Q2 2021 Eton Pharmaceuticals Inc Earnings Call

August 16, 2021

[music].

Good afternoon, and welcome to the Eton Pharmaceuticals second quarter, 2021 financial and operating results conference call. At this time, all participants are in a listen-only mode.

Following the formal remarks, we will open the call up for your questions. Please be advised that this call is being recorded at the company's request.

At this time I'd like to turn it over to David Krempa, Senior Vice President of business development and Investor Relations at Eton Pharmaceuticals. Please proceed.

Thank you operator, good afternoon, everyone and welcome to Eaton's second quarter 2021 conference call.

This afternoon, we issued a press release that outlines the topics we plan to discuss on today's call. The release is available on our website Eaton pharma Dot com <unk>.

Joining me on the call today, we have Sean burn Jellison, our CEO Wilson Troutman, our CFO and Paul Stickler, our senior Vice President of sales and marketing.

See the forward looking statements disclaimer in our earnings release and the risk factors in the company's filings with the SEC now.

Now I will turn the call over to our CEO Sean Brynjolfsson. Thank.

Thank you David Thank you everyone for joining us today as we discuss our second quarter earnings results.

During the second quarter, we had a number of important accomplishments, including the approval of resi press, a ready to use formulation of ephedrine injection.

For years hospitals have had to manually dilute or compound concentrated ephedrine and emergency care situations.

Now with the approval of resi price Eaton is offering yet another value enhancing option for physicians and caregivers. This.

This is now our fourth FDA approval and I'm very proud of our team and the hard work they've put in to achieve that so many approvals in such a short period of time.

Of the nine products in our pipeline nearly 50% are now approved with the others under FDA review and approval expected over the next couple of weeks and months.

Currently there are over 6 million vials of the concentrated ephedrine injections sold annually in the U S market as you can imagine this would translate into a significantly higher number of ready to use doses once they have been diluted for administration.

We would expect to launch <unk> at a slight premium to the ephedrine concentrate in the coming months.

<unk> also expanded our orphan drug pipeline in the quarter with the acquisition of the U S and Canadian rights to <unk> Hydro cortisol <unk> is a.

Our proprietary needle free auto injector that is designed to quickly and safely deliver a rescue dose of hydrocortisone during an adrenal crisis.

Since launching <unk> sprinkle, we had constantly heard patients describing an auto injector is the number one unmet need for the adrenal insufficiency community. So we are very excited to be able to work with cross checked to try to bring this treatment to the community as quickly as possible.

This product is a perfect strategic fit with our Kinder sprinkle Elkins sprinkle as the daily maintenance treatment for pediatric AI patients and Zinio hydrocortisone as the rescue treatment that AI patients are likely to carry with them similar to how someone would carrying an epipen.

For obviously a different indication.

The announcement of our deal has also helped further deepen our relationship with the AI community numerous physicians and patient advocacy groups reached out to express their excitement for the project, including some leading pediatric endocrinologists that had previously been hard to reach.

Now more than <unk> sprinkle commercial launch we were pleased to be able to initiate in person meetings during the second quarter.

Now we are prioritizing in person meetings and their frequency has surpassed our zoom and telephone calls in recent months. We are finding in person meetings to be significantly more effective than zoom calls physicians are much more engaged when meeting person to person and they enjoy being able to see how can these samples. So they can feel comfortable knowing exactly what they are prescribing to their <unk>.

Patients.

As a result of this ability to now hosts more in person meetings and the positive feedback. We've received we are now planning to expand our field sales force.

The ongoing feedback is clear physicians and patients like al Kindi. So we believe increasing the reach and frequency of our in person meetings with doctors will accelerate adoption of the product to illustrate this point to date, we've only reached approximately 10% of prescribing physicians in person what that means is that we have a long runway of <unk>.

Growth ahead of us the.

The company is also seeing favorable support from payers that understand the critical need to dose precisely in pediatric patients. We are not aware of any patients that have had al kindi coverage rejected by their insurer and many patients are starting with a quick start program, where we immediately filled a prescription so the child can begin treatment and handle the <unk>.

For work in the administrative aspects on the backend this processes works seamlessly with patients converting to their insurance coverage by the second monthly script currently more than 90% of patients on treatment are being reimbursed for the product and the remainder of newly added patients on the quick start that are expected to convert to commercial coverage.

By next month.

