Eton Pharmaceuticals Reports Record Revenue and Earnings
05/13/2021 - 04:05 PM
First quarter 2021 revenue of $11.9 million First quarter 2021 operating earnings of $5.4 million ; EPS of $0.19 Eton now has three commercial, revenue-generating products DEER PARK, Ill., May 13, 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 first quarter ended March 31, 2021 and provided an update on business progress.
“We are proud to report record revenue and the first profitable quarter in Eton’s history,” said Sean Brynjelsen, CEO of Eton Pharmaceuticals. “We have begun seeing the results of the years of hard work developing our product candidates. We now have three approved and revenue generating products, and we expect to have a number of additional products launched later this year as a result of the four upcoming PDUFA dates over the next three months,” added Brynjelsen.
Q1 Business Highlights
First quarter revenue of $11.9 million and operating income of $5.4 million . Revenue included sales or royalties received on three commercial products plus payments related to the sale of Eton’s neurology oral liquids products.
Launch of Alaway Preservative Free . In February, Bausch Health launched Alaway Preservative Free in major U.S. retailers. Eton collected a $1.5 million launch milestone plus a royalty on the product’s sales in the first quarter.
Completed sale of neurology oral liquid products. Eton completed the sale of its neurology portfolio to Azurity Pharmaceuticals. Eton will receive milestone payments of up to $45 million , $9.5 million of which was received in the first quarter, and a single digit royalty on product sales.
ALKINDI® SPRINKLE
Eton remains focused on the commercial launch of ALKINDI SPRINKLE in the United States. The first quarter of 2021 was the first full quarter of the product’s launch. The company’s sales representatives have already engaged with more than 90% of their initial targets in the pediatric endocrinology community, and sales representatives have been met with a positive reception from physicians, nurses, and caretakers.
Although Initial sales force communications have largely been virtual due to COVID-19 related restrictions, certain physicians’ offices and hospitals have recently begun accepting in-person meetings. Given the expectation for higher conversion rates on in-person meetings, Eton has adopted a sales force strategy that focuses resources most heavily in states where in-person meetings are taking place, rather than the traditional regional allocation of territories. The new strategy will allow all sales representatives to focus on maximizing in-person meetings, even if their previously assigned geography comprises states that are not accepting in-person visits. Eton will continue to refine the resource allocation in the coming weeks and months as additional states begin accepting in-person visits.
In April, Eton presented virtually at the Pediatric Endocrinology Nursing Society national conference and the Pediatric Endocrinology Society annual meeting, the first two conferences since the product’s launch.
The company has seen strong adoption of ALKINDI SPRINKLE, and prescriptions continue to grow month over month. Over 100 new patient prescriptions have been written this year, and the company continues to work towards its goal of more than 400 new patient prescriptions by the end of the year.
Pipeline Update
Eton owns or has economic interests in six pipeline products that are currently under review with the FDA, four of which have been assigned Prescription Drug User Fee Act (PDUFA) dates:
May 27: Dehydrated Alcohol Injection May 29: Zonisamide Oral Suspension June 18: Ready-to-Use Ephedrine Injection August 6: Topiramate Oral Solution Eton expects these products to be approved and launched later this year. In addition, given the company’s strong financial position, it remains actively pursuing business development opportunities to add high-value late-stage orphan product candidates to its portfolio.
Current Product Portfolio & Pipeline Product Status ALKINDI® SPRINKLE Commercial Alaway® Preservative Free Commercial Biorphen® Commercial Dehydrated Alcohol Injection Filed Zonisamide Oral Suspension Filed Topiramate Oral Solution Filed Lamotrigine for Suspension Filed RTU Ephedrine Injection Filed Cysteine Injection Filed ALKINDI® SPRINKLE - Canada Pre-Filing
Financial Results
Revenue : Eton reported revenue of $11.9 million for the first quarter of 2021, which included $9.5 million from the sale of its neurology oral liquid products and a $1.5 million milestone payment from Bausch Health for the launch of Alaway Preservative Free. In the prior-year period, the company reported revenue of $0.1 million .
General and Administrative (G&A) Expenses: G&A expenses for the first quarter of 2021 were $4.1 million compared to $2.6 million in the prior-year period. The increase was largely due to increased costs related to the commercialization of ALKINDI SPRINKLE. G&A expenses for the first quarter of 2021 included $0.7 million of non-cash expenses.
Research and Development (R&D) Expenses: R&D expenses for the first quarter of 2021 were $0.9 million compared to $6.3 million in the prior-year period. The prior-year period included $4.8 million of one-time licensing payments for the acquisition of marketing rights to ALKINDI SPRINKLE. Absent any new business development transaction, the company expects full year 2021 R&D expenses to be substantially below 2020 levels.
