Eton Pharmaceuticals Announces Fourth Quarter and Full Year 2019 Financial Results

Pharmaceuticals Announces Fourth Quarter and Full Year 2019 Financial Results

PARK, Ill., Mar. 5, 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 fourth quarter ended

December 31, 2019 and provided an update on business progress.

was an important year for Eton. Our team achieved a number of major milestones in the advancement of our pipeline, the most significant

of which was the approval and launch of Biorphen, our first commercial product," said Sean Brynjelsen, CEO of Eton Pharmaceuticals.

"We are excited to transition to a commercial revenue company and we look forward to earning additional product approvals

Commercial Launch Update

the fourth quarter, Eton launched Biorphen, the first and only FDA-approved ready-to-use formulation of phenylephrine injection.

The product was approved in October and launched in December. Initial customer demand for the product has resulted in more than

100 different institutions purchasing the product. Customers have specifically cited Biorphen's lack of dilution, three-year

shelf-life, and FDA-approved status as significant benefits that led to their institutions' conversion to the product.

recently announced that it entered into a co-promotion arrangement with Xellia Pharmaceuticals for the promotion of Biorphen.

Under the arrangement, Xellia's existing U.S hospital-based sales force is actively promoting Biorphen to certain customer

segments. Eton expects the arrangement to significantly reduce Eton's Biorphen-related sales expenses in 2020, while also

driving faster customer adoption of Biorphen due to Xellia's existing relationships with hospitals that have adopted ready-to-use

products. Xellia's sales force was previously focused on the promotion of Vanco Ready, a ready-to-use formulation of vancomycin

injection, which has the same call points and a similar value proposition to Biorphen.

phenylephrine supply disruptions from 503B compounding facilities, including the announced shutdown of compounding industry leader

PharMedium in January, have highlighted the critical need for Biorphen. During the quarter, Eton sent 503B facilities notices

referencing that FDA-approved Biorphen is now commercially available and as a result, there is no longer a clinical need for compounded

phenylephrine injection. Eton believes that selling compounded phenylephrine after the introduction of Biorphen is a violation

of FDA regulations, and Eton is actively engaged in communications with the FDA to discuss the enforcement of the existing compounding

overall market opportunity for ready-to-use phenylephrine is estimated to be more than 20 million units of Biorphen annually,

and Eton's long-term goal is to capture at least four million units per year.

has also initiated the development of line extensions to convert Biorphen into vial and pre-filled syringe container systems to

address the needs and preferences of certain customer segments. The line extension products are expected to launch as early as

currently has eight product candidates in its late-stage pipeline, including three products under review with the FDA:

Pipeline only includes product candidates that Eton expects to submit within twelve months.

product market sizes based on IQVIA data unless noted.

on management estimates

will be marketed by Bausch Health

In December, the company's licensing partner, Bausch Health, submitted an amendment to the EM-100 product application,

and Eton believes the amendment fully addresses all issues raised by the FDA in the July 2019 Complete Response Letter (CRL).

The amendment was classified as a major amendment and was assigned a Generic Drug User Fee Act(GDUFA) target action date in August

As previously disclosed, Eton received comments from the FDA requesting changes to the Dosage and Administration section of

the product's Prescribing Information to simplify the dosing information for intended users, and the FDA requested a human

factors validation study with the revised labeling to demonstrate that the intended users can accurately prepare and administer

the oral suspension. As a result, Eton expects to receive a CRL on its PDUFA date of March 17, 2020. The company has begun drafting

the human factors study protocol and expects to have the study completed and resubmitted to the FDA in the second or third quarter

of this year, which would allow for final approval of the NDA before year end. During the quarter, Eton's partner was granted

a patent by the United States Patent and Trademark Office for ET-105's unique formulation. Eton expects the patent to be

Orange Book listed after product approval.

