Financial Data and Key Metrics Changes - Total revenues increased to $13.5 million in Q3 2024 from $13 million in Q3 2023, a 4% increase primarily driven by an increase in license and royalty revenue [18] - Net loss for Q3 2024 was $11.5 million or $0.13 per share, compared to a net loss of $2 million or $0.03 per share in Q3 2023, driven by increased expenses [22] - Non-GAAP adjusted EBITDA loss was $6.6 million in Q3 2024 compared to a loss of $1.3 million in Q3 2023 [23] Business Line Data and Key Metrics Changes - Manufacture and supply revenue decreased to $10.7 million in Q3 2024 from $11.4 million in Q3 2023, primarily due to timing of revenues [18] - Research and development expenses increased to $5.3 million in Q3 2024 from $3.2 million in Q3 2023, driven by clinical trial costs [20] - Selling, general and administrative expenses increased to $12.1 million in Q3 2024 from $7.4 million in Q3 2023, influenced by increased commercial spending [21] Market Data and Key Metrics Changes - Medicaid coverage for Libervant is now available in all 50 states, enhancing market access [12] - Libervant prescriptions have steadily increased between September and October 2024 due to expanded retail distribution and a national sales team [13] Company Strategy and Development Direction - The company is focused on advancing Anaphylm towards NDA submission and growing Libervant prescriptions in the pediatric space [15] - Plans for a Phase 2a study for AQST-108 are set for 2025, targeting alopecia areata, with expectations for significant market opportunity [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the progress made with Anaphylm and the supportive feedback received from the FDA [9][10] - The outlook for 2024 remains unchanged, with total revenues expected to be approximately $57 million to $60 million [25] Other Important Information - Cash and cash equivalents were $77.9 million as of September 30, 2024, supporting ongoing development and commercialization efforts [24] - The company is preparing for a pre-NDA meeting with the FDA and plans to share findings post-meeting [10] Q&A Session Summary Question: What topics will be highlighted in the Anaphylm clinical briefing book? - The company aims to demonstrate that they have met all FDA requirements and is looking for guidance on the completeness of their package [28] Question: How did negotiations with PBMs for Libervant go? - Negotiations have been positive, with coverage being secured for patients aged two to five [29] Question: Will there be an Ad Comm for Anaphylm? - The company is prepared for the possibility of an Ad Comm but does not have insight into the FDA's thinking [36] Question: What is the pricing paradigm for Libervant? - Pricing has not been an obstacle, and the payer community understands the necessity of the product [46] Question: How will the NDA for Anaphylm be prepared while the pediatric study is ongoing? - The NDA preparation is ongoing, and the company expects alignment with the FDA on the pediatric study design [66]

Company Overview - Aquestive Therapeutics (NASDAQ: AQST) is a small-cap pharmaceutical company founded in 2004, specializing in unique film-based medicines for various indications [1] - The company has developed the "PharmFilm" platform, which serves as an alternative to invasive delivery methods [1] Investment Interest - The primary investment interest lies in biotech, with over a decade of investment experience in this sector [1] - Secondary interests include dividend growth equities and business development companies (BDC) [1]

| --- | --- | --- | --- | --- | --- | |-------|-------|-------|-------|-----------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | | | | | | | | | | | | | | | | | | Third Quarter 2024 Earnings Supplemental Materials | | | | | | | September 2024 November 4, 2024 | Advancing medicines. Advancing medicines. Solving problems. S ...

Aquestive Therapeutics (AQST) reported $13.54 million in revenue for the quarter ended September 2024, representing a year-over-year increase of 4.2%. EPS of -$0.13 for the same period compares to -$0.03 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $12.69 million, representing a surprise of +6.68%. The company delivered an EPS surprise of -8.33%, with the consensus EPS estimate being -$0.12.While investors closely watch year-over-year changes in headline numbers -- revenue and ...

Aquestive Therapeutics (AQST) came out with a quarterly loss of $0.13 per share versus the Zacks Consensus Estimate of a loss of $0.12. This compares to loss of $0.03 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -8.33%. A quarter ago, it was expected that this specialty pharmaceutical company would post a loss of $0.11 per share when it actually produced a loss of $0.03, delivering a surprise of 72.73%.Over the last four qu ...

PART I – FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20FINANCIAL%20STATEMENTS%20(Unaudited)) This section presents Aquestive Therapeutics' unaudited condensed financial statements, showing increased cash, reduced liabilities, and a decreased stockholders' deficit, alongside net losses for the periods ended September 30, 2024 Condensed Balance Sheet Highlights (In thousands) | Metric | Sep 30, 2024 | Dec 31, 2023 | | :--------------------------- | :----------- | :----------- | | Cash and cash equivalents | $77,893 | $23,872 | | Total current assets | $96,570 | $40,966 | | Total assets | $109,958 | $57,418 | | Total current liabilities | $15,152 | $18,308 | | Total liabilities | $155,378 | $163,905 | | Total stockholders' deficit | $(45,420) | $(106,487) | Condensed Statements of Operations and Comprehensive (Loss) Income (In thousands) | Metric (3 Months Ended Sep 30) | 2024 | 2023 | | :----------------------------- | :---------- | :--------- | | Revenues | $13,542 | $13,002 | | Total costs and expenses | $21,832 | $15,379 | | Loss from operations | $(8,290) | $(2,377) | | Net (loss) income | $(11,509) | $(2,035) | | Metric (9 Months Ended Sep 30) | 2024 | 2023 | | :----------------------------- | :---------- | :--------- | | Revenues | $45,694 | $37,377 | | Total costs and expenses | $62,886 | $48,568 | | Loss from operations | $(17,192) | $(11,191) | | Net (loss) income | $(27,082) | $241 | Net (Loss) Earnings Per Share (Dollars per share) | Metric (3 Months Ended Sep 30) | 2024 | 2023 | | :----------------------------- | :----- | :----- | | Basic | $(0.13) | $(0.03) | | Diluted | $(0.13) | $(0.03) | | Metric (9 Months Ended Sep 30) | 2024 | 2023 | | :----------------------------- | :----- | :----- | | Basic | $(0.32) | $— | | Diluted | $(0.32) | $— | Condensed Statements of Cash Flows (In thousands) | Metric (9 Months Ended Sep 30) | 2024 | 2023 | | :----------------------------- | :---------- | :--------- | | Net cash used for operating activities | $(29,270) | $(1,438) | | Net cash used for investing activities | $(144) | $(979) | | Net cash provided by financing activities | $83,435 | $61 |\ | Net increase (decrease) in cash and cash equivalents | $54,021 | $(2,356) | [Notes to Unaudited Condensed Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Financial%20Statements) This section provides detailed notes on Aquestive's operations, accounting policies, financial instruments, debt, equity, and legal contingencies, highlighting product launches and agreement terminations [Note 1. Company Overview and Basis of Presentation](index=11&type=section&id=Note%201.%20Company%20Overview%20and%20Basis%20of%20Presentation) Aquestive Therapeutics, a pharmaceutical company, launched Libervant® in April 2024, is advancing its Anaphylm™ and Adrenaverse™ pipeline, and secured substantial net proceeds from 2024 equity offerings - Aquestive Therapeutics, Inc. launched Libervant® (diazepam) Buccal Film in April 2024 for acute treatment of seizure activity in epilepsy patients aged two to five years[20](index=20&type=chunk)[99](index=99&type=chunk) - The company is developing Anaphylm™ for severe allergic reactions and AQST-108 (epinephrine) topical gel for alopecia areata[20](index=20&type=chunk)[101](index=101&type=chunk)[104](index=104&type=chunk) Equity Offering Proceeds (In thousands) | Equity Offering Type | Period Ended Sep 30, 2024 (Net Proceeds) | | :---------------------------- | :--------------------------------------- | | ATM facility (9 months) | $11,855 | | Underwritten Public Offering | $72,868 | - The company dissolved its subsidiaries as of March 31, 2024, with no material impact on financial statements[23](index=23&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=12&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) The company adopted new accounting pronouncements ASU 2020-06 and ASU 2022-03 without material impact and is evaluating ASU 2023-07 and ASU 2023-09 for future effects - Aquestive is no longer an 'emerging growth company' but remains a 'smaller reporting company'[24](index=24&type=chunk) - Adopted ASU 2020-06 (Convertible Instruments) and ASU 2022-03 (Fair Value Measurement of Equity Securities) on January 1, 2024, with no material impact[24](index=24&type=chunk) - Evaluating ASU 2023-07 (Segment Reporting) and ASU 2023-09 (Income Tax Disclosures) for future impact[24](index=24&type=chunk)[25](index=25&type=chunk) [Note 3. Risks and Uncertainties](index=13&type=section&id=Note%203.