Aquestive Therapeutics, Inc.

Good morning and welcome to the Equestria Therapeutics third quarter 2024 conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. As a reminder, this call will be recorded. I would now like to introduce your host for today's conference call, Bennett Watson of ICR Westwick Investor Relations, you may begin.

Thank you, operator.

Good morning and welcome to today's call. On today's call, I'm joined by Dan Barber, Chief Executive Officer, and Ernie Toth, Chief Financial Officer. We're going to provide an overview of recent business developments and performance for the third quarter of 2024, followed by a Q&A session. During the Q&A session, the team will be joined by Dr. Carl Cross, Chief Medical Officer, Dr. Steve Workacki, Chief Science Officer, and Sherry Korzynski, Senior Vice President of Sales and Marketing. As a reminder, the company's remarks today correspond with the earnings release that was issued after market closed yesterday. In addition, a recording of today's call will be made available on Equestria's website within the Investors section shortly following the conclusion of this call. To remind you, the Equestiv team will be discussing some non-GAAP financial measures this morning as part of a review of third quarter 2024 results. A description of these measures, along with a reconciliation to GAAP, can be found in the earnings release issued yesterday, which is posted on the investor section of Equestiv's website. During the call, the company will be making forward-looking statements. We remind you of the company's safe harbor language as outlined in yesterday's earnings release, as well as the risks and uncertainties affecting the company as described in the risk factor section and in other sections included in the company's quarterly report on Form 10-Q filed with the Securities Exchange Commission on November 4, 2024. As with any pharmaceutical company with product candidates under development and products being commercialized, there are significant risks and uncertainties with respect to the company's business and the development, regulatory approval, and commercialization of its products and other matters related to operations. Given these uncertainties, you should not place undue reliance on these forward-looking statements, which speak only as of the date made. Actual results may differ materially from these statements. All forward-looking statements attributable to a quest of any person acting on its behalf are expressly qualified in their entirety by this cautionary statement and the cautionary statements contained in the earnings release issued yesterday. The company assumes no obligation to update its forward-looking statements after the date of this conference call, whether as a result of new information, future events, or otherwise, except as required under applicable law. With that, I will now turn the line over to Dan.