While the initial launch phase some COVID-19 related headwinds that limited our ability to get in front of doctors the physicians reactions to in person meetings and a strong payer support has confirmed our assumptions about the product and given us greater confidence in our long term expectations, which remain unchanged.

While we had some delays in our pipeline during the quarter in large part due to COVID-19, delaying the FDA is international inspections. Our team has proven that we are resilient and I am confident we will be able to achieve approval on these products in short order.

The company is looking forward to the new <unk> date of November six the product is manufactured at an already FDA approved U S. Manufacturing site that was successfully inspected in late 2020. So we do not expect any inspection issues during the review.

We also continue to believe that the <unk> application is fully ready for approval whenever the FDA can complete the foreign manufacturing site inspection and.

Unfortunately, we have not been given any indication of timing from the agency, but the manufacturing side as many other pending product applications similar situation to ours and we are hopeful the agency will prioritize the site with a near term inspection and allow these important products to get to patients.

Regarding our dehydrated alcohol and Lamotrigine products, we expect both product applications will have amendments filed shortly with the FDA and after responding to these FDA questions. We believe approval of the product could occur early next year.

And as excited for all four of these products to be approved and launched in the near future, which sets the company up for a very strong growth in 2022 and beyond.

Before discussing financial results I would like to just summarize and to thank also our long term shareholders for their continued support and their belief in the vision of the company I sincerely believe that Eaton's outlook has never been stronger than it is today for a number of reasons.

One the <unk> launch is taking strides growing sales every week.

Two were on the cost of launching our fourth commercial product <unk>.

Three we have four more potential product approvals lined up in the coming quarters and lastly, we are fully funded with more than $25 million of cash today, plus more milestone payments expected to come in soon therefore, no need for external financing.

In the foreseeable future with that I would like to turn the call over to Wilson, who will briefly walk through some of the financials before we open up the call for Q&A Wilson. Thank.

Thank you Sean Ian reported revenue of $3.1 million for the second quarter of 2021 revenue included $2.5 million of licensing revenue related to the company's previously announced transaction with <unk>.

In the prior year period, the company did not record material revenue.

General and administrative expense for the second quarter of 2021 were $3.3 million compared to $2.9 million in the prior year period.

The increase was largely due to increased costs related to the commercialization of our <unk> sprinkle.

G&A expenses for the second quarter of 2021 included <unk> 7 million of noncash expenses.

R&D expenses for the second quarter of 2021 were $2 <unk> million compared to $1.6 million in the prior year period.

R&D expenses in the quarter included a onetime $1.5 million payment related to the acquisition of U S and Canadian rights to Jennie O hydrocortisone.

Eton reported a net loss of $2.8 million compared to a net loss of $4.7 million in the prior year period and resulted in a loss of <unk> <unk> per share in the second quarter of 2021 compared to a loss of 23 per share in the prior year period.

Eton finished the second quarter with cash and cash equivalents of $25.8 million.

We remain confident that our current cash position is sufficient to allow us to launch our products and continue to pursue value creating business development opportunities.

With that I would like to turn it over to the operator for Q&A.

Operator thank.

Thank you as a reminder to ask a question you will need to press Star and then the number one on your telephone keypad again, just press Star and then the number one on your telephone keypad and Jimmy draw. Your question press the pound key.

Plus for a moment to compile the Q&A roster.

Our first question comes from the line of Jason Private Investor Sir Your line is open.

Hey, guys.

So there was third.

<unk> already.

Media seeking alpine believe that.

Published something about.

Labeling related to al can be and the FDA getting involved I'm curious you guys are aware of that.

Do you have any comments.

Yes, we are aware of it.

This just for everybody on the call. This is a Google AD. We believe when we distributed this the link at the splits of sponsored link that it was acceptable to provide a link to the risk information.

It was now understood that that was incorrect consolidated risk information has to be a part of that whole thing.

So.

Remove the add in.

Sometimes what happens on these things is certainly was inadvertent and it wasn't purposeful.

I think it will be resolved.

Obviously, we take these things seriously we're committed to regulatory compliance.

More importantly, we've made the corrective stuff.

Thank you.

As you guys look at where you're at with the.

Ram.

Going into the fourth quarter.

Hello.

Mary Anne.

Yep.

In certain parts of the country.

And the complementary first months.

Yes.

Through this acceleration program.

