GlobeNewswire Inc | May 13, 2021 04:05PM EDT

May 13, 2021

-- First quarter 2021 revenue of $11.9 million -- First quarter 2021 operating earnings of $5.4 million; EPS of $0.19 -- Eton now has three commercial, revenue-generating products

DEER PARK, Ill., May 13, 2021 (GLOBE NEWSWIRE) -- Eton Pharmaceuticals, Inc (Nasdaq: ETON), an innovative pharmaceutical company focused on developing and commercializing treatments for rare diseases, today reported financial results for the first quarter ended March 31, 2021 and provided an update on business progress.

We are proud to report record revenue and the first profitable quarter in Etons history, said Sean Brynjelsen, CEO of Eton Pharmaceuticals. We have begun seeing the results of the years of hard work developing our product candidates. We now have three approved and revenue generating products, and we expect to have a number of additional products launched later this year as a result of the four upcoming PDUFA dates over the next three months, added Brynjelsen.

Q1 Business Highlights

First quarter revenue of $11.9 million and operating income of $5.4 million. Revenue included sales or royalties received on three commercial products plus payments related to the sale of Etons neurology oral liquids products.

Launch of Alaway Preservative Free. In February, Bausch Health launched Alaway Preservative Free in major U.S. retailers. Eton collected a $1.5 million launch milestone plus a royalty on the products sales in the first quarter.

Completed sale of neurology oral liquid products. Eton completed the sale of its neurology portfolio to Azurity Pharmaceuticals. Eton will receive milestone payments of up to $45 million, $9.5 million of which was received in the first quarter, and a single digit royalty on product sales.

ALKINDI SPRINKLE

Eton remains focused on the commercial launch of ALKINDI SPRINKLE in the United States. The first quarter of 2021 was the first full quarter of the products launch. The companys sales representatives have already engaged with more than 90% of their initial targets in the pediatric endocrinology community, and sales representatives have been met with a positive reception from physicians, nurses, and caretakers.

Although Initial sales force communications have largely been virtual due to COVID-19 related restrictions, certain physicians offices and hospitals have recently begun accepting in-person meetings. Given the expectation for higher conversion rates on in-person meetings, Eton has adopted a sales force strategy that focuses resources most heavily in states where in-person meetings are taking place, rather than the traditional regional allocation of territories. The new strategy will allow all sales representatives to focus on maximizing in-person meetings, even if their previously assigned geography comprises states that are not accepting in-person visits. Eton will continue to refine the resource allocation in the coming weeks and months as additional states begin accepting in-person visits.

In April, Eton presented virtually at the Pediatric Endocrinology Nursing Society national conference and the Pediatric Endocrinology Society annual meeting, the first two conferences since the products launch.

The company has seen strong adoption of ALKINDI SPRINKLE, and prescriptions continue to grow month over month. Over 100 new patient prescriptions have been written this year, and the company continues to work towards its goal of more than 400 new patient prescriptions by the end of the year.

Pipeline Update

Eton owns or has economic interests in six pipeline products that are currently under review with the FDA, four of which have been assigned Prescription Drug User Fee Act (PDUFA) dates:

-- May 27: Dehydrated Alcohol Injection -- May 29: Zonisamide Oral Suspension -- June 18: Ready-to-Use Ephedrine Injection -- August 6: Topiramate Oral Solution

Eton expects these products to be approved and launched later this year. In addition, given the companys strong financial position, it remains actively pursuing business development opportunities to add high-value late-stage orphan product candidates to its portfolio.

Current Product Portfolio & PipelineProduct StatusALKINDI^ SPRINKLE CommercialAlaway^ Preservative Free CommercialBiorphen^ CommercialDehydrated Alcohol Injection FiledZonisamide Oral Suspension FiledTopiramate Oral Solution FiledLamotrigine for Suspension FiledRTU Ephedrine Injection FiledCysteine Injection FiledALKINDI^ SPRINKLE - Canada Pre-Filing

Financial Results

Revenue Eton reported revenue of $11.9 million for the first quarter of 2021, which included $9.5 million from the sale of its neurology oral liquid products and a $1.5 million milestone payment from Bausch Health for the launch of Alaway Preservative Free. In the prior-year period, the company reported revenue of $0.1 million.

General and Administrative (G&A) Expenses: G&A expenses for the first quarter of 2021 were $4.1 million compared to $2.6 million in the prior-year period. The increase was largely due to increased costs related to the commercialization of ALKINDI SPRINKLE. G&A expenses for the first quarter of 2021 included $0.7 million of non-cash expenses.

Research and Development (R&D) Expenses: R&D expenses for the first quarter of 2021 were $0.9 million compared to $6.3 million in the prior-year period. The prior-year period included $4.8 million of one-time licensing payments for the acquisition of marketing rights to ALKINDI SPRINKLE. Absent any new business development transaction, the company expects full year 2021 R&D expenses to be substantially below 2020 levels.

Net Income Eton reported net income of $5.1 million for the first quarter of 2021, compared to a net loss of $9.0 million in the prior-year period. Eton reported diluted earnings per share (EPS) of $0.19 in the first quarter of 2021, compared to a loss of $0.50 per share in the prior year period.