%20Risks%20and%20Uncertainties) The company assesses liquidity based on funding operations and development, expecting sufficient cash and equity market access to cover at least the next twelve months despite historical net losses Liquidity Position (In thousands) | Metric | Sep 30, 2024 | | :---------------------- | :----------- | | Cash and cash equivalents | $77,893 | | Accumulated deficits | $(346,159) | - The company's ongoing business, cash, expense management (including ceasing R&D activities), and access to equity markets (ATM facility, Lincoln Park Purchase Agreement) provide near-term liquidity for at least the next twelve months[27](index=27&type=chunk) [Note 4. Revenues and Trade Receivables, Net](index=13&type=section&id=Note%204.%20Revenues%20and%20Trade%20Receivables,%20Net) Total revenues increased by **22%** for the nine months ended September 30, 2024, driven by significant license and royalty revenue from terminated agreements, with Indivior remaining a major customer Revenue Breakdown (In thousands) | Revenue Type (3 Months Ended Sep 30) | 2024 | 2023 | Change ($) | Change (%) | | :----------------------------------- | :---------- | :--------- | :--------- | :--------- | | Manufacture and supply revenue | $10,671 | $11,409 | $(738) | (6%) | | License and royalty revenue | $2,162 | $1,103 | $1,059 | 96% | | Co-development and research fees | $492 | $490 | $2 | —% | | Proprietary product revenue, net | $217 | $— | $217 | N/M | | **Total revenues** | **$13,542** | **$13,002**| **$540** | **4%** | | Revenue Type (9 Months Ended Sep 30) | 2024 | 2023 | Change ($) | Change (%) | | :----------------------------------- | :---------- | :--------- | :--------- | :--------- | | Manufacture and supply revenue | $29,312 | $32,807 | $(3,495) | (11%) | | License and royalty revenue | $14,514 | $3,503 | $11,011 | 314% | | Co-development and research fees | $1,651 | $1,067 | $584 | 55% | | Proprietary product revenue, net | $217 | $— | $217 | N/M | | **Total revenues** | **$45,694** | **$37,377**| **$8,317** | **22%** | - License and royalty revenue for the nine months ended September 30, 2024, increased significantly by **314%** due to one-time recognition of **$11,544 thousand** in deferred revenues from terminated licensing and supply agreements[131](index=131&type=chunk) - Proprietary product revenue, net, increased by **$217 thousand** for both three and nine months ended September 30, 2024, due to the launch of Libervant for pediatric patients[129](index=129&type=chunk)[131](index=131&type=chunk) - Indivior and Haisco represented approximately **59%** and **15%** of total revenue, respectively, for the nine months ended September 30, 2024, with Indivior also accounting for approximately **67%** of total trade and other receivables as of September 30, 2024[39](index=39&type=chunk) [Note 5. Material Agreements](index=16&type=section&id=Note%205.%20Material%20Agreements) This section details significant commercial agreements, including those with Indivior, Sunovion, Zevra, Haisco, Pharmanovia, and Assertio, noting the impact of terminated agreements on revenue recognition and capitalized commissions - The Haisco Agreement for Exservan™ in China was terminated in June 2024, leading to the recognition of **$7,000 thousand** in deferred revenue and expensing of **$134 thousand** in capitalized commissions[48](index=48&type=chunk)[49](index=49&type=chunk) - The MTPA license agreement for Exservan in the U.S. was mutually terminated in June 2024, resulting in the recognition of **$3,317 thousand** in deferred revenue and expensing of **$57 thousand** in capitalized commissions[54](index=54&type=chunk) - Sunovion voluntarily withdrew KYNMOBI from the U.S. and Canadian markets in June 2023, making additional contingent payments under the Monetization Agreement unlikely[45](index=45&type=chunk)[125](index=125&type=chunk) - The Pharmanovia Agreement for Libervant was amended in March 2023 to expand the licensed territory globally (excluding U.S., Canada, China), with a non-refundable payment of **$2,000 thousand** received[51](index=51&type=chunk) [Note 6. Financial Instruments – Fair Value Measurements](index=21&type=section&id=Note%206.%20Financial%20Instruments%20%E2%80%93%20Fair%20Value%20Measurements) The company classifies financial assets and liabilities at fair value into Level 1, 2, or 3 hierarchy, with warrants and royalty obligations valued using Level 3 inputs, and the embedded put option on Senior Secured Notes valued at **$0** due to refinancing - Warrants and Royalty Right Agreements are valued using Level 3 inputs, based on independent third-party appraisals and internal management estimates[55](index=55&type=chunk) - The embedded put option on the 12.5% Senior Secured Notes is no longer in place as of September 30, 2024, due to refinancing[65](index=65&type=chunk) Royalty Right Agreements Valuation Inputs | Valuation Methodology | Significant Unobservable Input | Weighted Average (range, if applicable) | | :------------------------------ | :----------------------------- | :-------------------------------------- | | Probability weighted income approach | Discount Rate | 15% | | | Probability of Success | 75% | | | Projected Years of Payments | 2025 - 2033 | [Note 7. Inventories](index=22&type=section&id=Note%207.%20Inventories) Total inventory increased slightly to **$7,021 thousand** as of September 30, 2024, from **$6,769 thousand** at December 31, 2023, driven by an increase in raw materials, partially offset by decreases in packaging materials and finished goods Inventory Components (In thousands) | Component | Sep 30, 2024 | Dec 31, 2023 | | :--------------- | :----------- | :----------- | | Raw material | $3,240 | $2,118 | | Packaging material | $2,731 | $3,028 | | Finished goods | $1,050 | $1,623 | | **Total inventory**| **$7,021** | **$6,769** | [Note 8. Property and Equipment, Net](index=22&type=section&id=Note%208.%20Property%20and%20Equipment,%20Net) Net property and equipment decreased to **$3,848 thousand** as of September 30, 2024, from **$4,179 thousand** at December 31, 2023, primarily due to accumulated depreciation and amortization totaling **$43,358 thousand** Property and Equipment, Net (In thousands) | Component | Sep 30, 2024 | Dec 31, 2023 | | :-------------------------------------- | :----------- | :----------- | | Machinery | $20,317 | $20,248 | | Furniture and fixtures | $769 | $769 | | Leasehold improvements | $21,386 | $21,386 | | Computer, network equipment and software| $2,685 | $2,627 | | Construction in progress | $2,049 | $2,033 | | Less: accumulated depreciation and amortization | $(43,358) | $(42,884) | | **Total property and equipment, net** | **$3,848** | **$4,179** | - Total depreciation, amortization, and impairment related to property and equipment was **$493 thousand** for the nine months ended September 30, 2024, down from **$760 thousand** in the prior year period[59](index=59&type=chunk) [Note 9. Right-of-Use Assets and Lease Obligations](index=22&type=section&id=Note%209.%20Right-of-Use%20Assets%20and%20Lease%20Obligations) The company primarily accounts for its realty leases as operating leases with remaining terms between 3.5 and 9.0 years, incurring **$1,345 thousand** in operating lease expenses for the nine months ended September 30, 2024 - Operating lease expenses for the nine months ended September 30, 2024, totaled **$1,345 thousand**, including **$349 thousand** in variable lease expenses[60](index=60&type=chunk)[61](index=61&type=chunk) - The company uses an incremental borrowing rate ranging from **14.8%** to **15.6%** to determine the present value of lease payments[60](index=60&type=chunk) [Note 10. Intangible Assets, Net](index=23&type=section&id=Note%2010.%20Intangible%20Assets,%20Net) Intangible assets, net, decreased to **$0** as of September 30, 2024, from **$1,278 thousand** at December 31, 2023, primarily due to a gain on contract termination and an adjustment to the remaining balance of an intangible asset in June 2024 Intangible Assets, Net (In thousands) | Component | Sep 30, 2024 | Dec 31, 2023 | | :------------------------- | :----------- | :----------- | | Purchased intangible | $3,858 | $3,858 | | Purchased patent | $509 | $509 | | Less: accumulated amortization | $(4,367) | $(3,089) | | **Intangible assets, net** | **$—** | **$1,278** | - In June 2024, a net gain of **$300 thousand** was recorded within Other income, net, on the Condensed Statements of Operations and Comprehensive (Loss) Income, related to a contract termination and intangible asset adjustment[62](index=62&type=chunk) [Note 11. Other Non-current Assets](index=23&type=section&id=Note%2011.