Thank you, Bennett. Good morning, everyone, and thank you for joining us today. I am pleased to say that we have once again made tremendous progress since our last earnings call in early August. This is truly an exciting time for the Equestiv team. In the last three months, we have announced a major new product candidate from our Adreniverse pipeline program with AQST 108 for alopecia areata, expanded our LiberVent launch in the two to five-year-old space by adding retail distribution and a full sales team, completed what we believe to be our final adult study for our ANIFILM program, and submitted our pre-NDA briefing book to the FDA in anticipation of a fourth quarter pre-NDA meeting. We believe this work has set us up well for continued progress in 2025 and beyond. Now, let's focus on ANIFILM. We recently announced the top line results from our Oral Allergy Syndrome Challenge Study, which we refer to as our OASIS study. The OASIS study was requested by the FDA to provide clinical data showing that epinephrine plasma concentrations following dosing of antifilm are similar with and without the presence of an allergen. As you have seen from our reported results, we have confirmed that the absorption profile of anafilm remains the same whether subjects have been exposed to an allergen or not. Importantly, the most meaningful part of this study was our symptom resolution data. During the OASIS study, we tracked the time to symptom resolution without anafilm administration and with anafilm administration. As a reminder, Symptoms included swelling of the lips, tongue, and throat, along with nasal congestion and systemic symptoms such as GI tract discomfort as well as tingling. When no anafilm was administered, the median time to full symptom resolution was 74 minutes. When anafilm was administered, this dropped to 12 minutes. In fact, There are three numbers that resonate with me from this study, two, five, and 12. The data showed that subjects started seeing symptom resolution two minutes after the administration of anisome, all swelling symptoms were resolved within five minutes, and median time to full symptom resolution was 12 minutes. These are truly remarkable results that make us wonder if treating at the site of symptoms may bring additional benefit to patients. This is something we hope to understand more as we continue to progress. One of the questions that we have heard from the allergy community is how to correlate this data to anaphylaxis. I have discussed this with our medical experts, and we believe that it is important to note the systemic symptoms from our OASIS study, as well as the fact that up to 10% of OAS reactions progress into more severe allergic reactions, with up to 2% resulting in anaphylaxis. This gives us confidence that the OASIS study increases our understanding of how anafilm works in the presence of edema. I am also excited to announce today that we received the first part of feedback from our FDA pre-NDA process. We had previously submitted our chemistry, manufacturing, and controls pre-NDA questions to the FDA. We recently received a written response from the FDA on all our questions, and I am pleased to say we found the FDA's responses supportive of filing our application. I am also pleased to confirm that we have submitted our anti-film clinical briefing book to the FDA for review ahead of our pre-NDA meeting. While we are not disclosing the specific date of the meeting, we remain on track to complete this meeting before the end of the year. We plan on sharing our findings from this meeting once we have final FDA meeting minutes if not sooner. If the FDA is supportive of our plans for submitting our NDA, then we will immediately start our pediatric pharmacokinetic, or PK, study. This is a single-dose study in children and adolescents between the ages of approximately seven to 17 years of age. We expect to enroll between 18 and 24 subjects. This will be a multi-site study and each subject will be administered one dose of anisone. Blood draws will be taken, and then the subject will go home. This is a similar study to the one conducted by the recently approved epinephrine nasal spray. Based on the anticipated positive FDA feedback and the expected pace of enrollment in our pediatric study, we continue to plan for a Q1 2025 filing and a Q1 2026 launch of Anafilm, if approved by the FDA. Now, turning to our commercial capabilities, they continue to grow on a daily basis. Our LiberVent launch in the two to five-year-old space has helped us build infrastructure around pharmacovigilance, medical affairs, market access, and sales management. This has been particularly helpful when it comes to market access as we know that a successful launch must include quick wins with payers. That is why I am pleased to share with you today that we now have Medicaid coverage of Libervant in all 50 states, and we recently completed agreements with two of the top three PBMs and are in negotiations with the third. I am also pleased to share that as of the first week of October, Libervant was available through retail distribution on a national basis, and we have a dozen sales colleagues spending their days educating physicians on the benefits of LibriVent for the indicated patient population. This has resulted in a steady increase in prescriptions between September and October, and we are working hard to continue this trend. We will take these learnings and apply them to our anafilm commercial launch if approved by the FDA. We have continued to increase our non-promotional efforts in the anaphylaxis space. These efforts will be an area of increased focus as we move towards submission of our NDA for anafilm. Now let's turn to AQST-108, our epinephrine prodrug topical gel. As you heard during our investor day on September 27th, we believe that the commercial opportunity for AQST-108 could be equal to or larger than anafilm. Our goal for 2025 is to conduct a phase two way study that will provide additional clinical data supporting our view on the benefits of AQST-108 for alopecia areata. This week, We submitted our briefing book to the FDA for our pre-IND meeting, and we continue to anticipate concluding this activity before the end of the year. We will then open our IND and begin the Phase IIa study. As a reminder, our initial study will focus on determining if we detect a meaningful change from baseline in the severity of alopecia tool score, or SALT score, for enrolled subjects. We believe patient unmet needs in alopecia areata remain high. The existing JAK inhibitor treatment products in this space work systemically and come with a significant black box warning. We anticipate AQST 108 will only be absorbed locally and may provide an opportunity for treatment without the adverse events associated with JAK inhibitors. In conclusion, we continue to focus on growing the company across multiple platforms. This includes continuing to advance anafilm towards NDA submission, continuing to grow our LibriVent prescriptions in the two to five-year-old space, and continuing to advance our AQSD 108 program for the treatment of alopecia areata. This truly remains an exciting time for the company the patients it serves and seeks to serve, and all our stakeholders. With that, I will turn the call over to Ernie.

