Eton Pharmaceuticals, Inc (“Eton” or “the Company”) (Nasdaq: ETON),
an innovative pharmaceutical company focused on developing and
commercializing treatments for rare diseases, today reported
financial results for the quarter ended June 30, 2023.
“With record product sales, the launch of Betaine Anhydrous, and
positive cash flow and earnings, Eton’s second quarter was
exceptional. It was the company’s tenth straight quarter of
sequential product revenue growth, driven by robust demand and
record results for ALKINDI SPRINKLE® and Carglumic Acid. Given our
strong performance through the first half of the year, we have
increased our revenue expectation and now anticipate reaching
approximately $30 million in total revenue this year,” said Sean
Brynjelsen, CEO of Eton Pharmaceuticals.
“With attractive growth prospects for our existing commercial
products, the targeted 2024 launch of ET-400, and the financial
resources to continue adding new products, Eton is very well
positioned to deliver long-term growth and achieve our goal of
having 10 commercial rare disease products on the market by the end
of 2025,” concluded Brynjelsen.
Second Quarter and Recent Business
Highlights
Tenth straight quarter of
sequential growth in product sales and royalty revenue.
Eton reported second quarter 2023 product sales and royalty revenue
of $6.5 million, representing 175% growth over the prior year
period and 22% growth over the first quarter of 2023.
Record sales of ALKINDI
SPRINKLE. ALKINDI SPRINKLE saw another record revenue
quarter. The Company’s goal is to reach 400 active patients by the
end of the year.
Record sales of Carglumic
Acid. Carglumic Acid also posted another quarter of record
revenue. The product is benefiting from the Company’s recently
expanded sales force as well as the launch of Betaine Anhydrous,
which shares the same prescriber base and has resulted in increased
interactions with metabolic geneticists.
Strong launch of Betaine
Anhydrous. Betaine Anhydrous was launched in May and has
already seen strong adoption by patients. The Company’s Eton Cares
patient support program has received favorable reviews from both
patients and prescribers.
Product candidate ET-400 on
track for an NDA submission in Q4 2023. The Company is
preparing for an NDA submission in the fourth quarter, which could
result in an approval and commercial launch in 2024. ET-400 is a
proprietary liquid formulation of hydrocortisone that, if approved,
would be sold alongside ALKINDI SPRINKLE, and would provide
patients with an additional treatment option. The Company believes
ET-400 will accelerate patient adoption, with total combined peak
sales of ALKINDI SPRINKLE and ET-400 expected to exceed $50 million
annually.
Monetized royalty interests
and strengthened financial position. During the quarter,
Eton sold its remaining milestone and royalty interests in
ZONISADE®, EPRONTIA®, and the lamotrigine product candidate. In
exchange for its interests, Eton received a payment of $5.5
million, which it intends to reinvest in the acquisition of rare
disease products. In the second quarter, the company also received
a $0.8 million break-up fee associated with its participation as
the stalking horse bidder in an auction process. The Company
finished the quarter with $21.6 million of cash and cash
equivalents.
Second Quarter Financial Results
Net Revenue: Net sales for the second quarter
of 2023 were $12.0 million compared with $7.4 million in the prior
year period. Net sales included $5.5 million of licensing payments
received during the quarter related to the sale of Eton’s neurology
product royalties and milestones to Azurity Pharmaceuticals,
compared to $5.0 million of licensing revenue in the prior year
period related to the sale of multiple hospital products to Dr.
Reddy’s.
Product sales and royalty revenue were $6.5 million for the
second quarter of 2023 compared with $2.4 million in the prior year
period, an increase of 175% over the prior year period and 22% over
the first quarter of 2023. The year-over-year increase in product
sales and royalty revenue was primarily driven by growth in ALKINDI
SPRINKLE and Carglumic Acid tablets.
Gross Profit: Gross profit for the second
quarter of 2023 was $9.7 million compared with $4.6 million in the
prior year period. The growth was driven by the sale of the
Company’s neurology product royalties as well as growth in ALKINDI
SPRINKLE and Carglumic Acid. Gross profit for the prior year period
included $1.8 million of non-cash expenses related to the hospital
products divestment.
Research and Development (R&D) Expenses:
R&D expenses for the second quarter of 2023 were $1.1 million
compared to $0.7 million in the prior year period. The increase was
primarily due to a $0.5 million milestone payment resulting from
the successful manufacturing of registration batches of product
candidate ET-600.
General and Administrative (G&A) Expenses:
G&A expenses for the second quarter of 2023 were $4.7 million
compared to $5.3 million in the prior year period. The decrease in
G&A expenses was mainly due to decreased FDA fees and legal
fees associated with products sold to Dr. Reddy's in June 2022.
Net Income: Net income for the second quarter
of 2023 was $4.6 million or $0.18 per basic and diluted share
compared to a net loss of $1.6 million, or $0.06 per basic and
diluted share in the prior year period.
