Eton Pharmaceuticals, Inc.

today's call. We will also be answering questions that are emailed to us. Investors can send their questions to InvestorRelations at EatonPharma.com. 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 the company's filings with the SEC. Now, I will turn the call over to our CEO, Sean Brinjelson.

Thank you, David, and thank you, everyone, for joining us this afternoon. As we're preparing for three new product launches and the initiation of a major co-promotion partnership in the coming weeks, I don't think there's ever been a more exciting time for me to talk to investors. We couldn't be happier with the way we are exiting 2021. the new acquisition of an approved rare disease product, a major co-promotion arrangement launching in December, and the upcoming launches of Aprantia and ResiPress. These major catalysts, combined with the expectation for at least three additional product approvals and launches next year, set us up for what should be a fantastic 2022. I will start with an Alkindi update and the exciting partnership with Tomar that we announced this morning. Alkindi sales continue to grow month over month, quarter over quarter, and we believe they can grow even faster, so we are implementing some major commercial changes. We are now about six months into holding in-person meetings with doctors. The feedback to us has been clear. Alkindi sprinkle is critical to giving patients and doctors the ability to precisely treat adrenal insufficiency. However, changing doctors' prescribing habits has been a higher touch activity than we originally expected. For decades, pediatric endocrinologists have been using hydrocortisone tablets and are used to the status quo. We found that in-person demonstrations and multiple face-to-face interactions has been the key to making doctors comfortable changing their prescribing habits. Ultimately, it would have taken us a significant amount of time to convert the market to Alkindi. Given the capacity constraints in our current internal sales force, we had only reached approximately 10% of the physicians face-to-face. So the very exciting announcement regarding our co-promotion with Tomar increases our presence more than tenfold. We believe this co-promotion partnership is a very attractive opportunity for Eaton for a number of reasons. First, Eaton will gain more than 60 new sales reps with existing and established relationships with pediatric endocrinologists. For comparison, we have less than five. So this is significant growth in terms of our ability to reach out and have multiple face-to-face interactions with the physicians. These reps can make a difference on day one alone. Hiring our own large team of sales reps with intact relationships with Pete Endos would have been extremely challenging, costly, and time-consuming. Secondly, based on the structure of the deal, we only pay for success. Tolmar receives a sales commission on the incremental sales of Alkindi. Furthermore, Tolmar has committed to hitting certain growth rates during the term of the agreement. A few other words regarding the deal structure. Eaton retains ownership of the asset and is also responsible for the pricing, contracting, branding, and the marketing strategies. At the end of the three-year term, we expect sales to be well on their way to reaching peak conversion levels, and we still have approximately 10 years left on the product's patents. We expect this partnership to have a favorable impact on our earnings in 2022 due to both higher sales and lower expenses. Specifically, we will no longer need to take on the additional expense of expanding an internal sales force, and the incremental growth produced by Tolmar above and beyond what we would have achieved on our own will more than pay for the sales commission they earn, which at the end of the day means more profit for all parties. Tolmar's pediatric endocrinology sales force has proven to be very successful. We are confident they are the right partner for Alkindi. Their sales reps currently sell Fensaldi, an orphan treatment for Central Precocious Puberty, also known as CPP. This product was launched in May of 2020 and has many characteristics similar to Alkindi, such as marketing size and position. Tolmar has been very successful in Fransalvi's product launch despite the COVID challenges and has already seen over 1,500 patients adopt the treatment just 18 months into launch. Our current plan is to have the Tolmar team fully trained in promoting Alkindi in December. We believe this will provide a nearly immediate boost to the Alkindi growth rate, which should be evident in the first half of 2022. Next, I want to discuss our recent acquisition of cargluomic acid tablets. You seldom find an attractive rare disease product that is ready for immediate commercial launch, so we are very excited about this opportunity. Our product is a therapeutic equivalent of Carboglu that is listed in the FDA's register as AB-rated. Our product is indicated for the treatment of hyper-ammonium due to NAGS deficiency. Carboglu is widely regarded as one of the most expensive drugs in the world. Based on the product's recommended dosing and multiple media articles, we believe that the annual cost of treatment can exceed $1 million annually for some patients. Our generic version of Carboglu will offer these patients a lower cost alternative. NAGS deficiency is extremely rare. One recent published study found around 98 cases globally in existing literature. Given this small patient population, we believe the market may require individualized support for each patient, and we plan to offer robust patient services similar to what we currently provide for Elkendi patients. Given our experience with Elkendi, We believe we are well-positioned to deliver a seamless experience for carboglumic acid patients. In terms of the market opportunity, Carboglu is not tracked in IQVIA, but based on government spending data and Recordati's publicly reported financials, we estimate that the current sales of the product are more than 50 million annually. Our goal is to eventually capture 25 to 35 percent of these patients. Launch activities are currently underway. and we expect to make the product available before the end of the year. With our existing infrastructure for Alkindi already in place, we expect very little incremental cost to commercialize coagulamic acid. Now turning to the recent approval of Aprantia. Aprantia is indicated for the treatment of epilepsy and migraines and was approved earlier this month. It is the first and only FDA-approved liquid formulation of topiramate. This was a product that Eaton initially initiated internally back in 2018, and I'm very proud of all the hard work from our team that went into taking a branded product idea from that stage all the way to FDA approval in only three years. Truly rare within the branded drug NDA is filed today. Aprantia was one of three neurology oral liquids we sold to Azurity earlier this year. Azzurri will be responsible for marketing the product and expects it to launch later in the year. Eaton will receive a $5 million payment upon launch, a royalty on product sales, and is also entitled to receive an additional $15 million in commercial milestones based on the sales of the three-product basket. The other two products in the Azzurri transaction appear on PACE for approval in the first half of 2022. The zonisamide application remains under FDA review, and we believe the only issue outstanding is the inspection of the product's UK-based manufacturing facility. The agency was unable to inspect the facility prior to the application's original PDUFA date, and they now have assigned the application a new approval date of January 29th. We hope to see the product approved on that date, but the FDA has yet to conduct or schedule its inspection of the UK facility. The third product, lamotrigine oral suspension, saw positive developments this quarter. Our partner successfully completed the human factor study and is expected to submit the results to the FDA later this month. This should allow for a potential approval of the product in the first half of 2022. As a reminder, in addition to the 5 million milestone payments we expect to receive upon the Aprantia launch, we also are entitled to 5 million for each of the launches of zonisamide and lamotrigine. Finally, we had positive developments in our orphan drug candidate dehydrated alcohol injection. After receiving a CRL letter from the FDA over the summer, Eaton held a meeting with the FDA to discuss the letter and proposed responses. We believe the meeting was both productive and successful. We left the meeting feeling confident that we can deliver everything the agency has asked for and expect to submit the response in the coming months to allow for potential approval and launch in 2022. Before I turn it over to Wilson, I would like to thank our shareholders for their continued support. After four years of focus on development and regulatory activities, we are poised to see the fruits of our labor become apparent in very short order. It is clear that our prospects have never been stronger. The recent cargluomic acid acquisition and now the Tolmar co-promotion should allow us to deliver meaningful revenue in 2022 and beyond, more than we had expected just a month ago. With our very strong cash position, three new product launches in the coming months, and the expectation for an additional three product approvals and launches next year, we are extremely excited as we look forward to the coming quarters. With that, I will turn it over to Wilson to discuss our financial results. Wilson?