I mean should we be thinking about modeling.

Sales over the coming quarters or months different need and say, how we might have thought about things we're doing.

Yes.

That's it's a good question, it's hard to say.

Many states and in fact, many countries feel that with the large number of people that have been vaccinated in and those who have not been vaccinated as probably caught it COVID-19 anyways that you have a pretty robust population in terms of resistance to the Delta variant.

I think that there is this is my own private opinion that theres a lot of fatigue about lockdowns and that people are ready to move forward. So we're not seeing.

Really a reversion there are some states obviously, but we believe we will continue to be able to reach prescribing.

Prescribing docs are face to face.

In many places and I think that one point, we made in our opening remarks is that we really have only scratched the surface in terms of face to face visits it's been an approximately 10%. So theres a lot of runway and yet we're seeing each week more and more patients as each week goes by which.

Is very typical for an orphan drug product, where youre trying to change prescribing practices or trying to get doctors to familiar and used to the concept of switching from whatever they were doing in the past to something that is more.

Appropriate for this age group that for these patients and more importantly indicated for these patients.

Thanks, Sean I don't have any more questions at this time. Thank you. Thank you.

Thank you. Your next question comes from the line of Andrew The Silver from B Riley Securities. Your line is open.

Hey, good afternoon. Thanks for.

Taking my question and sorry, if you answered this I actually got dropped off.

For a second.

If you could just give any color on product revenue breakout during the quarter.

And then how should we.

Think about product revenue kicking in the back half of the year now that you have obtained approval for our revenue guidance.

Hi, Andy Thanks for the question. So we didn't break out product specific revenue.

But as we've talked about in the past obviously all can be the biggest driver.

Revenue driver going forward.

<unk> half of the year, we expect <unk> to continue to ramp even more.

As we grow patients and we talked about potentially increasing our sales force, which should accelerate the revenue growth in the back half of the year.

Okay, perfect and then.

Hey, guys.

A file correct, Andrew Wilson formulation that was accurate.

No actually this is a little bit of a redo and with regards to Biolife and it is it is an ampoule. It is we will offer into a vial at some point.

But we believe the product will have sales we're in the process of that are converting it and I think that that won't be nearly as long part of the reason with the by orphan Violet conversion that took along is that we had completed the site transfer nearly completed the site transfer at a facility in France in the French government basically.

It over for Covid production for vaccine production. So we had to then do the site transfer it into the U S. So it's been a little longer but that's really close to being complete and we think that both by orphan and royalty press and vials.

Our.

Big drivers and important products.

Over the coming months not years.

Okay.

And then as it relates to that.

CIT injector acquisition.

First are you aware of any competing hydrocortisone injections that are being developed and then could you talk about.

The market synergies with all Kandi as far as any differences in the target physician or anything like that.

Sure.

So shortly after we announced our deal and.

Antares pharma announced.

Their own resi resi prosper hydrocortisone emergency auto injector.

And they had indicated we didn't indicate market. They had indicated a market of 100 million or something like that.

There is enough room for both of us, but I will tell you these products, especially with devices are not always the easiest they don't always stay on time, we believe the cross check device is really just it's not in a development stage, it's really a complete <unk>.

Very reliable in my opinion very usable system, it's needless, which we think will appeal to our patients and we believe the product will be preferred.

Over a needle.

And it's really easy to use it's like two steps I mean somebody put it in front of me I had no instructions and I was able to activate it and use it.

Obviously, we are using this on up on it.

Test.

It's a test case is kind of like the style that you injected into.

The product has been on the wish list four.

Renal patients insufficiency patients for a number of years and.

The fact that Antares was working on and sort of validates that we made the right decision in terms of the market was a good is a good market and it will continue to be a good market and I think we will get there before them.

This is my opinion.

Great great color.

I understand a lot of the BRL and regularly.

Thank you inventory related delays tied to manufacturing or candidates to be sold.

But in general is there anything else you can do.

Eastern or bringing in additional development specialists or reallocating key members to that area of focus Im just looking at the CLO to approval rates.

Public its just not aligning with industry norms and wonder a greater investment in the area of oversight would this enable you to resolve critical issues fire to carry out being issued or at least be able to convey potential holdup too.

Hey, Dan.

Yes, it's a fair question.

Some of the products have been literally fully developed by our partners and so we had very little.

The development.

