ETON - Earnings call transcript Q1 2020 | Eton Pharmaceuticals, Inc.

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Operator

Good afternoon, and welcome to the Eton Pharmaceuticals First Quarter 2020 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 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 the call over to David Krempa, Vice President of Business Development at Eton Pharmaceuticals. proceed. go Please

David Krempa

discuss Good quarter operator. a and to website, plan welcome release is The Thank on available conference afternoon call. first our to we topics XXXX outlines issued today's This Eton's call. that release you, etonpharma.com. the everyone, on afternoon, press we

and is, Joining Paul Vice Senior Stickler, today our Marketing. Wilson Sean Sales on me call Troutman CEO; our President Brynjelsen, our our and of CFO

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

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

Sean Brynjelsen

Thank and today. David, afternoon good you, us Thank everyone everyone. for joining you

with for to are beyond. our expectations our you looking first forward and an We XXXX update results on providing and quarter

First which unfortunately off, negatively Biorphen commercial been COVID-XX. start launch, to impacted by I’d has the with like

we out you launch and XXXX XXXX. many disrupted COVID-XX in market. gain were with surgery of and to arrangement with launched co-promotion commercial know, Biorphen Xellia January in of We beginning customers and just signed our As full a roll December deal traction activities the elective

any in launch. for current phenylephrine hospitals not the country their for new resulted has in of injectable meaningful Moreover, to the in procedures across crisis unprecedented midst decline in demand at product is norms surgical This in a getting optimal operating decline a change general. hospitals

plans crisis has interrupted promotional for Biorphen. COVID Secondly, our sales the and

that has get active the country policies the to reps. by in-person key would meetings with ability the to drive example, hospitals decision-makers switch our Biorphen. sales hindered to limiting For across clearly visits face-to-face have hospitals This

and has Biorphen throughout been also XXXX. to the and important These to which planned We doctors for COVID-XX, due product. the efficient us of of introduce pharmacists most at have drive the conferences had ways also awareness promotion eliminated to one industry conferences to

to in is digital on caregivers. awareness these targeted preferred launched a format which of by campaigns response we have to However, most which challenges, drive the bio product also investing expect we in promotional

would about remain the normalize onsite The annually. achieving have soon. start market our is targeting of in very there. we know is add pass to I volumes able Biorphen’s sales there. We that and need prospects will that near-term will units surgical will our long-term optimistic remains this the excited be The million to Eton crisis teams and X visits

The timing, of unfortunately, uptake believe has patients. we the to was not the the adoption QX, do Biorphen but sales. optimal and the committed to driving to for remain in to product to the and the community us And and value to hospitals and a that the launch we

the acquisition Turning to Alkindi we the we In view March, highest product in to our We are revenue Alkindi our now this very Sprinkle. rights to marketing Alkindi has for announce be newest addition our believe to potential of Sprinkle. U.S. to acquisition as and our Sprinkle company excited transformative portfolio. portfolio, the

Alkindi for is therapy pediatric adrenal replacement insufficiency under orphan is and review a patients. Sprinkle with the drug FDA an in currently

of launched seen already rates Diurnal the Our and sales Europe adoption. partner, Group has has in and strong product

to U.S. are and enthusiasm. market marketing We conducted this its optimistic about the support studies have very detailed potential in

date product expect. to we of which hard launch a we a the launch XX, also to its prepare in good position we’ll quarter September in activities – approved working of this Eton on fourth if fully the be is year, in and its for believe PDUFA

Recordati pediatric Rare and this launch experience He product I the as Sales leading Marketing. number excited a Vice company us effort. brings he joined where ideal products. commercialized President about To has our Stickler announced Senior to Diseases, further very from week, the successfully orphan drug of is support launch, Alkindi last of and like the Paul a Paul orphan joins Sprinkle

of to Paragraph hydrochloride notably been Most continued for progress our nicely. FDA announced that and by product. been against quarter, to the we has pipeline challenge the has be or ANDA rest among be The the review the also cysteine to confirmed innovator accepted has in first – IV

has Our in the since XXXX. least current the selling product development been partner form at

project overturn press detailed we We’ve innovator’s to year. that additional us which to patterns, in provided So, allow the as will be we launch product the are release. for next could the very updates early confident able as