%20Other%20Non-current%20Assets) Other non-current assets decreased to **$4,230 thousand** as of September 30, 2024, from **$5,438 thousand** at December 31, 2023, mainly due to a decrease in royalty receivable from Sunovion and expensed capitalized commissions Other Non-current Assets (In thousands) | Component | Sep 30, 2024 | Dec 31, 2023 | | :------------------------- | :----------- | :----------- | | Royalty receivable | $3,000 | $4,000 | | Other | $1,230 | $1,438 | | **Total other non-current assets** | **$4,230** | **$5,438** | - Commissions of **$191 thousand** capitalized under ASC 340 were expensed in Selling, general, and administrative expenses for the nine months ended September 30, 2024, due to contract terminations[63](index=63&type=chunk) [Note 12. Accrued Expenses](index=24&type=section&id=Note%2012.%20Accrued%20Expenses) Total accrued expenses decreased to **$5,025 thousand** as of September 30, 2024, from **$6,497 thousand** at December 31, 2023, primarily driven by reductions in accrued compensation and interest payable Accrued Expenses (In thousands) | Component | Sep 30, 2024 | Dec 31, 2023 | | :-------------------------------------- | :----------- | :----------- | | Accrued compensation | $3,457 | $4,202 | | Real estate and personal property taxes | $473 | $337 | | Accrued distribution expenses and sales returns provision | $640 | $645 | | Interest payable | $17 | $1,013 | | Other | $438 | $300 | | **Total accrued expenses** | **$5,025** | **$6,497** | - The reduction in accrued compensation is due to payments of accrued bonuses, partially offset by current year accruals[64](index=64&type=chunk) - The decrease in interest payable is mainly due to the timing of interest payments on the **13.5%** Senior Notes[64](index=64&type=chunk) [Note 13. Long-Term Debt](index=24&type=section&id=Note%2013.%20Long-Term%20Debt) The company refinanced its 12.5% Senior Secured Notes with new 13.5% Senior Secured Notes due November 1, 2028, and issued Royalty Right Agreements granting tiered royalties on future sales of Anaphylm and Libervant, classified as debt and amortized as interest expense - On November 1, 2023, the company issued **$45,000 thousand** aggregate principal amount of **13.5%** Senior Secured Notes due 2028, using proceeds to repay outstanding **12.5%** Notes[66](index=66&type=chunk)[145](index=145&type=chunk) - The **13.5%** Notes bear interest at **13.5%** per year, payable quarterly, with principal payments commencing June 30, 2026[66](index=66&type=chunk)[145](index=145&type=chunk) - Royalty Right Agreements were issued in conjunction with the **13.5%** Notes, granting noteholders tiered royalties (**1.0%-2.0%**) on worldwide net sales of Anaphylm and Libervant[67](index=67&type=chunk)[124](index=124&type=chunk) - The allocated fair value of Royalty Right Agreements (**$13,856 thousand**) and an Exit Fee (**$2,000 thousand**), along with original issue discount and debt issuance costs, resulted in a total debt discount of **$20,498 thousand**, amortized as interest expense[68](index=68&type=chunk) Long-Term Debt and Royalty Obligations (In thousands) | Metric | Sep 30, 2024 | Dec 31, 2023 | | :----------------------------------- | :----------- | :----------- | | Total outstanding notes | $45,000 | $45,000 | | Unamortized discount (13.5% Notes) | $(13,900) | $(17,665) | | Notes payable, long-term | $31,100 | $27,335 | | Royalty obligations | $56,926 | $56,926 | | Unamortized discount (Royalty obligations) | $(38,091) | $(42,165) | | Royalty obligations, net | $18,835 | $14,761 | [Note 14. Warrants](index=27&type=section&id=Note%2014.%20Warrants) The company has various outstanding warrants, including those issued with the 12.5% Senior Secured Notes and New Warrants to purchase **2,750,000** shares at **$2.60** per share, exercisable after February 2, 2024 - Warrants to purchase **1,714,429** shares of Common Stock (exercise prices **$4.25** and **$5.38**) related to the 12.5% Notes remain outstanding as of September 30, 2024[71](index=71&type=chunk)[73](index=73&type=chunk) - New Warrants to purchase **2,750,000** shares of Common Stock were issued in August 2023, exercisable after February 2, 2024, at an exercise price of **$2.60** per share[73](index=73&type=chunk) - No warrants related to Securities Purchase Agreements were issued or exercised during the nine months ended September 30, 2024[73](index=73&type=chunk) [Note 15. Sale of Future Revenue](index=28&type=section&id=Note%2015.%20Sale%20of%20Future%20Revenue) The company sold its contractual rights to KYNMOBI royalties and milestone payments to Marathon, receiving **$50,000 thousand** to date, with the transaction recorded as a liability and interest expense discontinued due to KYNMOBI's market withdrawal - The company received an aggregate of **$50,000 thousand** from Marathon through September 30, 2024, from the sale of KYNMOBI royalties and milestone payments[74](index=74&type=chunk) - The transaction is accounted for as a liability related to the sale of future revenue, amortized using the effective interest method, with an initial effective annual interest rate of approximately **24.9%**[74](index=74&type=chunk) - Due to KYNMOBI's withdrawal from U.S. and Canadian markets in June 2023, the company discontinued recording interest expense related to this sale in Q4 2022, and further contingent payments are unlikely[75](index=75&type=chunk)[125](index=125&type=chunk) Liability Related to Sale of Future Revenue (In thousands) | Metric | Sep 30, 2024 | Dec 31, 2023 | | :----------------------------------- | :----------- | :----------- | | Liability at beginning of period | $64,490 | $65,259 | | Royalties related to sale of future revenue | $(935) | $(989) | | Amortization of issuance costs | $175 | $220 | | **Liability at end of period** | **$63,730** | **$64,490** | [Note 16. Net (Loss) Earnings Per Share](index=29&type=section&id=Note%2016.%20Net%20(Loss)%20Earnings%20Per%20Share) Basic and diluted net loss per share were identical for the three and nine months ended September 30, 2024 and 2023, as net losses rendered all potentially dilutive instruments anti-dilutive Net (Loss) Earnings Per Share (Dollars per share) | Metric (3 Months Ended Sep 30) | 2024 | 2023 | | :----------------------------- | :----- | :----- | | Basic | $(0.13) | $(0.03) | | Diluted | $(0.13) | $(0.03) | | Metric (9 Months Ended Sep 30) | 2024 | 2023 | | :----------------------------- | :----- | :----- | | Basic | $(0.32) | $— | | Diluted | $(0.32) | $— | - For the three and nine months ended September 30, 2024, and the three months ended September 30, 2023, all outstanding stock options, restricted stock units, and warrants were anti-dilutive and excluded from diluted EPS calculations due to net losses[77](index=77&type=chunk)[80](index=80&type=chunk) [Note 17. Share-Based Compensation](index=30&type=section&id=Note%2017.%20Share-Based%20Compensation) Total share-based compensation expenses significantly increased to **$4,696 thousand** for the nine months ended September 30, 2024, primarily due to new grants of restricted stock units and stock options, with unrecognized expenses to be recognized over 1.96 and 1.56 years, respectively Share-Based Compensation Expenses (In thousands) | Expense Type (3 Months Ended Sep 30) | 2024 | 2023 | | :----------------------------------- | :-------- | :------- | | Manufacture and supply | $102 | $59 | | Research and development | $310 | $105 | | Selling, general and administrative | $1,165 | $610 | | **Total share-based compensation expenses** | **$1,577**| **$774** | | Expense Type (9 Months Ended Sep 30) | 2024 | 2023 | | :----------------------------------- | :-------- | :------- | | Manufacture and supply | $271 | $155 | | Research and development | $788 | $277 | | Selling, general and administrative | $3,637 | $1,334 | | **Total share-based compensation expenses** | **$4,696**| **$1,766**| - Unrecognized compensation expenses for unvested service-based restricted stock units totaled **$6,677 thousand**, expected to be recognized over a remaining weighted average period of **1.96 years**[82](index=82&type=chunk) - Unrecognized compensation expenses for non-vested stock options totaled **$3,559 thousand**, expected to be recognized over a remaining weighted average period of **1.56 years**[88](index=88&type=chunk) - Market conditions vesting-based restricted stock units vest based on a Performance Price tied to the 30-day average of the common stock's closing prices, with vesting percentages ranging from **0%** to **150%** based on price thresholds[84](index=84&type=chunk) [Note 18. Income Taxes](index=32&type=section&id=Note%2018.%20Income%20Taxes) The company recorded a **0%** effective income tax rate for the three and nine months ended September 30, 2024, due to anticipated full-year pre-tax book losses and a full valuation allowance against net deferred tax assets, contrasting with **6.4%** and **37.4%** in 2023 Effective Income Tax Rate | Period (Ended Sep 30) | 2024 | 2023 | | :-------------------- | :--- | :--- | | Three Months | 0% | 6.4% | | Nine Months | 0% | 37.4%| - The **0%** effective tax rate for 2024 is primarily due to anticipated full-year pre-tax book loss and a full valuation allowance against net deferred tax assets[89](index=89&type=chunk) [Note 19. Contingencies](index=32&type=section&id=Note%2019.