And they have been submitted and you get the call, but with the 500 <unk>.

Carl process has almost become routine.

Having a deficiency of some sort and you have to go and respond to it but you can see that.

Of the four products, we had that.

We have approved three of them had CRM <unk> my memory is correct and they ultimately get approved so this isn't like a.

A new drug entity or branded product being developed by let's say, a Pfizer, where you get a CRM tool and potentially as dead because the clinical didn't work. The products. We are developing we know they work for their indication.

So we think the risk is much slower than a lot of the <unk> has to do with CMC.

Chemistry type related issues or manufacturing im not.

And we want to minimize those obviously to your point, though we have contracted we do have a contract.

Kind of like.

Scientific consultant, that's now on staff or I should say not really have staff with a consultant we are using to really dig into the due diligence on a lot of our projects and we hope to improve that and have a lower CRM.

Right.

Obviously, as what everybody would like to see and I get that but they do come.

This like Topiramate.

Nobody really called out <unk>. It was we've submitted information they want FDA wanted more time.

That's fine, but I think that product is well poised for approval.

Okay Fair enough. Thank you very much and best of luck going forward.

Sure. Thank you.

Next.

Your next question comes from the line of Graham.

<unk> <unk> from H C. Wainwright your line is open.

Thanks, So much for taking my questions I was wondering if you could provide a bit more granularity regarding what you expect to be steady.

Steady state size of the sales force to support Al Kindi Sprinkle and if you could also give us some visibility into how you anticipate the commercialization effort for all can be sprinkle to be dovetailed with or.

Complementary to the efforts you make with respect to does the Mayo auto injector products.

Go ahead, Paul and I'll, let Paul take this question is our senior VP of sales and marketing. Thanks.

Thanks, Sean Hi Ram.

Thanks for your questions with regards to the steady state it really comes down to determining.

How many key positions we need to see are in the United States and are we able to see them with the right reach and frequency.

And ultimately when we launched our <unk> sprinkle, we were an unusual times and the pandemic and so we allocated resources to a different modality, we put some on the <unk>.

Inside sales and outside sales, but always with the intention of fully resourcing the outside sales team appropriately and since we started to see some more in person calls and productivity of those calls is substantially higher.

Then the type of calls that we'd be delivering over zoom and <unk>.

Telephone and so that was something that we saw and we knew that at some point, we're going to go do that and then as the country opened up.

Do anticipate getting to a full size of between five and eight sales representatives to support out can be sprinkle.

Your other question related to <unk>.

I think that there is a tremendous amount of synergy that can be unlocked with these without <unk> together.

To put a little finer point, the advocacy organizations and the adrenal insufficiency community have stated that this is their number one concern to have an auto injector for emergency crisis situations and we are we are calling on those very same positions that would be prescribing <unk>.

<unk> in the future and so we've already established a great relationship with them and anticipate continuing to do so and so I think it's going to be a very nice synergistic fit and I think we'll be well positioned to grow this product once its approved by the FDA.

Yeah.

Great. Thanks, very much and we'll also wanted to visit the timing that you anticipate for the payment of future regulatory related milestones from majority.

Is it reasonable to expect that only the milestone related to the Topiramate approval, which we now anticipate to occur in November of this year will be the will be milestone that's paid in 2021 and everything else that you expect from majority would most likely occur after the end of 2021 or is there a <unk>.

Possibility that you could receive payments from majority beyond the topiramate approval related regulatory milestone payment in 2021.

I think that it's a fair assessment on how you communicated it likely.

That topiramate.

Payment will happen this year, and then likely than the.

The other ones will happen in early 2022.

For us it's not a huge.

It's not that meaningful because it's still we've got like I said, we have plenty of cash for a long time and those payments coming in let's say Q1 is not really material from our perspective.

To get them sooner of course, but.

They are coming and files are strong the solid they're good.

The comments have been very constructive.

More importantly, our products that are needed by patients. So I think that they are all positioned for APA.

Approval in the coming months so.

Okay, and then with respect to.

The dehydrated alcohol injection product candidates.

Can you just clarify for us what type of.

Review period, you expect the FDA to assign the application amendment once it has been submitted.

Sure I believe it will be approximately three months.

As long as they are classified as a miner may I think majors six months, but a minor we believe it will be minor and we'll respond to it.

Shortly.

<unk> items was just.