So project-by-project won’t new we the go year. have drug applications summary, in this But products. into submitted additional of I detail all on four

We expect year at drug half applications have the of approvals least and submitted product two to additional year. new four in second this the

the year you big a we have As of see, expecting I can our to strongest continue industry. the in attractive most were will and for be pipelines one to pharmaceutical and believe we XXXX pipeline

I Wilson. that, CFO, Thank turn over With Wilson financial to you, to like Troutman would the results. to it our discuss

Wilson Troutman

was sales records for Biorphen for when sales first Biorphen. which quarter the product of Revenue the wholesalers XXXX, you, distributors. shipped Eton Thank $X.X Sean. and is of million resulted to from

in with changes a due channel. period not the in demand As to distribution revenue within end-user reported aligned result, inventory is this always given

first orders quarter for stocking Biorphen large the in wholesalers due by of fourth sales placed to XXXX demand XXXX. Eton’s of quarter Customer in exceeded reported the

sale first February revenue also $X.X impacted resulted XXXX Health COVID-XX As with of upfront pandemic. volume associated was payment the Bausch adversely previously from EM-XXX Biorphen in by discussed, XXXX. the million sales quarter in of Eton’s asset to its

$X.X for licensing quarter and of XXXX. compared for spending rights Alkindi were XXXX, for R&D Sprinkle. quarter of first million of the the the same million U.S. to expenses to $X.X included acquire first $X.X in payments million period the marketing to Research XXXX development one-time

XXXX acquire $X.X of the million included quarter rights payments and first of ET-XXX, The Biorphen, R&D ET-XXX. licensing of spending to

XXXX. the primarily against Elcys was higher for Exela employee Pharma commercialization, Biorphen driven with associated of for $X.X costs. same for quarter and XXXX, first The compared period increase million were by distribution $X.X expenses costs Sciences’ marketing Eton’s compensation million challenge higher Administrative expenses patent to General& of product, legal and the

net first period million, Eton XXXX. million loss to net reported same compared of for of for a the the XXXX $X.X $X.X quarter loss of a of

As the million of with received Sprinkle reported million XX, Alkindi XXXX, in March Eton a in cash conjunction In equivalents common cash million. the proceeds placement announced and $X.X first Eton stock $X.X were the March, acquisition. of stock $XX.X of quarter. of private of

were the received on million cash in balance. was included quarter not $X.X first However, Xnd April and

a the Alkindi agreement Federal Coronavirus the Paycheck Relief, Protection available EM-XXX additional under received loan Eton approvals Additionally, million undrawn in and to $X.X Sprinkle. be and Program the company $X.X proceeds May, through will of Security entitled $X.X from has Act. credit of and the Aid, an of Economic million capacity liquidity its million of from upon currently

open now your would questions. up call like the to Operator? We for

Operator

Instructions] first comes [Operator from Andrew Our question FBR. D'silva B.Riley of

line Your is open.

Andrew D'silva

much very am taking hear you to and questions glad everybody healthy. for very I sounds my Thank

just with your to being off pipeline. Sprinkle, that likely have start offering So, Alkindi the you you that largest in mentioned

co-marketing seem Biorphen get back to math revenue it maybe with explaining. for thus it far? over me help of the Just, little can to covenant how then, the you you and your the And like, some looking just that seems a partnership sales there, envelope comparing you there European bit just that understand have is

the better can trajectory I So there. understand

Sean Brynjelsen

Sure. start Alkindi turn with and off Paul. question I’ll the the I’ll it question then Biorphen over to

really we’re it’s have Biorphen, hampered moment. ability – with our the product So, having at matter the which of to to launch

attributable the not sense, hospital. we one able they in not yes, the necessarily of get and compliance so, into selling – to but of Currently, Xellia cannot transaction covenant, was We to Part not are are their that promotion with have to performance. the product. the it’s also do in

We are detail to attend not conference- nor able the product are the tradeshows. able we to

United buying. phenylephrine States. – They know is there. we hospitals product actually market we know can would the product, strong. We we the is promote. mean the hospitals it’s are especially, get only freedom We the if time, The that sampling. if are the to ready-to-use know the In And adopt in

an over to four We next are I of uptick be and get able terms to number of total the think we’ll months. greater three that on in seeing the hospitals traction

Andrew D'silva

I am sorry.