Thank you, Dan, and good morning, everyone. By now, you have seen our financial results in our earnings release that was issued last evening. As we typically do, we will address most of the discussion related to the third quarter 2024 results in the Q&A. During the third quarter, we continued to execute on our strategy to support the further development of Anafilm, our lead product candidate that has no needle, is not a device, is orally administered, and is easy to carry. We continued our pre-commercial launch activities for Anafilm to increase awareness among physicians, payers, and the advocacy community. On April 26th of this year, We received approval for Libervan for patients ages between two and five years. We have expanded our launch for this pediatric age group with broadening national retail distribution, expanded insurance coverage, and additional commercial infrastructure, including a national sales team of 12 individuals in the third quarter to support the continued growth of this product. Now, Let's turn to the third quarter results. Total revenues increased to $13.5 million in the third quarter of 2024 from $13 million in the third quarter of 2023. This 4% increase in revenue was primarily driven by an increase in license and royalty revenue due to the recognition of deferred revenue from the termination of a licensing and supply agreement partially offset by decreases in manufacturer and supply revenue. Excluding this one-time recognition of deferred revenue, total revenues decreased by $.7 million, or 5% year-over-year. Manufacturer and supply revenue decreased to $10.7 million in the third quarter of 2024 from $11.4 million in the third quarter of 2023 primarily due to the timing of Suboxone and Simpazan revenues, partially offset by an increase in ONDIF revenue. Co-development and research fees in the third quarter, 2024, remained relatively unchanged compared to the same period in the prior year. Total revenues increased to $45.7 million for the nine months ended September 30th, 2024, from $37.4 million for the nine months ended September 30th, 2023. This 22% increase in revenue was primarily driven by the increases in license and royalty revenue due to the recognition of deferred revenues from termination of license and supply agreements, increases in co-development and research fees, partially offset by decreases in manufacture and supply revenue. Excluding this one-time recognition of deferred revenue, total revenues decreased by $3.2 million or 9% year-over-year. Research and development expenses increased to $5.3 million in the third quarter of 2024 from $3.2 million in the third quarter of 2023. The increase in research and development expenses was primarily due to the clinical trial cost and product research expenses associated with the continued advancement of our anti-film development program and an increase in share-based compensation. Research and development expenses increased to $15.4 million for the nine months ended September 30th, 2024, from $10.2 million for the nine months ended September 30th, 2023. The increase in research and development expenses was primarily due to the clinical trial costs associated with the continued advancement of the ANAFILM and AQST 108 programs, as well as an increase in personnel costs and share-based compensation. Selling, general, and administrative expenses increased to $12.1 million for the third quarter of 2024 from $7.4 million in the third quarter of 2023. This increase was partially driven by a $1.5 million year-over-year change in the allocation of expenses of manufacturing and supply costs. Given this year-over-year change, the company expects to continue to see a positive benefit in gross margin offset by somewhat higher selling, general, and administrative expenses. Excluding this item, Increases in SG&A expenses were primarily driven by increased commercial spending and regulatory fees related to the approval of LibraBan and the commercial preparations for ANIFIL. Selling, general, and administrative expenses increased to $34.2 million for the nine months ended September 30th, 2024, from $22.2 million for the nine months ended September 30th, 2023. The increase included severance costs of $1.1 million incurred in the first three months of the year and $4.1 million due to the year-over-year change in the allocation of manufacturer and supply costs. The remainder of the increase is largely driven by higher commercial spending and regulatory fees related to the approval of LibraBand. The commercial preparations for AnnaFilm partially offset by lower legal fees, and decreases in other general and administrative costs, including insurance fees. Acquesta's net loss for the third quarter of 2024 was $11.5 million, or 13 cents for both basic and diluted loss per share, compared to the net loss for the third quarter of 2023, of $2 million, or 3 cents, for both basic and diluted loss per share. The increase in net loss was primarily driven by increases in selling general and administrative expenses, research and development expenses, non-cash interest expense related to the amortization of the debt and royalty obligation discounts, and decreases in interest income and other income, partially offset by increases in revenues and decreases in manufacturer and supply expenses. Equestria's net loss for the nine months ended September 30, 2024, was $27.1 million, or 32 cents for both basic and diluted loss per share, compared to the net income for the nine months ended September 30, 2023, of $.2 million, or zero cents for both basic and diluted loss per share. The increase in net loss was primarily driven by the items previously mentioned. Non-GAAP adjusted EBITDA loss was $6.6 million in the third quarter of 2024 compared to a non-GAAP adjusted EBITDA loss of $1.3 million in the third quarter of 2023. Non-GAAP adjusted EBITDA loss excluding adjusted R&D expenses was $1.6 million in the third quarter of 2024, compared to a non-GAAP-adjusted EBITDA income, excluding R&D expenses, of $1.7 million in the third quarter of 2023. Non-GAAP-adjusted EBITDA loss was $11.9 million for the nine months ended September 30, 2024, compared to a non-GAAP-adjusted EBITDA loss of $8.5 million for the nine months ended September 30th, 2023. Non-GAAP adjusted EBITDA income excluding adjusted R&D expenses was $2.6 million for the nine months ended September 30th, 2024 compared to a non-GAAP adjusted EBITDA income excluding R&D expenses of $1.3 million for the nine months ended September 30th, 2023. Cash and cash equivalents were $77.9 million as of September 30th, 2024. During the third quarter, we did not sell any shares under our ATM facility. We continue our focus in 2024 on the advancement of antifilm, epinephrine, and AQST 108 programs and continued commercialization of LiberVent for patient ages between 2 and 5 years old. As outlined in the press release issued last night after market close, our outlook for 2024 remains unchanged at total revenues of approximately $57 million to $60 million and non-GAAP-adjusted EBITDA loss of approximately $20 million to $23 million. Our guidance for 2024 includes, for anafilm, conclusion of the supportive studies, engaging the FDA in a pre-NDA meeting this quarter, commencing a pediatric study, and pre-commercial activities for a planned launch in the first quarter of 2026 if approved by the FDA. Our guidance also includes continued expansion of the commercial launch of Libervan for patients ages between 2 and 5, and the advancement of our AQST-108 epinephrine topical gel program. With that, I will now turn the line back to the operator to open the line for questions.

