Aquestive(AQST) - 2025 Q1 - Quarterly Results

Executive Summary & Business Update This section outlines Aquestive's strategic shift towards Anaphylm's commercialization and FDA approval, highlighted by the recent NDA submission and Q1 2025 achievements CEO Statement & Strategic Focus Aquestive's CEO highlighted the Anaphylm NDA submission as a major milestone, signaling a strategic shift to fully focus resources on Anaphylm's pre-commercial preparedness and FDA approval process, involving de-emphasizing AQST-108 advancement and not appealing the Libervant court decision - Submitted NDA for Anaphylm, a critical step towards the first oral, non-invasive epinephrine treatment[3] - Anticipate FDA's determination of NDA acceptance for Anaphylm in Q2 2025[3] - Actively preparing for a potential U.S. launch of Anaphylm in Q1 2026, if approved[3] - Company will have complete focus on Anaphylm's pre-commercial preparedness and FDA approval process, de-emphasizing AQST-108 advancement and not appealing the Libervant court decision[3] Q1 2025 Highlights Key achievements for the first quarter of 2025 include the submission of the New Drug Application (NDA) for Anaphylm and the advancement of commercial readiness efforts for its planned Q1 2026 launch - Submitted NDA for Anaphylm™ (epinephrine), the first and only oral sublingual film for patients with severe allergic reactions[7] - Advancing commercial readiness efforts with a planned Q1 2026 launch of Anaphylm, subject to FDA approval[7] Product Pipeline & Commercial Activities This section details the progress of Aquestive's product pipeline, including Anaphylm's NDA submission and commercial preparations, the revised timeline for AQST-108, and the regulatory status change for Libervant Anaphylm™ (epinephrine) Sublingual Film Aquestive completed the NDA submission for Anaphylm, including positive pediatric study results, and is actively preparing for a potential Q1 2026 U.S. launch, with efforts including establishing broad market access, expanding teams, and planning international regulatory submissions - Completed NDA submission for Anaphylm with the FDA, including data from adult clinical program and pediatric study[4] - Pediatric trial (ages 7-17) demonstrated a pharmacokinetic (PK) profile consistent with prior adult data, supporting a proposed label aligned with the 0.3 mg epinephrine autoinjector[4] - Anticipate FDA acceptance notice for NDA review in Q2 2025[4] - Launch preparations are well underway for a potential U.S. commercial introduction in H1 2026, focusing on broad market access[5] - Plans to initiate regulatory submissions in key international markets (Europe, UK, Canada) following FDA acceptance[5] - Preparing for a potential Advisory Committee meeting during the FDA review process; regulatory timeline unaffected by recent HHS changes[6] AQST-108 (epinephrine) Topical Gel The Phase 2a clinical trial for AQST-108, a topical gel for alopecia areata, is now scheduled for H1 2026, after the Anaphylm launch, to allow for focused resource allocation, offering a potential systemic side-effect-free alternative to existing JAK inhibitors in a multi-billion dollar market - Phase 2a clinical trial for AQST-108, a topical gel for alopecia areata (AA), planned for H1 2026, after the launch of Anaphylm[8] - AQST-108, if approved, has the potential to avoid systemic side effects associated with existing JAK inhibitors for AA[9] - The current estimated market opportunity for JAK inhibitors in AA is over $1 billion[9] Libervant® (diazepam) Buccal Film Libervant's full FDA approval was converted to tentative status due to a court decision on orphan drug exclusivity, not safety or efficacy concerns, leading to a pause in sales and marketing, with U.S. patient access now anticipated in 2027 upon exclusivity expiration, and the company will not appeal the court decision to prioritize Anaphylm - FDA revised Libervant's full approval (April 2024) to tentative approval status due to a court's interpretation of the orphan drug statute, not safety or efficacy concerns[10] - Sales and marketing activities for Libervant have paused due to the change in regulatory status[11] - U.S. patient access to Libervant is planned for 2027, upon the expiration of orphan drug market exclusivity granted to a competitor's intranasal product, or sooner if market access is granted by the FDA[11] - Company decided not to pursue an appeal of the court's decision to ensure focus on the launch of Anaphylm[11] Commercial Collaborations Aquestive's manufacturing business remains stable, with growth in newer collaborations (Ondif, Sympazan, Emylif) offsetting the gradual decline of Suboxone, while its U.S.