Eton submitted the ANDA for DS-300 in December. The application was accepted for review and assigned a GDUFA target action

date in October 2020, however, anticipated Paragraph IV litigation related to the innovator's patent is likely to delay

the product's final approval beyond the target action date. In February 2020, Eton amended its agreement with its licensing

partner for DS-300. Eton will now be entitled to 62.5% of product profits, up from 50%, in exchange for managing the application's

Eton is awaiting final FDA acceptance of its pediatric study protocol (PSP) for ET-104. The product's NDA is expected

to be submitted once agreement is reached on the PSP.

Eton is in discussions with the FDA regarding the product's bioequivalence data results to ensure compliance with FDA

requirements prior to submission of the NDA. If Eton receives agreement from the FDA, it expects the product's NDA to be

submitted in the first half of 2020.

Eton's development partner, Sintetica, expects to resubmit the NDA for ET-203 in 2020. Due to ET-203's original

new drug application receiving a refuse-to-file letter from the FDA, Eton received a refund of its initial $1 million licensing

fee paid to Sintetica. If the product's application is resubmitted and accepted for review, Eton will repay the $1 million

NDA compilation is under way and Eton expects to submit the NDA in 2020.

The product's bioequivalence study is ongoing, and Eton is in discussions with the FDA regarding the application's

Pediatric Study Plan. If successful, Eton expects to submit the product's NDA in the second half of 2020.

Quarter and Full Year 2019 Financial Results

Revenue for the fourth quarter of 2019 was $0.5 million. Revenue included initial Biorphen stocking orders placed by wholesalers

during the quarter. Eton reported no sales in the fourth quarter of 2018. Full year 2019 revenue was $1.0 million and consisted

of a $0.5 million milestone payment received from Bausch Health for the acquisition of EM-100 marketing rights, as well as initial

Biorphen sales. Eton reported no revenue for the full year 2018.

of Product Sales: Cost of product sales for the fourth quarter of 2019 was $0.5 million. The expense consisted primarily of

profit share payments made to Eton's licensing partner on Biorphen. Under terms of the licensing agreement, Eton's

partner was entitled to receive the first $0.5 million of profit from commercialization of the product. Cost of product sales

for the full year 2019 was $0.5 million. There was no cost of product sales associated with the $0.5 million milestone payment

received from Bausch Health.

and Development (R&D) Expenses: R&D expenses for the fourth quarter of 2019 totaled $0.2 million compared with $1.1

million in the fourth quarter of 2018. R&D expenses in the fourth quarter of 2019 were reduced by $1.0 million due to Eton

receiving a refund of its original licensing payment for ET-203. The $1.0 million licensing payment had originally been expensed

in the first quarter of 2019.

the full year 2019, R&D expenses were $11.6 million compared to $5.6 million for the full year 2018. The increase was primarily

driven by $4.0 million of total expenses for the initial licensing payments for Biorphen (ET-202) and ET-105, as well as increased

headcount and operation costs associated with the company's research and development lab that was opened in late-2018.

General and Administrative (SG&A) Expenses: SG&A expenses for the fourth quarter of 2019 were $2.4 million compared

with $1.2 million in the fourth quarter of 2018. The increase was primarily due to increased sales, marketing and distribution

costs associated with the commercialization of Biorphen, higher employee-related costs from increased headcount, and higher expenses

associated with being a public company.

the full year 2019, SG&A expenses were $7.6 million compared to $4.7 million for the full year 2018. The increase was primarily

due to higher employee-related costs from increased headcount, increased expenses associated with being a public company, and

costs associated with the commercialization of Biorphen.

Loss: Net loss for the fourth quarter of 2019 was $2.7 million compared with $2.3 million in the fourth quarter of 2018. The

increase was driven by higher SG&A expenses, partially offset by reduced R&D expenses.

the full year 2019, net loss was $18.3 million compared with $12.7 million for the full year 2018. The increased loss was driven

by increased SG&A and R&D expenses in 2019.

Position: As of December 31, 2019, Eton reported cash and cash equivalents of $12.1 million.

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 5119269. 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 oral liquid 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 has an additional eight products under development, including three that are under review with the FDA.