I wanted some additional stability data and things like that but.

No real additional work per se just additional literature information additional clarification on indication I'm, just giving you sort of.

The types of things that were in there and.

Yes, we are.

Happy with how that's going and we will have a <unk>.

Meeting with the agency and just say look this is what we're going to give in and make sure. They are all on board with it but it's been good dialogue I think that the <unk>.

Product is in good shape.

Okay, and then lastly, with respect to the <unk> injection.

Can you just.

Give us a little bit more background on.

What gives you confidence that you will prevail in this litigation.

Sure.

I know that in any litigation the opposing side likes to make things complex, but the reality is our partner.

You could say us in a way.

<unk> been making this product for 20 years.

Same formula same spec same everything and somebody decides to come out and patent.

Formula that we've.

<unk> had on the market for a very long time so.

We have a very good position a very strong position. There is nothing newer novel in my opinion about what they're trying to claim is new and novel.

All of these things were already part of our products. So fundamentally it is to me a moral for companies to try patenting old products that have been on the market for decades, and then try to secure a monopoly at extremely high prices.

And really abuse of the U S health care system. So we're going to convey what the facts of the situation is in the best way to win a case is to have effects on your side and we believe the facts are on our side.

Great. Thank you very much.

Sure.

Thank you there are no other questions. Thank you ladies and gentlemen. This does concludes today's conference call. Thank you for participating you may now disconnect.

Thank you.

Okay.

[music].

Good afternoon, and welcome to the Eton Pharmaceuticals second quarter, 2021 financial and operating results conference call. At this time all participants are in a listen only mode. Following the formal remarks, we will open the call up for your questions.

Be advised that this call is being recorded at the company's request.

At this time I'd like to turn it over to David Krempa, Senior Vice President of business development and Investor Relations at Eton Pharmaceuticals. Please proceed.

Thank you operator, good afternoon, everyone and welcome to Eaton's second quarter 2021 Conference call. This afternoon, we issued a press release that outlines the topics we plan to discuss on today's call and the release is available on our website Eaton pharma Dot com.

Joining me on the call today, we have Sean French Allison, our CEO Wilson Troutman, our CFO and Paul Stickler, our senior Vice President of sales and marketing.

Before we begin I would like to remind everyone that statements made during this call may contain forward looking statements and involve risks and uncertainties that could cause actual results to differ materially from those contained in these forward looking statements. Please see the forward looking statements disclaimer in our earnings release and the risk factors in the Companys filings.

With the SEC.

Now I will turn the call over to our CEO, Sean Fringe Allison.

Thank you David Thank you everyone for joining us today as we discuss our second quarter earnings results.

During the second quarter, we had a number of important accomplishments, including the approval of resi press, a ready to use formulation of ephedrine injection.

For years hospitals have had to manually dilute or compound concentrated ephedrine and emergency care situations.

Now with the approval of Resi press Eaton is offering yet another value enhancing option for physicians and caregivers. This.

This is now our fourth FDA approval and I'm very proud of our team and the hard work they've put in to achieve that so many approvals in such a short period of time of the nine products in our pipeline nearly 50% are now approved with the others under FDA review and approval expected over the next couple of weeks and months.

We would expect to launch revenue press at a slight premium to the ephedrine concentrate in the coming months.

And also expanded our orphan drug pipeline in the quarter with the acquisition of the U S and Canadian rights to <unk> Hydro cortisol does any of those are proprietary needle free auto injector that is designed to quickly and safely deliver a rescue dose of hydrocortisone during an adrenal crisis.

This product is a perfect strategic fit with our Kinder sprinkle El Kenneth Sprinkle as the daily maintenance treatment for pediatric AI patients and Zinio hydrocortisone as the rescue treatment that AI patients are likely to carry with them similar to how someone would carry an epipen.

For obviously a different indication.

The announcement of our deal is also help further deepen our relationship with the AI community numerous physicians and patient advocacy groups reached out to express their excitement for the project, including some leading pediatric endocrinologists that had previously been hard to reach.

Now more than <unk> Kennedy sprinkled commercial launch we were pleased to be able to initiate in person meetings during the second quarter now.

Now we are prioritizing in person meetings and their frequency has surpassed our zoom and telephone calls in recent months. We are finding in person meetings to be significantly more effective than zoom calls physicians are much more engaged when meeting person to person and they enjoy being able to see how kinder samples. So they can feel comfortable knowing exactly what they are prescribing to there.

