Part I [Business](index=6&type=section&id=Item%201.%20Business) Aquestive Therapeutics is a pharmaceutical company specializing in orally administered medicines using its proprietary PharmFilm® technology, focusing on CNS disorders and severe allergic reactions with five commercialized products and a late-stage pipeline [Overview](index=6&type=section&id=Overview) Aquestive Therapeutics develops orally administered products using PharmFilm® technology for CNS diseases and severe allergic reactions, with five commercialized products manufactured in Indiana - Aquestive Therapeutics is a pharmaceutical company focused on developing orally administered products as alternatives to invasive therapies, utilizing its proprietary PharmFilm® technology[12](index=12&type=chunk) - The company has **five commercialized products** in the U.S. market: four licensed products and one proprietary product, Sympazan® (clobazam) oral film, for treating seizures associated with Lennox-Gastaut Syndrome[12](index=12&type=chunk) - Aquestive's development pipeline is concentrated on Central Nervous System (CNS) diseases and severe allergic reactions, including anaphylaxis[12](index=12&type=chunk) - All proprietary and licensed products are manufactured at the company's FDA and DEA inspected facilities in Portage, Indiana, with corporate headquarters in Warren, New Jersey[12](index=12&type=chunk)[13](index=13&type=chunk) [PharmFilm – Our Oral Film Technology](index=6&type=section&id=PharmFilm%20%E2%80%93%20Our%20Oral%20Film%20Technology) Aquestive is a global leader in oral film drug delivery, producing over one billion doses annually with its patented PharmFilm® technology, offering non-invasive, rapid, and convenient drug administration - Aquestive is a global leader in oral film drug delivery, with the capacity to produce over **one billion commercial doses annually**[14](index=14&type=chunk) - The PharmFilm® technology is protected by a robust patent portfolio, including at least **260 issued patents worldwide** (**55 in the U.S.**) and over **100 pending applications**[14](index=14&type=chunk) - PharmFilm offers several advantages over traditional drug administration methods, including being a non-invasive alternative to injections, faster onset of action, ease of administration without water, and direct absorption into the bloodstream, which can reduce liver 'first pass' effects[16](index=16&type=chunk) [Our Product Portfolio and Pipeline](index=7&type=section&id=Our%20Product%20Portfolio%20and%20Pipeline) The company's portfolio includes proprietary CNS products like Sympazan® and Libervant™, complex molecule AQST-109, and licensed products such as Suboxone®, generating significant revenue Licensed Product Portfolio Revenue | Year | Revenue (in millions) | | :--- | :--- | | 2021 | $42.3 | | 2020 | $40.2 | [Market Overview](index=12&type=section&id=Market%20Overview) The U.S. epilepsy market, with 3.4 million people and billions in sales, presents an unmet need for rescue therapies, which Libervant aims to address, while the anaphylaxis market seeks non-injectable solutions like AQST-109 - The U.S. epilepsy market includes **3.4 million people**, with antiepileptic medications generating **billions in sales in 2021** Approximately **1.1 million patients** suffer from breakthrough seizures and may require rescue therapy[34](index=34&type=chunk)[35](index=35&type=chunk) - Current rescue therapies for epilepsy, like rectal diazepam gel, are challenging to administer, leading to only about **100,000 of 1.1 million potential patients** using them Aquestive's Libervant aims to address this unmet need[36](index=36&type=chunk) - Anaphylaxis has an estimated incidence of **50 to 112 episodes per 100,000 people per year** The market has a significant opportunity for a non-injectable, easier-to-administer product like AQST-109, as current auto-injectors can be inconvenient and disliked by patients[37](index=37&type=chunk)[39](index=39&type=chunk) [Manufacturing and Product Supply](index=13&type=section&id=Manufacturing%20and%20Product%20Supply) The company operates two FDA/DEA-registered manufacturing facilities in Portage, Indiana, adhering to cGMP, and utilizes third-party CROs for clinical trials and external logistics for proprietary products - The company operates **two manufacturing facilities** in Portage, Indiana, with a combined capacity to produce proprietary and licensed products like Suboxone and Exservan These facilities are registered with the DEA for Schedule II-V drugs[40](index=40&type=chunk) - Facilities are subject to FDA, DEA, and other health authority regulations, adhering to current Good Manufacturing Practices (cGMP) They have passed