Thank you, Sean. Eaton reported revenue of $0.8 million for the third quarter of 2021. There was no material revenue in the third quarter of 2020. Eaton's gross profit for the third quarter of 2021 was $0.2 million and reflected the impact of the $0.4 million write-down for excess inventory of biorphan ampule stock. The gross profit for the prior year quarter was not material. R&D expenses for the third quarter of 2021 were $2.7 million compared to $2.8 million for the prior year period. R&D expenses in the third quarter of 2021 were elevated due to expenses related to the development of biorphine and resipres vial container conversions. R&D expenses in the third quarter of 2020 included a one-time $1.5 million NDA filing fee. General and administrative expenses for the third quarter of 2021 were $3.3 million compared to $3.4 million in the prior year period. This decrease was largely due to elevated spending in the prior year period related to launch preparation activities for Elkendi Sprinkle. The third quarter of 2021 included $0.9 million of non-cash expenses. As a result of these factors, EAT reported a net loss of $6.1 million for the third quarter of 2021 compared to a net loss of $6.5 million in the prior year period. Eaton reported diluted earnings per share of a negative 0.2424 cents per share in the third quarter of 2021 compared to a negative 31 cents per share in the prior year period. Cash equivalents were $22.7 million as of September 30, 2021. Eaton expects to receive a $5.0 million milestone cash payment in December 2021. from the recent approval of the Prantia, which is a Topiramate oral solution product. Operator, we are now open for questions.