Eton Pharmaceuticals Announces First Quarter 2020 Financial Results
“The 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
First Quarter Milestones
U.S.marketing rights to Alkindi® Sprinkle. Eton acquired U.Smarketing rights to the product from Diurnal Group plc in March. Alkindi Sprinkle is an orphan product that is currently under review with the U.S. Food and Drug Administration(FDA) for use as a replacement therapy for pediatric adrenal insufficiency (AI), including congenital adrenal hyperplasia (CAH) in patients from birth to less than 17 years of age. The application was assigned a Prescription Drug User Fee Act (PDUFA) date of September 29, 2020.
$9.8 millionof additional liquidity. In conjunction with the Alkindi Sprinkle transaction, Eton closed a $7.8 millionequity raise, and amended its existing credit facility to grant Eton the immediate option to access $2.0 millionat its discretion.
- Announced first-to-file status on cysteine hydrochloride injection ANDA (DS-300). During the quarter, Eton’s Abbreviate New Drug Application (ANDA) was accepted for review by the FDA. Eton was confirmed to be the first Paragraph
IV ANDAfiler referencing Exela Pharma Sciences’ Elcys product, which entitles Eton to 180 days of generic exclusivity upon successfully challenging the patent. In addition, Eton announced it plans to file Post Grant Reviews (PGR) with the U.S. Patent and Trademark Office(USPTO) to challenge the patents, which, if successful, could allow Eton to launch the product in 2021.
Biorphen Commercial Launch
Eton launched Biorphen, the only FDA-approved formulation of ready-to-use phenylephrine injection, in
In 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.
Eton 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.
During 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.
Alkindi Sprinkle Update
Eton recently announced that
At 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 been assigned.
|Product (Molecule)||Category||Estimated Submission Timing|
|Alkindi Sprinkle (hydrocortisone)||Pediatric||Filed|
|DS-300 (cysteine hydrochloride)||Hospital||Filed|
EM-100 (Ketotifen PF Ophthalmic Solution). Eton believes all outstanding deficiencies were addressed in the product’s
ET-105 (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.
DS-300 (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
ET-104. 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.
DS-100. 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.
ET-103 (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.
ET-203. Eton’s partner expects to file the product’s NDA in the second half of 2020.
Revenue: Revenue was
Research and Development (R&D) Expenses: R&D expenses were
General& Administrative (G&A) Expenses: G&A expenses were
Net Loss: Eton reported a net loss for the first quarter of 2020 of
Cash Position: As of
Conference Call and Webcast Information:
Eton Pharmaceuticals will host a conference call and webcast today at 4:30 p.m. ET (
About Eton Pharmaceuticals
Statements 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.
Condensed Statements of Operations
(In thousands, except per share amounts)
|For the three months ended|
|Cost of product sales||102||—|
|Gross (loss) profit||(3||)||500|
|Research and development||6,268||6,465|
|General and administrative||2,610||1,589|
|Total operating expenses||8,878||8,054|
|Loss from operations||(8,881||)||(7,554||)|
|Other (expense) income:|
|Interest and other (expense) income, net||(168||)||144|
|Loss before income tax expense||(9,049||)||(7,410||)|
|Income tax expense||—||—|
|Net loss per share, basic and diluted||$||(0.50||)||$||(0.42||)|
|Weighted average number of common shares outstanding, basic and diluted||18,143||17,502|
Condensed Balance Sheets
(in thousands, except share and per share amounts)
|Cash and cash equivalents||$||12,335||$||12,066|
|Accounts receivable, net||205||473|
|Prepaid expenses and other current assets||1,075||2,090|
|Total current assets||15,341||15,009|
|Property and equipment, net||1,025||1,117|
|Intangible assets, net||688||725|
|Operating lease right-of-use assets, net||129||160|
|Other long-term assets, net||58||61|
|Liabilities and stockholders’ equity|
|Total current liabilities||2,051||1,963|
|Long-term debt, net of discount and including accrued fees||4,570||4,540|
|Operating lease liabilities, net of current portion||—||19|
|Commitments and contingencies (Note 11)|
|Additional paid-in capital||83,836||74,720|
|Total stockholders’ equity||10,620||10,550|
|Total liabilities and stockholders’ equity||$||17,241||$||17,072|
Condensed Statements of Cash Flows
|Three months ended||Three months ended|
|Cash flows from operating activities|
|Adjustments to reconcile net loss to net cash used in operating activities:|
|Common stock issued for product candidate licensing rights||1,264||—|
|Depreciation and amortization||162||55|
|Debt discount amortization||27||—|
|Changes in operating assets and liabilities:|
|Prepaid expenses and other assets||1,020||(1,187||)|
|Net cash used in operating activities||(7,217||)||(6,767||)|
|Cash used in investing activities|
|Purchases of property and equipment||(4||)||(388||)|
|Cash flows from financing activities|
|Proceeds from sales of common stock, net of offering costs||7,459||—|
|Proceeds from employee stock option exercises||31||4|
|Net cash provided by financing activities||7,490||4|
|Change in cash and cash equivalents||269||(7,151||)|
|Cash and cash equivalents at beginning of period||12,066||26,735|
|Cash and cash equivalents at end of period||$||12,335||$||19,584|
|Supplemental disclosures of cash flow information|
|Cash paid for interest||$||189||$||—|
|Cash paid for income taxes||$||—||$||—|
|Supplemental disclosures of non-cash investing and financing activities:|
|Purchases of equipment included in accounts payable||$||—||$||51|
Source: Eton Pharmaceuticals