Cash Position: As of June 30, 2023, the Company
had cash and cash equivalents of $21.6 million.
Conference Call and Webcast Information
As previously announced, Eton will host its second quarter 2023
conference call as follows:
Date:Time:Register* (Audio Only) |
|
Thursday, August 10, 20234:30 p.m. ET (3:30 p.m.CT)Click here |
|
|
|
In addition to taking live questions from participants on the
conference call, management will be answering emailed questions
from investors. Investors can email questions to:
investorrelations@etonpharma.com.
The live webcast can be accessed on the Investors section of
Eton’s website at https://ir.etonpharma.com/. An archived webcast
will be available on Eton’s website approximately two hours after
the completion of the event and for 30 days thereafter.
* Conference call participants should register to obtain their
dial-in and passcode details. Please be sure to register using a
valid email address.
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.
About Eton
Pharmaceuticals
Eton is an innovative pharmaceutical company focused on
developing, acquiring, and commercializing innovative products to
address unmet needs in patients suffering from rare diseases. The
Company currently has three commercial rare disease products,
ALKINDI SPRINKLE® for the treatment of pediatric adrenocortical
insufficiency, Carglumic Acid for the treatment of hyperammonemia
due to N-acetylglutamate synthase (NAGS) deficiency, and Betaine
Anhydrous for the treatment of homocystinuria. The Company has
four additional product candidates in late-stage
development: dehydrated alcohol injection, which has received
Orphan Drug Designation for the treatment of methanol poisoning,
ZENEO® hydrocortisone autoinjector for the treatment of adrenal
crisis, ET-400 for the treatment of adrenocortical insufficiency,
and ET-600 for the treatment of diabetes insipidus. For more
information, please visit our website at www.etonpharma.com.
Investor Relations:Lisa M. Wilson, In-Site
Communications, Inc.T: 212-452-2793E: lwilson@insitecony.com
Eton Pharmaceuticals,
Inc.Condensed Statements of
Operations(In thousands, except per share
amounts)(Unaudited)
|
For the three months ended |
|
|
For the six months ended |
|
|
June 30, |
|
|
June 30, |
|
|
June 30, |
|
|
June 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Licensing revenue |
$ |
5,500 |
|
|
$ |
5,000 |
|
|
$ |
5,500 |
|
|
$ |
5,000 |
|
Product sales and
royalties |
|
6,497 |
|
|
|
2,358 |
|
|
|
11,801 |
|
|
|
4,534 |
|
Total net revenues |
|
11,997 |
|
|
|
7,358 |
|
|
|
17,301 |
|
|
|
9,534 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Licensing revenue |
|
— |
|
|
|
990 |
|
|
|
— |
|
|
|
990 |
|
Product sales and
royalties |
|
2,315 |
|
|
|
1,755 |
|
|
|
4,273 |
|
|
|
2,604 |
|
Total cost of sales |
|
2,315 |
|
|
|
2,745 |
|
|
|
4,273 |
|
|
|
3,594 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
9,682 |
|
|
|
4,613 |
|
|
|
13,028 |
|
|
|
5,940 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
1,125 |
|
|
|
690 |
|
|
|
1,660 |
|
|
|
2,308 |
|
General and
administrative |
|
4,674 |
|
|
|
5,263 |
|
|
|
10,019 |
|
|
|
10,059 |
|
Total operating expenses |
|
5,799 |
|
|
|
5,953 |
|
|
|
11,679 |
|
|
|
12,367 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations |
|
3,883 |
|
|
|
(1,340 |
) |
|
|
1,349 |
|
|
|
(6,427 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income |
|
800 |
|
|
|
— |
|
|
|
800 |
|
|
|
— |
|
Interest and other expense,
net |
|
(124 |
) |
|
|
(218 |
) |
|
|
(250 |
) |
|
|
(461 |
) |
Total other income
(expense) |
|
676 |
|
|
|
(218 |
) |
|
|
550 |
|
|
|
(461 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income
tax expense |
|
4,559 |
|
|
|
(1,558 |
) |
|
|
1,899 |
|
|
|
(6,888 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) |
$ |
4,559 |
|
|
$ |
(1,558 |
) |
|
$ |
1,899 |
|
|
$ |
(6,888 |
) |
Net income (loss) per share,
basic |
$ |
0.18 |
|
|
$ |
(0.06 |
) |
|
$ |
0.07 |
|
|
$ |
(0.28 |
) |
Weighted average number of
common shares outstanding, basic |
|
25,593 |
|
|
|
25,126 |
|
|
|
25,560 |
|
|
|
24,915 |
|
Net income (loss) per share,
diluted |
$ |
0.18 |
|
|
$ |
(0.06 |
) |
|
$ |
0.07 |
|
|
$ |
(0.28 |
) |
Weighted average number of
