ETON - NASDAQ
Eton Pharmaceuticals, Inc.
ETON·NASDAQ
$28.86
+5.3%HealthcareBiotechnology
Eton Pharmaceuticals, Inc., a specialty pharmaceutical company, focuses on developing and commercializing pharmaceutical products for rare diseases. The company offers Biorphen, a phenylephrine injection for the treatment of clinically important hypotension resulting primarily from vasodilation in the setting of anesthesia; Carglumic Acid for the treatment of acute and chronic hyperammonemia due to N-acetylglutamate Synthase deficiency; and Rezipres, a ready-to-use formulation of a molecule that is indicated for the treatment of clinically important hypotension occurring in the setting of anesthesia. It also offers Alkindi Sprinkle, a replacement therapy for adrenocortical insufficiency in children under 17 years of age; EPRONTIA, a liquid formulation of topiramate; and Alaway Preservative Free, a preservative-free ophthalmic product to treat allergic conjunctivitis. In addition, the company develops Zonisamide Oral Suspension for the treatment of partial on-set seizures; Lamotrigine for Oral Suspension for the treatment of partial on-set seizures; cysteine injection; dehydrated alcohol injection; and Zeneo hydrocortisone autoinjector. Eton Pharmaceuticals, Inc. was incorporated in 2017 and is based in Deer Park, Illinois.
At a Glance
Live SnapshotMarket Cap$790.54M
EPS-0.1700
P/E Ratio-169.76
Earnings Date08/06/2026
Earnings Call Transcript
ETON • 2025 • Q3
Operator
Good afternoon, and welcome to the Eton Pharmaceuticals Third Quarter 2025 Financial Results Conference Call. [Operator Instructions] 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, Chief Business Officer at Eton Pharmaceuticals. Please proceed.
David Krempa
Thank you, operator. Good afternoon, everyone, and welcome to Eton's Third Quarter 2025 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, etonpharma.com. Joining me on our call today, we have Sean Brynjelsen, our CEO; James Gruber, our CFO; and Ipek Trinkaus, our Chief Commercial Officer. In addition to taking live questions on today's call, we will be answering questions that are e-mailed to us. Investors can send their questions to [email protected]. Before we begin, I would like to remind everyone that remarks made during the 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 company's filings with the SEC. Now I will turn the call over to our CEO, Sean Brynjelsen.
Sean Brynjelsen
Thank you, David. Good afternoon, everyone, and thank you for joining us today. I'm thrilled to report another record quarter for the company with triple-digit year-over-year revenue growth. I look forward to discussing the underlying drivers in more detail and highlighting some of our initiatives that help deliver this growth. In addition, we will have made significant progress with our development activities, which are not reflected in this quarter's numbers, but will propel our revenue and earnings growth for many years to come. Third quarter product revenue was $22.5 million, an increase of 129% year-over-year and up 19% compared to the second quarter. It was our 19th straight quarter of sequential product revenue growth, driven by strong year-over-year growth from ALKINDI SPRINKLE and Carglumic Acid, as well as additions from the recently acquired products, INCRELEX and GAL
James Gruber
Thank you, Sean. Our third-quarter revenue increased 118% to $22.5 million compared to $10.3 million in the third quarter of 2024, and revenue was primarily comprised of product sales in both periods. Third quarter revenue included $0.9 million of product revenue from the sale of finished product inventory to Ipsen and Esteve to facilitate the ownership transition of INCRELEX in certain European countries, and these sales are expected to be nonrecurring. In addition, $2.4 million of revenue was derived from an initial loading order of semi-finished INCRELEX inventory for Esteve. When Eton out-licensed the rights to ex-U.S. INCRELEX, it entered into a long-term supply agreement with Esteve, under which Eton will provide semi-finished goods to Esteve at a fixed transfer price. The company expects these ongoing purchases to produce roughly $2 million to $3 million of annual revenue. However, the ordering patterns may be inconsistent and not occur every quarter. Revenue growth in the quarter was driven primarily by increased sales of ALKINDI SPRINKLE and Carglumic acid, plus the addition of sales from INCRELEX and GAL
Operator
[Operator Instructions] Our first question comes from the line of Chase Knickerbocker of Craig-Hallum.
Chase Knickerbocker
James, maybe just first, a quick one. If you back out those -- that $2 million to $3 million in OUS kind of related revenue on those inventory shipments and then the associated costs that got into COGS, can you just give us what kind of, call it, pro forma gross margins would be kind of on the core U.S. business would have been -- sorry.
James Gruber
Sure. So adjusted the GAAP gross margins with all that -- with the ex U.S. INCRELEX activity in there was 35%. Adjusted was 45%. And if we remove all of that ex-U.S. activity, it's north of just over 70% for the quarter.
Chase Knickerbocker
And then, Sean, maybe just as we think about that reacceleration for ALKINDI, is it truly just that kind of refocusing of the sales force kind of solely on PDENO? Or are there kind of other drivers that you would point to as far as kind of how that sequential revenue growth has accelerated so far through '25?
Sean Brynjelsen
I think the big lever certainly was the focus of the PDENO group. Secondary aspect, I would say our physicians are comfortable with the product. They know it works. It's a product that has early adopters, we've got late adopters, and we're seeing a lot of late adopters and those who took a wait-and-see attitude now they believe in it. And I would say that we'll continue to add patients for the foreseeable future. It's not a perfect product. That's why we came out with the liquid version. And so we've got -- we want to be able to offer that, and we think that will really jump-start the growth next year. But right now, it's a steady increase in ALKINDI patients in addition to the KHINDIVI. As we said during the call, we don't see a lot of cannibalization. Really, it's additive.