Patients.

As a result of this ability to now hosts more in person meetings and the positive feedback. We've received we are now planning to expand our field sales force.

Growth ahead of us the.

For work in the administrative aspects on the backend this processes works seamlessly with patients converting to their insurance coverage by the second monthly scrubbed currently more than 90% of patients on treatment are being reimbursed for the product and the remainder are newly added patients on the quick start that are expected to convert to commercial coverage.

By next month.

The company is looking forward to the neutral <unk> date of November six the product is manufactured at an already FDA approved U S. Manufacturing site that was successfully inspected in late 2020. So we do not expect any inspection issues during the review.

We also continue to believe that the <unk> application is fully ready for approval whenever the FDA can complete the foreign manufacturing site inspection and.

Unfortunately, we have not been given any indication of timing from the agency, but the manufacturing side as many other pending product application similar situation to ours and we are hopeful the agency will prioritize the site with a near term inspection and allow these important products to get to patients.

And as excited for all four of these products to be approved and launched in the near future, which sets the company up for a very strong growth in 2022 and beyond.

One the al Kindi launches, taking strides growing sales every week.

Two we are on the cost of launching our fourth commercial product <unk>.

In the foreseeable future with that I would like to turn the call over to Wilson, who will briefly walk through some of the financials before we open up the call for Q&A Wilson. Thank.

In the prior year period, the company did not record material revenue.

General and administrative expense for the second quarter of 2021 were $3.3 million compared to $2.9 million in the prior year period.

The increase was largely due to increased costs related to the commercialization of our <unk> sprinkle.

G&A expenses for the second quarter of 2021 included <unk> 7 million of noncash expenses.

R&D expenses for the second quarter of 2021 with $2 <unk> million compared to $1.6 million in the prior year period.

R&D expenses in the quarter included a onetime $1.5 million payment related to the acquisition of U S and Canadian rights to Jennie O hydrocortisone.

Eton reported a net loss of $2 <unk> million compared to a net loss of $4.7 million in the prior year period and resulted in a loss of <unk> <unk> per share in the second quarter of 2021 compared to a loss of 23 per share in the prior year period.

Eton finished the second quarter with cash and cash equivalents of $25.8 million.

We remain confident that our current cash position is sufficient to allow us to launch our products and continue to pursue value creating business development opportunities.

With that I would like to turn it over to the operator for Q&A.

Operator thank.

Pause for a moment to compile the Q&A roster.

Our first question comes from the line of Jason Private Investor Sir Your line is open.

Hey, guys.

So there was third.

R&D.

Media seeking alpine believe that.

Published something about.

Labeling related to al can be and the FDA getting involved I'm curious if you guys are aware of that and you and if you have any comments.

Yes, we are aware of it.

Just for everybody on the call. This is a Google AD. We believe when we distributed this the link at this lets US sponsored link that it was acceptable to provide a link to the risk information.

It was now understood that that was incorrect and saw the risk information has to be a part of that whole thing.

So.

Remove the add in.

Sometimes what happens on these things is certainly was inadvertent and it was a purposeful.

I think it will be resolved.

Obviously.

We take these things seriously we're committed to regulatory compliance.

More importantly, we've made the corrective step.

Thank you.

Do you guys look at where you're at with the and the Ram.

Ram.

Going into the fourth quarter with.

Hello.

Maryann.

In certain parts of the country.

And the complementary first months.

Through this acceleration program that you have you.

Should we be thinking about modeling sales over the coming quarters or months differently than say, how we might have thought about things.

We're going to go.

That's it's a good question, it's hard to say.

Many states and in fact, many countries feel that.

With the large number of people that have been vaccinated and those who have not been vaccinated as probably caught it COVID-19 anyways that you have a pretty robust population in terms of resistance to the Delta variant.

I think that there is this is my own private opinion that theres a lot of fatigue about lockdowns and that people are ready to move forward. So we're not seeing.

Really a reversion there are some states obviously, but we believe we will continue to be able to reach priest.

Prescribing docs are face to face.

In many places.

I think that one point, we made in our opening remarks is that we really have only scratched the surface in terms of face to face visits it's been an approximately 10%. So there is a lot of runway and yet we're seeing each week more and more patients as each week goes by which is very typical for an orphan.