common shares outstanding, diluted |
|
25,983 |
|
|
|
25,126 |
|
|
|
25,949 |
|
|
|
24,915 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eton Pharmaceuticals,
Inc.Condensed Balance Sheets(in
thousands, except share and per share amounts)
|
|
June 30, 2023 |
|
|
December 31, 2022 |
|
|
|
(Unaudited) |
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
21,566 |
|
|
$ |
16,305 |
|
Accounts receivable, net |
|
|
3,084 |
|
|
|
1,852 |
|
Inventories |
|
|
816 |
|
|
|
557 |
|
Prepaid expenses and other current assets |
|
|
867 |
|
|
|
1,290 |
|
Total current
assets |
|
|
26,333 |
|
|
|
20,004 |
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
46 |
|
|
|
72 |
|
Intangible assets, net |
|
|
4,392 |
|
|
|
4,754 |
|
Operating lease right-of-use assets, net |
|
|
149 |
|
|
|
188 |
|
Other long-term assets, net |
|
|
12 |
|
|
|
12 |
|
Total
assets |
|
$ |
30,932 |
|
|
$ |
25,030 |
|
|
|
|
|
|
|
|
|
|
Liabilities and
stockholders’ equity |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
2,300 |
|
|
$ |
1,766 |
|
Current portion of long-term debt |
|
|
1,540 |
|
|
|
1,033 |
|
Accrued liabilities |
|
|
5,748 |
|
|
|
3,662 |
|
Total current
liabilities |
|
|
9,588 |
|
|
|
6,461 |
|
|
|
|
|
|
|
|
|
|
Long-term debt, net of
discount and including accrued fees |
|
|
4,553 |
|
|
|
5,384 |
|
Operating lease liabilities,
net of current portion |
|
|
66 |
|
|
|
107 |
|
|
|
|
|
|
|
|
|
|
Total
liabilities |
|
|
14,207 |
|
|
|
11,952 |
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies (Note 11) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
equity |
|
|
|
|
|
|
|
|
Common stock, $0.001 par
value; 50,000,000 shares authorized; 25,561,994 and 25,353,119
shares issued and outstanding at June 30, 2023 and December 31,
2022, respectively |
|
|
26 |
|
|
|
25 |
|
Additional paid-in
capital |
|
|
117,934 |
|
|
|
116,187 |
|
Accumulated deficit |
|
|
(101,235 |
) |
|
|
(103,134 |
) |
Total stockholders’
equity |
|
|
16,725 |
|
|
|
13,078 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders’ equity |
|
$ |
30,932 |
|
|
$ |
25,030 |
|
|
|
|
|
|
|
|
|
|
Eton Pharmaceuticals,
Inc.Condensed Statements of Cash
Flows(In
thousands)(Unaudited)
|
|
Six months ended |
|
|
Six months ended |
|
|
|
June 30, 2023 |
|
|
June 30, 2022 |
|
Cash flows from operating activities |
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
1,899 |
|
|
$ |
(6,888 |
) |
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net
income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
1,657 |
|
|
|
2,383 |
|
Depreciation and amortization |
|
|
424 |
|
|
|
1,352 |
|
Debt discount amortization |
|
|
61 |
|
|
|
66 |
|
Changes in operating assets
and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(1,232 |
) |
|
|
4,637 |
|
Inventories |
|
|
(259 |
) |
|
|
19 |
|
Prepaid expenses and other assets |
|
|
423 |
|
|
|
1,827 |
|
Accounts payable |
|
|
537 |
|
|
|
(475 |
) |
Accrued liabilities |
|
|
2,045 |
|
|
|
763 |
|
Net cash provided by
operating activities |
|
|
5,555 |
|
|
|
3,684 |
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities |
|
|
|
|
|
|
|
|
Purchases of product license rights |
|
|
— |
|
|
|
(750 |
) |
Purchases of property and equipment |
|
|
— |
|
|
|
(26 |
) |
Net cash used in
investing activities |
|
|
— |
|
|
|
(776 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities |
|
|
|
|
|
|
|
|
Repayment of long-term debt |
|
|
(385 |
) |
|
|
(385 |
) |
Proceeds from employee stock purchase plan and stock option
exercises |
|
|
272 |
|
|
|
117 |
|
Payment of tax withholding related to net share settlement of stock
option exercises |
|
|
(181 |
) |
|
|
— |
|
Net cash used in
financing activities |
|
|
(294 |
) |
|
|
(268 |
) |
|
|
|
|
|
|
|
|
|
Change in cash and cash
equivalents |
|
|
5,261 |
|
|
|
2,640 |
|
Cash and cash equivalents at
beginning of period |
|
|
16,305 |
|
|
|
14,406 |
|
Cash and cash equivalents at
end of period |
|
$ |
21,566 |
|
|
$ |
17,046 |
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosures of cash flow information |
|
|
|
|
|
|
|
|
Cash paid for interest |
|
$ |
426 |
|
|
$ |
378 |
|
Cash paid for income taxes |
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
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