– you you just was very when expectation market. large covenant I the have is examining may what I that for that, saying be a was the Biorphen have think would it

it’s has actually seeing that than Sprinkle how so does covenant a get And agreement high. to more co-marketing Alkindi just so the that’s when

hit that’s that I have just with an would And am to like partner. the assuming that you you expectation

have it was than Biorphen when centered get partner, how know So co-marketing your on Sprinkle, a basically with does to $XX million… it we more just being you Alkindi

Sean Brynjelsen

you asking am I Biorphen. I thought were sorry. about

so. Okay,

Andrew D'silva

problem. No

Sean Brynjelsen

it. of We royalty a have we the promotion Sprinkle, agreement Alkindi sales do Diurnal. aspect and with With

We our will be opening in sales team. own place

question. let I’ll on and So, ahead elaborate go your Paul

Paul Stickler

Stickler. very far and patients have has Yes. Europe experience, rates the In in thus that’s reference Good actually percentage the we’ve really been the focused and had Paul seen encouraging. afternoon, the on of Andy. adoption Alkindi been of taking European to This adoption that experience and some rate is good Diurnal has been

adoption you patients. account as are implied meaningful. and sales expected size the if the actually little stated so, if And U.S. numbers before, quite the felt $XXX pricing, a company north rates you we diagnosed all we’ve extrapolate market as before, Further, million to or of is stated those that for size population include

strong a opportunity to as that significant believe market position the this portion will in achieve be at So, we point. of such, Alkindi

very Alkindi So, sales. for we meaningful about prospects are excited the

Andrew D'silva

number And particularly Thank I as C true, I it the was Biorphen, primarily in and then, Great. used obviously, phenylephrine I sections of you know… an relates elective curious, you just don’t to declined, standpoint. surgeries for But mentioned, that’s Okay. thought from that. was

Paul Stickler

the surgeries, That labor knee yes. be correct. be the in surgeries, it and that’s it’s variety primary and in use. can of is delivery. But things. a it Certainly, it because not the of use uses, is could not, is is elective or one Believe it operations, used That all - elective primary could

And market so, the still that is there. of part

point. want get And sales mass they crisis at of a products to hampered conversion focused are, try hospitals It’s when on They we this you truth, not hospitals into we us is new challenge being the what the focused team on inside calling a have when that to are enhancements get to tell is. to conversion process or are the the like hospitals has situation that don’t – the in to are able on COVID. we small

that the know that ramp the It’s Hospitals just will occur. which rate conversion We on occur. that ultimately, have bought Biorphen. will

then reorders we that we to the We will are will have We of those who expect of of significantly buy vial, Biorphen it. the that reorder would it year. a filing seeing majority from end and before that amp to expect convert product once from grow the

Andrew D'silva

Okay.

– it issues. very being check, it did Now, actually. lot of quick of the are creates that just phenylephrine of a versions COVID-XX makes I obviously like understand logistical I just lot sense, And compounded does seem channel a still utilized.