%20Contingencies) The company is involved in over **560** product liability lawsuits related to Suboxone and intellectual property/competition litigation with Neurelis Inc., with ultimate outcomes and potential losses currently unestimable - Aquestive is a defendant in over **560** product liability lawsuits in the U.S. (MDL) and three proposed class actions in Canada, alleging dental injuries from Suboxone Sublingual Film[93](index=93&type=chunk) - Indivior has agreed to defend Aquestive in the Suboxone product liability litigation[93](index=93&type=chunk) - Neurelis Inc. filed a lawsuit against Aquestive in California alleging unfair competition, defamation, malicious prosecution, and trade libel, with trial scheduled for March 7, 2025[91](index=91&type=chunk) - Neurelis Inc. also filed a lawsuit against the FDA, challenging the approval of Libervant™ for epilepsy patients aged two to five years, seeking to vacate the approval and enjoin marketing until January 10, 2027, due to orphan drug market exclusivity[92](index=92&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on financial performance, highlighting revenue growth from one-time recognitions, increased operating expenses for R&D and commercialization, and bolstered liquidity from financing activities [Forward-Looking Statements](index=34&type=section&id=Forward-Looking%20Statements) This section outlines the company's forward-looking statements regarding product development, regulatory approvals, commercialization, financial outlook, and market opportunities for Anaphylm™, AQST-108, and Libervant®, detailing various risks and uncertainties that could cause actual results to differ materially - Forward-looking statements cover the advancement and timing of Anaphylm™ and AQST-108 through clinical development and FDA approval, including NDA submission and launch plans[96](index=96&type=chunk) - Risks include delays in product development and clinical trials, regulatory approval failures, challenges in market access for Libervant due to orphan drug exclusivity, and the ability to secure sufficient capital[96](index=96&type=chunk)[97](index=97&type=chunk) - The company assumes no obligation to update forward-looking statements after the filing date, except as required by law[97](index=97&type=chunk) [Overview](index=35&type=section&id=Overview) Aquestive Therapeutics, a pharmaceutical company, launched Libervant® for pediatric epilepsy in April 2024, is advancing its pipeline including Anaphylm™ and AQST-108, and leverages its proprietary PharmFilm® technology for licensed commercial products - Aquestive launched Libervant® (diazepam) Buccal Film in April 2024 for acute treatment of seizure activity in epilepsy patients aged two to five years[99](index=99&type=chunk)[105](index=105&type=chunk) - Anaphylm™ (epinephrine) Sublingual Film is a product candidate for anaphylaxis, aiming to be the first non-device based, orally delivered epinephrine, with positive topline data from pivotal clinical studies and an OASIS study[101](index=101&type=chunk)[102](index=102&type=chunk)[103](index=103&type=chunk) - AQST-108 (epinephrine) topical gel is being developed for alopecia areata, with completed first human clinical study showing no serious adverse events and plans for a Phase 2a study in Q2 2025[104](index=104&type=chunk) - The company's licensed product portfolio generated **$45,694 thousand** in revenue for the nine months ended September 30, 2024[106](index=106&type=chunk) [Critical Accounting Policies and Use of Estimates](index=40&type=section&id=Critical%20Accounting%20Policies%20and%20Use%20of%20Estimates) There have been no material changes to the company's critical accounting policies and use of estimates as previously disclosed in its 2023 Annual Report on Form 10-K - No material changes to critical accounting policies and estimates since the 2023 Annual Report on Form 10-K[109](index=109&type=chunk) [JOBS Act and Smaller Reporting Company](index=40&type=section&id=JOBS%20Act%20and%20Smaller%20Reporting%20Company) As of December 31, 2023, the company is no longer an 'emerging growth company' but retains its 'smaller reporting company' status, allowing it to benefit from certain exemptions from disclosure requirements - The company is no longer an 'emerging growth company' but remains a 'smaller reporting company' as of December 31, 2023[111](index=111&type=chunk) - As a smaller reporting company, it is exempt from auditor attestation requirements of Section 404(b) of Sarbanes-Oxley Act and has reduced disclosure obligations[111](index=111&type=chunk) [Financial Operations Overview](index=41&type=section&id=Financial%20Operations%20Overview) The company's financial operations are driven by four primary revenue categories and costs from manufacturing, R&D for pipeline products, SG&A activities, and interest expenses related to debt, royalty obligations, and future revenue sales - Revenues are generated from manufacture and supply, license and royalty, co-development and research fees, and proprietary product sales[113](index=113&type=chunk) - Costs and expenses are primarily from manufacturing, R&D for pipeline products (Anaphylm, AQST-108), and selling, general, and administrative activities, including Libervant commercialization[118](index=118&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk) - Interest expenses include those on **12.5%** and **13.5%** Notes, royalty obligations, and the sale of future revenue (KYNMOBI monetization)[123](index=123&type=chunk)[124](index=124&type=chunk)[125](index=125&type=chunk) [Results of Operations](index=44&type=section&id=Results%20of%20Operations) For the nine months ended September 30, 2024, total revenues increased by **22%** to **$45,694 thousand**, driven by license and royalty revenue, while operating expenses rose significantly due to R&D and SG&A, widening the net loss Revenue Comparison (In thousands) | Revenue Type (9 Months Ended Sep 30) | 2024 | 2023 | Change ($) | Change (%) | | :----------------------------------- | :---------- | :--------- | :--------- | :--------- | | Manufacture and supply revenue | $29,312 | $32,807 | $(3,495) | (11%) | | License and royalty revenue | $14,514 | $3,503 | $11,011 | 314% | | Co-development and research fees | $1,651 | $1,067 | $584 | 55% | | Proprietary product revenue, net | $217 | $— | $217 | N/M | | **Total revenues** | **$45,694** | **$37,377**| **$8,317** | **22%** | Expense and Other Income Comparison (In thousands) | Metric (9 Months Ended Sep 30) | 2024 | 2023 | Change ($) | Change (%) | | :----------------------------- | :---------- | :---------- | :--------- | :--------- | | Manufacture and supply | $13,352 | $16,152 | $(2,800) | (17%) | | Research and development | $15,363 | $10,216 | $5,147 | 50% | | Selling, general and administrative | $34,171 | $22,200 | $11,971 | 54% | | Interest expense | $8,343 | $4,064 | $4,279 | 105% | | Interest expense related to royalty obligations | $4,075 | $— | $4,075 | N/M | | Interest income and other income, net | $(2,703) | $(16,156) | $13,453 | (83%) | - R&D expenses increased by **50%** due to higher clinical trial costs for Anaphylm and AQST-108, increased personnel costs, and higher share-based compensation[140](index=140&type=chunk)[143](index=143&type=chunk) - SG&A expenses increased by **54%** due to higher personnel costs, consulting and market access costs, share-based compensation, one-time severance costs, and regulatory fees for Libervant[144](index=144&type=chunk) [Liquidity and Capital Resources](index=48&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is supported by **$77,893 thousand** in cash and cash equivalents, significantly boosted by equity offerings, but it expects ongoing losses and negative cash flows, relying on external financing for product development and debt obligations Cash Flow Summary (In thousands) | Metric (9 Months Ended Sep 30) | 2024 | 2023 | | :----------------------------- | :---------- | :--------- | | Net cash used for operating activities | $(29,270) | $(1,438) | | Net cash used for investing activities | $(144) | $(979) | | Net cash provided by financing activities | $83,435 | $61 | | Net increase (decrease) in cash and cash equivalents | $54,021 | $(2,356) | - Net cash provided by financing activities increased by **$83,374 thousand**, primarily from **$71,974 thousand** in net proceeds from the Underwritten Public Offering and **$11,855 thousand** from the ATM facility[151](index=151&type=chunk)[146](index=146&type=chunk) - The company expects to incur losses and negative cash flows for the foreseeable future, dependent on external financing to fund commercialization of Libervant and development of Anaphylm and AQST-108[154](index=154&type=chunk) - The company has significant debt with substantial ongoing interest payments and principal repayments for its **13.5%** Notes starting in June 2026[154](index=154&type=chunk) [Off-Balance Sheet Arrangements](index=52&type=section&id=Off-Balance%20Sheet%20Arrangements) During the reported period, the company did not have any material off-balance sheet arrangements or relationships with unconsolidated entities or financial partnerships - No material off-balance sheet arrangements or relationships with unconsolidated entities during the period[156](index=156&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=53&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 19, Contingencies, for detailed information on the company's legal proceedings, including product liability lawsuits related to Suboxone and intellectual property/competition litigation with Neurelis Inc - For details on legal proceedings, refer to Note 19, Contingencies, in the financial statements[160](index=160&type=chunk) [Item 1A. Risk Factors](index=53&type=section&id=Item%201A.