inspections from the FDA, DEA, and TGA[41](index=41&type=chunk) - Aquestive uses third-party contract research organizations (CROs) for clinical trials and outsources secondary packaging and logistics for its proprietary products[43](index=43&type=chunk) [Competition](index=13&type=section&id=Competition) Aquestive faces intense competition from pharmaceutical companies, with Libervant facing a major hurdle due to a competitor's orphan drug exclusivity requiring demonstration of clinical superiority - Aquestive faces intense competition from multinational pharmaceutical companies, specialty pharma, and generic drug companies in a rapidly evolving industry[44](index=44&type=chunk)[45](index=45&type=chunk) - A major competitive hurdle for Libervant is the orphan drug exclusivity granted to a competitor for its diazepam nasal spray on **January 10, 2020** This exclusivity lasts for **seven years**[46](index=46&type=chunk) - To gain market access for Libervant, Aquestive must demonstrate to the FDA that its product is "clinically superior" or provides a "major contribution to patient care" compared to the approved orphan drug This is a difficult standard to meet with limited precedent[46](index=46&type=chunk) [Intellectual Property](index=14&type=section&id=Intellectual%20Property) The company's robust patent portfolio includes over 260 issued patents worldwide and 100 pending applications, protecting its PharmFilm® technology and product formulations, with expirations ranging from 2022 to 2042 - The company's patent portfolio includes at least **260 issued patents worldwide**, with at least **55 in the U.S.**, and over **100 pending applications** These patents protect the PharmFilm® technology and specific product formulations[49](index=49&type=chunk) - Patents and pending applications for PharmFilm® technology and products like diazepam, epinephrine, and octreotide formulations are expected to expire between **2022 and 2042**[49](index=49&type=chunk)[50](index=50&type=chunk) - Aquestive also relies on trade secrets and confidentiality agreements to protect proprietary information not covered by patents[55](index=55&type=chunk) [Regulatory](index=15&type=section&id=Regulatory) The company is subject to extensive FDA regulation, involving preclinical testing, IND applications, multi-phase clinical trials, and NDA submissions, often utilizing the 505(b)(2) pathway, while adhering to post-approval manufacturing and marketing requirements - The FDA approval process for a new drug is extensive, involving preclinical studies, an IND application, and three phases of human clinical trials to establish safety and efficacy before an NDA can be submitted[58](index=58&type=chunk)[60](index=60&type=chunk)[62](index=62&type=chunk) - Aquestive often uses the **505(b)(2) NDA pathway**, which allows an applicant to rely on FDA's previous findings of safety and effectiveness for a previously approved drug, potentially reducing the need for extensive new preclinical or clinical studies[77](index=77&type=chunk) - The Orphan Drug Act provides incentives, including **seven years of market exclusivity**, for drugs treating rare diseases (affecting fewer than **200,000 people in the U.S.**) This exclusivity can block competitors with the same active ingredient for the same indication[83](index=83&type=chunk)[84](index=84&type=chunk) - The company is subject to numerous healthcare laws, including the Federal Anti-Kickback Statute, the Federal False Claims Act, and the Physician Payments Sunshine Act, which regulate interactions with healthcare providers and payors[85](index=85&type=chunk)[86](index=86&type=chunk)[89](index=89&type=chunk) [Human Capital](index=24&type=section&id=Human%20Capital) As of December 31, 2021, Aquestive employed approximately 157 colleagues across manufacturing, R&D, and commercial roles, implementing COVID-19 safety measures that ensured uninterrupted production and high employee vaccination rates - As of **December 31, 2021**, Aquestive employed approximately **157 colleagues** in the U.S., with **81 in manufacturing**, **16 in R&D**, and **60 in commercial, sales, and G&A roles**[109](index=109&type=chunk) - In response to the COVID-19 pandemic, the company implemented safety measures such as isolating its R&D lab, segregating its manufacturing site for essential workers, and providing testing, which allowed for uninterrupted production of critical products[113](index=113&type=chunk) - By **2021**, the company achieved a voluntary employee vaccination status of approximately **90%**, including **100% of its customer-facing and field sales personnel**[113](index=113&type=chunk) [Risk