Eton Pharmaceuticals Announces First Quarter 2020 Financial Results

Pharmaceuticals Announces First Quarter 2020 Financial Results

PARK, Ill., May 14, 2020 (GLOBE NEWSWIRE) - Eton Pharmaceuticals, Inc (Nasdaq: ETON), a specialty pharmaceutical company

focused on developing and commercializing innovative drug products, today reported financial results for the first quarter ended

March 31, 2020 and provided an update on business progress.

first quarter was an exciting period for Eton. We acquired marketing rights to orphan drug Alkindi Sprinkle and strengthened our

balance sheet with an additional $9.8 million of liquidity," said Sean Brynjelsen, CEO of Eton Pharmaceuticals. "While

COVID-19 has impacted our Biorphen commercial launch, we remain in a strong financial position and we look forward to the potential

for multiple additional product launches later this year."

launched Biorphen, the only FDA-approved formulation of ready-to-use phenylephrine injection, in December 2019. Unfortunately,

the commercial launch has been negatively impacted by the COVID-19 pandemic. Biorphen, like many hospital-based pharmaceutical

products, has experienced reduced demand due to the unprecedented nationwide decline in surgical procedures.

addition, COVID-19 has disrupted marketing and promotional activities surrounding the Biorphen launch. Hospitals across the country

have enacted policies restricting in-person visits by field sales representatives, which has limited the company's ability

to market Biorphen in person to key decision-makers. Eton had also planned to introduce Biorphen to physicians and pharmacists

throughout 2020 at industry conferences that have now been cancelled. In response to these marketing and promotional challenges,

Eton has increased its digital promotional activities and rolled out online campaigns aimed at pharmacy directors and potential

Biorphen users in intensive care units and emergency rooms.

has seen a high rate of conversion from the nearly 200 unique institutions that have purchased Biorphen since launch, however,

certain customer groups have stated that Biorphen's ampule container system is the sole reason they have not converted to

Biorphen despite their interest in an FDA-approved ready-to-use formulation of phenylephrine. In response to the feedback, Eton

is working on a vial presentation of Biorphen. Eton believes it will be in position to launch the vial line extension in 2021,

which is expected to accelerate adoption of the product.

the quarter, Eton also held a meeting with the FDA to discuss what Eton believes to be illegal compounding of ready-to-use phenylephrine

by 503B facilities. Eton believes the Federal Food, Drug, and Cosmetic Act prohibits 503B compounders from commercializing ready-to-use

phenylephrine products that are essentially a copy of Biorphen. Eton also submitted a comment to the FDA requesting that phenylephrine

hydrochloride for injectable products in certain concentrations not be included in the list of bulk drug substances that may be

used in 503B compounding. Until the FDA makes that determination, Eton asked that the FDA not allow phenylephrine hydrochloride

to be used in compounding such products. Eton believes the opportunity to discuss the issue directly with the FDA was beneficial,

and the company is confident that the FDA understands the current situation in the ready-to-use phenylephrine market.

recently announced that Paul Stickler has joined the company as Senior Vice President of Sales and Marketing to oversee the launch

of Alkindi Sprinkle. Stickler joins Eton from Recordati Rare Disease, where he successfully led the sales and marketing activities

of numerous orphan drug products. Eton has begun launch activities and is working closely with Diurnal Group to ensure that the

product will be available for a launch in the fourth quarter of this year if it is approved on its PDUFA date of September 29,

this time, Eton does not anticipate material disruption to its research and development or regulatory timelines due to COVID-19.

Eton has continued to receive regular communications from the FDA regarding its product applications currently under review, and

the company believes the FDA will be able to maintain the existing PDUFA and Target Action Dates that Eton and its partners have

(Ketotifen PF Ophthalmic Solution). Eton believes all outstanding deficiencies were addressed in the product's December

2019 application amendment, and the company expects the product to be approved on its assigned Target Action Date of August 10,

(Lamotrigine for Oral Suspension). The clinical study protocol for ET-105's human factor study has been submitted to

the FDA. If the FDA agrees to the study protocol, Eton expects to complete the human factory study in the second quarter and submit

results to the FDA in the third quarter of 2020.