%20Risk%20Factors) This section directs readers to the company's 2023 Annual Report on Form 10-K for a comprehensive review of risks and uncertainties that could materially affect its business, financial condition, and results of operations - Readers should review the 'Risk Factors' section in the 2023 Annual Report on Form 10-K for information on risks and uncertainties[161](index=161&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=53&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities,%20Use%20of%20Proceeds,%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company reported no unregistered sales of equity securities, use of proceeds, or issuer purchases of equity securities during the period - No unregistered sales of equity securities, use of proceeds, or issuer purchases of equity securities were reported[161](index=161&type=chunk) [Item 3. Defaults Upon Senior Securities](index=53&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - No defaults upon senior securities were reported[161](index=161&type=chunk) [Item 4. Mine Safety Disclosures](index=53&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine Safety Disclosures are not applicable to the company[161](index=161&type=chunk) [Item 5. Other Information](index=53&type=section&id=Item%205.%20Other%20Information) CEO Daniel Barber and Senior Vice President Peter Boyd adopted Rule 10b5-1(c) sales plans in June and September 2024, respectively, allowing for the sale of a maximum of **650,055** shares for Barber and **35,000** shares for Boyd, dependent on certain conditions - CEO Daniel Barber adopted a Rule 10b5-1(c) sales plan on June 14, 2024, to sell up to **650,055** shares between September 13, 2024, and September 30, 2025[162](index=162&type=chunk) - Senior Vice President Peter Boyd adopted a Rule 10b5-1(c) sales plan on September 11, 2024, to sell up to **35,000** shares between December 13, 2024, and December 12, 2025[162](index=162&type=chunk) [Item 6. Exhibits](index=53&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed or furnished as part of the report, including organizational documents, certifications from executive officers, and XBRL interactive data files - Exhibits include Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, certifications of principal executive and financial officers, and XBRL Instance, Schema, Calculation, Definition, Label, and Presentation Linkbase Documents[164](index=164&type=chunk)

[Executive Summary & Business Update](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Update) Aquestive Therapeutics reported Q3 2024 financial results and business updates, including regulatory meetings for Anaphylm and AQST-108, Libervant market expansion, and a strong cash position [Third Quarter 2024 Highlights](index=1&type=section&id=Third%20Quarter%202024%20Highlights) Aquestive Therapeutics announced Q3 2024 financial results and business updates, including regulatory meeting schedules for Anaphylm and AQST-108, Libervant market expansion, and approximately $78 million in cash reserves, with cash flow projected through 2026 - Anaphylm™ (epinephrine) sublingual film pre-NDA meeting scheduled for **Q4 2024**[1](index=1&type=chunk) - AQST-108 (epinephrine) topical gel pre-IND meeting scheduled for **Q4 2024**[1](index=1&type=chunk) - Libervant® (diazepam) buccal film for patients aged 2-5 years is commercially available through retail distribution channels[1](index=1&type=chunk) - As of the end of Q3 2024, the company held approximately **$78 million in cash**, reaffirming cash flow sustainability through **2026**[1](index=1&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Daniel Barber highlighted the company's epinephrine prodrug platform as a cornerstone of its growth strategy, with Anaphylm reaching clinical milestones and Libervant successfully expanding market share - The innovative epinephrine prodrug platform is a cornerstone of the company's growth strategy[2](index=2&type=chunk) - Anaphylm's adult supportive study is complete, with preparations underway for a pre-NDA meeting with the FDA[2](index=2&type=chunk) - AQST-108 is advancing towards a pre-IND meeting, preparing for a potential alopecia areata Phase 2a study next year[2](index=2&type=chunk) - Libervant's market share successfully expanded through the deployment of a specialized sales team and national reimbursement coverage[2](index=2&type=chunk) [Product Development & Commercialization](index=1&type=section&id=Product%20Development%20%26%20Commercialization) This section details the development and commercialization strategies for Anaphylm, AQST-108, and Libervant, including clinical results, regulatory pathways, and market opportunities [Anaphylm™ (epinephrine) Sublingual Film](index=1&type=section&id=Anaphylm%E2%84%A2%20(epinephrine)%20Sublingual%20Film) Anaphylm, the first and only oral epinephrine product candidate for severe allergic reactions, shows stable PK/PD characteristics and rapid symptom relief in recent clinical data, with a pre-NDA meeting planned for Q4 2024 and a target launch in Q1 2026 [Clinical Study Results](index=1&type=section&id=Clinical%20Study%20Results) Positive top-line data from the OASIS study demonstrated Anaphylm maintained its PK/PD characteristics and provided rapid symptom relief during allergen-induced oral physiological changes, with further analysis confirming consistent PK/PD regardless of film placement - The OASIS study (Oral Allergy Syndrome Challenge Study) yielded positive top-line data, meeting primary and secondary endpoints, indicating Anaphylm maintained its pharmacokinetic (PK) and pharmacodynamic (PD) characteristics during allergen-induced oral physiological changes[4](index=4&type=chunk) - Rapid symptom relief was observed within **two minutes** of Anaphylm administration, with a median time to complete symptom resolution of **twelve minutes**[4](index=4&type=chunk) - Subsequent analysis of the pivotal study showed Anaphylm's PK and PD characteristics remained consistent regardless of film placement or intraoral movement, with **87.5% of subjects** maintaining stable film position during disintegration[5](index=5&type=chunk)[6](index=6&type=chunk) [Regulatory Pathway & Timeline](index=2&type=section&id=Regulatory%20Pathway%20%26%20Timeline) The company received positive FDA written feedback on Anaphylm's CMC submission, plans a clinical-focused pre-NDA meeting in Q4 2024, expects to submit the NDA in Q1 2025, and aims for a full Anaphylm launch in Q1 2026, if approved - The company received positive pre-NDA written feedback from the FDA regarding Anaphylm's proposed Chemistry, Manufacturing, and Controls (CMC) submission[7](index=7&type=chunk) - A clinical-focused pre-NDA meeting with the FDA is scheduled for **Q4 2024**[7](index=7&type=chunk) - The company maintains its guidance for a full Anaphylm launch in **Q1 2026**, if FDA approved, based on initiating a study in pediatric patients weighing 30 kg and above in **Q4 2024** and submitting the NDA to the FDA in **Q1 2025**[7](index=7&type=chunk) [AQST-108 (epinephrine) Topical Gel](index=2&type=section&id=AQST-108%20(epinephrine)%20Topical%20Gel) AQST-108, a topically administered adrenergic agonist prodrug for alopecia areata, plans a pre-IND meeting in Q4 2024 to define its Phase 2a study design, targeting a Q2 2025 launch, with potential for a significant share in the over **$1 billion** alopecia market due to its local action and lack of systemic side effects [Development Strategy & Market Opportunity](index=2&type=section&id=Development%20Strategy%20%26%20Market%20Opportunity) Aquestive outlined AQST-108's development strategy, including a Q4 2024 pre-IND meeting and a Q2 2025 Phase 2a study launch, positioning it for a significant share in the over **$1 billion** alopecia market due to its local action and favorable safety profile compared to existing JAK inhibitors - The company has scheduled a pre-IND meeting with the FDA in **Q4 2024** to determine the Phase 2a study design for AQST-108 in alopecia areata patients, with