PHARMACEUTICALS Reimagining Molecules to Advance Medicine Corporate Presentation October 2019 Safe Harbor 2 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This document contains forward-looking statements concerning Eton Pharmaceuticals, Inc. ("Eton", the "Company," "we," "us," and "our"). The words "believe," "may," "will," "potentially," "estimate," "continue," "anticipate," "intend," "could," "would," "project," "plan," "expect" and similar expressions that convey uncertainty of future events or outco ...

Eton Pharmaceuticals, Inc. (NASDAQ:ETON) Q2 2019 Earnings Conference Call August 6, 2019 4:30 PM ET Company Participants David Krempa - VP, Business Development Sean Brynjelsen - CEO Wilson Troutman - CFO Conference Call Participants Ram Selvaraju - H.C. Wainwright Operator Good afternoon, and welcome to the Eton Pharmaceuticals Second Quarter 2019 Financial and Operating Results Conference Call. At this time, all participants are in a listen-only mode. Following the formal remarks, we will open the call up ...

P H A R M A C E U T I C A L S Reimagining Molecules to Advance Medicine Corporate Presentation August 2019 Safe Harbor 2 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This document contains forward-looking statements concerning Eton Pharmaceuticals, Inc. ("Eton", the "Company," "we," "us," and "our"). The words "believe," "may," "will," "potentially," "estimate," "continue," "anticipate," "intend," "could," "would," "project," "plan," "expect" and similar expressions that convey uncertainty of future ev ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________________ to _______________________ Commission file number: 001-38738 ETON PHARMACEUTICALS, INC. (Exact name of registrant as specified in its cha ...

Company Overview - Eton Pharmaceuticals is a specialty pharmaceutical company focused on improving existing medicines to address unmet patient needs[5] - The company utilizes the 505(b)(2) NDA pathway for low-cost, low-risk development of innovative branded drugs[5] - Eton has a diversified pipeline of 12 products under development, with four products filed with the FDA and three additional NDA's expected to be filed in 2019[5] - The company expects to become a commercial revenue company in 2019[5] Product Pipeline - Four candidates are currently filed with the FDA, and three additional filings are expected in 2019[16] - The company is developing six injectable product candidates for administration in the hospital setting[16] - Eton is also developing four innovative oral liquid formulations of molecules that are only FDA-approved in oral solid form[18] - EM-100 ophthalmic solution, an innovative over-the-counter ophthalmic solution for treatment of allergic conjunctivitis, has been filed with the FDA and is expected to be approved in 2019[20] - The U S allergic conjunctivitis ophthalmic market is >$600 million annually[20] Financial Information - As of April 1, 2019, the stock price was $7 95[23] - As of March 15, 2019, shares outstanding were 17 6 million[23] - As of April 1, 2019, the market cap was $140 million[23] - As of December 31, 2018, the cash balance was $26 7 million[23]

