GlobeNewswire Inc | Nov 15, 2021 04:05PM EST

November 15, 2021

DEER PARK, Ill., Nov. 15, 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 third quarter ended September 30, 2021.

Over the last month we have made tremendous advancements to our commercial portfolio. We gained two more FDA-approved products, EPRONTIA and carglumic acid, both of which should launch in the fourth quarter, and we are increasing ALKINDI SPRINKLEs commercial footprint more than ten-fold through an attractive co-promotion arrangement with Tolmar Pharmaceuticals. These events put us in an even stronger position to deliver significant revenue and reach sustained profitability in 2022, said Sean Brynjelsen, CEO of Eton Pharmaceuticals.

Major Business Updates

-- Acquired marketing rights to FDA-approved carglumic acid tablets. Etons product is the first and only generic alternative to Carbaglu and is indicated for acute and chronic hyperammonemia due to N-acetylglutamine Synthase (NAGS) deficiency. Carbaglu is widely believed to be one of the most expensive treatments in the world and Eton looks forward to offering a lower-cost alternative to patients and caregivers. -- FDA Approval of EPRONTIA (topiramate) oral solution. Earlier this month, the U.S. Food and Drug Administration (FDA) approved EPRONTIA, the first oral liquid formulation of topiramate. EPRONTIA is now Etons sixth approved product. The product will be marketed by Azurity Pharmaceuticals and is expected to be available before the end of the year. The products launch will trigger a $5 million milestone payment to Eton, and Eton will also receive a royalty on sales of the product and potential future commercial milestone payments. -- Significantly expanded ALKINDI SPRINKLEs commercial footprint through a co-promotion partnership with Tolmar Pharmaceuticals. Tolmars 62-person commercial sales force is expected to be fully trained and promoting ALKINDI SPRINKLE in December. The transaction is expected to significantly accelerate product adoption and ALKINDI SPRINKLE sales growth.

ALKINDI SPRINKLE Commercial Update

In a separate press release issued this morning, Eton announced that it has entered into a co-promotion arrangement with Tolmar Pharmaceuticals for the promotion of ALKINDI SPRINKLE.

ALKINDI SPRINKLE sales continued to grow month-over-month in the third quarter and in October. During the quarter, Eton held an advisory panel with key opinion leaders in the pediatric endocrinology community and product feedback continues to be overwhelmingly positive as doctors appreciate the critical importance of precisely dosing pediatric patients when treating adrenal insufficiency. Eton believes in-person meetings have proven to be effective at driving adoption, and as a result, is drastically increasing ALKINDI SPRINKLEs commercial footprint through the co-promotion arrangement.

Portfolio Update

Eton now has six FDA-approved products, three of which (carglumic acid, EPRONTIA, and Rezipres) are expected to launch in the fourth quarter of 2021. The company also has four additional products that have been submitted to the FDA and could be approved and launched in 2022.

Biorphen & Rezipres Vial Conversions. Biorphen and Rezipres registration batches have successfully been manufactured in vials, and Eton will submit the supplement applications to the FDA as soon as the necessary stability data is available. Eton expects the vial format of both products to be approved and launched in 2022.

Dehydrated Alcohol Injection. Eton recently held a meeting with the FDA to discuss the dehydrated alcohol product applications complete response letter and Etons proposed responses. Based on the positive outcome of the meeting, Eton believes the FDAs requests are fully addressable, and the company expects to submit its response as an amendment in the coming months.

Zonisamide Oral Suspension. Eton continues to believe the only item holding up FDA approval of the zonisamide oral suspension product application is the FDA inspection of the products European manufacturer. The FDA has assigned the product application a new target action date of January 29, 2022, but the FDA has yet to conduct or schedule the onsite inspection. Eton will receive a $5 million milestone payment upon the approval and launch of zonisamide.

Lamotrigine for Suspension. The products human factor study was successfully completed during the quarter. Etons partner intends to submit the results to the FDA later this month. The submission should allow for a potential approval of the product in the first half of 2022. Eton will receive a $5 million milestone payment upon the approval and launch of lamotrigine.

Cysteine Hydrochloride Injection. Etons paragraph IV litigation and FDA application review remain on going. Eton expects to receive tentative approval from the FDA in advance of the 30-month stay expiration in August 2022.

Zeneo Hydrocortisone Autoinjector. Development activities are ongoing and the product remains on pace for an expected NDA submission in 2023.

Financial Results

Revenue: Eton reported revenue of $0.8 million for the third quarter of 2021. Eton reported no material revenue in the third quarter of 2020.

General and Administrative (G&A) Expenses: G&A expenses for the third quarter of 2021 were $3.3 million compared to $3.4 million in the prior-year period. Decrease was largely due to elevated spending in the prior year period related to launch preparation activities for ALKINDI SPRINKLE. The third quarter of 2021 included $0.9 million of non-cash expenses.

Research and Development (R&D) Expenses: R&D expenses for the third quarter of 2021 were $2.7 million compared to $2.8 million in the prior-year period. R&D expenses in the third quarter of 2021 were elevated due to expenses related to the development of Biorphen and Rezipres vial container conversion. R&D expenses in the third quarter of 2020 included a one-time $1.5 million NDA filing fee.

