Eton Pharmaceuticals, Inc.

Good afternoon, and welcome to Eaton Pharmaceuticals' first quarter 2020 financial and operating results conference call. At this time, all participants are on a listen-only mode. Following the formal remarks, we will open the call for your questions. Please be advised that this call is being recorded at the company's request. At this time, I'd like to turn the call over to David Krempa, Vice President of Business Development at Eaton Pharmaceuticals. Please proceed.

Thank you, Operator. Good afternoon, everyone, and welcome to Eaton's first quarter 2020 conference call. This afternoon, we issued a press release that outlines the topics we plan to discuss on today's call. The release is available on our website, EatonPharma.com. Joining me on our call today are Sean Brynjelsen, our CEO, Wilson Troutman, our CFO, and Paul Stickler, our Senior Vice President of Sales and Marketing. Before we begin, I would like to remind everyone that statements made during this call may contain forward-looking statements and involve risks and uncertainties that could cause actual results to differ materially from those contained in these forward-looking statements. Please see the forward-looking statements disclaimer in our earnings release and the risk factors in our company's filings with the SEC. Now, I will turn the call over to our CEO, Sean Brynjelsen.

Thank you, David. Thank you, everyone, for joining us today. We are looking forward to providing you with an update on our first quarter results and our expectations for 2020 and beyond. First off, I'd like to start with the Biorphin commercial launch, which unfortunately has been negatively impacted by COVID-19. As many of you know, we launched Biorphin in December 2019 and signed a co-promotion deal arrangement with Accelia in January of 2020. We were just beginning to roll out our full commercial launch activities and gain traction with customers when COVID-19 disrupted the elective surgery market. This unprecedented decline in surgical procedures at hospitals across the country has resulted in a meaningful decline in demand for injectable phenylephrine in general. Moreover, getting hospitals to change their current operating norms in the midst of a crisis is not optimal for any new product launch. Secondly, the COVID crisis has interrupted our sales and promotional plans for biorphine. For example, hospitals across the country have enacted policies limiting in-person visits by sales reps. This has clearly hindered our ability to get the face-to-face meetings of the key decision makers that would drive hospitals to switch to BioOrphan. We had also planned to introduce BioOrphan to pharmacists and doctors at important industry conferences throughout 2020. These conferences have been canceled due to COVID-19, which has also eliminated one of the most efficient ways for us to drive promotion and awareness of the product. However, in response to these challenges, we have launched targeted digital promotional campaigns which we expect to drive awareness of the product on our vesting in a vial format which is also preferred by most caregivers. I would add that we remain very optimistic that the surgical volumes will start to normalize in the near term and our sales teams will be able to have onsite visits soon. We know this crisis will pass and Eaton remains excited about BioOrphan's long-term prospects and our targeting of achieving four million units annually. The market is there, the need is there, The timing, unfortunately, was not optimal for us to launch in Q1, but we do believe that the uptake and the adoption of BioOrphan has value to the community and to the hospitals and to the patients, and we remain committed to the product and to driving the sales. Turning now to our newest addition to our portfolio, Alkindi Sprinkle. In March, we are very excited to announce the acquisition of U.S. marketing rights to Alkindi Sprinkle. We view this acquisition as transformative for our company and we believe Alkindi Sprinkle has the potential to be the highest revenue product in our portfolio. Alkindi Sprinkle is an orphan drug currently under review with the FDA as a replacement therapy for adrenal insufficiency in pediatric patients. Our partner, Durinal Group, has already launched the product in Europe and has seen strong sales and rates of adoption. We are very optimistic about its potential in the U.S. market and have conducted detailed marketing studies to support this enthusiasm. Eaton is also working hard to prepare for launch activities and we believe will be in a good position to launch the product in the fourth quarter of this year that's approved on its PDUFA date of September 29th, which we fully expect. To further support the launch, I announced last week Paul Stickler has joined the company as our Senior Vice President of Sales and Marketing. Paul joins us from Recordati Rare Diseases where he successfully commercialized a number of orphan drug products. He brings the ideal experience to launch a pediatric orphan product like L-Kindy Sprinkle and is very excited about leading this effort. The rest of our pipeline has also continued to progress nicely. Most notably in the quarter, we announced that our cysteine hydrochloride ANDA has been accepted for review by the FDA. and has been confirmed to be the first Paragraph 4 challenge against the Innovator product. Our development partner has been selling the product in the current form since at least 1990, so we are very confident that we will be able to overturn the Innovator's patents, which could allow for us to launch the product as early as next year. We provided additional detailed project updates in the press release, so I won't go into project by project detail on all of the projects, but in summary, We have four additional new drug applications submitted this year. We expect to have four additional new drug applications submitted this year, and at least two product approvals in the second half of the year. As you can see, we are expecting 2020 to be a big year for our pipeline, and I continue to believe we will have one of the strongest and most attractive pipelines in the pharmaceutical industry. With that, I would like to turn it over to our CFO, Wilson Trautman, to discuss the financial results. Thank you, Wilson.