Full Press Release Details
Pharmaceuticals Reports Second Quarter 2023 Financial Results
| Total Q2 revenue of $12.0 million and net income of $4.6 million |
| Product sales and royalty revenue of $6.5 million up 175% from Q2 2022 and 22% from Q1 2023 |
| $21.6 million of cash on hand |
| Launched Betaine Anhydrous |
| Management to hold conference call today at 4:30pm ET |
PARK, Ill., August 10, 2023 (GLOBE NEWSWIRE) - 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.
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.
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.
Quarter and Recent Business Highlights
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.
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.
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.
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.
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
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.
Quarter Financial Results
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.
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.
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.
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.
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.
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.
Position: As of June 30, 2023, the Company had cash and cash equivalents of $21.6 million.
Call and Webcast Information
previously announced, Eton will host its second quarter 2023 conference call as follows:
| Date: | Thursday, August 10, 2023 | |
| Time: | 4:30 p.m. ET (3:30 p.m.CT) | |
| Register* (Audio Only) | Click here |
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.
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
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.
Eton Pharmaceuticals
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.
Lisa M. Wilson, In-Site Communications, Inc.
Pharmaceuticals, Inc.
Statements of Operations
thousands, except per share amounts)
| 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 |
Pharmaceuticals, Inc.
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 |
Pharmaceuticals, Inc.
Statements of Cash Flows
| 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 | $ | - | $ | - |