Eton Pharmaceuticals Reports First Quarter 2025 Financial Results
- Q1 2025 revenue of
$17.3 million , with product sales of$14.0 million , representing 76% growth over Q1 2024 and the 17th straight quarter of sequential product sales growth - Q1 2025 basic and fully diluted GAAP EPS of
$(0.06) , Non-GAAP fully diluted EPS of$0.07 , and Adjusted EBITDA of$3.7 million - Relaunched pediatric endocrinology biologic INCRELEX® in the
U.S. and out-licensed international rights - Established Wilson disease franchise with the acquisition and relaunch of GALZIN® (zinc acetate) capsules and the introduction of product candidate ET-700
- Announced positive pivotal clinical study results for ET-600 and submitted its New Drug Application (NDA) to the
U.S. Food and Drug Administration (FDA) - Management to hold conference call today at
4:30pm ET
“The first quarter was another exceptional quarter for Eton. We reported record financial results, launched two recently acquired commercial products, and achieved critical milestones with the advancement of our development pipeline. In its first quarter of relaunch, INCRELEX is already tracking ahead of our expectations, with a significant number of new patients added to therapy in the first quarter, and we are confident that it has a long runway for growth in the years ahead. In March, we relaunched GALZIN with our full
“We are now less than one month away from a potential launch of ET-400. We have been actively engaged with the FDA as part of the ongoing review, and we remain prepared to launch quickly upon potential approval on its Prescription Drug User Fee Act (PDUFA) date of
First Quarter and Recent Business Highlights
17th straight quarter of sequential growth in product sales. Eton reported first quarter 2025 product sales of
Relaunched INCRELEX and increased number of active patients. INCRELEX is a biologic product used for the treatment of an ultra-rare pediatric endocrinology condition called Severe Primary IGF-1 Deficiency (SPIGFD) that is estimated to impact approximately 200 children in
Preparing for the anticipated second quarter launch of ET-400. With product inventory on hand, and a specialty sales force and promotional campaigns ready to go live, the Company is prepared to launch ET-400 shortly after its scheduled
Relaunched GALZIN and announced internal development program ET-700 to further invest in advancing treatment options for Wilson disease. Eton added GALZIN to its metabolic portfolio in January and relaunched the product in March with its newly deployed metabolic sales force and its
Out-licensed ex-US rights to INCRELEX. During the first quarter, Eton out-licensed INCRELEX commercial rights in territories outside of the
Submitted NDA for ET-600. During the quarter, ET-600 passed its pivotal bioequivalence study, and the Company submitted an NDA for the product candidate in late April. ET-600 is a proprietary, patented oral solution of desmopressin under development for the treatment of central diabetes insipidus.
The Company expects to receive a 10-month FDA review, which could allow for potential approval and launch in the first quarter of 2026.
First Quarter Financial Results
Net Revenue: Net revenues for the first quarter of 2025 were
Product sales and royalty revenue were
The company continues to expect to exit 2025 at an approximately
Gross Profit: Gross profit for the first quarter of 2025 was
Adjusted gross profit, which adjusts for the impact of acquired inventory step-up adjustments and intangible amortization, was
The Company continues to expect to report full year 2025 adjusted gross profit of approximately 70%.
Research and Development (R&D) Expenses: R&D expenses for the first quarter of 2025 were
In April, the Company paid
General and Administrative (G&A) Expenses: G&A expenses for the first quarter of 2025 were
Adjusted G&A expense, which removes share-based compensation, transaction-related costs, and other one-time expenses, was
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA): Adjusted EBITDA for the first quarter of 2025 was
Net Income/Loss: Net loss for the first quarter of 2025 was
On a non-GAAP basis, the Company reported net income of
For a reconciliations of GAAP net loss to Earnings Before Interest, Taxes, Depreciation and Amortization EBITDA (“EBITDA”), Adjusted EBITDA and adjusted Non-GAAP basic and fully diluted earnings per share to the most directly comparable GAAP financial measure, please see the tables below.
Cash Position: As of
Conference Call and Webcast Information
As previously announced,
Date:
Time:
Dial In* (Audio Only): Click Here
Webcast: Click Here
In 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.
The 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 address.