Thank you. As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. One moment for questions. Our first question comes from Rowana Ruiz with Learing Partners. You may proceed.

Hi. Morning, everyone. Two questions for me. First one's for Anna Film and the clinical briefing book. I was curious, what topics did you seek to highlight most to the FDA? And if you're able to share, what were some of your main goals when assembling the data for this briefing book?

Good morning, Rowana. Did you have a second question, or was that...

Second question was on Librevent. So I was also curious, how did the initial negotiations go with the first two PBMs and if you have any color around that?

Sure. So let me, I'll talk to the Anna Film question and then I'll hand it over to Sherry who will give you her view of how the negotiations have gone, though I may not be able to help myself and I might give you a comment or two. In terms of the A clinical briefing book for Anifilm. Look, as you know, we are exactly where we wanted to be. When we look at the goal of that meeting, it's very simple. We have done everything the FDA has asked us to do to date. We think the results of what we have produced are positive, as we've shared with the public. And we're looking for the FDA to provide us their guidance on the completeness of our package. So we think we're well-positioned. We think we've put our best foot forward, and we're excited for that upcoming meeting. In terms of LiberVent and the negotiations, I also couldn't be happier with the work that Sherry and her team have done in terms of getting us positioned well, and I'll let her walk you through what she's seen so far.

Thanks, Dan. Hi, Rowana. How are you? Thanks so much for the question. Our negotiations... thus far with our account team have been very, very positive. What we're finding in both at the state Medicaid level as well as with the commercial PBMs is that as long as the product is being prescribed for patients ages two to five, we are getting, LibraVan is getting covered for these patients. And so we continue to broaden our reach into the downstream payers as well And again, it is very consistent. There's a significant unmet need in the market. And for patients ages two to five, it is really being seen by physicians and payers as a game changer.

Got it. That's great. And one quick follow-up for LibraVant. I noticed you mentioned you have Medicaid coverage now. When should we expect that to start to impact prescribing going forward?

Well, I would remember... to think about the two to five-year-old spaces we've guided before from a financial perspective or a size perspective that will be limited in scope and what that does for Equestiv in 2025, where I would have people look in terms of results and what we're driving for the company is our ability to get coverage, drive patients to our product, which we believe accordingly. So I believe we're on track to do that with now our national sales force in place for, Sherry, what, all of three weeks at this point? Three or four weeks?

Four weeks, yes.

And we're really excited by the feedback we're getting so far. So while it will be financially small until we are able to access the entire market in the years to come, we think the learnings we're getting are the places to focus on as we go forward.

That's great. Thanks.

Thank you.

Our next question comes from David Amselm with Piper Sandler. You may proceed.

Thanks. So just have a couple. First, regarding the NDA for Anisome, are you going to assume or at least prepare for an ADCOM, particularly given the experience with with NEFI, how are you thinking about that, or how should we think about that? That's number one. Number two, you just remind us how you're thinking about the initial sales force for Anafilm. I'm specifically interested in how are you thinking about prescriber concentration on EpiPen and what that means in terms of your target audience and initial sales force headcount. and then lastly a libervant uh question which is um is you have uh executed on uh with regarding payers uh and you know we're obviously launching into that two to five uh segment is it more likely or just as likely that um you're going to continue to keep rights to the product and ultimately over the long term launch it in a wider population? In other words, is this asset core to the overall mission of Equestiv? Thank you.

Sure.

Good morning, David. So I think I captured the three questions. And let me just for fun this morning, let me go in reverse order. So I'll answer your question on Libervin. I'll then hand it to Sherry, who can talk about the concentration of prescribers for anafilm. And then, Carl, you can close it out for us on your view on an adcom. But so your question on Libervin, I think, is a great one because it goes back to what are we trying to accomplish as a company. And if you look at what we've done over the last couple of years, this is a steady march to building a continuously more valuable company. So we've got three different products that we think are all very valuable, Anifilm, 108, and Liberman. And we'll continue to pursue maximizing the value of those products for all our stakeholders, obviously the patient, but also the shareholders. So with Liberman in particular, right now we think we're incredibly well-placed. we're able to launch our product into a very specific area, get all of the infrastructure, pieces and parts up and running, get learnings for anafilm, and that's all very beneficial to us. So right now, our focus with Liberman is on growing it in the two to five-year-old space. When the opportunity comes to be in the six and up space, we absolutely want to be front and center and ready to launch. In terms of all of our products, whether we hold on to all of the efforts ourselves or augment our efforts with other people's sales forces, that is purely whether it falls into our ability to grow the company or not. So we will always look to what's the best for the company and what's the best for the shareholders on all of our assets. But with that, let me pass it over to Sherry on the NFL question specifically.