But there disruption while for compounders to is health the meets too restrictions your from it since this it with way a much product of to a or be – on is just going criteria expedite viable. you that COVID-XX is systems mentioned to

Sean Brynjelsen

I think both points are valid.

point, we really of a doctors difference product copies compounded many not they agency even meeting a between FDA. them not who fully FDA with the are the First a know The got with and compounded don’t that the to you’ve That doesn’t product. and ready-to-use approved Biorphen be had mean sold. should allowed of that aren’t agree

that receive don’t they using. appreciate approved. the when I that difference. may not or what fully is, mean And know they that it, always product, it’s they the they don’t whether they don’t compounded a know FDA they it mean, I by receive I when are product was compounded mean

administration level. hospital need doing level, communicate really that make you of identify from pharmacy because the to from and approved the that to the administration phenylephrine is drive go FDA the an the with to pharmacist that ordering in the version beyond ones that, should copies at the is but conversion, to pharmacy regs not compliance just So, is there are not that and level, the the you of

of which as working fully our supports those, And position. doing we well are agency, with the both as

days We against the change. monitoring not expect enforcement of are COVID. to agency due exercising that is exercising. They enforcement to these But that as we also situation rate compounders the are much would

Andrew D'silva

good color. Thank you. That’s

wanted I with about your to one Just response. point, ask

phenylephrine formulations of said with same the Are different that would You kind the being than created formulation that a allow so, the Biorphen. those seasoned are by exemption? FDA other are compounders that, sold? are outside that that as And assist fall there if would of that Biorphen

Sean Brynjelsen

I depends, ask. that – know would that Well, you

they can That’s which The that so an rule is an be issue. Then Essential of copy. Copy really essentially a it’s Rule. a So, don’t. the tweaking it’s the but – exact say have difference different, not if it Essential word clinical somebody is and formula, called that’s use but may a doesn’t they copy,

if product effects. there a XX% for So, therapeutic it clinical or make has or a sort potency fact add some that XX% you potent excipient less the purposes, you in same all has of intensive more of

making are product. It’s of really is to that the You compounders which gain a trying utilize that tactic. copy agency the the well system aware

been of as process type and They’ve by as They compounders, sued behavior. the when FDA are there, think well. are companies bypassing process. the against other are company more approval any undermining we They encouraging which different. are out the won compounders really We making that the don’t Vasopressin by see companies, they approval there while Certainly, out pharmaceutical are copies. was case this

Andrew D'silva

color. very healthy and you of And much. going That’s stay luck forward. Okay. Thank great best

Sean Brynjelsen

Thanks a lot.

Operator

Thank you.

comes question Ram Selvaraju H.C. of next from Wainwright. Our

is line open. Your

Edward Marks

Marks Hello, Selvaraju. Ram this on been have behalf is Most speaking our of answered. of questions

Just If could so, one how you U.S. provide exists color you much question, demand ascertained on and granularity Sprinkle for outstanding additional Alkindi this? the product? some have

Sean Brynjelsen

is, we XX that, and population I and X,XXX range. now, segmented patient by those are is years estimate that gets that the who to And patients. that The our right would Sure. mean, younger, approximately be X,XXX so, know

could be that. It than actually higher

So that’s on it. an estimate providing

products. of to that But pricing than We less orphan range. are be a going in consistent it, drug lot

with up that’s sort come we estimate. market how our of So,

Edward Marks

Thank Best this year. luck of you.

Sean Brynjelsen

Sure.

Operator

Very next comes Capital from Markets. Lake good. of Street Instructions] [Operator question Takkinen Our Frank

line Your is open.

Frank Takkinen

Thanks questions. my guys. Hey taking for

for couple a Just you here today.

Just you for background us commercial give and the your products. activities could hope little a update around respective different

if we Xellia, Paul or Lamo Right process? thought to Paul with if with thought an – is drug is process keep So, now, is looking just in-house the to Biorphen start onboard organization going – updated commercial thought was can onboard different curious if I there Lamo for got a now process. and

Sean Brynjelsen

Sure.

as So, Alkindi overall, that? well the and neurology first address Paul, don’t why you as our Lamotrigine, plans – neurology franchise for and what the

Paul Stickler

Thanks, Sure. Sean.

we we organization to to an a efficient to less small would dedicated on group, calling than regard with organization, Alkindi, pediatric, Alkindi towards a endocrinologists. looking XXXX working anticipate are be relatively calling So, what support It’s small on. at sales physicians a

representatives. somewhere anticipate to would we seven five And between sales

for separate pipeline neurologists we sales In addition that to that, we year calling on next have and a to organization a we preparing focusing will dedicated anticipate be really pediatric on epilepsy.