Drug product, where you're trying to change prescribing practices youre trying to get doctors to familiar and used to the concept of switching from whatever they were doing in the past to something that is more.

Appropriate for this age group and for these patients and more importantly indicated for these patients.

Thanks, Sean I don't have any more questions at this time. Thank you. Thank you.

Thank you. Your next question comes from the line of Andrew The Silver from B Riley Securities. Your line is open.

Hey, good afternoon. Thanks for.

Taking my question sorry, if you answered this I actually got dropped off I think a bad connection for a second.

If you could just give any color on product revenue breakout during the quarter.

And then how should we.

Think about product revenue uptick in the back half of the year now that you have obtained approval for our revenue guidance.

Hi, Andy Thanks for the question. So we didn't break out product specific revenue.

But as we've talked about in the past, obviously L. <unk> the biggest driver.

Revenue driver going forward.

<unk> half of the year, we expect <unk> to continue to ramp even more as we grow patients when we talked about potentially increasing our sales force, which should accelerate the revenue growth in the back half of the year.

Okay, perfect and then.

Hey, guys.

A file correct not the agile fund formulation that was accurate.

No actually this is a little bit of a redo and with regards to Biolife and it is a it is an ampoule. It is we will offer into a vial at some point.

But we believe the product will have sales. We're in the process of that are converting yet and I think that that won't be nearly as long part of the reason with the by orphan Violet conversion that took along is that we had completed the site transfer nearly completed the site transfer at a facility in France in the French government basically.

Our.

Big drivers and important products.

Over the coming months not years.

Okay.

And then as it relates to the injection.

Injection injector acquisition first are you aware of any.

Competing hydrocortisone injections that are getting developed and then could you talk about.

The market synergies with our candy as far as any differences in the target physicians or anything like that.

Sure.

So shortly after we announced our deal.

Antares pharma announced.

Their own resi non resi prosper hydrocortisone emergency auto injector.

They had indicated we didn't indicate market. They had indicated a market of 100 million or something like that.

There is enough room for both of us, but I'll tell you these products, especially with devices are not always the easiest.

Don't always stay on time, we believe the cross check device is really just it's not in a development stage, it's really a complete very reliable in my opinion very usable system, It's needless, which we think will appeal to our patients and we believe the product will be preferred.

Over a needle.

And it's really easy to use it's like two steps I mean somebody put in front of me I had no instructions and I was able to activate it and use it.

<unk>.

So we're using this honor.

On a test.

Recipient. It's a test case is kind of like the style that you injected into the product has been on the wish list four.

Dwayne ill patients insufficiency patients for a number of years and.

The fact that Antares was working on it sort of validates that we made the right decision in terms of the market was a good is a good market.

Turning to be a good market.

We will get there before them.

It's just my opinion.

Great great color.

I understand a lot of the BRL and radio.

Regulatory related delays tied to manufacturing or candidates to be sold.

In general.

Anything else you can view Easter, bringing in additional development focused specialists or reallocating key members to that area of focus I'm just looking at the CLO to approval rates.

Public its just not aligning with industry norms and wonder a greater investment in the area of oversight.

To enable you to resolve critical issues fire to carry all being issued or at least be able to convey potential hold ups.

Yes.

Yes, it's a fair question.

Some of the products have been literally fully developed by our partners and so we had very little in the development.

And they have been submitted and you get the call, but with the 505 <unk>.

RL process has almost become routine.

Having a deficiency of some sort and you have to go and respond to it but you can see that.

Of the four products, we had that.

But we have approved three of them had <unk> my memory is correct.

And they ultimately get approved so this isn't like a.

So we think the risk is much slower than a lot of the <unk> have to do with CMC chemistry type related issues or manufacturing I'm not.

And we want to minimize those obviously to your point, though we have contracted we do have a contract.

Yeah.

Kind of like.

Scientific consultant, that's now on staff or I should say not really his staff, but a consultant we are using to really dig into the due diligence on a lot of our projects and we hope to improve that and have a lower CRM.

Right.

Obviously, as where everybody would like to see and I get that but they do.

They do come.

Like Topiramate.

If I really called out Krell. It was we've submitted information they want FDA wanted more time.

That's fine, but I think that product is well poised for approval.

Okay Fair enough. Thank you very much and best of luck going forward.

Sure. Thank you.

Next thank you.

Your next question comes from the line of Graham.