Chase Knickerbocker
And then maybe just on INCRELEX. First, could you just, if you wouldn't mind, give that gross adds number since August, just so we can kind of get a sense for demand generation? And then just second, on INCRELEX and additional thoughts or details that you can give us as far as that trial design that you submitted to FDA that we're waiting to hear feedback on kind of timelines, number of patients, that sort of thing, as far as how you're thinking?
Sean Brynjelsen
So on the numbers, we're roughly where we were at on our last call, and it had to do with the number of ads, but then we had a number of folks go off, but now we're seeing more ads. We just saw a number of ads just the past week in terms of new scripts. So we're going to see if we can hit that 110 number by the end of next month. And -- but I would say that we're very pleased with the product overall. It's -- we knew it was going to slow down a little bit, but it's a little bit lumpy in terms of when people come on and off the product. We had that significant increase in Q1 and going a little bit into Q2. So that's that. And then regarding the clinical, we've submitted it. We expect to get feedback from the FDA in the coming weeks. And I do think that, that will be favorable. And hopefully, we can start enrolling patients in the first half of next year.
Chase Knickerbocker
Last one for me. Maybe just as we look -- start to look into 2026 as you guys prepare your budget, any initial thoughts that you'd be willing to give us just as far as how you're thinking about top-line growth next year? It looks like -- the Street is somewhere kind of mid- to high 20s as far as top line growth goes from a percentage perspective. I mean do you have any initial thoughts that you'd be willing to give on '26?
Sean Brynjelsen
Sure. I'll let David answer that one.
David Krempa
As we said on the prepared remarks, we expect significant growth to continue for INCRELEX, GAL
Operator
Our next question comes from the line of Madison El-Saadi of B. Riley.
Madison Wynne El-Saadi
Congrats on the progress and multiple positive updates. Question about the INCRELEX U.S. registry. Would this take place at the same sites that are active in the global registry trial? There are a few sites in that global registry that are U.S.-based.
Sean Brynjelsen
Yes, Madison, it would be just the U.S. It would just be U.S. sites. We would not be enrolling folks overseas.
Madison Wynne El-Saadi
Would it be at separate sites that are activated in the global registry? I think there are about 7 U.S. sites that are active as part of that global registry.
Sean Brynjelsen
It would probably be different sites, Madison, if one of those sites did have a meaningful number of patients within that negative 2 to negative 3 standard deviation, we would consider adding them, but it will probably be different sites within the U.S.
Madison Wynne El-Saadi
And then maybe if you could comment on how -- partner, how you're ranking the potential business development opportunities as we look to the end of the year and even into kind of next year and beyond?
Sean Brynjelsen
Well, we -- I would say right now, they're strong. We're in late discussions. We've been in late-stage discussions with 2 parties, and we're hoping to get something done before the end of the year. If not, it would be shortly thereafter. Obviously, nothing is done until you sign, but these are ultra-rare disease products. The late stage, a very good strategic fit. We think they would add appreciable revenue over the next 12 to 24 months. So -- and we'll see what happens, but that's always been a core part of our strategy as a company is to take on the right acquisitions. Obviously, we don't just do acquisitions for the sake of doing acquisitions. They have to be the right fit. And with or without the acquisitions, we're going to continue to grow. We've got a good pipeline of internal products, but I believe we will close transactions that we will end up with, I'll say, at least 2 additional product launches next year.
Operator
Our next question comes from the line of Swayampakula Ramakanth of H.C. Wainwright.
Swayampakula Ramakanth
Quick question on INCRELEX. You said some -- there were some patients who discontinued as you are putting on some patients. So generally, what are the reasons for the discontinuation? And is there anything either your salesforce or some amount of detailing, additional detailing needed for kind of stopping that getting off the drug?
Sean Brynjelsen
RK, primarily, it's patients aging out. So discontinuations is almost misleading. All the kids are going to be on it until they stop growing. So typically around age 18, they will age out, they no longer need it. So it is expected and normal, and you're always going to have it. That's the vast majority of the discontinuations. We see very little of what you think about as traditional discontinuations where somebody stops taking treatment before they reach their full adult or their full height, primarily because there's no other alternatives. It's not something like ALKINDI where they try to go to something else. So it was primarily age-outs. I think we are starting to promote and educate the market better. We think we are getting patients that are being diagnosed earlier. So their total duration on therapy is going to be longer. They're going to age out around 18 regardless of when they start. But if we can get them diagnosed and starting much earlier, that's going to lead to much better outcomes for the patients, and they're going to be on treatment much longer. So we think our average age is shifting much lower than it was when we inherited the business at the start of the year.
Swayampakula Ramakanth
And James, you gave us -- you guided for a 70% gross margin into the fourth quarter. But in general, if I start thinking about beyond '25, '26 to '28 or '29, as you start seeing the new formulation of KHINDIVI come on board and whatnot, how -- what will be the cadence of the gross margin over that time period?
James Gruber
RK, we have stated before, we think we can get to north of 75% by 2028. And how we get there is as the majority of our product revenue growth is concentrated in the products where we own more of the economics in KHINDIVI and ALKINDI and INCRELEX. That product mix shifts more towards those higher-margin products, which will continue to increase our margin profile over the next several years.
Swayampakula Ramakanth
And then last question, Sean, in general, what's the pricing power that you have with your products? And do you -- are you seeing any pressures at all either from the government or from some of your private payers?
Sean Brynjelsen
No, I'd say we're always trying to be on the lower end in terms of the pricing for the -- compared to the number of patients. So we're a company that prides itself on pricing products appropriately. We don't believe that all the pricing discussions will fall down into the orphan drug products. We're talking about many of these diseases have only a few hundred patients. And so for them to start putting pressure on those products.
Transcript from November 6, 2025
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