-based facility supports a diverse product range and its supply chain is largely unaffected by tariffs, ensuring production reliability - Manufacturing business remains steady, with growth across newer collaborations (Ondif, Sympazan, Emylif) offsetting the decline of Suboxone[12] - Supply chain remains largely unaffected by implemented and proposed tariffs, providing continued reliability and stability in production[12] - Royalty-based products, including Sympazan and Azstarys, continued to contribute to revenue in Q1 2025[12] First Quarter 2025 Financial Results This section provides a detailed analysis of Aquestive's financial performance for Q1 2025, including revenue, operating expenses, net loss, EBITDA, and cash position Revenue Analysis Total revenues decreased by 28% year-over-year, primarily driven by decreases in manufacture and supply revenue (due to Suboxone) and license and supply revenue, partially offset by an increase in proprietary product revenue Total Revenue (Q1 2025 vs. Q1 2024) | Metric | Q1 2025 (Millions) | Q1 2024 (Millions) | Change (%) | | :----- | :----------------- | :----------------- | :--------- | | Total Revenue | $8.7 | $12.1 | -28% | Manufacture and Supply Revenue (Q1 2025 vs. Q1 2024) | Metric | Q1 2025 (Millions) | Q1 2024 (Millions) | | :----- | :----------------- | :----------------- | | M&S Revenue | $7.2 | $10.5 | - Manufacture and supply revenue decreased primarily due to lower Suboxone revenues, partially offset by an increase in Ondif revenues[14] Operating Expenses Research and development expenses saw a slight decrease, while selling, general and administrative expenses significantly increased, primarily due to higher regulatory fees, legal fees, and commercial spending related to Anaphylm Research and Development Expenses (Q1 2025 vs. Q1 2024) | Metric | Q1 2025 (Millions) | Q1 2024 (Millions) | Change (%) | | :----- | :----------------- | :----------------- | :--------- | | R&D Expenses | $5.4 | $5.9 | -8.5% | - Decrease in R&D expenses primarily due to lower clinical trial costs for Anaphylm, partially offset by increases in product research, preclinical expenses, personnel, and share-based compensation[15] Selling, General and Administrative Expenses (Q1 2025 vs. Q1 2024) | Metric | Q1 2025 (Millions) | Q1 2024 (Millions) | Change (%) | | :----- | :----------------- | :----------------- | :--------- | | SG&A Expenses | $19.1 | $10.7 | +78.5% | - Increase in SG&A expenses primarily due to $4.8 million in regulatory fees (including Anaphylm PDUFA fee), $2.3 million in higher legal fees, and approximately $2.1 million in higher commercial spending[16] Net Loss & EBITDA The company reported a significantly increased net loss and non-GAAP adjusted EBITDA loss for Q1 2025 compared to Q1 2024, primarily driven by higher selling, general and administrative expenses and decreased revenues Net Loss and EPS (Q1 2025 vs. Q1 2024) | Metric | Q1 2025 (Millions) | Q1 2024 (Millions) | Basic & Diluted EPS (Q1 2025) | Basic & Diluted EPS (Q1 2024) | | :----- | :----------------- | :----------------- | :---------------------------- | :---------------------------- | | Net Loss | $(22.9) | $(12.8) | $(0.24) | $(0.17) | - Increase in net loss primarily driven by increases in selling, general and administrative expenses and decreases in revenues[17] Non-GAAP Adjusted EBITDA Loss (Q1 2025 vs. Q1 2024) | Metric | Q1 2025 (Millions) | Q1 2024 (Millions) | | :----- | :----------------- | :----------------- | | Non-GAAP Adj. EBITDA Loss | $(17.6) | $(7.2) | | Non-GAAP Adj. EBITDA Loss (excl. R&D) | $(12.6) | $(1.4) | Cash Position As of March 31, 2025, Aquestive Therapeutics reported cash and cash equivalents of $68.7 million - Cash and cash equivalents were $68.7 million as of March 31, 2025[19] 2025 Financial Outlook This section outlines Aquestive's revised financial guidance for the full year 2025, reflecting adjustments due to recent regulatory changes Revised Full-Year 2025 Guidance Aquestive