Hi, David. Thank you so much for the question. You know, it's a really exciting time here at Equestria as it relates to our commercial readiness. We have our plans in place to ensure we have a very successful launch. As it relates specifically to the sales force, this is a well-worn path. As the allergists continue to be the most productive specialty, they prescribe approximately 200 epinephrine prescriptions annually. So our focus for our sales force will be on those allergists and then the high-decile prescribing PCPs, otolaryngologists, NPPAs, and pediatricians. And we believe, based on the expertise that we have here in-house, that a sales force about the size of 100 reps will be able to cover those large prescribing physicians. Does that answer your question?

Yeah, that's helpful. Thank you.

And Carl, could you give your view on the outcome? Sure. Happy to. Good morning. So, obviously, I can't predict what the FDA will do. I can say that we have risk mitigated this program tremendously. All of our primary and secondary endpoints have been met for all of our studies, whether it's our pivotal, our self-administration, our temperature pH, and most recently, the oral anisome symptom intervention study, the OASIS study. We're certainly considering the possibility, and we'll be prepared should this become an avenue that FDA pursues. But right now, we don't have insight into the FDA's thinking.

I appreciate all the color. Thanks, everyone.

Thank you. Our next question comes from Francois Rizwa with Oppenheimer. You may proceed.

Hey, thanks for the question. So I was just wondering, you touched on the allergen test and the study, and I was just trying to figure out the importance of efficacy here based on this study, just in terms of real-world adoption with doctors, and just maybe a little more, if you could push on the potential importance here of treating at the site to see benefit. Is this something that can help in the real world just because, you know, like a lot of launches, docs will kind of wait and see sometimes how things work. And I was just wondering if the OAS study is something that should really create some buzz with the medical community. Thank you.

Yeah. Good morning, Frank. And I'll pass it over to Carl in a second to walk through your full question. But I have to tell you, from my perspective, we're incredibly excited to have this data. We think this is a differentiator. As far as we're aware, we're the only ones with data like this. And we absolutely, from the recent interactions at several conferences with physicians, think they're paying attention. But with that, I'll let Carl answer your specific questions.

Yeah, no, that's a good question. And I can tell you, both anecdotally and meeting with a number of KOLs, there was widespread support that these data do indicate delivery of epinephrine into the oral cavity probably does hold promise when you think about interrupting the anaphylactic cycle or certainly localized reactions in the oral cavity. I hadn't realized it, but many allergists actually use direct spraying of epinephrine into the back of the oral cavity when these symptoms do arise as a way of trying to get more drugs at the site of reaction. Also worth noting that we do have, for the first time, an oral physiologic change model that hadn't been developed before, and those changes did not impact anafilm absorption, as Dan said earlier, and we certainly shrank time to symptom resolution. All of those, in my mind, certainly underscore the fact that we now have a potentially predictive model that one could use and think about when it comes to evaluating anaphylaxis, so useful for many different regards.

I was just going to say, we just released these results, I don't know, less than 10, maybe about 10 days ago, and we didn't have the opportunity to hold a conference at that time with this community. So, we really appreciate you bringing this up because this is a big major point for our program. But anyway, you were going to ask an additional question, I think.

Great. No, I think it makes a lot of sense. I just wanted to, this is not as much a question as I just, I don't think I heard it quite right. The percentage you mentioned, I think 10% progressed with the allergen test. You mentioned a percentage in terms of patients that progressed to anaphylaxis in the real world. Can you just repeat what that was in your prepared remarks?

Sure. My prepared remarks, and Carl can that in oral allergy syndrome, so OAS, which was the model we used for the study, there are a percentage of patients when they have an OAS reaction do progress into anaphylaxis. So the literature says that around OAS is somewhere on the continuum of anaphylaxis.

Okay. It's 2% of the total, not 2% of that 10%.

It's 2% of the total. That's correct.

Okay. Perfect. Thank you.

Thank you. Our next question comes from Raghuram Selvaraju with H.E. Wainwright and Company. You may proceed.

Thanks so much for taking my questions and congrats on all the progress. Can you hear me?

We can hear you just fine, Rob.

Okay, very quickly, with respect to Libravent, I was wondering if you could comment on two things. One is the overall pricing paradigm that currently prevails with respect to Valtoco and what you believe is likely to be the implication for the future introduction of Libravent into the adult population. You know, any kind of thoughts there, any granularity you can provide to us regarding where the pricing levels are. And secondly, you mentioned in the press release that you will be filing for approval of LiberVent in that population ahead of the expiration of orphan drug exclusivity on Valtoco. But I wanted to better understand what that means. How far in advance of the expiration of exclusivity in early 2027 do you expect to file and what are the likely implications of that with respect to the FDA path forward? Thanks.