About Eton Pharmaceuticals
Eton is an innovative pharmaceutical company focused on developing and commercializing treatments for rare diseases. The Company currently has seven commercial rare disease products: INCRELEX®, ALKINDI SPRINKLE®, GALZIN®, PKU GOLIKE®, Carglumic Acid, Betaine Anhydrous, and Nitisinone. The Company has six additional product candidates in late-stage development: ET-
Forward-Looking Statements
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
Non-GAAP Financial Measures
In addition to the Company’s results of operations determined in accordance with
Adjusted EBITDA
The Company defines Adjusted EBITDA as net loss, excluding the effects of stock-based compensation and expenses, interest, taxes, depreciation, amortization, investment loss, net, and, if any and when specified, other non-recurring income or expense items. Management believes that the most directly comparable GAAP financial measure to Adjusted EBITDA is net loss. Adjusted EBITDA has limitations and should not be considered as an alternative to gross profit or net loss as a measure of operating performance or to net cash provided by (used in) operating, investing, or financing activities as a measure of ability to meet cash needs.
Investor Relations:
T: 212-452-2793
E: lwilson@insitecony.com
The following is a reconciliation of Adjusted EBITDA, a non-GAAP measure, to the most comparable GAAP measure, net loss, for the three months ended
Statements of Operations (In thousands, except per share amounts) (Unaudited) |
||||||||
| For the three months ended | ||||||||
| 2025 | 2024 | |||||||
| Revenues: | ||||||||
| Licensing revenue | $ | 3,286 | $ | — | ||||
| Product sales and royalties, net | 13,996 | 7,966 | ||||||
| Total net revenues | 17,282 | 7,966 | ||||||
| Cost of sales: | ||||||||
| Licensing revenue | 825 | — | ||||||
| Product sales and royalties | 6,596 | 2,959 | ||||||
| Total cost of sales | 7,421 | 2,959 | ||||||
| Gross profit | 9,861 | 5,007 | ||||||
| Operating expenses: | ||||||||
| Research and development | 1,161 | 651 | ||||||
| General and administrative | 9,170 | 5,156 | ||||||
| Total operating expenses | 10,331 | 5,807 | ||||||
| Loss from operations | (470 | ) | (800 | ) | ||||
| Other expense: | ||||||||
| Interest and other expense, net | (1,028 | ) | (11 | ) | ||||
| Loss before income tax expense | (1,498 | ) | (811 | ) | ||||
| Income tax expense | 74 | — | ||||||
| Net loss | $ | (1,572 | ) | $ | (811 | ) | ||
| Net loss per share, basic and diluted | $ | (0.06 | ) | $ | (0.03 | ) | ||
| Weighted average number of common shares outstanding, basic and diluted | 26,886 | 25,763 | ||||||
Balance Sheets (In thousands, except share and per share amounts) |
||||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 17,420 | $ | 14,936 | ||||
| Accounts receivable, net | 16,400 | 5,361 | ||||||
| Inventories, net | 13,621 | 15,232 | ||||||
| Prepaid expenses and other current assets | 2,519 | 5,492 | ||||||
| Total current assets | 49,960 | 41,021 | ||||||
| Property and equipment, net | 22 | 34 | ||||||
| Intangible assets, net | 33,880 | 34,881 | ||||||
| Operating lease right-of-use assets, net | 158 | 175 | ||||||
| Other long-term assets, net | 12 | 12 | ||||||
| Total assets | $ | 84,032 | $ | 76,123 | ||||
| Liabilities and stockholders’ equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 4,872 | $ | 4,167 | ||||
| Accrued Medicaid rebates | 12,937 | 6,866 | ||||||
| Accrued liabilities | 7,541 | 8,914 | ||||||
| Total current liabilities | 25,350 | 19,947 | ||||||
| Long-term debt, net of discount and including accrued fees | 29,992 | 29,811 | ||||||
| Operating lease liabilities, net of current portion | 87 | 107 | ||||||
| Other long-term liabilities | 4,153 | 1,830 | ||||||
| Total liabilities | 59,582 | 51,695 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity | ||||||||
| Common stock, |
27 | 27 | ||||||
| Additional paid-in capital | 133,888 | 132,294 | ||||||