Net Income Eton reported a net loss of $6.1 million for the third quarter of 2021, compared to a net loss of $6.5 million in the prior-year period. Eton reported diluted earnings per share (EPS) of ($0.24) in the third quarter of 2021, compared to ($0.31) in the prior year period.

Cash Position: Cash and cash equivalents were $22.7 million as of September 30, 2021.

Conference Call and Webcast Information:Eton 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 1875678. 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.

About Eton 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 six FDA-approved products, including ALKINDI SPRINKLE, carglumic acid, Biorphen, Alaway Preservative Free, Rezipres, and Eprontia, and has four additional products that have been submitted to the FDA.

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 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 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, Inc.Condensed Statements of Operations(In thousands, except per share amounts)(Unaudited)

For the three months For the nine months ended ended September September September September 30, 30, 30, 30, 2021 2020 2021 2020 Revenues: Licensing revenue $ ? $ ? $ 14,000 $ ? Product sales and 775 (161 ) 1,739 (42 )royaltiesTotal net revenues 775 (161 ) 15,739 (42 ) Cost of sales: Licensing revenue ? ? 1,500 ? Product sales and 617 (144 ) 843 (14 )royaltiesTotal cost of sales 617 (144 ) 2,343 (14 ) Gross profit (loss) 158 (17 ) 13,396 (28 ) Operating expenses: Research and 2,678 2,826 5,554 10,703 developmentGeneral and 3,327 3,429 10,651 8,960 administrativeTotal operating 6,005 6,255 16,205 19,663 expenses Loss from operations (5,847 ) (6,272 ) (2,809 ) (19,691 ) Other (expense) income: Interest and other (247 ) (232 ) (731 ) (592 )(expense) income, netGain on PPP loan ? ? 365 ? forgivenGain on equipment sale ? ? 181 ? Loss before income tax (6,094 ) (6,504 ) (2,994 ) (20,283 )expense Income tax expense ? ? ? ? Net loss $ (6,094 ) $ (6,504 ) $ (2,994 ) $ (20,283 ) Net loss per share, $ (0.24 ) $ (0.31 ) $ (0.12 ) $ (1.01 )basic and diluted Weighted average numberof common shares 25,276 21,052 25,181 20,070 outstanding, basic anddiluted

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

September 30, December 2021 31, 2020 (Unaudited) Assets Current assets: Cash and cash equivalents $ 22,709 $ 21,295 Accounts receivable, net 385 48 Inventories 334 1,242 Prepaid expenses and other current assets 2,435 2,116 Total current assets 25,863 24,701 Property and equipment, net 134 811 Intangible assets, net 463 575 Operating lease right-of-use assets, net 123 192 Other long-term assets, net 23 40 Total assets $ 26,606 $ 26,319 Liabilities and stockholders? equity Current liabilities: Accounts payable $ 3,273 $ 2,344 Current portion of long-term debt 1,092 ? PPP loan, current portion ? 280 Accrued liabilities 995 1,170 Total current liabilities 5,360 3,794 Long-term debt, net of discount and including 5,550 6,532 accrued feesLong-term portion of PPP and EIDL loans ? 231 Operating lease liabilities, net of current 36 99 portion Total liabilities 10,946 10,656 Commitments and contingencies Stockholders? equity Common stock, $0.001 par value; 50,000,000shares authorized as of September 30, 2021 andDecember 31, 2020; 24,606,175 and 24,312,808 25 24 shares issued and outstanding at September 30,2021 and December 31, 2020, respectivelyAdditional paid-in capital 110,787 107,797 Accumulated deficit (95,152 ) (92,158 )Total stockholders? equity 15,660 15,663 Total liabilities and stockholders? equity $ 26,606 $ 26,319

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

Nine Nine months months ended ended September September 30, 2021 30, 2020Cash flows from operating activities Net loss $ (2,994 ) $ (20,283 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities:Stock-based compensation 2,518 1,803 Common stock issued for product candidate ? 1,264 licensing rightsDepreciation and amortization 325 490 Debt discount amortization 110 85 Gain on forgiveness of debt (365 ) ? Gain on sale of equipment (181 ) ? Changes in operating assets and liabilities: Accounts receivable (337 ) 473 Inventories 908 (1,319 )Prepaid expenses and other assets (283 ) 1,305 Accounts payable 929 1,633 Accrued liabilities (234 ) (615 )Net cash provided by (used in) operating 396 (15,164 )activities Cash provided by (used in) investing activities Proceeds from sale of equipment 700 ? Purchases of property and equipment (5 ) (6 )Net cash provided by (used in) financing 695 (6 )activities Cash flows from financing activities Proceeds from sales of common stock, net of ? 7,756 offering costsProceeds from issuance of long-term debt, net of ? 1,965 issuance costsEIDL loan payoff (150 ) ? Proceeds from PPP and EIDL loans ? 511 Proceeds from employee stock purchase plan and 473 204 stock option exercisesNet cash provided by financing activities 323 10,436 Change in cash and cash equivalents 1,414 (4,734 )Cash and cash equivalents at beginning of period 21,295 12,066 Cash and cash equivalents at end of period $ 22,709 $ 7,332 Supplemental disclosures of cash flow information Cash paid for interest $ 603 $ 545 Cash paid for income taxes $ ? $ ? Supplemental disclosure of non-cash financing activityRelative fair value of warrants to purchase $ ? $ 94 common stock issued in connection with debt

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