Yeah, and thanks, Ram. Let me start with the liver vent filing question because that's largely just a technical question. So the way it works is we have to submit our administrative filing, I'll call it, when the ODE exclusivity expires. And we also still have to complete the approval process for the 6 to 11 because we were obviously focused in other places. So most of that will be behind the scenes because it's just technical FDA paperwork, I'll call it. But rest assured, our plan and the work we'll be doing will set us up and our goal continues to be that the day we're allowed to sell in the six and up population, so six and up and all adult, that we will not only be ready, but we will be approved and in the market. On the pricing side, I would give you this to think about. What we're finding so far with LAUNCH is this is a rescue product. This is a rescue product in epilepsy and right now in pediatrics. We have not found price to be an obstacle. We have not found coverage to be an obstacle. We have not found in places where there's still a prior auth because we're going through the contracting process, we have not found prior auths to be a problem. So we feel that the payer community understands the necessity of the product and is acting accordingly. In terms of how pricing dynamics will come when we have access to the full market, we have no reason

really different than they are today. Okay, that's very helpful.

Somewhat analogous question with respect to anafilm. Since NEFI is on the market, I was wondering if you intend to do any kind of prescriber outreach or market research to kind of assess who the high value prescribers or high frequency prescribers of NEFI are. who might not necessarily be completely on board with prescribing NEFI. And in those kind of two general populations of prescribers, what sort of product characteristics that are embodied by Anafilm's product profile as seen so far would be most likely to appeal to them, sort of as a precursor to engaging in sort of full-blown launch preparations for the product?

Yes. Well, in a second, I'll hand it over to Sherry, who can just walk you through the survey-type work in general that we're undertaking and preparing. But what I would say as a general comment is one of the nice things about watching a competitor launch in this space is exactly that. We're getting to watch. So we absolutely are watching the pricing dynamics, watching the prescriber habits and reactions, But we continue to believe that this is not a zero-sum game for this space, that the patient need is high, and that as patients learn about alternate products, they will be looking for what fits them best, which I think leads to your question of what characteristics in our survey work do we think are most exciting for us, which I'll let Sherry cover for you.

Sure. Hi, Ram. Thanks so much for these questions. You know, it's rare to be able to launch multiple products that are game changers, but I can tell you again, based on market research we were engaged in over the last few weeks, it is a common term that physicians are using, game changer for their patients. And why is that? Well, if you think about it, this product category has a significant unmet need. And when you, you know, as you know about anaphylaxis, It is a condition that comes on rapidly and can lead to some very challenging outcomes. So it is critical for patients to have an epinephrine product that they can easily use and easily carry. And so, again, all of our market research comes back to saying, Anafilm is the easiest to carry. It is the easiest to use. And on top of that, you have the great efficacy of it working quickly and consistently. So at the end of the day, who are the patients? Well, we think, look, we're watching obviously very closely and we'll continue to watch as Dan has shared. But you're always going to have those physicians that are quick adopters. You're going to have patients that are quick adopters. And so we also believe that patients with an active prescription of NEFI or their devices, you know, will be quick adopters of our products, both patients and HCPs. We believe that patients that are newly diagnosed that don't yet have a prescription, that NEFI will, or excuse me, anafilm, will be the preferred option. And finally, we see this market expanding in that patients that have never filled a prescription and just avoid their allergen will be a great patient, too, for the product.

Great. Thanks. And very quickly, one last thing with respect to 108. Given the timeline that you've laid out with respect to the IND and initiation of the Phase 2A trial, are we to assume that this effectively falls within the scope of the previous timeline guidance that you provided indicating an expectation that this product could be launched before the end of 2028. Just wanted to make sure that, you know, things are still effectively on track relative to what you previously showcased at the Investor Day event.

Yes, Rob. We're very excited and very serious about 108. We've already, as you heard from the comments before in our press release, we've already put our briefing book into the FDA. we are ready to file our IND and we want to get our phase 2a going. So absolutely out of schedule, just like we laid out just a few weeks ago.

Thank you very much.

Thank you. Our next question comes from Jason Butler with JMP Securities. You may proceed.

Hi, thanks for taking the question. Just thinking about the meeting with FDA for NFM, Can you maybe talk about, and obviously I understand you can't go into a ton of detail here, but what aspects of the product label do you think are still up for debate or discussion? What data do you think that you can discuss with FDA, including the oral allergy challenge study, pediatric study, et cetera? But just anything that can help provide a differentiated picture relative to NEFI. Thank you.

Yeah. Good morning, Jason. global strategy with a label like any company in our position, while there will be elements of the label that are just standard, we do believe that we have differentiation in a couple of places, like you mentioned, the OASIS study. That could be very interesting. But, Carl, I'll let you go a little deeper.