revised its full-year 2025 financial guidance, lowering total revenue expectations and slightly adjusting the non-GAAP adjusted EBITDA loss range, a direct result of the change in Libervant's regulatory status and the subsequent pausing of its sales and marketing activities - Revised full-year 2025 financial guidance due to the change in regulatory status of Libervant and pausing sales and marketing activities[20] Revised 2025 Financial Guidance (in millions) | Metric | Prior Guidance | Current Guidance | | :------------------------ | :------------- | :--------------- | | Total Revenue | $47 to $56 | $44 to $50 | | Non-GAAP Adjusted EBITDA Loss | $46 to $53 | $47 to $51 | Product Information This section provides detailed descriptions of Aquestive's key product candidates: Anaphylm, Libervant, and AQST-108 About Anaphylm™ Anaphylm is a polymer matrix-based epinephrine prodrug sublingual film designed for non-invasive administration without water or swallowing, with compact, credit card-sized, and weather-resistant packaging enhancing portability and usability - Anaphylm™ (epinephrine) Sublingual Film is a polymer matrix-based epinephrine prodrug product[25] - It is similar in size to a postage stamp, weighs less than an ounce, and dissolves on contact, requiring no water or swallowing for administration[25][26] - The primary packaging is thinner and smaller than an average credit card, designed to withstand weather excursions[26] - The Anaphylm trade name has been conditionally approved by the FDA, pending final product approval[26] About Libervant® Libervant is a buccally administered diazepam film for the acute treatment of seizure clusters in epilepsy patients; while initially fully approved for ages 2-5, its status was converted to tentative due to a competitor's orphan drug exclusivity, with U.S. market access now contingent on the expiration of this exclusivity in January 2027 - Libervant (diazepam) Buccal Film is a buccally administered film formulation of diazepam for the acute treatment of intermittent, stereotypic episodes of frequent seizure activity (seizure clusters, acute repetitive seizures) in epilepsy patients[27] - Developed as an alternative to device-based products like rectal gel and nasal spray[27] - FDA approval for U.S. market access for patients aged two to five years was converted to 'tentative approval' due to existing orphan drug market exclusivity granted to an intranasal spray of another company[27] - U.S. market access for Libervant is currently subject to the expiration of this orphan drug market exclusivity, scheduled for January 2027[27] About AQST-108 AQST-108 is a topically delivered adrenergic agonist prodrug gel, part of Aquestive's Adrenaverse™ platform, with a first-in-human study completed, and the platform aims to control absorption and conversion rates across various dosage forms and delivery sites - AQST-108 (epinephrine) Topical Gel is a topically delivered adrenergic agonist prodrug gel product candidate[28] - Aquestive completed a first-in-human study for AQST-108[28] - It is based on Aquestive's Adrenaverse™ platform, which contains a library of over twenty epinephrine prodrug product candidates intended to control absorption and conversion rates[28] Important Safety Information (Libervant®) This section outlines critical safety warnings and potential adverse effects associated with Libervant, emphasizing risks related to co-administration with other depressants, abuse, dependence, and neurological impacts Key Safety Warnings Libervant carries significant safety warnings, including risks of severe drowsiness, breathing problems, coma, and death when taken with opioids, alcohol, or other CNS depressants, as well as risks of abuse, misuse, addiction, physical dependence, withdrawal reactions, and potential suicidal thoughts or actions - Do not give Libervant to children aged two to five if allergic to diazepam or ingredients, or if they have acute narrow angle glaucoma[29] - Taking Libervant with opioid medicines, alcohol, or other CNS depressants can cause severe drowsiness, breathing problems, coma, and death[32] - Risk of abuse, misuse, and addiction, which can lead to overdose and serious side effects including coma and death[32] - Libervant can cause physical dependence and withdrawal reactions, especially if