false 0001710340 0001710340 2024-08-08 2024-08-08


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

 
FORM 8-K
 

 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
August 8, 2024

Date of Report (Date of earliest event reported)
 

 
ETON PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
 
Delaware
001-38738
37-1858472
(State of
(Commission
(I.R.S. Employer
incorporation)
File Number)
Identification Number)
 
21925 W. Field Parkway, Suite 235
Deer Park, Illinois 60010-7208
(Address of principal executive offices) (Zip code)
 
(847) 787-7361
(Registrants telephone number, including area code)
 

 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
 
Trading symbol(s)
 
Name of each exchange on which registered
Common Stock, par value $0.001 per share
 
ETON
 
NASDAQ Global Market
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
 

 
 
2.02: Results of Operations and Financial Condition
 
On August 8, 2024, Eton Pharmaceuticals, Inc. issued a press release announcing its financial results for the second quarter ended June 30, 2024. A copy of the press release is attached hereto as Exhibit 99.1.
 
The information in this Item 2.02 and the attached Exhibit 99.1 are being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information in this Item 2.02 and the attached exhibit shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.
 
2

 
9.01: Financial Statements and Exhibits
 
Exhibit No.
 
Description
     
Exhibit 99.1   Press Release issued by Eton Pharmaceuticals, Inc. on August 8, 2024 relating to financial results
104
 
Cover Page Interactive Data File (embedded within the Inline XBRL document)
 
 
3

 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Date: August 8, 2024
By:
/s/ James R. Gruber
   
James R. Gruber
   
Chief Financial Officer and Secretary
   
(Principal Financial Officer)
 
4

Exhibit 99.1

 

Eton Pharmaceuticals Reports Second Quarter 2024 Financial Results

 

 

Product sales and royalty revenue of $9.1 million, representing 40% growth over Q2 2023 and the 14th straight quarter of sequential product sales growth

 

New drug application (NDA) for ET-400 accepted by the U.S. Food and Drug Administration (FDA) and assigned a February 28, 2025 PDUFA date

 

Q2 2024 Cash Flow from Operations of $1.3 million, including the payment of one-time $2.0 million NDA filing fee for ET-400

 

Management to hold conference call today at 4:30pm ET

 

DEER PARK, Ill., August 8, 2024 (GLOBE NEWSWIRE) -- Eton Pharmaceuticals, Inc (“Eton” or “the Company”) (Nasdaq: ETON), an innovative pharmaceutical company focused on developing and commercializing treatments for rare diseases, today reported financial results for the quarter ended June 30, 2024.

 

“We are pleased to report another quarter of record product sales as Carglumic Acid and ALKINDI SPRINKLE® continue to deliver impressive growth. During the quarter we also launched PKU GOLIKE under our commercial infrastructure and received a favorable reception from the PKU community. Our five existing commercial products have the potential to deliver strong organic growth for many years to come, and we plan to accelerate that growth with our internal pipeline and business development activities” said Sean Brynjelsen, CEO of Eton Pharmaceuticals.

 

“We have made tremendous recent progress advancing our pipeline, which we believe will set us up to deliver even greater growth in 2025 and beyond. Our NDA for ET-400 was recently accepted for review and assigned a target action date in early 2025. Pre-launch commercialization activities for the product are underway and we anticipate launching it shortly after the expected approval. In addition, our ET-600 product candidate is now ready to start its pivotal study in Q3, after passing a pilot study earlier this year. This should allow for an early 2025 NDA submission, which would further boost the Company’s long-term growth prospects” concluded Brynjelsen.

 

Second quarter and Recent Business Highlights

 

14th straight quarter of sequential growth in product sales and royalty revenue. Eton reported second quarter 2024 product sales of $9.1 million, representing 40% growth over the prior year period, and 14% over the first quarter of 2024, driven primarily by the ongoing growth of ALKINDI SPRINKLE and Carglumic Acid. The Company expects to continue to see sequential quarter-over-quarter growth of product sales through the remainder of 2024 and beyond.