Financial Data and Key Metrics Changes - Eton Pharmaceuticals reported $500,000 in revenue for Q1 2019, derived from an upfront fee related to the EM-100 asset sale to Bausch Health, compared to no revenue in Q1 2018 [28][29] - R&D expenses increased to $6.5 million in Q1 2019 from $1.3 million in the same period in 2018, primarily due to licensing payments and milestone expenses [29][30] - The net loss for Q1 2019 was $7.4 million, up from a net loss of $3.0 million in Q1 2018, driven by higher R&D expenses [32] Business Line Data and Key Metrics Changes - The company has expanded its pipeline to 12 product candidates, with 4 products submitted to the FDA and 3 additional filings expected by the end of 2019 [11][19] - Eton's strategy includes pursuing a diverse portfolio of product candidates, with a goal of filing at least three NDA products per year [12][13] Market Data and Key Metrics Changes - The market opportunity for ET-202 is significant, with over 7 million vials of concentrated phenylephrine sold annually, and the vasopressor market estimated at over $650 million in sales [24][25] - The company anticipates capturing more than 10% of the market share for ET-202, which is expected to be launched in Q4 2019 [59] Company Strategy and Development Direction - Eton focuses on developing innovative branded products through the FDA's 505(b)(2) pathway, aiming to address unmet patient needs with low-risk, high-reward candidates [6][7] - The company plans to continue its active approach to business development, seeking additional late-stage candidates to enhance its pipeline [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving commercial revenue generation in 2019, highlighting a strong start in Q1 [13][19] - The company is optimistic about the approval and launch of its products, with expectations of becoming cash flow positive by mid-2020 if FDA approvals are received as anticipated [56] Other Important Information - Eton has partnered with Bausch Health for the commercialization of EM-100, which is expected to be the first preservative-free ophthalmic product for allergic conjunctivitis [16][17] - The company has received fast track designation for its DS-200 product, indicating a focus on addressing critical unmet needs in the market [18] Q&A Session Summary Question: Pipeline Expansion - Andrew D'silva inquired about the capacity for further pipeline expansion under the current corporate infrastructure, to which management responded that they aim for 3 to 5 transactions per year [34][35] Question: Commercialization Strategy - D'silva also asked about the commercialization strategy related to the Bausch agreement, and management indicated that they would consider licensing deals that add value [38][39] Question: Sales and Marketing Infrastructure - Ram Selvaraju asked about the establishment of sales and marketing infrastructure for ET-202, and management confirmed plans for a detailed sales team as they approach approval [43][47] Question: Cash Flow Positive Timeline - An unidentified analyst questioned when the company expects to be cash flow positive, with management indicating a potential timeline towards mid-2020 [53][56] Question: Revenue Ramp for ET-202 - Brett Conrad asked about the anticipated revenue ramp for ET-202, and management noted that they expect to convert internal compounders quickly, targeting a significant market share [58][59] Question: Earnings Leverage - Robert London inquired about earnings leverage and gross margins, with management explaining that margins vary by product and that significant operating leverage is expected [61][62] Question: Specialty Generic Opportunities - Selvaraju asked about emerging opportunities in the specialty generic space, and management expressed confidence in their positioning within the 505(b)(2) space [64][66]