Yeah, no, Jason, thank you for the question. And I completely agree. I think there are elements here. that are clearly differentiating. We've created and demonstrated utility with regards to thinking about symptom resolution in a relatively predictive model, right? We're actually introducing allergens into the oral cavity where you typically see allergens introduced in people with food allergies. But with regard to the forthcoming pre-NDA meeting, as Dan said earlier, the overarching intent is to align on the completion of the adult program and march forward with the execution of the pediatric program study. So that is really the intent overall, but we're certainly considering all potential opportunities to include the most recent data as a differentiating element.

Great. And then just a follow-up for Ernie. I understand you're not going to give guidance for 2025 at this point, but how should we think about the trends for legacy revenues as we exit this year? And I'm

not thinking about liver van or anafilm everything you know but everything that's driven the the other revenue streams up until now what is the tail kind of life of those those royalty streams or revenue streams thanks well you know i think you know i think you're asking mostly about suboxone um look we as we've said in the past you know it is a legacy product for us that continues to generate cash flow It's an important part of the company, but recognizing that its future is somewhat questionable at times, depending on the competitive nature of the market. We depend on Indivior for the orders, and we would expect there's going to be some level of... dislocation in that market, and that will flow through to us going forward. But we continue to stress it is an important part of the company. It generates positive cash flow for us, and I think when we provide our guidance for 2025, we will take that into account.

Okay, great. Thanks for taking the questions.

Thank you. Our next question comes from Thomas Flatton with Lake Street Capital Markets. You may proceed.

Excellent. Good morning, and thanks for taking the questions. Sticking with Ernie, for the cash runway into 2026, what level of commercial investment does that contemplate for Anafilm? Will you have a fully staffed sales force stood up by then within that guidance, or does that contemplate something more maybe measured from a sales force perspective?

So, What we have said in the past, Thomas, is the cash gets us into 26. We've not given any more granularity on that. But what we could say is, you know, here in 24 and 25, that cash supports, you know, the launch of the expanded launch of liver band, and that will continue into 25. It includes all pre-commercial products. in 24 and 25 for Antifilm, but we've also publicly said that we would not be ramping up any sales rep force until we have approval.

Got it. Appreciate that. And is there anything ongoing with respect to trying to overturn the orphan drug exclusivity for LiberVent? I know, you know, a while back you had the major contribution to patient care argument that was trying to be made. Is there anything going on there still?

Yeah, Thomas, we do have what I guess I would call backup. are putting a lot of our energy right now. So our focus is on the next milestone, the next few milestones for anafil. Our focus is on building livervin two to five. Our focus is on getting 108 for alopecia areata through the next couple of milestones. And yes, somewhere behind all of that, there is effort with the FDA

watching the clock run out. Okay, appreciate it, thank you. Thank you.

Our next question comes from Gary Nachman with Raymond James, you may proceed.

Thanks, good morning. So back on anafilm, do you still need to get alignment at all specifically on the pediatric study at the FDA meeting or do you feel you have good visibility on the dose and design for that pediatric study that you're going to start soon after the meeting. And then how will you be prepping the NDA while the PEADS study is ongoing so that you meet the 1Q25 filing? And in the CMC feedback, anything you still need to do with manufacturing before the filing, or is that completely buttoned up?

Yeah. good morning gary i'm glad you brought up the cmc uh because um sometimes from our perspective because we have such a deep history in cmc we don't talk about it as much as we should but that that was in my view a major win for our organization and i'll pass it over to steve who can give you his view on what it means for a major part of the nda which by the way as you know I think more than half of CRLs that occur are due to the CMC sections of NDAs.

Thank you, Dan. Gary, we're really excited about the feedback we got. We were able to align on all of the important features that you just want to present in the best possible way, having completed all the work we've needed to do for our filing. But the presentation of that data, the within our NDA, and just aligning on exactly how that's presented is a big win to have the cleanest possible filing.

And going on to the prepping of the NDA, yeah, that, Gary, as you know, an NDA is a major paperwork undertaking, I'll call it, to get into the FDA. So there are major sections of that NDA that are required we now have all the information, right? So, CMC being one of them. So, yes, the work is going on as we speak to prepare the NDA, and the information that we gain from whatever is left to do from here forward would be slotted into the document as we get close to filing. In terms of pediatric alignment, I'll let, well, I think you can look at our, the competitive lands fairly standard across all of the different programs. I'll let Gary, excuse me, I'll let Carl give you his view.

Yeah, no, thanks, Dan. Thanks, Gary. The study design itself is quite straightforward, as Dan alluded to. We do and I certainly do expect and anticipate alignment with the FDA for our targeted adolescent study, which would be 7 to 17 using the same dose. So I don't anticipate anything other than moving forward after this pre-NDA meeting. Okay, great.