used daily; sudden cessation can lead to serious and life-threatening side effects[34] - May cause sleepiness, dizziness, slowed thinking and motor skills, and suicidal thoughts or actions (about 1 in 500 people)[33] - The most common side effects of Libervant are sleepiness and headache[37] Company Information This section provides an overview of Aquestive Therapeutics, Inc., highlighting its mission, technological capabilities, and product development focus About Aquestive Therapeutics, Inc. Aquestive is a pharmaceutical company dedicated to improving patient lives through innovative science and delivery technologies, particularly orally administered products using its proprietary PharmFilm® technology, with four licensed commercialized products and advancing late-stage Anaphylm and early-stage AQST-108 - Aquestive is a pharmaceutical company advancing medicines through innovative science and delivery technologies[36] - Developing orally administered products to deliver complex molecules, offering alternatives to invasive therapies[36] - Has four licensed commercialized products marketed globally and is their exclusive manufacturer[36] - Utilizes proprietary, best-in-class technologies like PharmFilm®[36] - Advancing a late-stage proprietary product candidate (Anaphylm) for severe allergic reactions and an early-stage epinephrine prodrug topical gel (AQST-108) for dermatological conditions[36] Non-GAAP Financial Measures This section explains Aquestive's use of non-GAAP financial measures, their purpose in supplementing GAAP results, and the rationale for their presentation Explanation and Use of Non-GAAP Measures This section clarifies that Aquestive uses non-GAAP financial measures, such as adjusted EBITDA loss and adjusted expenses, to supplement GAAP results, excluding specific non-cash expenses and certain interest/income items to provide additional insight into the company's ongoing operating performance and aid managerial decision-making, but are not substitutes for GAAP measures - Non-GAAP financial measures (e.g., adjusted EBITDA loss, adjusted gross margins, adjusted expenses) are used to supplement U.S. GAAP results[38] - These measures exclude certain non-cash expenses like share-based compensation, depreciation, amortization, interest expense, and income taxes[38][39] - Management uses non-GAAP measures to analyze financial results, assess operating strategies, and make managerial decisions, providing added transparency into operating performance[40] - Non-GAAP measures are intended to supplement, not act as substitutes for, comparable GAAP measures and should not be read as a measure of liquidity[40] - Outlook for non-GAAP measures is provided because the company cannot predict certain GAAP adjustments (e.g., share-based compensation, income tax, amortization) with reasonable certainty for the forward-looking period[41] Forward-Looking Statements This section provides a disclaimer regarding forward-looking statements, outlining the inherent risks and uncertainties that could cause actual results to differ from projections Disclaimer and Risk Factors This section provides a standard disclaimer, identifying forward-looking statements and outlining numerous risks and uncertainties that could cause actual results to differ materially from projections, encompassing regulatory approval delays, clinical trial outcomes, commercialization challenges, market competition, financial resources, intellectual property, and broader economic and political factors - Identifies forward-looking statements by terms such as 'believe,' 'anticipate,' 'plan,' 'expect,' 'estimate,' 'intend,' 'may,' 'will,' or their negatives[42] - Statements are based on current expectations and beliefs, subject to risks and uncertainties that could cause actual results to differ materially[42] - Key risks include: delays in Anaphylm approval, sufficiency of clinical data, FDA requirements for additional studies, Libervant market access issues, competition, insufficient capital, manufacturing capabilities, Suboxone market share erosion, intellectual property, regulatory changes, and general economic/political conditions[42][43] - Caution against undue reliance on these forward-looking statements, which speak only as of the date made[43] - The Company assumes no obligation to update forward-looking