| Accumulated deficit | (109,465 | ) | (107,893 | ) | ||||
| Total stockholders’ equity | 24,450 | 24,428 | ||||||
| Total liabilities and stockholders’ equity | $ | 84,032 | $ | 76,123 | ||||
Statements of Cash Flows (In thousands) (Unaudited) |
||||||||
| Three months ended | Three months ended | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | (1,572 | ) | $ | (811 | ) | ||
| Adjustments to reconcile net loss to net cash from operating activities: | ||||||||
| Stock-based compensation | 1,200 | 821 | ||||||
| Depreciation and amortization | 1,013 | 234 | ||||||
| Inventory step-up | 1,142 | — | ||||||
| Non-cash lease expense | 17 | 18 | ||||||
| Debt discount amortization and non-cash interest expenses | 294 | 25 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (11,039 | ) | (829 | ) | ||||
| Inventories | 468 | (1,407 | ) | |||||
| Prepaid expenses and other assets | 2,973 | 79 | ||||||
| Accounts payable | 705 | 414 | ||||||
| Accrued Medicaid rebates | 6,071 | 622 | ||||||
| Accrued liabilities | (1,373 | ) | (1,639 | ) | ||||
| Other non-current assets and liabilities | 2,191 | — | ||||||
| Net cash from operating activities | 2,090 | (2,473 | ) | |||||
| Cash flows from investing activities | ||||||||
| Purchases of product license rights | — | (1,868 | ) | |||||
| Purchases of property and equipment | — | (14 | ) | |||||
| Net cash from investing activities | — | (1,882 | ) | |||||
| Cash flows from financing activities | ||||||||
| Repayment of long-term debt | — | (385 | ) | |||||
| Proceeds from stock option exercises | 394 | 7 | ||||||
| Net cash from financing activities | 394 | (378 | ) | |||||
| Change in cash and cash equivalents | 2,484 | (4,733 | ) | |||||
| Cash and cash equivalents at beginning of period | 14,936 | 21,388 | ||||||
| Cash and cash equivalents at end of period | $ | 17,420 | $ | 16,655 | ||||
| Supplemental disclosures of cash flow information | ||||||||
| Cash paid for interest | $ | 642 | $ | 190 | ||||
| Cash paid for income taxes | $ | 8 | $ | — | ||||
Adjusted non-GAAP EBITDA Calculation and US GAAP to Non-GAAP Reconciliation (in thousands, except per share amounts) (Unaudited) |
||||||||
| For the three months ended | ||||||||
| 2025 | 2024 | |||||||
| GAAP net loss | $ | (1,572 | ) | $ | (811 | ) | ||
| Depreciation (1) | 12 | 14 | ||||||
| Intangible amortization expense (2) | 1,001 | 220 | ||||||
| Interest expense (including debt discount amortization and non-cash interest expenses) | 1,163 | 238 | ||||||
| Income tax expense | 74 | — | ||||||
| EBITDA | $ | 678 | $ | (339 | ) | |||
| Other non-GAAP adjustments: | ||||||||
| Inventory step-up expense (3) | 1,142 | — | ||||||
| Stock-based compensation (4) | 1,200 | 821 | ||||||
| Severance expense (5) | 335 | — | ||||||
| Divestiture-related costs (6) | 320 | — | ||||||
| Total of Other non-GAAP adjustments | 2,997 | 821 | ||||||
| Adjusted EBITDA | $ | 3,675 | $ | 482 | ||||
| GAAP loss before income tax | $ | (1,498 | ) | $ | (811 | ) | ||
| Non-GAAP adjustments: | ||||||||
| Depreciation (1) | 12 | 14 | ||||||
| Intangible amortization expense (2) | 1,001 | 220 | ||||||
| Inventory step-up expense (3) | 1,142 | — | ||||||
| Share-based compensation (4) | 1,200 | 821 | ||||||
| Severance expense (5) | 335 | — | ||||||
| Divestiture-related costs (6) | 320 | — | ||||||
| Total pre-tax non-GAAP adjustments | 4,010 | 1,055 | ||||||
| Income tax effect of pre-tax non-GAAP adjustments (7) | 117 | — | ||||||
| Total non-GAAP adjustments | 3,893 | 1,055 | ||||||
| Non-GAAP Net Income | $ | 2,395 | $ | 244 | ||||
| Weighted average number of common shares outstanding, basic | 26,886 | 25,763 | ||||||
| Weighted average number of common shares outstanding, diluted | 31,017 | 31,706 | ||||||
| GAAP loss per share - Basic | $ | (0.06 | ) | $ | (0.03 | ) | ||
| Non-GAAP adjustments | 0.14 | 0.04 | ||||||
| Non-GAAP earnings per share - Basic | $ | 0.08 | $ | 0.01 | ||||