Factors](index=25&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including a history of operating losses, uncertainty about future profitability, critical need for regulatory approval for Libervant, and the challenge of overcoming competitor orphan drug exclusivity, requiring substantial additional funding - The company has a history of significant operating losses and may never achieve or sustain profitability[117](index=117&type=chunk)[119](index=119&type=chunk) - A primary risk is the delay or failure to obtain U.S. market access for the drug candidate Libervant™, particularly due to a competitor's existing orphan drug exclusivity[117](index=117&type=chunk)[150](index=150&type=chunk) - Aquestive will need to raise substantial additional funds, and failure to do so could force a delay or cessation of operations[117](index=117&type=chunk)[127](index=127&type=chunk) - The business is dependent on third-party contract research organizations (CROs) for clinical trials, and any failure on their part could delay or terminate product development[117](index=117&type=chunk)[204](index=204&type=chunk) [Unresolved Staff Comments](index=71&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[339](index=339&type=chunk) [Properties](index=71&type=section&id=Item%202.%20Properties) Aquestive Therapeutics leases all its primary facilities, including production and R&D sites in Portage, Indiana, and its corporate headquarters and main laboratory in Warren, New Jersey - The company leases an **8,400-square-foot** production facility (Melton) in Portage, Indiana, with the lease expiring in **March 2023**[339](index=339&type=chunk) - An additional **73,000-square-foot** facility (Ameriplex) in Portage, Indiana, is leased for packaging and R&D operations, with the current term extending through **September 2022**[339](index=339&type=chunk) - The corporate headquarters and main laboratory in Warren, New Jersey, consist of **23,589 square feet** under a lease extending to **August 2023**[340](index=340&type=chunk) [Legal Proceedings](index=71&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in multiple legal proceedings, including patent infringement litigation against generic drug makers for Suboxone®, antitrust litigation, and a federal securities class action lawsuit - This section refers to Note 20 of the Financial Statements for details on legal proceedings[341](index=341&type=chunk) [Mine Safety Disclosures](index=72&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[343](index=343&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=72&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Aquestive's common stock trades on NASDAQ under "AQST" since July 2018, with approximately 120 record holders as of March 2022, and the company does not anticipate paying cash dividends - The company's common stock began trading on the NASDAQ Global Select Market on **July 24, 2018**, under the symbol "**AQST**"[345](index=345&type=chunk) - The company has never declared or paid cash dividends and does not expect to in the foreseeable future, retaining earnings for business development[347](index=347&type=chunk) [Reserved]](index=73&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=74&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2021, total revenues increased 11% to $50.8 million, driven by higher manufacture and supply revenue and proprietary product sales, but the net loss widened to $70.5 million due to a debt extinguishment loss and increased non-cash interest expense [Results of Operations](index=78&type=section&id=Results%20of%20Operations) For 2021, total revenues increased 11% to $50.8 million, primarily from manufacture and supply and proprietary sales, offset by decreased license and royalty revenue, leading to a wider net loss of $70.5 million due to one-time expenses Revenues Comparison (2021 vs. 2020) | Revenue Category | 2021 ($ in thousands) | 2020 ($ in thousands) | Change ($ in thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Manufacture and supply | 35,312 | 24,881 | 10,431 | 42% | | License and royalty | 5,380 | 14,055 | (8,675) | (62%) | | Co-development and research | 1,635 | 1,264 | 371 | 29% | | Proprietary product sales, net | 8,505 | 5,649 | 2,856 | 51% | | **Total Revenues** | **50,832** | **45,849** | **4,983** | **11%** | Expenses Comparison (2021 vs. 2020) | Expense Category | 2021 ($ in thousands) | 2020 ($ in thousands) | Change ($ in thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Manufacture and supply | 14,989 | 12,964 | 2,025 | 16% | | Research and development | 17,047 | 19,886 | (2,839) | (14%) | | Selling, general and administrative | 53,475 | 55,892 | (2,417) | (4%) | | Interest expense | 10,049 | 11,064 | (1,015) | (9%) | | Interest expense related to sale of future revenue | 12,412 | 1,958 | 10,454 | 534% | | Loss on extinguishment of debt | 13,822 | — | 13,822 | 100% | [Liquidity and Capital Resources](index=80&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2021, Aquestive had $28.0 million in cash, supported by its ATM equity facility which generated $29.8 million in net proceeds in 2021, and believes current resources will fund operations for the next 12 months - The company held **$28.0 million** in cash and cash equivalents as of **December 31, 2021**[385](index=385&type=chunk) - In **2021**, the company sold **6,550,486 shares** through its ATM facility, generating net proceeds of approximately **$29.8 million** Approximately **$37.4 million** remained available under the facility at year-end[390](index=390&type=chunk) Cash Flow Summary (2021 vs. 2020) | Cash Flow Activity | 2021 ($ in thousands) | 2020 ($ in thousands) | | :--- | :--- | :--- | | Net cash used for operating activities | (32,979) | (45,459) | | Net cash used for investing activities | (913) | (517) | | Net cash provided by financing activities | 30,109 | 28,457 | | **Net (decrease) increase in cash** | **(3,783)** | **(17,519)** | - The company has the option to access an additional **$30.0 million** of its 12.5% Senior Secured Notes, contingent upon FDA approval of Libervant[388](index=388&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=86&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This item is not applicable as the company qualifies as a smaller reporting company - Item 7A is not applicable to us as a smaller reporting company and has been omitted[414](index=414&type=chunk) [Financial Statements and Supplementary Data](index=86&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section includes the company's audited consolidated financial statements for 2021 and 2020, along with accompanying notes and the independent auditor's report [Note 5. Revenues and Trade Receivables, Net](index=105&type=section&id=Note%205.%20Revenues%20and%20Trade%20Receivables%2C%20Net) Indivior Inc. was a major customer, representing approximately 73% of total revenue in 2021, while in 2020, Indivior and Sunovion collectively accounted for 83% of total revenue - For the year ended **December 31, 2021**, Indivior Inc. was a major customer, representing approximately **73% of total revenue**[514](index=514&type=chunk) - For the year ended **December 31, 2020**, two customers, Indivior and Sunovion, exceeded the 10% revenue threshold, representing **57% and 26% of total revenue**, respectively[515](index=515&type=chunk) [Note 6. Material Agreements](index=107&type=section&id=Note%206.%20Material%20Agreements) The company has a Commercial Exploitation Agreement with Indivior for Suboxone® manufacturing and supply, a supplemental agreement for patent enforcement payments, and monetized KYNMOBI® royalty rights for up to $125.0 million - The company has a Commercial Exploitation Agreement with Indivior to exclusively manufacture and supply Suboxone®, with pricing subject to volume thresholds and rebates[516](index=516&type=chunk)[518](index=518&type=chunk) - A **2017 Supplemental Agreement** with Indivior entitled Aquestive to payments up to a cap of **$75.0 million** related to patent enforcement actions Payments were suspended in **February 2019** pending litigation outcomes, with up to **$34.25 million** potentially remaining[520](index=520&type=chunk) - The company sold its royalty and milestone rights for Sunovion's KYNMOBI® to an affiliate of Marathon Asset Management in **November 2020** for up to **$125.0 million**, of which **$50.0 million** had been received as of year-end **2021**[527](index=527&type=chunk) [Note 12. 12.5% Senior Secured Notes and Loans Payable](index=110&type=section&id=Note%2012.%2012.5%25%20Senior%20Secured%20Notes%20and%20Loans%20Payable) As of December 31, 2021, the company had $51.5 million in 12.5% Senior Secured Notes due 2025, with the first amortization payment extended to March 2023, resulting in a $13.8 million loss on debt extinguishment - As of **December 31, 2021**, the company had **$51.5 million** aggregate principal amount of 12.5% Senior Secured Notes due **2025** outstanding[543](index=543&type=chunk) - In **October 2021**, the company executed the Fourth Supplemental Indenture, which extended the first amortization payment date to **March 30, 2023** This resulted in a one-time loss on extinguishment of debt of **$13.8 million**[550](index=550&type=chunk) - The company has an option to access an additional **$30.0 million** of 12.5% Notes, contingent upon FDA approval of Libervant for U.S. market access[546](index=546&type=chunk) [Note 20. Contingencies](index=118&type=section&id=Note%2020.