statements or outlook/guidance after the date of the press release, except as required by applicable law[43] Financial Statements This section presents Aquestive's key financial statements, including condensed balance sheets, statements of operations, and reconciliations of non-GAAP adjustments Condensed Balance Sheets The condensed balance sheets present the company's financial position as of March 31, 2025, and December 31, 2024, showing a slight decrease in cash and cash equivalents and an overall increase in total liabilities Condensed Balance Sheets (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :---------------------------------- | :--------------- | :---------------- | | Assets | | | | Cash and cash equivalents | $68,657 | $71,546 | | Trade and other receivables, net | $10,444 | $7,344 | | Inventories | $7,198 | $6,044 | | Total current assets | $89,169 | $88,220 | | Total assets | $102,234 | $101,424 | | Liabilities and Stockholders' Deficit | | | | Accounts payable | $12,280 | $10,287 | | Total current liabilities | $18,298 | $18,865 | | Total liabilities | $163,164 | $161,580 | | Total stockholders' deficit | $(60,930) | $(60,156) | | Total liabilities and stockholders' deficit | $102,234 | $101,424 | Condensed Statements of Operations and Comprehensive Loss The condensed statements of operations for the three months ended March 31, 2025, and 2024, indicate a significant increase in net loss, primarily due to decreased revenues and a substantial rise in selling, general, and administrative expenses Condensed Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :---------------------------------- | :-------------------------------- | :-------------------------------- | | Revenues | $8,720 | $12,053 | | Manufacture and supply | $3,652 | $4,389 | | Research and development | $5,361 | $5,932 | | Selling, general and administrative | $19,072 | $10,689 | | Total costs and expenses | $28,085 | $21,010 | | Loss from operations | $(19,365) | $(8,957) | | Net loss | $(22,930) | $(12,828) | | Basic and diluted loss per share | $(0.24) | $(0.17) | | Weighted average common shares outstanding | 95,497,056 | 73,614,710 | Reconciliation of Non-GAAP Adjustments - Net Loss to Non-GAAP Adjusted EBITDA This reconciliation table details the adjustments made to GAAP net loss to arrive at non-GAAP adjusted EBITDA for the three months ended March 31, 2025, and 2024, highlighting the impact of non-cash expenses and specific interest/income items Reconciliation of Non-GAAP Adjustments - Net Loss to Non-GAAP Adjusted EBITDA (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | GAAP net loss | $(22,930) | $(12,828) | | Share-based compensation expense | $1,587 | $1,580 | | Interest expense | $2,782 | $2,784 | | Interest expense related to royalty obligations | $1,437 | $1,358 | | Interest income and other income, net | $(713) | $(329) | | Depreciation and Amortization | $139 | $207 | | Total non-GAAP adjustments | $5,291 | $5,658 | | Non-GAAP adjusted EBITDA | $(17,639) | $(7,170) | | Non-GAAP adjusted EBITDA excluding Non-GAAP adjusted R&D expenses | $(12,623) | $(1,428) | Reconciliation of Non-GAAP Adjustments - GAAP Expenses to Non-GAAP Adjusted Expenses This table reconciles GAAP expenses (total costs, manufacture and supply, R&D, and SG&A) to their non-GAAP adjusted counterparts for the three months ended March 31, 2025, and 2024, primarily by adjusting for share-based compensation and depreciation/amortization to provide a clearer view of operational costs Reconciliation of Non-GAAP Adjustments - GAAP Expenses to Non-GAAP Adjusted Expenses (in thousands, except percentages) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Total costs and expenses (GAAP) | $28,085 | $21,010 | | Non-GAAP adjusted costs and expenses | $26,359 | $19,223 | | Manufacture and Supply Expense (GAAP) | $3,652 | $4,389 | | Gross Margin on total revenue (GAAP) | 58 % | 64 % | | Non-GAAP adjusted manufacture and supply expense | $3,437 | $4,143 | | Non-GAAP Gross Margin on total revenue | 61 % | 66 % | | Research and Development Expense (GAAP) | $5,361 | $5,932 | | Non-GAAP adjusted research and development expense | $5,016 | $5,742 | | Selling, General and Administrative Expenses (GAAP) | $19,072 | $10,689 | | Non-GAAP adjusted selling, general and administrative expenses | $17,906 | $9,338 |