<unk> <unk> from H C. Wainwright your line is open.

Thanks, So much for taking my questions I was wondering if you could provide a bit more granularity regarding what you expect to be steady.

Steady state size of the sales force to support al can the sprinkle and if you could also give us some visibility into how you anticipate the commercialization effort for all can be sprinkle to be dovetailed with or.

Complementary to the efforts you make with respect to does the needle auto injector product.

Go ahead, Paul I'm going to let Paul take this question is our senior VP of sales and marketing. Thanks.

Thanks, Sean Hi Ram.

Thanks for your questions with regards to the steady state it really comes down to determining.

How many key positions we need to see are in the United States and are we able to see them with the right reach and frequency.

And ultimately when we launched our <unk> sprinkle, we were an unusual times and the pandemic and so we allocated resources to a different modality, we put some on the <unk>.

Inside sales and outside sales, but always with the intention of fully resourcing the outside sales team appropriately and since we started to see some more in person call. The productivity of those calls is substantially higher.

Then the type of calls that we'd be delivering over zoom and <unk>.

Telephone and so that was something that we saw we knew at some point, we're going to go do that and then as the country opened up.

Do anticipate getting to a full size of between five and eight sales representatives to support out can be sprinkle.

Your other question related to <unk> I think that there is a tremendous amount of synergy that can be unlocked with these without <unk> together.

To put a little finer point, the advocacy organizations and the adrenal insufficiency community has stated that this is their number one concern to have an auto injector for emergency crisis situations and we are we are calling on those very same physicians that would be prescribing <unk>.

Oh in the future and so we've already established a great relationship with them.

Anticipate continuing to do so and so I think it's going to be a very nice synergistic fit and I think we'll be well positioned to grow this product once its approved by the FDA.

Yeah.

Great. Thank you very much. We'll also wanted to visit the timing that you anticipate for the payment of future regulatory related milestones from majority.

Is it reasonable to expect that only the milestone related to the Topiramate approval, which would now anticipate to occur in November of this year will be the will be milestone that's paid in 2021 and everything else that you expect from majority would most likely occur after the end of 2021 or is there a.

Possibility that you could receive payments from majority beyond the topiramate approval related regulatory milestone payment in 2021.

I think that it's a fair assessment of how you communicated at some likely.

That topiramate.

Payment will happen this year, and then likely than the.

The other ones will happen in early 2022.

For us it's not a huge.

It's not that meaningful because it's still we've got like I said, we have plenty of cash for a long time and those payments coming in let's say Q1 is not really material from our perspective.

Like to get them sooner of course, but they're.

They are coming and filed the strong the solid they're good of FDA comments have been very constructive and more importantly, our products that are needed by patients. So I think that they are all positioned for.

Approval in the coming months so.

Okay, and then with respect to.

The dehydrated alcohol injection product candidates.

Can you just clarify for us what type of.

Review period, you expect the FDA to assign the application amendment once it has been submitted.

Sure I believe it will be approximately three months.

Lines are classified as a miner may I think majors or it was six months, but a minor we believe it will be minor and we'll respond to it.

Shortly one of the items was just.

I wanted some additional stability data and things like that but.

No real additional work per se just additional literature information additional clarification on indication I'm, just giving you sort of.

The types of things that were in there and.

Yes.

We're happy with how Thats going and we'll have a meeting with the agency and just say look this is what we're going to give in and make sure. They are all on board with it but it's been good dialogue I think that the <unk>.

Product is in good shape.

Okay, and then lastly, with respect to the <unk> injection.

Can you just.

Give us a little bit more background on.

What gives you confidence that you will prevail in this litigation.

Sure.

I know that in any litigation the opposing side likes to make things complex, but the reality is our partner.

You could say us in a way.

<unk> been making this product for 20 years.

Same formula same spec same everything if somebody decides to come out and patent.

Formula that we've had.

<unk> had on the market for a very long time so.

We have a very good position a very strong position there is nothing new or novel in my opinion about what they're trying to claim is new and novel.

Great. Thank you very much.

Sure.

Thank you there are no other questions. Thank you ladies and gentlemen. This does concludes today's conference call. Thank you for participating you may now disconnect.

Q2 2021 Eton Pharmaceuticals Inc Earnings Call

Request a DemoDemo

ETON

Eton Pharmaceuticals

Earnings