%20Contingencies) The company is involved in patent infringement lawsuits against generic Suboxone® manufacturers, an antitrust lawsuit by multiple states, and a federal securities class action lawsuit regarding Libervant's FDA approval - The company is a plaintiff, alongside Indivior, in patent infringement lawsuits against Dr. Reddy's, Teva, and Alvogen concerning generic versions of Suboxone®[589](index=589&type=chunk)[590](index=590&type=chunk)[591](index=591&type=chunk) - Aquestive is a defendant in a lawsuit brought by **41 states and the District of Columbia** alleging federal and state antitrust violations related to the launch of Suboxone® Sublingual Film[595](index=595&type=chunk)[596](index=596&type=chunk) - A federal securities class action lawsuit was filed against the company in **March 2021**, alleging violations related to public statements made regarding the FDA approval of Libervant[603](index=603&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=86&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[415](index=415&type=chunk) [Controls and Procedures](index=86&type=section&id=Item%209A.%20Controls%20and%20Procedures) As of December 31, 2021, management concluded that the company's disclosure controls and internal control over financial reporting were effective, with no material changes identified - Management concluded that as of **December 31, 2021**, the company's disclosure controls and procedures were effective at a reasonable assurance level[417](index=417&type=chunk) - Based on the COSO framework, management concluded that the company's internal control over financial reporting was effective as of **December 31, 2021**[419](index=419&type=chunk) - As an "emerging growth company," the annual report does not include an attestation report from the registered public accounting firm on internal controls[420](index=420&type=chunk) [Other Information](index=86&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[421](index=421&type=chunk) Part III [Directors, Executive Officers, and Corporate Governance](index=88&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%2C%20and%20Corporate%20Governance) The information required for this item, concerning the company's directors, executive officers, and corporate governance practices, is incorporated by reference from the company's definitive Proxy Statement to be filed with the SEC [Executive Compensation](index=88&type=section&id=Item%2011.%20Executive%20Compensation) The information required for this item, detailing the compensation of the company's executives, is incorporated by reference from the company's definitive Proxy Statement to be filed with the SEC [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=88&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) The information required for this item, regarding security ownership by major shareholders and management, is incorporated by reference from the company's definitive Proxy Statement to be filed with the SEC [Certain Relationships and Related Party Transactions and Director Independence](index=88&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Party%20Transactions%20and%20Director%20Independence) The information required for this item, concerning related party transactions and director independence, is incorporated by reference from the company's definitive Proxy Statement to be filed with the SEC [Principal Accountant Fees and Services](index=88&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) The information required for this item, detailing the fees paid to and services provided by the principal accountant, is incorporated by reference from the company's definitive Proxy Statement to be filed with the SEC Part IV [Exhibits, Financial Statement Schedules](index=89&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements, which are included under Item 8, and notes that all financial statement schedules have been omitted as they are not applicable It also provides an index of all exhibits filed as part of the Form 10-K, such as corporate governance documents, material contracts, and certifications

Aquestive Therapeutics, Inc. (NASDAQ:AQST) Q3 2021 Earnings Conference Call November 3, 2021 8:00 AM ET Company Participants Bennett Watson - IR Keith Kendall - President & CEO Ernie Toth - CFO Dan Barber - COO Conference Call Participants Evan Hua - BMO Capital Markets Jason Butler - JMP Securities Thomas Flaten - Lake Street Capital Andreas Argyrides - Wedbush Ram Selvaraju - H.C. Wainwright Operator Good morning, and welcome to the Aquestive Therapeutics Third Quarter 2021 Conference Call. At this time, ...