 

NDA for ET-400 submitted and accepted by the FDA. During the second quarter of 2024, Eton submitted an NDA for ET-400, its proprietary patented formulation of hydrocortisone oral solution. The FDA accepted the NDA and assigned it a Prescription Drug User Fee Act (PDUFA) target action date of February 28, 2025. Eton anticipates initiating production of launch quantities in the fourth quarter of 2024, to allow for a commercial launch promptly after the expected approval. Eton believes the introduction of ET-400 will allow the Company to capture a greater percentage of the oral hydrocortisone market and, together with ALKINDI SPRINKLE, can achieve combined peak sales of more than $50 million annually.

 

Acceleration of growth for ALKINDI SPRINKLE. ALKINDI SPRINKLE reported 63% year over year revenue growth in Q2 2024. Product sales are benefiting from the Company’s internal sales force, which has now been in place for more than a year and has seen increased production, as well as recent initiatives including the launch of the sampling program and the Company’s strong presence at Endocrinology medical conferences and patient advocacy events in the first half of 2024.

 

Continued Carglumic Acid outperformance. Sales of Carglumic Acid continue to exceed the Company’s expectations. The product reported strong growth in the second quarter and has already added additional patients in the third quarter of 2024. The recent launches of Betaine Anhydrous, Nitisinone, and now PKU GOLIKE have also helped increase the frequency of the Company’s interactions with potential Carglumic Acid prescribers.

 

Launched PKU GOLIKE, a medical formula for patients with phenylketonuria (PKU). After acquiring PKU GOLIKE in the first quarter, the Company launched the product under Eton’s commercial infrastructure in April at the Genetic Metabolic Dieticians International Conference. The product has been well received and the Company has already seen an increased number of patient referrals since the initiation of its promotional activities.

 

Anticipated initiation of ET-600 pivotal study. Eton expects to initiate a pivotal bioequivalence study for ET-600, the Company’s product candidate for diabetes insipidus, in the third quarter. Earlier this year, the product passed its pilot bioequivalence study, and the company anticipates submitting an NDA for the product in early 2025

 

 

 

Second Quarter Financial Results

 

Net Revenue: Net sales for the second quarter of 2024 were $9.1 million compared to $12.0 million in the prior year period. Net sales in the prior year period included $5.5 million of licensing payments related to the divestment of Eton’s neurology product royalties.

 

Product sales and royalty revenue were $9.1 million for the second quarter of 2024, an increase of 40% compared to $6.5 million in the prior year period, and an increase of 14% over the first quarter of 2024. The year-over-year increase in product sales and royalty revenue was primarily driven by growth in ALKINDI SPRINKLE and Carglumic Acid.

 

Gross Profit: Gross profit for the second quarter of 2024 was $5.6 million compared to $9.7 million in the prior year period.

 

Research and Development (R&D) Expenses: R&D expenses for the second quarter of 2024 were $3.0 million compared to $1.1 million in the prior year period. The increase was primarily due to the payment of a $2.0 million NDA filing fee for ET-400.

 

General and Administrative (G&A) Expenses: G&A expenses for the second quarter of 2024 were $5.6 million compared to $4.7 million in the prior year period, mainly due to increased sales and marketing expenses, employee-related expenses, and one-time legal fees related to business development activities.

 

Net Income: Net loss for the second quarter of 2024 was $2.9 million or $0.11 per basic and diluted share, including the $2.0 million ET-400 filing fee. In the prior year period, net income was $4.6 million, or $0.18 per basic and diluted share, and included $5.5 million from the sale of Eton’s royalty interests.

 

Cash Position: As of June 30, 2024, Eton had cash and cash equivalents of $17.7 million. The Company generated $1.3 million of operating cash flow during the quarter, including the $2.0 million ET-400 filing fee. The company expects to continue to generate positive operating cash flow for the remainder of 2024.