plans to initiate the study in **Q2 2025**[8](index=8&type=chunk) - Approximately **6.7 million people** in the U.S. are affected by alopecia areata, with an existing JAK inhibitor market opportunity exceeding **$1 billion**, but these treatments carry "black box warnings" and high costs[9](index=9&type=chunk) - AQST-108 showed no serious or local adverse events in its first-in-human Phase 1 clinical study, and as a topical medication, it may lack systemic side effects, positioning it for a significant share in the alopecia areata treatment market[9](index=9&type=chunk) [Libervant® (diazepam) Buccal Film](index=2&type=section&id=Libervant%C2%AE%20(diazepam)%20Buccal%20Film) Libervant, the first and only FDA-approved oral rescue product for seizure clusters in epilepsy patients aged 2-5, has expanded its market reach with a national sales team and broad reimbursement coverage, while its NDA for patients aged 12 and above received tentative approval in August 2022, subject to orphan drug exclusivity until January 2027 [Market Expansion & Regulatory Status](index=2&type=section&id=Market%20Expansion%20%26%20Regulatory%20Status) Libervant received FDA approval in April 2024 for acute treatment of seizure clusters in epilepsy patients aged 2-5, with a 12-person national sales team expanding market access and Medicaid coverage, while its NDA for patients aged 12 and above is tentatively approved but subject to orphan drug exclusivity until January 2027, with plans to submit for 6-12 year olds before exclusivity ends - In **April 2024**, the FDA approved Libervant for the acute treatment of seizure clusters in epilepsy patients aged 2-5 years[11](index=11&type=chunk) - The company expanded Libervant's promotion for patients aged 2-5, establishing a **12-person national sales team**, achieving national retail distribution, covering Medicaid patients in all states, and continuously expanding commercial insurance coverage[12](index=12&type=chunk) - The Libervant NDA for patients aged 12 and above received FDA tentative approval in **August 2022**, but its market access is limited by another company's nasal spray product's orphan drug exclusivity until **January 2027**[13](index=13&type=chunk) - The company anticipates submitting an approval application for Libervant for epilepsy patients aged 6-12 years before the orphan drug exclusivity period ends[13](index=13&type=chunk) [Commercial Collaborations](index=3&type=section&id=Commercial%20Collaborations) Aquestive continues to manufacture products for its licensing and supply collaborations, producing approximately **44 million doses** in Q3 2024, supporting Indivior's Suboxone and other global partners, with royalty-based products like Sympazan and Azstarys contributing to Q3 revenue - In **Q3 2024**, the company manufactured approximately **44 million doses** of product, slightly less than the **46 million doses** in Q3 2023[14](index=14&type=chunk) - The company continues to support the manufacturing of Indivior's Suboxone sublingual film and other global collaboration products such as Assertio Holdings' Sympazan, Hypera's Ondif, and Zambon's Emylif[14](index=14&type=chunk) - Royalty-based products, including Sympazan and Azstarys, continued to contribute to the company's revenue in **Q3 2024**[14](index=14&type=chunk) [Financial Results Summary](index=3&type=section&id=Financial%20Results%20Summary) This section summarizes Aquestive Therapeutics' Q3 2024 financial performance, including revenue, expenses, net loss, cash position, and non-GAAP adjusted EBITDA [Third Quarter 2024 Financial Performance](index=3&type=section&id=Third%20Quarter%202024%20Financial%20Performance) Aquestive Therapeutics' total revenue grew **4%** year-over-year to **$13.5 million** in Q3 2024, driven by increased licensing and royalty income, despite a decline in manufacturing and supply revenue, while significantly higher R&D and SG&A expenses led to an expanded net loss of **$11.5 million** Key Financial Data for Q3 2024 (Compared to Q3 2023) | Metric | Q3 2024 (million U.S. dollars) | Q3 2023 (million U.S. dollars) | Year-over-Year Change (%) | | :-------------------------------- | :-------------------- | :-------------------- | :--------- | | Total Revenue | $13.5 | $13.0 | +4% | | Manufacturing and Supply Revenue | $10.7 | $11.4 | -6.1% | | Research and Development Expenses | $5.3 | $3.2 | +65.6% | | Selling, General, and Administrative Expenses | $12.1 | $7.4 | +63.5% | | Net Loss | $(11.5) | $(2.0) | +475% | | Basic and Diluted Loss Per Share | $(0.13) | $(0.03) | +333% | - Total revenue growth was primarily driven by increased licensing and royalty income, attributed to the recognition of deferred revenue following the termination of a licensing and supply agreement[15](index=15&type=chunk) - The decrease in manufacturing and supply revenue was primarily due to reduced Suboxone and Sympazan revenue, partially offset by increased Ondif revenue[16](index=16&type=chunk) - Increased R&D expenses were primarily due to clinical trial costs and product research expenses for the Anaphylm development program[17](index=17&type=chunk) - Increased selling, general, and administrative expenses were partly due to a **$1.5 million** year-over-year change in manufacturing and supply cost allocation, as well as higher commercial expenditures and regulatory fees related to Libervant approval and Anaphylm commercial readiness[18](index=18&type=chunk) [Cash Position](index=3&type=section&id=Cash%20Position) As of September 30, 2024, Aquestive Therapeutics held **$77.9 million** in cash and cash equivalents, with the company reaffirming its cash flow sustainability through 2026 - As of **September 30, 2024**, cash and cash equivalents totaled **$77.9 million**[20](index=20&type=chunk) - The company reaffirmed its cash flow sustainability through **2026**[1](index=1&type=chunk) [Non-GAAP Adjusted EBITDA](index=3&type=section&id=Non-GAAP%20Adjusted%20EBITDA) Non-GAAP adjusted EBITDA loss for Q3 2024 was **$6.6 million**, a significant increase from the **$1.3 million** loss in Q3 2023, while excluding adjusted R&D expenses, the loss was **$1.6 million** compared to a **$1.7 million** income in the prior year Non-GAAP Adjusted EBITDA (Q3 2024 vs. Q3 2023) | Metric | Q3 2024 (million U.S. dollars) | Q3 2023 (million U.S. dollars) | | :------------------------------------------------ | :-------------------- | :-------------------- | | Non-GAAP Adjusted EBITDA Loss | $(6.6) | $(1.3) | | Non-GAAP Adjusted EBITDA Loss Excluding Non-GAAP Adjusted R&D Expenses | $(1.6) | $1.7 (Income) | [Outlook](index=4&type=section&id=Outlook) Aquestive Therapeutics reaffirmed its FY 2024 financial guidance, projecting total revenue between **$57 million and $60 million** and a non-GAAP adjusted EBITDA loss between **$20 million and $23 million** FY 2024 Financial Guidance | Metric | Guidance Range (million U.S. dollars) | | :-------------------------- | :--------------------- | | Total Revenue | $57 to $60 | | Non-GAAP Adjusted EBITDA Loss | $20 to $23 | [Company & Product Information](index=4&type=section&id=Company%20%26%20Product%20Information) This section provides an overview of Aquestive Therapeutics, detailing its mission and product portfolio, along with specific information on Anaphylm, Libervant, and AQST-108 [About Aquestive Therapeutics, Inc.](index=6&type=section&id=About%20Aquestive%20Therapeutics%2C%20Inc.) Aquestive is a pharmaceutical company dedicated to improving patient lives through innovative science and delivery technologies, developing orally administered products for complex molecules, and advancing a late-stage proprietary product candidate for severe allergic reactions and an early-stage epinephrine prodrug topical gel for various dermatological conditions - Aquestive is a pharmaceutical company dedicated to bringing meaningful improvements to patients' lives through innovative science and delivery technologies[33](index=33&type=chunk) - The company develops orally administered products to deliver complex molecules, offering new alternatives to invasive and inconvenient standard therapies[33](index=33&type=chunk) - Aquestive has **five commercialized products**, sold by the company and its licensees in the U.S. and globally, and is the exclusive manufacturer of these licensed products[33](index=33&type=chunk) - The company is advancing a late-stage proprietary product candidate (Anaphylm) for severe allergic reactions, including anaphylaxis, and an early-stage epinephrine prodrug topical gel product candidate (AQST-108) for various potential dermatological conditions[33](index=33&type=chunk) [About Anaphylm™](index=4&type=section&id=About%20Anaphylm%E2%84%A2) Anaphylm™ (epinephrine) sublingual film is a polymer-matrix-based epinephrine prodrug product, stamp-sized and less than an ounce, dissolving on contact without water or swallowing, with primary packaging thinner than a credit card, portable, and resistant to weather, and its trade name has received conditional FDA approval - Anaphylm™ (epinephrine) sublingual film is a polymer-matrix-based epinephrine prodrug product, similar in size to a postage stamp, weighing less than an ounce, and begins to dissolve on contact[23](index=23&type=chunk) - It can be administered without water or swallowing, with primary packaging thinner and smaller than a typical credit card, pocketable, and resistant to weather elements like rain and sunlight[23](index=23&type=chunk) - Anaphylm's trade name has received conditional FDA approval, with final approval contingent upon FDA approval of the product candidate[23](index=23&type=chunk) [About Libervant®](index=4&type=section&id=About%20Libervant%C2%AE) Libervant® (diazepam) buccal film is a buccally administered diazepam formulation for the acute treatment of intermittent, stereotypic, frequent epileptic seizures (i.e., seizure clusters, acute repetitive seizures) in epilepsy patients aged 2-5 years, with FDA approval for U.S. market access in April 2024, and tentative approval for patients aged 12 and above in August 2022, subject to orphan drug exclusivity until January 2027 - Libervant® (diazepam) buccal film is a buccally administered diazepam formulation for the acute treatment of intermittent, stereotypic, frequent epileptic seizures in epilepsy patients aged 2-5 years[24](index=24&type=chunk) - The FDA approved Libervant for U.S. market access for epilepsy patients aged 2-5 years in **April 2024**[24](index=24&type=chunk) - Libervant for patients aged 12 and above received FDA tentative approval in **August 2022**, with its U.S. market access limited by existing orphan drug exclusivity, which is expected to expire in **January 2027**[24](index=24&type=chunk) [About AQST-108](index=4&type=section&id=About%20AQST-108) AQST-108 (epinephrine) topical gel is a locally administered adrenergic agonist prodrug gel product candidate, which completed its first-in-human study without serious or local adverse events, and is based on Aquestive's Adrenaverse™ platform, featuring over 20 epinephrine prodrug candidates designed to control absorption and conversion rates across various dosage forms and administration sites - AQST-108 (epinephrine) topical gel is a locally administered adrenergic agonist prodrug gel product candidate[25](index=25&type=chunk) - The first-in-human study showed no serious or local adverse events with AQST-108[25](index=25&type=chunk) - AQST-108 is based on Aquestive's Adrenaverse™ platform, which includes over **20 epinephrine prodrug product candidates** designed to control absorption and conversion rates across various potential dosage forms and administration sites[25](index=25&type=chunk) [Important Safety Information (Libervant®)](index=4&type=section&id=Important%20Safety%20Information%20(Libervant%C2%AE)) This section provides important safety information for Libervant® (diazepam) buccal film, including contraindications, risks with opioids/alcohol/CNS depressants, abuse/misuse/addiction, physical dependence and withdrawal, and potential for suicidal thoughts or behavior, with drowsiness and headache as the most common side effects - Libervant should not be administered if a child is allergic to diazepam or any of its ingredients, or has acute narrow-angle glaucoma[26](index=26&type=chunk) - Taking benzodiazepines, including Libervant, with opioids, alcohol, or other central nervous system (CNS) depressants, including street drugs, can cause severe drowsiness, breathing problems (respiratory depression), coma, and death[26](index=26&type=chunk)[27](index=27&type=chunk) - Libervant carries risks of abuse, misuse, and addiction, which can lead to overdose and serious side effects, including coma and death; drug addiction can occur even when taken as prescribed[28](index=28&type=chunk) - Libervant can cause physical dependence and withdrawal reactions, especially if used daily (Libervant is not for daily use); suddenly stopping it can lead to severe and life-threatening side effects, including status epilepticus, severe mental or nervous system changes, and suicidal thoughts[28](index=28&type=chunk) - Libervant may cause drowsiness or dizziness and slow thinking and motor skills; like other anti-epileptic drugs, Libervant may cause suicidal thoughts or behavior in a small number of people (about **1 in 500**)[29](index=29&type=chunk)[30](index=30&type=chunk) - The most common side effects of Libervant are drowsiness and headache[32](index=32&type=chunk) [Legal & Disclosures](index=7&type=section&id=Legal%20%26%20Disclosures) This section outlines the company's use of non-GAAP financial measures and provides important forward-looking statements regarding product development, regulatory approvals, and financial outlook [Non-GAAP Financial Information Disclosure](index=7&type=section&id=Non-GAAP%20Financial%20Information%20Disclosure) This section explains the company's use of non-GAAP financial measures, such as non-GAAP adjusted EBITDA loss and adjusted expenses, which exclude items like stock-based compensation, interest expense, depreciation, amortization, and income taxes, used by management to analyze financial performance and provide additional operational transparency, but not as substitutes for GAAP measures - This press release and webcast earnings call contain financial measures not in accordance with U.S. Generally Accepted Accounting Principles (GAAP), such as non-GAAP adjusted EBITDA loss, non-GAAP adjusted gross margin, non-GAAP adjusted costs and expenses, and other adjusted expense measures[34](index=34&type=chunk) - These non-GAAP measures exclude items such as stock-based compensation expense, interest expense, interest expense related to future revenue sales, interest income, depreciation, amortization, and income taxes[34](index=34&type=chunk)[35](index=35&type=chunk) - Aquestive management uses these measures to analyze its financial performance and aid in management decisions, providing additional transparency into operating performance[36](index=36&type=chunk) - The company provides outlook only on a non-GAAP basis because the sum or ultimate outcome of these adjustments (e.g., stock-based compensation expense, income taxes, amortization) for future periods cannot be reasonably determined[37](index=37&type=chunk) [Forward-Looking Statement](index=8&type=section&id=Forward-Looking%20Statement) This section contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995, concerning the development, regulatory approval, commercialization, financial condition, and business strategy of product candidates (Anaphylm, AQST-108, Libervant), which are based on current expectations but subject to risks and uncertainties that could cause actual results to differ materially, including clinical trial delays, regulatory hurdles, market competition, and funding risks, with no obligation for the company to update these statements - Forward-looking statements include, but are not limited to, statements regarding the clinical development, regulatory approval, commercialization, financial condition, and business strategy of product candidates Anaphylm™ (epinephrine) sublingual film, AQST-108 (epinephrine) topical gel, and Libervant® (diazepam) buccal film[38](index=38&type=chunk) - These forward-looking statements are based on current expectations and beliefs but are subject to various risks and uncertainties that could cause actual results to differ materially from the statements[39](index=39&type=chunk) - Risks and uncertainties include those related to product development efforts, delays in the regulatory approval process, competitive products, orphan drug exclusivity, funding adequacy, manufacturing capabilities, market acceptance, intellectual property, legal proceedings, and macroeconomic conditions[39](index=39&type=chunk)[40](index=40&type=chunk) - The company undertakes no obligation to update forward-looking statements or outlook after the date of this press release, except as required by applicable law[40](index=40&type=chunk) [Financial Statements](index=10&type=section&id=Financial%20Statements) This section presents the company's condensed balance sheets, statements of operations, and reconciliations of non-GAAP adjustments to provide a comprehensive view of its financial position and performance [Condensed Balance Sheets](index=10&type=section&id=Condensed%20Balance%20Sheets) The condensed balance sheets as of September 30, 2024, and December 31, 2023, show a significant increase in cash and cash equivalents, growth in total assets, a slight decrease in total liabilities, and a substantial improvement in total stockholders' deficit Condensed Balance Sheets (in thousands of U.S. dollars) | Metric | September 30, 2024 | December 31, 2023 | | :------------------------------------ | :----------- | :----------- | | Cash and cash equivalents | $77,893 | $23,872 | | Accounts receivable, net and other | $9,684 | $8,471 | | Inventories | $7,021 | $6,769 | | Prepaid expenses and other current assets | $1,972 | $1,854 | | **Total current assets** | **$96,570** | **$40,966** | | Property