Product Development and FDA Approvals - The company has five products approved by the FDA, including Sympazan and Libervant, with a focus on addressing unmet medical needs in CNS diseases [141]. - Sympazan, launched in December 2018, continues to show growth in prescriber metrics and retail shipments [142]. - Libervant is under FDA review with a PDUFA target goal date of December 23, 2021, following a resubmission of its NDA [143]. - AQST-109, a sublingual film formulation of epinephrine, has completed a Phase 1 clinical trial in Canada, showing safety and tolerability comparable to auto-injectors [145]. - AQST-108, another sublingual formulation, is in development for allergic reactions and has shown a favorable safety profile in a recent Phase 1 trial [146]. - AQST-305, a sublingual film formulation of octreotide for acromegaly treatment, is being prepared for additional research trials [148]. - The company is focused on commercializing Sympazan and advancing its product pipeline, including Libervant, AQST-109, and AQST-108 [141]. - The anticipated launch of Libervant is contingent upon FDA approval, with the current commercial organization prepared to initiate the launch shortly after approval [175]. Financial Performance and Revenue - The licensed product portfolio generated $40.2 million in revenue for the year ended December 31, 2020, down from $49.7 million in 2019, indicating a decline of approximately 19.8% [149]. - Total revenues for the three months ended September 30, 2021, increased by 61% to $13,287, compared to $8,260 in the same period of the prior year, primarily driven by higher manufacturing and supply revenue [181]. - Manufacturing and supply revenue rose by 77% to $10,447 for the three months ended September 30, 2021, compared to $5,903 in the same period of the prior year, attributed to increased Suboxone manufacturing volume [182][183]. - License and royalty revenue decreased by 63% to $5,000 for the nine months ended September 30, 2021, compared to $13,682 in the same period of the prior year, due to the absence of a milestone earned in the previous year [184]. - The company expects future manufacture and supply revenue to be based on volume demand for existing licensed products and new agreements for successful product development collaborations [164]. Operating Expenses and Cash Flow - Research and development expenses decreased by 35% to $4,726 for the three months ended September 30, 2021, compared to $7,260 in the same period of the prior year, driven by the timing of clinical trial activities [188]. - Selling, general and administrative expenses increased by 3% to $12,129 for the three months ended September 30, 2021, compared to $11,803 in the same period of the prior year, primarily due to litigation expenses [189]. - Interest expense related to the sale of future revenue was $3,767 for the three months ended September 30, 2021, reflecting the accounting associated with the sale of future revenue related to KYNMOBI® [190]. - The company had $31,164 in cash and cash equivalents as of September 30, 2021, amidst a history of net losses totaling $227,851 [191]. - Net cash used for operating activities decreased by $7,029 to $(24,918) for the nine months ended September 30, 2021, compared to $(31,947) in the prior year [198]. - Net cash provided by financing activities increased by $24,689 to $24,655 for the nine months ended September 30, 2021, primarily due to net proceeds from the sale of shares under the ATM facility [201]. Market Competition and Risks - The company faces risks related to FDA approval processes and potential competition for its product candidates [138]. - The ongoing COVID-19 pandemic may impact clinical trials, regulatory submissions, and overall business operations [139]. - Suboxone retains approximately 38% market share in the film category as of September 30, 2021, despite increased competition from generic products [149]. - The company plans to manage business costs in light of anticipated declines in Suboxone revenue and to focus on ongoing product development for Libervant, AQST-109, and AQST-108 [204]. Strategic Partnerships and Future Outlook - The company is seeking a new partner to commercialize Zuplenz in the United States after regaining rights following Fortovia's bankruptcy [154]. - The company expects to continue significant research and development expenses as it develops existing product candidates and identifies new ones [173]. - The company anticipates that the sufficiency of its liquidity will be impacted by operating revenues and the timely achievement of regulatory approvals for its proprietary products [205]. - The company may need to engage in expense management activities, including reducing staff or scaling back research and development programs, if adequate funds are not available [208].