 

 

Conference Call and Webcast Information

 

As previously announced, Eton Pharmaceuticals will host a its second quarter 2024 conference call as follows:

 

Date                                   August 8, 2024

 

Time                                  4:30 p.m. ET (3:30 p.m. CT)

 

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 also 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 five commercial rare disease products: ALKINDI SPRINKLE®, PKU GOLIKE®, Carglumic Acid, Betaine Anhydrous, and Nitisinone. The Company has three additional product candidates in late-stage development: ET-400, ET-600, and ZENEO® hydrocortisone autoinjector. For more information, please visit our website at www.etonpharma.com.

 

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 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.

 

Investor Relations:
Lisa M. Wilson, In-Site Communications, Inc.
T: 212-452-2793

E: lwilson@insitecony.com

 

 

 

 

 

Eton Pharmaceuticals, Inc.

Condensed Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

 

   

For the three months ended

   

For the six months ended

 
   

June 30,

   

June 30,

   

June 30,

   

June 30,

 
   

2024

   

2023

   

2024

   

2023

 

Revenues:

                               

Licensing revenue

 

$

   

$

5,500

   

$

   

$

5,500

 

Product sales and royalties

   

9,074

     

6,497

     

17,040

     

11,801

 

Total net revenues

   

9,074

     

11,997

     

17,040

     

17,301

 
                                 

Cost of sales:

                               

Licensing revenue

   

     

   

$

     

 

Product sales and royalties

   

3,448

     

2,315

     

6,407

     

4,273

 

Total cost of sales

   

3,448

     

2,315

     

6,407

     

4,273

 
                                 

Gross profit

   

5,626

     

9,682

     

10,633

     

13,028

 
                                 

Operating expenses:

                               

Research and development

   

2,970

     

1,125

     

3,621

     

1,660

 

General and administrative

   

5,591

     

4,674

     

10,747

     

10,019

 

Total operating expenses

   

8,561

     

5,799

     

14,368

     

11,679

 
                                 

Income (loss) from operations

   

(2,935

)

   

3,883

     

(3,735

)

   

1,349

 
                                 

Other income (expense):

                               

Other income

   

     

800

     

     

800

 

Interest expense, net

   

(52

)

   

(124

)

   

(63

)

   

(250

)

Total other income (expense)

   

(52

)

   

676

     

(63

)

   

550

 
                                 

Income (loss) before income tax expense

   

(2,987

)

   

4,559

     

(3,798

)

   

1,899

 
                                 

Income tax expense

   

54

     

     

54

     

 
                                 

Net income (loss)

 

$

(3,041

)

 

$

4,559

   

$

(3,852

)

 

$

1,899

 

Net income (loss) per share, basic

 

$

(0.12

)

 

$

0.18

   

$

(0.15

)

 

$

0.07

 

Weighted average number of common shares outstanding, basic

   

25,778

     

25,593

     

25,771

     

25,560

 

Net income (loss) per share, diluted

 

$

(0.12

)

 

$

0.18

   

$

(0.15

)

 

$

0.07

 

Weighted average number of common shares outstanding, diluted

   

25,778

     

25,983

     

25,771

     

25,949

 

 

 

 

 

 

 

 

 

Eton Pharmaceuticals, Inc.

Condensed Balance Sheets

(in thousands, except share and per share amounts)

 

   

June 30, 2024

   

December 31, 2023

 
   

(Unaudited)

         

Assets

               

Current assets:

               

Cash and cash equivalents

 

$

17,694

   

$

21,388

 

Accounts receivable, net

   

4,873

     

3,411

 

Inventories

   

2,068

     

911

 

Prepaid expenses and other current assets

   

799

     

1,129

 

Total current assets

   

25,434

     

26,839

 
                 

Property and equipment, net

   

45

     

58

 

Intangible assets, net

   

6,122

     

4,739

 

Operating lease right-of-use assets, net

   

210

     

92

 

Other long-term assets, net

   

12

     

12

 

Total assets

 