Part I - Financial Information [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Eton Pharmaceuticals reported its first revenues of **$0.5 million** in Q1 2019, with a net loss of **$7.4 million** primarily due to increased R&D expenses, and total assets decreasing to **$23.0 million** [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets) Total assets decreased to **$23.0 million** as of March 31, 2019, primarily due to a decline in cash, while total liabilities increased to **$3.8 million**, leading to a decrease in stockholders' equity Condensed Balance Sheet Data (in thousands) | Account | March 31, 2019 (unaudited) | December 31, 2018 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $19,584 | $26,735 | | Total current assets | $21,527 | $27,502 | | Total assets | $23,017 | $28,327 | | **Liabilities & Equity** | | | | Accounts payable | $3,208 | $1,421 | | Total current liabilities | $3,656 | $2,024 | | Total liabilities | $3,775 | $2,024 | | Accumulated deficit | $(53,278) | $(45,868) | | Total stockholders' equity | $19,242 | $26,303 | [Condensed Statements of Operations](index=5&type=section&id=Condensed%20Statements%20of%20Operations) First-quarter 2019 revenue was **$0.5 million**, but net loss increased to **$7.4 million** due to a substantial rise in research and development expenses to **$6.5 million** Condensed Statements of Operations (in thousands, except per share amounts) | Metric | Three months ended March 31, 2019 | Three months ended March 31, 2018 | | :--- | :--- | :--- | | Revenues | $500 | $— | | Research and development | $6,465 | $1,274 | | General and administrative | $1,589 | $1,690 | | Total operating expenses | $8,054 | $2,964 | | Loss from operations | $(7,554) | $(2,964) | | Net loss | $(7,410) | $(3,018) | | Net loss per share | $(0.42) | $(1.05) | [Condensed Statements of Cash Flows](index=7&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) Net cash used in operating activities significantly increased to **$6.8 million** in Q1 2019, leading to a **$7.2 million** decrease in cash and cash equivalents, ending at **$19.6 million** Condensed Statements of Cash Flows (in thousands) | Activity | Three months ended March 31, 2019 | Three months ended March 31, 2018 | | :--- | :--- | :--- | | Net cash used in operating activities | $(6,767) | $(1,850) | | Cash used in investing activities | $(388) | $(91) | | Net cash provided by financing activities | $4 | $— | | **Change in cash and cash equivalents** | **$(7,151)** | **$(1,941)** | | Cash and cash equivalents at end of period | $19,584 | $11,215 | [Notes to Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) Notes detail the company's 505(b)(2) pathway focus, November 2018 IPO, cash sufficiency, first revenue from EM-100 rights sale, and various licensing and development commitments - The company is a specialty pharmaceutical firm focused on developing products via the FDA's 505(b)(2) pathway. It completed its IPO in November 2018, raising net proceeds of **$21.96 million**[18](index=18&type=chunk)[19](index=19&type=chunk) - Management believes its cash and cash equivalents of **$19.6 million** as of March 31, 2019, are sufficient to fund operations for at least the next twelve months[21](index=21&type=chunk) - First-ever revenue of **$500,000** was recognized in Q1 2019 from an upfront payment from Bausch Health for the sale of EM-100 product rights. The agreement also includes potential future milestones and royalties[60](index=60&type=chunk) - The company entered into several licensing agreements in early 2019, including for ET-104 with Liqmeds Worldwide and for ET-202 and ET-203 with Sintetica SA, involving upfront payments and future milestone/royalty obligations[123](index=123&type=chunk)[126](index=126&type=chunk) - Subsequent to the quarter end, on May 6, 2019, the company sold its rights to the CT-100 product to its former parent company, Harrow Health, for potential future milestones and royalties[130](index=130&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's 505(b)(2) pathway focus, increased Q1 2019 net loss of **$7.4 million** due to higher R&D expenses, first revenue of **$0.5 million**, and increased cash used in operations - The company's strategy is to develop low-risk product candidates using the 505(b)(2) pathway, with four candidates already submitted to the FDA for review[134](index=134&type=chunk)[135](index=135&type=chunk) Research and Development Spending by Product (in thousands) | Product candidate | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | DS-200 | $1,656 | $190 | | DS-300 | $559 | $65 | | EM-100 | $96 | $605 | | ET-202 | $2,000 | $— | | ET-203 | $1,000 | $— | | ET-104 | $350 | $— | | Other products | $158 | $93 | | Indirect expenses | $637 | $256 | | **TOTAL** | **$6,465** | **$1,274** | - The increase in cash used in operating activities to **$6.8 million** in Q1 2019 from **$1.9 million** in Q1 2018 was primarily due to higher operating losses from increased product candidate licensing and development activity[143](index=143&type=chunk) - The company's first revenue of **$500,000** resulted from the sale of EM-100 product rights to Bausch Health, which includes potential future commercial milestones up to **$2.5 million** and royalties[147](index=147&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate fluctuations on cash and equivalents, deemed immaterial, with no foreign currency risk or hedging activities - The company's primary market risk is interest rate risk on its cash and cash equivalents[164](index=164&type=chunk) - Management does not believe there is any material exposure to interest rate risk, and the company has no exposure to foreign currency risk[164](index=164&type=chunk) [Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2019, with no material changes to internal control over financial reporting - Management concluded that as of March 31, 2019, the company's disclosure controls and procedures were effective[167](index=167&type=chunk) - No changes occurred during the quarter that materially affected or are reasonably likely to materially affect the company's internal control over financial reporting[169](index=169&type=chunk) Part II - Other Information [Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings - None[171](index=171&type=chunk) [Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the 2018 Annual Report on Form 10-K - There have been no material changes in the risk factors included in the 2018 10-K[171](index=171&type=chunk) [Other Items (Items 2, 3, 4, 5)](index=29&type=section&id=Other%20Items) The company reported no unregistered equity sales, no defaults on senior securities, and no mine safety disclosures or other information - Item 2: Unregistered Sales of Equity Securities and Use of Proceeds - None[172](index=172&type=chunk) - Items 3, 4, and 5 are all 'Not applicable'[173](index=173&type=chunk)[174](index=174&type=chunk)[175](index=175&type=chunk) [Exhibits](index=29&type=section&id=Item%206.%20Exhibits) The report lists various asset purchase and licensing agreements as exhibits, along with required CEO and CFO certifications - Exhibits filed include agreements with Bausch Health, Sintetica SA, Liqmeds Worldwide, Harrow Health, and Eyemax LLC, all dated in 2019[179](index=179&type=chunk) - Certifications by the CEO and CFO pursuant to Sarbanes-Oxley Sections 302 and 906 are included as exhibits[179](index=179&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | |------------------------------------------------------------------------------------------|-----------------------------------------------------| | FOR THE TRANSITION PERIOD F ...