and equipment, net | $3,848 | $4,179 | | Operating lease right-of-use assets, net | $5,310 | $5,557 | | Intangible assets, net | $— | $1,278 | | Other non-current assets | $4,230 | $5,438 | | **Total assets** | **$109,958** | **$57,418** | | Accounts payable | $7,572 | $8,926 | | Accrued expenses | $5,025 | $6,497 | | Operating lease liabilities, current | $482 | $390 | | Deferred revenue, current | $1,048 | $1,551 | | Liabilities related to future revenue sales, current | $1,000 | $922 | | Loans payable, current | $25 | $22 | | **Total current liabilities** | **$15,152** | **$18,308** | | Notes payable, net | $31,253 | $27,508 | | Royalty obligation, net | $18,835 | $14,761 | | Liabilities related to future revenue sales, net | $62,730 | $63,568 | | Operating lease liabilities, non-current | $5,109 | $5,399 | | Deferred revenue, non-current | $20,266 | $32,345 | | Other non-current liabilities | $2,033 | $2,016 | | **Total liabilities** | **$155,378** | **$163,905** | | Total stockholders’ deficit | $(45,420) | $(106,487) | [Condensed Statements of Operations and Comprehensive (Loss) Income](index=11&type=section&id=Condensed%20Statements%20of%20Operations%20and%20Comprehensive%20(Loss)%20Income) The condensed statements of operations and comprehensive (loss) income show total revenue of **$13.5 million** and total costs and expenses of **$21.8 million** for Q3 2024, resulting in a net loss of **$11.5 million** and basic and diluted loss per share of **$0.13**, representing a significant expansion of loss compared to the prior year Condensed Statements of Operations and Comprehensive (Loss) Income (in thousands of U.S. dollars, except per share data) | Metric | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 | | :------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Revenue | $13,542 | $13,002 | $45,694 | $37,377 | | Cost of manufacturing and supply | $4,437 | $4,798 | $13,352 | $16,152 | | Research and development expenses | $5,269 | $3,196 | $15,363 | $10,216 | | Selling, general and administrative expenses | $12,126 | $7,385 | $34,171 | $22,200 | | **Total costs and expenses** | **$21,832** | **$15,379** | **$62,886** | **$48,568** | | Operating (loss) income | $(8,290) | $(2,377) | $(17,192) | $(11,191) | | Interest expense | $(2,780) | $(1,256) | $(8,343) | $(4,064) | | Interest expense related to royalty obligation | $(1,359) | $— | $(4,075) | $— | | Interest expense related to future revenue sales | $(59) | $(56) | $(175) | $(163) | | Interest income and other income, net | $979 | $1,514 | $2,703 | $16,156 | | Loss on extinguishment of debt | $— | $— | $— | $(353) | | Net (loss) income before income taxes | $(11,509) | $(2,175) | $(27,082) | $385 | | Income tax (benefit) expense | $— | $(140) | $— | $144 | | **Net (loss) income** | **$(11,509)** | **$(2,035)** | **$(27,082)** | **$241** | | **Comprehensive (loss) income** | **$(11,509)** | **$(2,035)** | **$(27,082)** | **$241** | | Basic (loss) income per share | $(0.13) | $(0.03) | $(0.32) | $— | | Diluted (loss) income per share | $(0.13) | $(0.03) | $(0.32) | $— | [Reconciliation of Non-GAAP Adjustments - Net (Loss) Income to Non-GAAP Adjusted EBITDA](index=12&type=section&id=Reconciliation%20of%20Non-GAAP%20Adjustments%20-%20Net%20(Loss)%20Income%20to%20Non-GAAP%20Adjusted%20EBITDA) This reconciliation details the process of adjusting GAAP net (loss) income to non-GAAP adjusted EBITDA, including non-GAAP adjustments such as stock-based compensation, interest expense, depreciation, and amortization, with a non-GAAP adjusted EBITDA loss of **$6.554 million** for Q3 2024 Reconciliation of Non-GAAP Adjustments - Net (Loss) Income to Non-GAAP Adjusted EBITDA (in thousands of U.S. dollars) | Metric | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 | | :---------------------------------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | GAAP Net (loss) income | $(11,509) | $(2,035) | $(27,082) | $241 | | Stock-based compensation expense | $1,577 | $774 | $4,696 | $1,766 | | Interest expense | $2,780 | $1,256 | $8,343 | $4,064 | | Interest expense related to royalty obligation | $1,359 | $— | $4,075 | $— | | Interest expense related to future revenue sales | $59 | $56 | $175 | $163 | | Interest income and other income, net | $(979) | $(1,514) | $(2,703) | $(16,156) | | Loss on extinguishment of debt | $— | $— | $— | $353 | | Income tax (benefit) expense | $— | $(140) | $— | $144 | | Depreciation and amortization | $159 | $264 | $571 | $878 | | **Total non-GAAP adjustments** | **$4,955** | **$696** | **$15,157** | **$(8,788)** | | **Non-GAAP Adjusted EBITDA** | **$(6,554)** | **$(1,339)** | **$(11,925)** | **$(8,547)** | | Non-GAAP Adjusted R&D expenses | $(4,943) | $(3,069) | $(14,521) | $(9,869) | | **Non-GAAP Adjusted EBITDA Excluding Non-GAAP Adjusted R&D Expenses** | **$(1,611)** | **$1,730** | **$2,596** | **$1,322** | [Reconciliation of Non-GAAP Adjustments - GAAP Expenses to Non-GAAP Adjusted Expenses](index=13&type=section&id=Reconciliation%20of%20Non-GAAP%20Adjustments%20-%20GAAP%20Expenses%20to%20Non-GAAP%20Adjusted%20Expenses) This reconciliation provides a detailed comparison of GAAP expenses (including total costs and expenses, manufacturing and supply expenses, R&D expenses, and selling, general, and administrative expenses) to non-GAAP adjusted expenses, listing adjustments such as stock-based compensation and depreciation and amortization, with a Q3 2024 non-GAAP gross margin of **69%**, higher than the GAAP gross margin of **67%** Reconciliation of Non-GAAP Adjustments - GAAP Expenses to Non-GAAP Adjusted Expenses (in thousands of U.S. dollars, except percentages) | Metric | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 | | :------------------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | **Total costs and expenses** | **$21,832** | **$15,379** | **$62,886** | **$48,568** | | Non-GAAP adjustments: | | | | | | Stock-based compensation expense | $(1,577) | $(774) | $(4,696) | $(1,766) | | Depreciation and amortization | $(159) | $(264) | $(571) | $(878) | | **Non-GAAP Adjusted Costs and Expenses** | **$20,096** | **$14,341** | **$57,619** | **$45,924** | | **Cost of manufacturing and supply** | **$4,437** | **$4,798** | **$13,352** | **$16,152** | | Gross margin on total revenue | 67% | 63% | 71% | 57% | | Non-GAAP adjustments: | | | | | | Stock-based compensation expense | $(102) | $(59) | $(271) | $(155) | | Depreciation and amortization | $(130) | $(214) | $(482) | $(746) | | **Non-GAAP Adjusted Cost of Manufacturing and Supply** | **$4,205** | **$4,525** | **$12,599** | **$15,251** | | **Non-GAAP Adjusted Gross Margin on Total Revenue** | **69%** | **65%** | **72%** | **59%** | | **Research and development expenses** | **$5,269** | **$3,196** | **$15,363** | **$10,216** | | Non-GAAP adjustments: | | | | | | Stock-based compensation expense | $(310) | $(105) | $(788) | $(277) | | Depreciation and amortization | $(16) | $(22) | $(54) | $(70) | | **Non-GAAP Adjusted Research and Development Expenses** | **$4,943** | **$3,069** | **$14,521** | **$9,869** | | **Selling, general and administrative expenses** | **$12,126** | **$7,385** | **$34,171** | **$22,200** | | Non-GAAP adjustments: | | | | | | Stock-based compensation expense | $(1,165) | $(610) | $(3,637) | $(1,334) | | Depreciation and amortization | $(13) | $(28) | $(35) | $(62) | | **Non-GAAP Adjusted Selling, General and Administrative Expenses** | **$10,948** | **$6,747** | **$30,499** | **$20,804** |

Anaphylm™ (epinephrine) Sublingual Film pre-NDA meeting scheduled for fourth quarter 2024AQST-108 (epinephrine) Topical Gel pre-IND meeting scheduled for fourth quarter 2024Libervant® (diazepam) Buccal Film for patients aged 2-5 available through retail distribution channelsFinished third quarter 2024 with approximately $78 million of cash and reaffirms cash runway into 2026To host investment community conference call at 8:00 am ET on November 5, 2024 WARREN, N.J., Nov. 04, 2024 (GLOBE NEWSWIRE) -- Aquestiv ...

WARREN, N.J., Sept. 09, 2024 (GLOBE NEWSWIRE) -- Aquestive Therapeutics, Inc. (NASDAQ: AQST) (“Aquestive” or the “Company”), a pharmaceutical company advancing medicines to bring meaningful improvement to patients' lives through innovative science and delivery technologies, today announced it will hold a virtual investor day on September 27, 2024 at 8:00 am ET to discuss the Company’s pipeline updates, inclusive of Anaphylm™ (epinephrine) Sublingual Film and AQST-108 (epinephrine) Topical Gel, both candidat ...

teekid It has been over four months since my last Aquestive Therapeutics (NASDAQ:AQST) article, where I went over Anaphylm's Phase III data and the possibility for the company to send in an NDA to the FDA this year. Furthermore, I pointed out that Anaphylm's trip through the FDA's regulatory path unearthed several potent catalysts that could offer some attractive trading opportunities for AQST investors. Following that article, I watched AQST experience selling pressure, but the ticker is now trading above ...