 31, 2019 |
|
|
(Unaudited) |
|
|
|
|
Assets |
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
7,332 |
|
|
$ |
12,066 |
|
Accounts receivable, net |
|
— |
|
|
|
473 |
|
Inventory |
|
1,699 |
|
|
|
380 |
|
Prepaid expenses and other current assets |
|
754 |
|
|
|
2,090 |
|
Total current
assets |
|
9,785 |
|
|
|
15,009 |
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
854 |
|
|
|
1,117 |
|
Intangible assets, net |
|
612 |
|
|
|
725 |
|
Operating lease right-of-use assets, net |
|
63 |
|
|
|
160 |
|
Other long-term assets, net |
|
81 |
|
|
|
61 |
|
Total
assets |
$ |
11,395 |
|
|
$ |
17,072 |
|
|
|
|
|
|
|
|
|
Liabilities and
stockholders’ equity |
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
Accounts payable |
$ |
2,208 |
|
|
$ |
575 |
|
PPP loan, current portion |
|
219 |
|
|
|
— |
|
Accrued liabilities |
|
792 |
|
|
|
1,388 |
|
Total current
liabilities |
|
3,219 |
|
|
|
1,963 |
|
|
|
|
|
|
|
|
|
Long-term debt, net of
discount and including accrued fees |
|
6,496 |
|
|
|
4,540 |
|
Long-term portion of PPP and
EIDL loans |
|
292 |
|
|
|
— |
|
Operating lease liabilities,
net of current portion |
|
— |
|
|
|
19 |
|
|
|
|
|
|
|
|
|
Total
liabilities |
|
10,007 |
|
|
|
6,522 |
|
|
|
|
|
|
|
|
|
Commitments and
contingencies (Note 11) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
equity |
|
|
|
|
|
|
|
Common stock, $0.001 par
value; 50,000,000 shares authorized as of September 30, 2020 and
December 31, 2019; 20,988,533 and 17,877,486 shares issued and
outstanding at September 30, 2020 and December 31, 2019,
respectively |
|
21 |
|
|
|
18 |
|
Additional paid-in
capital |
|
85,838 |
|
|
|
74,720 |
|
Accumulated deficit |
|
(84,471 |
) |
|
|
(64,188 |
) |
Total stockholders’
equity |
|
1,388 |
|
|
|
10,550 |
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders’ equity |
$ |
11,395 |
|
|
$ |
17,072 |
|
Eton Pharmaceuticals,
Inc.Condensed Statements of Cash
Flows(In
thousands)(Unaudited)
|
Nine months ended September 30, 2020 |
|
|
Nine months ended September 30,
2019 |
|
Cash flows from operating activities |
|
|
|
|
|
|
|
Net loss |
$ |
(20,283 |
) |
|
$ |
(15,624 |
) |
|
|
|
|
|
|
|
|
Adjustments to reconcile net
loss to net cash used in operating activities: |
|
|
|
|
|
|
|
Stock-based compensation |
|
1,803 |
|
|
|
1,387 |
|
Common stock issued for product candidate licensing rights |
|
1,264 |
|
|
|
— |
|
Depreciation and amortization |
|
490 |
|
|
|
299 |
|
Debt discount amortization |
|
85 |
|
|
|
— |
|
Changes in operating assets
and liabilities: |
|
|
|
|
|
|
|
Accounts receivable |
|
473 |
|
|
|
— |
|
Inventory |
|
(1,319 |
) |
|
|
— |
|
Prepaid expenses and other assets |
|
1,305 |
|
|
|
426 |
|
Accounts payable |
|
1,633 |
|
|
|
(403 |
) |
Accrued liabilities |
|
(615 |
) |
|
|
(263 |
) |
Net cash used in
operating activities |
|
(15,164 |
) |
|
|
(14,178 |
) |
|
|
|
|
|
|
|
|
Cash used in investing
activities |
|
|
|
|
|
|
|
Purchases of property and equipment |
|
(6 |
) |
|
|
(1,062 |
) |
|
|
|
|
|
|
|
|
Cash flows from
financing activities |
|
|
|
|
|
|
|
Proceeds from issuance of long-term debt, net of issuance
costs |
|
1,965 |
|
|
|
— |
|
Proceeds from sales of common stock, net of offering costs |
|
7,756 |
|
|
|
— |
|
Proceeds from PPP and EIDL loans |
|
511 |
|
|
|
— |
|
Proceeds from employee stock purchase plan and stock option
exercises |
|
204 |
|
|
|
282 |
|
Net cash provided by financing activities |
|
10,436 |
|
|
|
282 |
|
|
|
|
|
|
|
|
|
Change in cash and
cash equivalents |
|
(4,734 |
) |
|
|
(14,958 |
) |
Cash and cash equivalents at
beginning of period |
|
12,066 |
|
|
|
26,735 |
|
Cash and cash equivalents at
end of period |
$ |
7,332 |
|
|
$ |
11,177 |
|
|
|
|
|
|
|
|
|
Supplemental
disclosures of cash flow information |
|
|
|
|
|
|
|
Cash paid for interest |
$ |
545 |
|
|
$ |
— |
|
Cash paid for income taxes |
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
Supplemental
disclosure of non-cash financing activity |
|
|
|
|
|
|
|
Relative fair value of common stock warrants issued in connection
with debt |
$ |
94 |
|
|
$ |
— |
|
Investor Contact:David
Krempadkrempa@etonpharma.com612-387-3740
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