Net Income : Eton reported net income of $5.1 million for the first quarter of 2021, compared to a net loss of $9.0 million in the prior-year period. Eton reported diluted earnings per share (EPS) of $0.19 in the first quarter of 2021, compared to a loss of $0.50 per share in the prior year period.
Cash Position : Eton reported cash and cash equivalents of $25.1 million as of March 31, 2021.
Conference Call and Webcast Information :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 ® SPRINKLE, Biorphen® , and Alaway® Preservative Free, and has six additional products that have been submitted to the FDA.
Forward-Looking Statements
Eton Pharmaceuticals, Inc. Condensed Statements of Operations (In thousands, except per share amounts) (Unaudited) For the three months ended March 31, March 31, 2021 2020 Revenues: Licensing revenue $ 11,500 $ — Product sales and royalties 397 99 Total net revenues 11,897 99 Cost of sales Licensing revenue 1,500 — Product sales and royalties 90 102 Total cost of sales 1,590 102 Gross profit (loss) 10,307 (3 ) Operating expenses: Research and development 886 6,268 General and administrative 4,058 2,610 Total operating expenses 4,944 8,878 Income (loss) from operations 5,363 (8,881 ) Other expense: Interest and other expense, net (247 ) (168 ) Income (loss) before income tax expense 5,116 (9,049 ) Income tax expense — — Net income (loss) $ 5,116 $ (9,049 ) Net income (loss) per share, basic $ 0.21 $ (0.50 ) Net income (loss) per share, diluted $ 0.19 $ (0.50 ) Weighted average number of common shares outstanding, basic 24,453 18,143 Weighted average number of common shares outstanding, diluted 26,547 18,143
Eton Pharmaceuticals, Inc. Condensed Balance Sheets (in thousands, except share and per share amounts) March 31, 2021 December 31, 2020 (Unaudited) Assets Current assets: Cash and cash equivalents $ 25,113 $ 21,295 Accounts receivable, net 300 48 Inventories 1,348 1,242 Equipment held-for-sale 551 — Prepaid expenses and other current assets 2,962 2,116 Total current assets 30,274 24,701 Property and equipment, net 176 811 Intangible assets, net 537 575 Operating lease right-of-use assets, net 163 192 Other long-term assets, net 36 40 Total assets $ 31,186 $ 26,319 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 1,761 $ 2,344 Current portion of long-term debt 385 — PPP loan, current portion 341 280 Accrued liabilities 712 1,170 Total current liabilities 3,199 3,794 Long-term debt, net of discount and including accrued fees 6,183 6,532 Long-term portion of PPP and EIDL loans 170 231 Operating lease liabilities, net of current portion 79 99 Total liabilities 9,631 10,656 Commitments and contingencies Stockholders’ equity Common stock, $0.001 par value; 50,000,000 shares authorized as of March 31, 2021 and December 31, 2020; 24,482,616 and 24,312,808 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively 24 24 Additional paid-in capital 108,573 107,797 Accumulated deficit (87,042 ) (92,158 ) Total stockholders’ equity 21,555 15,663 Total liabilities and stockholders’ equity $ 31,186 $ 26,319
Eton Pharmaceuticals, Inc. Condensed Statements of Cash Flows (In thousands) (Unaudited) Three months ended Three months ended March 31, 2020 Cash flows from operating activities Net income (loss) $ 5,116 $ (9,049 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Stock-based compensation 673 365 Common stock issued for product candidate licensing rights — 1,264 Depreciation and amortization 155 162 Debt discount amortization 36 27 Changes in operating assets and liabilities: Accounts receivable (252 ) 268 Inventories (106 ) (1,346 ) Prepaid expenses and other assets (846 ) 1,020 Accounts payable (583 ) 608 Accrued liabilities (478 ) (536 ) Net cash provided by (used in) operating activities 3,715 (7,217 ) Cash used in investing activities Purchases of property and equipment — (4 ) Cash flows from financing activities Proceeds from sales of common stock, net of offering costs — 7,459 Proceeds from employee stock option exercises 103 31 Net cash provided by financing activities 103 7,490 Change in cash and cash equivalents 3,818 269 Cash and cash equivalents at beginning of period 21,295 12,066 Cash and cash equivalents at end of period $ 25,113 $ 12,335 Supplemental disclosures of cash flow information Cash paid for interest $ 214 $ 189 Cash paid for income taxes $ — $ —
Investor Contact: dkrempa@etonpharma.com
