Eton Pharmaceuticals(ETON) - 2019 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for Q4 2019 was $0.5 million, with full-year 2019 revenue totaling $1.0 million, which included a $0.5 million milestone payment from Bausch Health for EM-100 marketing rights and initial Biorphen sales [18][19] - The net loss for Q4 2019 was $2.7 million, compared to a net loss of $2.3 million in Q4 2018. The full-year net loss for 2019 was $18.3 million, up from $12.7 million in 2018, driven by higher SG&A and R&D expenses [23] Business Line Data and Key Metrics Changes - Biorphen was approved and launched in December 2019, with over 100 institutions placing orders since launch. Initial interest has been strong, with expectations for increased adoption in Q2 and Q3 2020 [6][9] - Research and development expenses for Q4 2019 were $0.2 million, significantly reduced from $1.1 million in Q4 2018 due to a refund credit received. Full-year R&D expenses increased to $11.6 million from $5.6 million in 2018, primarily due to licensing payments and increased operational costs [20][21] Market Data and Key Metrics Changes - The addressable market for phenylephrine is estimated at over 20 million units annually, with a long-term goal to capture at least 4 million units. The company believes that enforcement of FDA regulations could lead to higher market capture [12][52] - The company secured its first GPO contract with Premier, which serves over 3,500 institutions, indicating progress in market penetration [12] Company Strategy and Development Direction - The company is actively pursuing high-value business development opportunities, focusing on late-stage development projects that align with its portfolio and can generate near-term revenue [17] - The introduction of additional product formats, such as vials and prefilled syringes, is planned to enhance market penetration and cater to customer needs [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the strong initial demand for Biorphen and the potential for increased sales as enforcement actions against compounding facilities are anticipated [36][52] - The company is confident in its pipeline, with three products under FDA review and plans to file additional ANDAs later in the year, which are expected to drive sustainable growth [16] Other Important Information - The company is engaged in discussions with the FDA regarding enforcement actions against compounding facilities that produce unapproved phenylephrine, which could significantly impact market dynamics [11][36] - The company expects to have a meeting with the FDA in April to discuss enforcement of regulations against compounders [11] Q&A Session Summary Question: Did the company have to pay an approval milestone during the quarter? - Yes, there was a $750,000 payment, which is capitalized and amortized over five years [26] Question: What is the expectation for co-promotion partnerships? - The company is excited about the partnership with Xellia and will evaluate future product launches on a case-by-case basis [27] Question: What is the status of EM-100? - The amendment filed was classified as a major amendment, and the product is expected to launch in the second half of the year [30] Question: What are the prospects for Biorphen with FDA enforcement? - The company is actively engaged with the FDA and believes enforcement will occur against compounders producing unapproved products [36] Question: What is the expected annualized running cost of the R&D lab? - The lab has 10 people, but specific operating expenses are not typically disclosed [43] Question: What is the expected revenue from capturing 4 million units of Biorphen? - The estimated revenue would be around $40 million, considering the current pricing structure [53]