Aquestive Therapeutics, Inc. (NASDAQ:AQST) Q2 2021 Earnings Conference Call August 4, 2021 8:00 AM ET Company Participants Stephanie Carrington - IR Keith Kendall - President & CEO Ernie Toth - CFO Ken Marshall - SVP, CCO Dan Barber - COO Conference Call Participants Evan Seigerman - BMO Capital Markets Jason Butler - JMP Securities Daniel Busby - RBC Capital Markets Thomas Flaten - Lake Street Capital Andreas Argyrides - Wedbush Ram Selvaraju - H.C. Wainwright Operator Good day and thank you for standing b ...

Financial Data and Key Metrics Changes - Total revenues for Q1 2021 were $11.1 million, up from $8.8 million in Q1 2020, reflecting a year-over-year increase of 26% [20] - Net loss for Q1 2021 was $14.7 million, or $0.41 loss per share, compared to a net loss of $16.5 million, or $0.49 loss per share in Q1 2020, indicating an improvement in loss [20] - Adjusted EBITDA loss was $6.3 million in Q1 2021, down from $11.2 million in Q1 2020, showing a significant reduction in losses [21] Business Line Data and Key Metrics Changes - SYMPAZAN, the company's proprietary product, saw a net revenue growth of 56% year-over-year in Q1 2021, with prescriptions shipped to pharmacies growing nearly 13% quarter-over-quarter and 40% year-over-year [15] - The company continues to focus on the resubmission of the NDA for Libervant, with no revenue from Libervant included in the full-year 2021 guidance until approval is certain [18] Market Data and Key Metrics Changes - The overall epilepsy market consists of approximately 3.2 million patients, with about 1.2 million having refractory disease, presenting a substantial market opportunity for Libervant [29] - SYMPAZAN's prescriber base has grown, achieving over 30% penetration into the company's focused group of prescribers, with approximately 80% of those prescribers writing multiple scripts [15] Company Strategy and Development Direction - The company is focused on two key value drivers: the resubmission and potential launch of Libervant and the continued development of its epinephrine program [18] - The company aims to launch Libervant as soon as possible after FDA approval, emphasizing the product's potential to provide a non-invasive treatment option for patients with refractory epilepsy [12][16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the ongoing uncertainties due to the COVID-19 pandemic but remains optimistic about the company's growth trajectory and product pipeline [5] - The company expects to continue growing SYMPAZAN and is preparing for the potential launch of Libervant, with a focus on maintaining strong relationships with prescribers [16][60] Other Important Information - The company reaffirmed its full-year 2021 financial guidance, expecting total revenues of approximately $38 million to $42 million and a non-GAAP adjusted EBITDA loss of approximately $42 million to $45 million [21] - As of March 31, 2021, cash and cash equivalents were $27.5 million, with access to approximately $57.1 million under the ATM facility [21] Q&A Session Summary Question: Could the additional work for Libervant help in showing meaningful improvements in patient care and getting orphan drug designation? - Management indicated that the totality of the package, including safety and PK modeling, will drive value and market access [24][25] Question: What is the size of the market opportunity for Libervant and how does it compare to competing products? - The market opportunity is substantial, with a significant number of patients needing rescue strategies, and Libervant differentiates itself as an orally administered medicine compared to nasal alternatives [26][29] Question: How predictive were the preclinical data for AQST-108 in initial human studies? - Preclinical data for AQST-108 was very predictive, showing solid absorption and rapid conversion into epinephrine [31][32] Question: What are the expectations for SYMPAZAN revenue growth in 2021? - Management expects continued quarter-over-quarter growth for SYMPAZAN, driven by in-person interactions with healthcare providers [58]