And then maybe you could just comment what the expected shelf life is going to be for anafilm versus NEFI and any potential temperature requirements. And then just on 108, regarding the phase 2A and alopecia areata, how confident are you the FDA will be aligned on that study design in your pre-NDA meeting, both in terms of doses and endpoints that you're looking at. Thanks.

Yeah, thanks, Gary. So we understand shelf life is an important component for patients and caregivers in this space. And shelf life can mean different things to different people, right? So when we refer to it on calls like this as of which you can store the product, right? But we think when you look at what's important to patients and caregivers, it's the ability in the real world to have a product that can go through all of the daily changes of their lives and still work, right? So our focus is on that way of thinking around shelf life. And while we haven't stated what our excursion data and our shelf life data will look like, we absolutely are planning on making that robust and something that meets the needs of patients. In terms of alopecia areata, I will let Carl give you his view.

Sure. Thanks for the question. And we really did rely heavily on the published data from the Illumian, the BRAVE1, BRAVE2 study, where they conducted regression fitting for those data, really showing that there's a strong cohort of early responders, and we're using that as our biomarker. I suspect that FDA would view that appropriately as a reasonable endpoint, given that these are data extracted and published from the recently approved drug for this indication, but just leveraging their analysis for our needs in an earlier Phase II study. So I do think this will be well-received, but we'll have to wait for their responses. Okay.

And then if you start that Phase 2a in, was it going to be the second quarter of next year? Just how long to get the data? I know you said before that the overall timeline, longer-term timeline is intact, but just maybe just comment on the Phase 2a specifically.

So we haven't given guidance yet on how you would think about it generally.

Yeah, so we're looking to have, as an adaptive study, an interim look at 12 weeks. Presumably we'll be able to move forward. Then we would have a 24-week readout. But if you add that all up, I would obviously think that we're going to be somewhere a little bit north of six months.

Okay, great. Thanks, guys.

Thank you. Our next question comes from James Malloy with Alliance Global Partners. You may proceed.

Hey, guys. Thanks for taking my questions. Just a couple of quick ones. I know that you touched upon whether or not you're going to make a decision on partner and a self-launching based on what's best. When do you think you'll come to that decision? Is that something that happens post hopeful approval next year? Or what are the deciding factors for self-launch versus partner? And then on the EQST-108, What does the post-Phase 2A, 2B trial timeline look like? I know you've got 2028 as the expected launch. Can you walk us through how to get to that, please?

Sure. Good morning, Jim. In terms of partner versus self-launch, my philosophy, for lack of a better word, is you should never look at the universe as black and white as it's one or the other. As we're building this company, as you've seen as we hit the milestones that we've put out ahead of us, we're always interacting with the community, the life sciences community around us. When there are opportunities that enhance our ability to grow, enhance our ability to get to more patients, we'll take those opportunities. When those opportunities are not there, we'll do it ourselves. We don't look at it As a black and white, by this date, we either have to have a partner or by this date, we have to self-launch. It is a continuum. And what I think we're very good at as a management team is making sure that we stay focused on growing rather than on specific moments in time around partners or self-launch. On 108, I think this gets back to the question Gary asked before. We are, as you'll see from the materials, We are planning on starting the Phase 2A in the second quarter of next year. As I said before, we haven't given specific guidance on when that would conclude. Carl gave a high-level view that perhaps it's a six-monthish timeframe, and our plan obviously would be after that, typically there would be a Phase 2B, and then after that we would do our Phase 3s, As we get further along, we can talk about the scaling of the Phase 2B into Phase 3 and so on, but all of that, we believe, can be done in a reasonable timeline for a launch in 2028.

Okay, just a quick follow-up on that. I'm looking at the time that you guys present from last month or the other month, the Phase 2A Q325, the Phase 2B, I'm sorry, Phase 2A Q225, Phase 2B Q325, which seem to suppose a three-month timeline, should we think that maybe it's more likely that's a little longer than that for, say, a four-quarter?

Yeah, I would focus on, as Carl alluded to in our investor day and some of the discussions we've had publicly since then, we are, and actually I think you mentioned it today, we are contemplating having adaptive design to our study plans. So what that would allow us to do is get some of that additional information that would come from a Phase 2B as we go, which actually I believe there's a slide in our Investor Day presentation that would lay out that continuum from a Phase 2A to a Phase 2B.

Great. Thank you very much for taking the questions.

Thank you. I would now like to turn the call back over to Dan Barber for any closing remarks.

Thank you, Josh. Well, thank you to everyone for the time this morning. I just want to reiterate the excitement we have about the moment we're in for this company. We believe we have built value across several different areas. We're focused on continuing to hit our milestones. And as we continue forward, you'll hear us be disciplined about staying focused

your time and we will talk to you soon thank you this concludes the conference thank you for your participation you may now disconnect