Frank Takkinen

was just Got market I either market in bit or translate the in seen going more European to the a it. And little are give then, into color on us not you translate could puts regards you’ve that hoping the different curve. to some takes – adoption U.S. the and

for to you a get and to adoption for feel an – markets? trying draw market about how curve it’s Just how going feel that the of kind U.S.

Sean Brynjelsen

Sure.

any Let to me turn for over I’ll commentary. additional take that then it Paul and

initial results an U.S. on that ran gave run study study by and using us marketing of Alkindi. That actually the certain we Diurnal transaction marketing did largely points, number company. two a So, service before we

run consummated want company transaction, different we without the that Before is first and Physicians and visibility A, study the came in we a is that study same marketing product. into which a to the demand. got results separately product the by any marketing to large

the been hasn’t points at. product why to looking can the on payers at in past. They this that the willingness understand the the we B, difference indicated were market pay

well from patient let’s So - benefit, as themselves. a say of study. some patients the payer And whole just it was C, the perspective then also as the

that our the into confirmed deal. really that going assumptions some was – of So,

the the the high, population the few adoption a there you Europe, price talking launched, mechanisms. there younger product of of rate extremely it In converted in especially, was of when to months a and into Now, looking different well XX% at controls, and excess Europe, are docs quickly. is are about launch

a we the look for it now penetration dollar really indication the and it can’t look positive same rate, market. that But it are and U.S. you seeing from was was fast patient right when actual at you So, at standpoint. quick

going comments. am I let add any additional and stop So to there Paul

Paul Stickler

the seen as Yes, in research product been consistent early received of we’ve on, the that here be key well market point. the some terms market, as place There you the U.S. this in and community in signals with Sean. both Diurnal’s both our outreaches seems at in are spot taken in have I two initial from sides of constituents the think to response pawn, that

So, it the clinical seems needs. terms pretty consistent in of

Frank Takkinen

there. money nice raise in just it’s Got the the last on hanging me, from balance work. then, it. and see Congrats And cash to one to putting

Just and COVID-XX any impacts you if could if one, from some you’ve presenting more parts, development two business opportunities? hoping talk in about attractive seen

million how as or cash so then balance feel you And the XX of part your looks two, runway? dollar cash

Sean Brynjelsen

sure. Sure,

cash includes the through the sales Alkindi us get balance on and efforts. the So, putting promotional and the marketing question, that team in approval should of that

in several would chose as credit we on – well is in We milestones also with line result could if draw we our one have coming from milestone that to to, as licensing or EM-XXX. deal wanted a

the plans additional So, no there do to are raise. at moment any

sales we and the typically well the recently Biorphen a Again, at money of and look decision. did think launch the shares make a to we of Alkindi, we would raise transaction which we’ll the I rate do – only initial sales and raise Alkindi raise. fund And a As of spent. adoption small is

I or months, are can the deals in few attractive. rare in filed filed that by disease which look And have the space. be do all next mean, several that, either We our products

space. lot needs. have types states neurology, these will of pediatrics, do be transactions in disease which the and of to I unmet a of So, expect rare to in disease focus in endocrinology would the us Most see the

Frank Takkinen

my all and taking for progress. thanks congrats questions Guys, the on

Sean Brynjelsen

Thank you.

pleasure. Our

Operator

to am remarks. no you. Thank to would the I any back this I further questions closing at showing over Sean for turn time. like call

Sean Brynjelsen

Thanks joined Thank to everybody you. that us today.

of are We second about the XXXX. half excited

have additional look updates. next few We I product several our next forward the coming to months. And providing launches over call and up

look please feel table, more free have get on adding always, and to As out we team, we to pipeline. to deals as as we’ll we news the and reach our our expand forward

stay again Thanks safe. and

Operator

this concludes Ladies participating. conference. and Thanks gentlemen, for today’s

disconnect. great may all a Have You day.

Eton Pharmaceuticals (ETON) 14 May 202020 Q1 Earnings call transcript