Eton Pharmaceuticals Reports Fourth Quarter 2021 Financial Results
03/16/2022 - 04:02 PM
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:
About Eton Pharmaceuticals
Forward-Looking Statements
Eton Pharmaceuticals, Inc. Statements of Operations (In thousands, except per share amounts)
For the three months ended For the years ended (Unaudited) December 31, December 31, December 31, December 31, 2021 2020 2021 2020 Revenues: 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 Assets 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, $0.00 1 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: dkrempa@etonpharma.com