Product Development and FDA Approvals - The company has five products approved by the FDA, including proprietary and out-licensed products, with a focus on central nervous system diseases and anaphylaxis treatment [154]. - Sympazan® has shown growth in prescriber metrics and retail shipments since its launch in December 2018, indicating strong market performance [155]. - Libervant™ is under development as a non-device delivered oral diazepam-based product for managing seizure clusters, with a resubmission of the NDA expected by the end of Q2 2021 [156]. - AQST-108-SF, an oral sublingual film for anaphylaxis, has completed a second pharmacokinetic trial, demonstrating similar pharmacokinetics to injectable epinephrine and improved patient adherence potential [157][158]. - AQST-109-SF is a next-generation formulation of epinephrine, with a single ascending dose PK study planned for the second half of 2021 [160]. - AQST-305-SF is being developed as a non-invasive alternative to Sandostatin for treating acromegaly, aiming to reduce treatment burden and healthcare costs [161]. - The company is focused on addressing FDA concerns regarding Libervant™ and aims to demonstrate its clinical superiority over existing treatments [156]. - The company anticipates a six-month review process post-resubmission of the NDA for Libervant™, contingent on FDA approval [156]. - The company is leveraging its proprietary PharmFilm® technology to develop differentiated products that meet unmet medical needs [154]. Financial Performance - Licensed product portfolio generated $40.2 million and $49.7 million in revenue for the years ended December 31, 2020 and 2019, respectively [162]. - Suboxone branded products retain approximately 40% film market share as of January 31, 2021, with over 2.2 billion doses produced since its launch in 2010 [162]. - KYNMOBI generated $50.0 million in gross proceeds through a monetization agreement, with potential total gross proceeds of $125.0 million [166]. - Total revenues increased by 27% or $2,357 to $11,122 for the three-month period ended March 31, 2021, compared to $8,765 for the same period in the prior year [198]. - License and royalty revenue surged by 454% or $1,935 to $2,361 for the three-month period ended March 31, 2021, due to the recognition of deferred revenue from a terminated agreement [200]. - Proprietary product sales, net increased by 56% or $652 to $1,812 for the three-month period ended March 31, 2021, reflecting improved acceptance of Sympazan in the medical community [201]. Cost Management and Expenses - Manufacture and supply costs decreased by 25% or $902 to $2,757 for the three-month period ended March 31, 2021, primarily due to lower production volumes of Suboxone [204]. - Research and development expenses decreased by 16% or $695 to $3,659 for the three-month period ended March 31, 2021, driven by the timing of clinical trial activities [204]. - Selling, general and administrative expenses decreased by 9% or $1,382 to $13,231 for the three-month period ended March 31, 2021, attributed to lower marketing costs for Sympazan [204]. - The company expects to continue to manage costs in response to declining Suboxone volumes and to support the commercialization of proprietary products [184]. - The company plans to manage business costs in light of potential declining Suboxone revenue and focus on ongoing product development for Libervant, AQST-108-SF, and AQST-109-SF [220]. Cash Flow and Liquidity - Net cash used for operating activities for the three-month period ended March 31, 2021 was $14,097, compared to $13,637 for the same period in 2020 [212][213]. - Net cash provided by financing activities was $9,891 for the three-month period ended March 31, 2021, compared to a net cash used of $37 during the same period in 2020 [215]. - The company expects existing cash and cash equivalents, along with anticipated revenues, to be adequate to fund cash requirements for the next 12 months [216]. - The company may need to engage in expense management activities if adequate funds are not available for liquidity needs [224]. Operational Impact of COVID-19 - The ongoing impact of the COVID-19 pandemic poses risks to clinical trials, regulatory submissions, and overall business operations [152]. - The company continues to manufacture and supply products without significant interruption despite the COVID-19 pandemic [169]. - The company has maintained appropriate staffing levels at laboratory and manufacturing sites while adapting sales and marketing practices to remote interactions [170]. Other Financial Obligations - The company has principal repayments aggregating $2,575 related to its 12.5% Notes due in the second half of 2021 [222]. - The company did not have any material off-balance sheet arrangements during the period presented [226].

Aquestive Therapeutics, Inc. (NASDAQ:AQST) Q4 2020 Earnings Conference Call March 10, 2021 8:00 AM ET Company Participants Stephanie Carrington - Investor Relations Keith Kendall - President and Chief Executive Officer Ernie Toth - Interim Chief Financial Officer Daniel Barber - Senior Vice President and Chief Operating Officer Conference Call Participants Gary Nachman - BMO Capital Markets Randall Stanicky - RBC Capital Markets Shveta Dighe - Wedbush Securities Jason Butler - JMP Securities Thomas Flaten - ...