$

31,823

   

$

31,740

 
                 

Liabilities and stockholders equity

               

Current liabilities:

               

Accounts payable

 

$

2,133

   

$

1,848

 

Debt, net of unamortized discount

   

4,658

     

5,380

 

Accrued liabilities

   

11,425

     

9,013

 

Total current liabilities

   

18,216

     

16,241

 

Operating lease liabilities, net of current portion

   

145

     

22

 
                 

Total liabilities

   

18,361

     

16,263

 
                 

Commitments and contingencies (Note 11)

               
                 

Stockholders equity

               

Common stock, $0.001 par value; 50,000,000 shares authorized; 25,745,802 and 25,688,062 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

   

26

     

26

 

Additional paid-in capital

   

121,358

     

119,521

 

Accumulated deficit

   

(107,922

)

   

(104,070

)

Total stockholders equity

   

13,462

     

15,477

 
                 

Total liabilities and stockholders equity

 

$

31,823

   

$

31,740

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Eton Pharmaceuticals, Inc.

Condensed Statements of Cash Flows

(In thousands)

(Unaudited)

 

   

Six months ended

   

Six months ended

 
   

June 30, 2024

   

June 30, 2023

 

Cash flows from operating activities

               

Net loss

 

$

(3,852

)

 

$

1,899

 
                 

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

               

Stock-based compensation

   

1,661

     

1,657

 

Depreciation and amortization

   

513

     

385

 

Non-cash lease expense

   

36

     

39

 

Debt discount amortization

   

48

     

61

 

Changes in operating assets and liabilities:

               

Accounts receivable

   

(1,462

)

   

(1,232

)

Inventories

   

(1,157

)

   

(259

)

Prepaid expenses and other assets

   

330

     

423

 

Accounts payable

   

284

     

537

 

Accrued liabilities

   

2,381

     

2,045

 

Net cash (used in) provided by operating activities

   

(1,218

)

   

5,555

 
                 

Cash flows from investing activities

               

Purchases of product license rights

   

(1,868

)

   

 

Purchases of property and equipment

   

(14

)

   

 

Net cash used in investing activities

   

(1,882

)

   

 
                 

Cash flows from financing activities

               

Repayment of long-term debt

   

(770

)

   

(385

)

Proceeds from employee stock purchase plan and stock option exercises

   

176

     

272

 

Payment of tax withholding related to net share settlement of stock option exercises

   

     

(181

)

Net cash used in financing activities

   

(594

)

   

(294

)

                 

Change in cash and cash equivalents

   

(3,694

)

   

5,261

 

Cash and cash equivalents at beginning of period

   

21,388

     

16,305

 

Cash and cash equivalents at end of period

 

$

17,694

   

$

21,566

 
                 

Supplemental disclosures of cash flow information

               

Cash paid for interest

 

$

362

   

$

426

 

Cash paid for income taxes

 

$

   

$

 
                 

Supplemental disclosures of non-cash transactions in investing and financing activities

               

Right-of-use assets and liabilities obtained due to lease renewal

 

$

153

   

$

 

 

 

 
v3.24.2.u1
Document And Entity Information
Aug. 08, 2024
Document Information [Line Items]  
Entity, Registrant Name ETON PHARMACEUTICALS, INC.
Document, Type 8-K
Document, Period End Date Aug. 08, 2024
Entity, Incorporation, State or Country Code DE
Entity, File Number 001-38738
Entity, Tax Identification Number 37-1858472
Entity, Address, Address Line One 21925 W. Field Parkway,
Entity, Address, Address Line Two Suite 235
Entity, Address, City or Town Deer Park,
Entity, Address, State or Province IL
Entity, Address, Postal Zip Code 60010-7208
City Area Code 847
Local Phone Number 787-7361
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock
Trading Symbol ETON
Security Exchange Name NASDAQ
Entity, Emerging Growth Company false
Amendment Flag false
Entity, Central Index Key 0001710340

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