(Cysteine Hydrochloride Injection). In a press release issued last week Eton announced the first-to-file status of its cysteine

hydrochloride ANDA and provided additional details on the project. Eton plans to file Post Grant Reviews later this month to challenge

the validity of Exela Pharma Sciences' patents related to Elcys. If successful, the PGRs could allow Eton to launch its

product as early as November 2021. Eton's ANDA was accepted for review during the quarter and was assigned a GDUFA date

Eton is waiting on FDA acceptance of the proposed pediatric study protocol (PSP). The product's NDA is assembled and

ready for submission upon the FDA's agreement to the PSP.

In April, Eton terminated its previous licensing agreement for DS-100 and entered into a new licensing agreement with two

unaffiliated third parties. Under terms of the new agreement, Eton is responsible for regulatory and clinical activities related

to the product and the licensing partners will be responsible for manufacturing and commercial activities. The agreement does

not require any licensing or milestone payments from Eton, and Eton's profit share percentage is unchanged at 50%.

ET-101 (Topiramate Oral Solution). During the quarter, Eton announced successful bioequivalence study results for ET-101.

Eton expects to submit the product's NDA in the second half of 2020.

(Levothyroxine Oral Solution). Eton has decided not to move forward with the ET-103 project due to concerns surrounding the

product's bioequivalence study results. The investment that would have been required for the product's NDA filing

fee and associated milestone payments will instead be reallocated to opportunities that the company believes can produce a more

attractive risk adjusted returns.

Eton's partner expects to file the product's NDA in the second half of 2020.

Revenue was $0.1 million in the first quarter of 2020, which resulted from sales of Biorphen. Eton records sales for Biorphen

when the product is shipped to wholesalers and distributors. As a result, reported revenue is not always aligned with end-user

demand within a given period due to changes in inventory in this distribution channel. Customer demand for Biorphen exceeded Eton's

reported sales in the first quarter of 2020 due to large stocking orders placed by wholesalers in the fourth quarter of 2019.

As previously discussed, Biorphen sales volume was also adversely impacted by the COVID-19 pandemic. Eton's revenue of $0.5

million in the first quarter of 2019 resulted from the upfront payment associated with its EM-100 asset sale to Bausch Health

and Development (R&D) Expenses: R&D expenses were $6.3 million for the first quarter of 2020 compared to $6.5 million

for the same period in 2019. R&D spending in the first quarter of 2020 included $4.8 million of one-time licensing payments

to acquire the U.S. marketing rights to Alkindi Sprinkle. The first quarter of 2019 R&D spending included $3.4 million of

licensing payments to acquire the rights to Biorphen, ET-203, and ET-104.

Administrative (G&A) Expenses: G&A expenses were $2.6 million for the first quarter of 2020, compared to $1.6 million

for the same period in 2019. The increase was primarily driven by higher marketing and distribution costs for Biorphen commercialization,

legal expenses associated with Eton's patent challenge against Exela Pharma Sciences' Elcys product, and higher employee

Loss: Eton reported a net loss for the first quarter of 2020 of $9.0 million compared to a net loss of $7.4 million for the

same period of 2019.

Position: As of March 31, 2020, Eton reported cash and cash equivalents of $12.3 million. In March, Eton announced a private

placement of $7.8 million of common stock in conjunction with the Alkindi Sprinkle acquisition. $7.5 million of the stock proceeds

were received in the first quarter, however, $0.3 million were received on April 2nd and were not included in the first quarter

cash balance. Additionally, in May, the company received $0.4 million of proceeds from a loan through the Paycheck Protection

Program under the Federal Coronavirus Aid, Relief, and Economic Security Act. Eton currently has $2.0 million of available liquidity

undrawn from its credit agreement and will be entitled to an additional $3.0 million of capacity upon the approvals of EM-100

and Alkindi Sprinkle.

Call and Webcast Information:

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 8498986. 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.

Eton Pharmaceuticals

Pharmaceuticals, Inc. is a specialty pharmaceutical company focused on developing, acquiring, and commercializing innovative products.

Eton is primarily focused on hospital injectable and pediatric rare disease products. The company's first commercial product,

Biorphen, is the only FDA approved ready-to-use formulation of phenylephrine injection and was launched in December 2019. The

company's lead pediatric product is the orphan drug Alkindi Sprinkle, which is currently under review with the FDA.

The company has an additional seven products under development, including three that are under review with the FDA.

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