Cash Position Eton reported cash and cash equivalents of $25.1 million as of March 31, 2021.

Conference Call and Webcast InformationEton Pharmaceuticalswill host a conference call and webcast today at4:30 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 5847989. The webcast can be accessed under Events & Presentations in the Investors section of the Companys website at https://ir.etonpharma.com. The webcast will be archived and made available for replay on the companys website approximately two hours after the call and will be available for 30 days.

AboutEton PharmaceuticalsEton Pharmaceuticals, Inc.is an innovative pharmaceutical company focused on developing and commercializing treatments for rare diseases. The company currently owns or receives royalties from three FDA-approved products, including ALKINDISPRINKLE, Biorphen, and AlawayPreservative Free, and has six additional products that have been submitted to the FDA.

Forward-Looking StatementsStatements 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 Etons business strategy, Etons plans to develop and commercialize its product candidates, the safety and efficacy of Etons product candidates, Etons plans and expected timing with respect to regulatory filings and approvals, and the size and growth potential of the markets for Etons 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 Etons 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 Etons development programs and financial position are described in additional detail in Etons filings with theSecurities 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, Inc.Condensed Statements of Operations(In thousands, except per share amounts)(Unaudited)

For the three months ended March 31, March 31, 2021 2020Revenues: Licensing revenue $ 11,500 $ ? Product sales and royalties 397 99 Total net revenues 11,897 99 Cost of sales Licensing revenue 1,500 ? Product sales and royalties 90 102 Total cost of sales 1,590 102 Gross profit (loss) 10,307 (3 ) Operating expenses: Research and development 886 6,268 General and administrative 4,058 2,610 Total operating expenses 4,944 8,878 Income (loss) from operations 5,363 (8,881 ) Other expense: Interest and other expense, net (247 ) (168 ) Income (loss) before income tax expense 5,116 (9,049 ) Income tax expense ? ? Net income (loss) $ 5,116 $ (9,049 )Net income (loss) per share, basic $ 0.21 $ (0.50 )Net income (loss) per share, diluted $ 0.19 $ (0.50 )Weighted average number of common shares outstanding, 24,453 18,143 basicWeighted average number of common shares outstanding, 26,547 18,143 diluted

Eton Pharmaceuticals, Inc.Condensed Balance Sheets(in thousands, except share and per share amounts)

March 31, 2021 December 31, 2020 (Unaudited) Assets Current assets: Cash and cash $ 25,113 $ 21,295 equivalentsAccounts 300 48 receivable, netInventories 1,348 1,242 Equipment 551 ? held-for-salePrepaid expensesand other current 2,962 2,116 assetsTotal current 30,274 24,701 assets Property and 176 811 equipment, netIntangible assets, 537 575 netOperating leaseright-of-use 163 192 assets, netOther long-term 36 40 assets, netTotal assets $ 31,186 $ 26,319 Liabilities andstockholders? equityCurrent liabilities:Accounts payable $ 1,761 $ 2,344 Current portion of 385 ? long-term debtPPP loan, current 341 280 portionAccrued liabilities 712 1,170 Total current 3,199 3,794 liabilities Long-term debt, netof discount and 6,183 6,532 including accruedfeesLong-term portionof PPP and EIDL 170 231 loansOperating leaseliabilities, net of 79 99 current portion Total liabilities 9,631 10,656 Commitments and contingencies Stockholders? equityCommon stock,$0.001 par value;50,000,000 sharesauthorized as ofMarch 31, 2021 andDecember 31, 2020;24,482,616 and 24 24 24,312,808 sharesissued andoutstanding atMarch 31, 2021 andDecember 31, 2020,respectivelyAdditional paid-in 108,573 107,797 capitalAccumulated deficit (87,042 ) (92,158 )Total stockholders? 21,555 15,663 equity Total liabilities and stockholders? $ 31,186 $ 26,319 equity

Eton Pharmaceuticals, Inc.Condensed Statements of Cash Flows(In thousands)(Unaudited)

Three Three months months ended ended March 31, March 31, 2021 2020Cash flows from operating activities Net income (loss) $ 5,116 $ (9,049 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities:Stock-based compensation 673 365 Common stock issued for product candidate licensing ? 1,264 rightsDepreciation and amortization 155 162 Debt discount amortization 36 27 Changes in operating assets and liabilities: Accounts receivable (252 ) 268 Inventories (106 ) (1,346 )Prepaid expenses and other assets (846 ) 1,020 Accounts payable (583 ) 608 Accrued liabilities (478 ) (536 )Net cash provided by (used in) operating activities 3,715 (7,217 ) Cash used in investing activities Purchases of property and equipment ? (4 ) Cash flows from financing activities Proceeds from sales of common stock, net of ? 7,459 offering costsProceeds from employee stock option exercises 103 31 Net cash provided by financing activities 103 7,490 Change in cash and cash equivalents 3,818 269 Cash and cash equivalents at beginning of period 21,295 12,066 Cash and cash equivalents at end of period $ 25,113 $ 12,335 Supplemental disclosures of cash flow information Cash paid for interest $ 214 $ 189 Cash paid for income taxes $ ? $ ?

Investor Contact:David Krempadkrempa@etonpharma.com612-387-3740