| GAAP loss per share - Basic | $ | (0.06 | ) | $ | (0.03 | ) | ||
| Non-GAAP adjustments | 0.13 | 0.03 | ||||||
| Non-GAAP earnings per share - Diluted | $ | 0.07 | $ | — | ||||
| (1 | ) | Represents depreciation expense related to our property and equipment. |
| (2 | ) | Intangible amortization expenses are associated with our intellectual property rights related to INCRELEX®, GALZIN®, PKU GOLIKE®, Carglumic Acid, Betaine Anhydrous, and Nitisinone. |
| (3 | ) | During the three months ended |
| (4 | ) | Represents share-based compensation expense associated with our stock option and restricted stock unit stock unit grants to our employees and non-employee directors and our employee share purchase plan. |
| (5 | ) | Represents severance and benefit expenses associated with role redundancy within commercial operations during the three months ended |
| (6 | ) | Represents legal expense and other divestiture-related costs associated with the out-licensing of the INCRELEX® commercial rights in territories outside of the U.S. |
| (7 | ) | Income tax adjustments on pre-tax non-GAAP adjustments represent the estimated income tax impact of each pre-tax non-GAAP adjustment based on the effective income tax rate for the period. As discussed further in Note 9, we are in a full income tax valuation allowance position and the income tax adjustments |
| on pre-tax non-GAAP adjustment is commensurate with the performance measure. | ||
First Quarter 2025 GAAP to Non-GAAP Net Income (Loss) Reconciliation (in thousands, except per share amounts) (Unaudited) |
||||||||||||||||||||||||||||
| GAAP Net Loss | Depreciation and Intangible Amortization | Inventory Step-Up Expense | Stock Based Compensation | Severance Expense | Divestiture Related Costs | Non-GAAP Net Income | ||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||||
| Licensing revenue | $ | 3286 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 3,286 | ||||||||||||||
| Product sales and royalties | 13,996 | — | — | — | — | — | 13,996 | |||||||||||||||||||||
| Total net revenues | 17,282 | — | — | — | — | — | 17,282 | |||||||||||||||||||||
| Cost of sales: | ||||||||||||||||||||||||||||
| Licensing revenue | 825 | — | — | — | — | — | 825 | |||||||||||||||||||||
| Product sales and royalties | 6,596 | (1,001 | ) | (1,142 | ) | — | — | — | 4,453 | |||||||||||||||||||
| Total cost of sales | 7,421 | (1,001 | ) | (1,142 | ) | — | — | — | 5,278 | |||||||||||||||||||
| Gross profit | 9,861 | 1,001 | 1,142 | — | — | — | 12,004 | |||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||||
| Research and development | 1,161 | — | — | (39 | ) | — | — | 1,122 | ||||||||||||||||||||
| General and administrative | 9,170 | (12 | ) | — | (1,161 | ) | (335 | ) | (320 | ) | 7,342 | |||||||||||||||||
| Total operating expenses | 10,331 | (12 | ) | — | (1,200 | ) | (335 | ) | (320 | ) | 8,464 | |||||||||||||||||
| (Loss) income from operations | (470 | ) | 1,013 | 1,142 | 1,200 | 335 | 320 | 3,540 | ||||||||||||||||||||
| Other expense: | ||||||||||||||||||||||||||||
| Interest and other expense, net | (1,028 | ) | — | — | — | — | — | (1,028 | ) | |||||||||||||||||||
| (Loss) income before income tax expense | (1,498 | ) | 1,013 | 1,142 | 1,200 | 335 | 320 | 2,512 | ||||||||||||||||||||
| Income tax expense | 74 | 11 | 12 | 13 | 4 | 3 | 117 | |||||||||||||||||||||
| Net (loss) income | $ | (1,572 | ) | $ | 1,002 | $ | 1,130 | $ | 1,187 | $ | 331 | $ | 317 | $ | 2,395 | |||||||||||||
| Net loss (income) per share, basic | $ | (0.06 | ) | $ | 0.04 | $ | 0.04 | $ | 0.04 | $ | 0.01 | $ | 0.01 | $ | 0.08 | |||||||||||||
| Net loss (income) per share, diluted | $ | (0.06 | ) | $ | 0.03 | $ | 0.04 | $ | 0.04 | $ | 0.01 | $ | 0.01 | $ | 0.07 | |||||||||||||
| Weighted average number of common shares outstanding, basic | 26,886 | |||||||||||||||||||||||||||
| Weighted average number of common shares outstanding, diluted | 31,017 | |||||||||||||||||||||||||||
Source: Eton Pharmaceuticals