Eton Pharmaceuticals, Inc.

and welcome to the Eaton Pharmaceuticals Second Quarter 2024 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Following the formal remarks, we will open the call up for your questions. Please be advised, this call is being recorded at the company's request. At this time, I'd like to turn it over to David Crimpa, Chief Business Officer at Eaton Pharmaceuticals. Please proceed.

Good afternoon, everyone, and welcome to Eaton's second quarter 2024 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, we have Sean Brinch-Elson, our CEO, and James Gruber, our CFO. In addition to taking live questions on today's call, we will 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 remarks 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, Shawn Brangelson.

Shawn Brangelson Thank you, David. Good afternoon, everyone, and thank you for joining us today. We are pleased to be reporting yet another quarter of record product sales. Eaton began 2024 with high expectations across all areas of the business. And now that we've reached the midpoint of the year, I'm proud to say we're executing at all fronts. We've continued to rapidly grow sales of our existing commercial products while also delivering on the advancement of our pipeline products, most notably ET400. And we were able to do all of this while generating positive cash flow from operations in the second quarter. I could not be happier with our corporate performance so far this year. The second quarter was Eaton's 14th straight quarter of sequential product sales growth. We are very proud of this streak and based on our portfolio's long runaway for growth, we expect this streak to continue for the foreseeable future. Product sales increased 40% year-over-year to $9.1 million in the quarter and grew 14% over the previous high in the preceding quarter. Absent any unannounced M&A transactions, we expect to reach positive GAAP net income by the end of this year. These impressive results were primarily due to continued strength from both of our lead products, Elkindi Sprinkle and Carglymic Acid. Elkindi Sprinkle saw its growth accelerate in the second quarter as we have seen a strong uptick in the number of new patient referrals received this year. Elkindi revenue increased an impressive 63% year-over-year. Given that Alkindi is our highest margin product and one which we believe has the largest market opportunity, we are very pleased to see this acceleration of growth. Sales are benefiting from several key initiatives, including our team's strong presence at endocrinology medical conferences during the first half of the year, the initiation of our sampling program, and the improved productivity of our internal sales force. We are now in the second year of having our full internal sales force in place, and we are seeing the results of our team's strengthening relationships that they worked hard to develop over the last 18 months in their respective territories. Eaton now has more than 400 active patients on therapy, and we estimate that this only represents 10% of the target market, so we still have a long ways to go. On the metabolic side of our portfolio, perglymic acid continues to shine. Once again, the product is exceeding our expectations, and we are happy with the performance. Herglimic posted record revenue in Q2, and we have already added additional new patients in July, so we expect the revenue growth to continue. Sticking with the metabolic portfolio, we were excited to announce the acquisition of PKU GoLike in March, and we have now fully relaunched the product with our commercial organization. Patients who suffer from phenylketonuria, also known as PKU, lack the enzyme needed to break down phenylalanine, an amino acid found in protein. The consumption of regular protein can result in a buildup of this amino acid, which may result in neurological issues. To combat this, an estimated 8,000 PKU patients in the U.S. rely on specialized protein medical formulas such as PKU-Golike. PKU GoLike was a strong strategic fit for Eaton because the condition is managed by metabolic geneticists, the same healthcare professionals that we are actively engaged with on our other metabolic products. We also view GoLike as a best-in-class product because it offers a variety of formats, including a unique bar, it is significantly better tasting than the competing products, and has a delayed release technology designed to keep patients full for longer periods of time. In addition to these compelling benefits, the acquisition of GoLike offered meaningful financial upside. We paid less than two times revenue for the asset, even though GoLike was and is still early in its launch with significant revenue left to capture. In mid-April, our sales team relaunched GoLike at the Genetic Metabolic Dietitians International Conference and received immediate strong interest. We've already seen an uptick in new patient referrals since our promotional activities have begun. And we continue to work towards our goal of achieving 10% market share of the estimated $100 million market for PKU medical foods in the U.S. Eaton has also continued to add patients on betaine and neticinone. Although the revenue impact for these two products is significantly lower than keraglumic acid, they have further strengthened our relationship in the metabolic geneticist community. increasing the frequency of interactions with potential curglimic acid prescribers, and now offering an additional opportunity to promote PKU go-like. Turning to our development pipeline over the past several quarters, you've heard me discuss the importance of our pipeline candidate ET400, our proprietary patented formulation of hydrocortisone oral solution. This formulation is in high demand from patients, caregivers, and physicians, and if approved, would complement L-candy sprinkle and provide an alternative for the large contingent of patients, potentially several thousand who prefer a liquid product. Currently, these patients are either creating their own homemade suspension by mixing crushed tablets with water or using a compounded product that is not FDA approved. During the second quarter, we completed our NDA submission for ET400 to the FDA. Last month we received the exciting news that the NDA was accepted for review. We're thrilled to be one step closer to bringing this critical medication to patients in need. The FDA has assigned our application a PDUFA target action date of February 28th, 2025, and I have initiated launch preparation activities accordingly. We plan to begin production of commercial product in the fourth quarter of this year. We expect to be in a position to launch ET400 quickly upon its anticipated approval in February. Once approved, we believe ET400 will allow us to capture a greater percentage of the oral hydrocortisone market, and together with Alkindi Sprinkle, achieve combined peak sales of more than 50 million annually. As you know, we are very excited about this product's potential. We believe growth of our existing portfolio combined with the ET400 launch sets Eaton up for a major inflection point in 2025. We've also made steady progress with ET600, our product candidate under development, for the treatment of diabetes insipidus. This product has passed its pilot bioequivalency study, and we are on track to complete a pivotal study over the next several months. We expect to submit the NDA early in 2025 for potential approval 10 months later. In addition to growth from our commercial products and near-term pipeline candidates, we continue to pursue opportunities to grow business development. We believe we are in a very attractive position from which to do this. We have a healthy balance sheet, we are generating cash, and our product sales are poised to continue growth for many years to come. As a result, we have the luxury of being able to remain patient and disciplined as we pursue new opportunities. While we certainly don't need to complete any transactions in order for the company to be successful, we do see opportunities to earn very attractive returns by putting money to work in commercial rare disease products that are a strong strategic fit. We are actively engaged in discussions on multiple opportunities and remain optimistic about our ability to land another product before year end. We remain focused on commercial assets that can immediately deliver revenue and earnings to the company. In addition to the excess cash on our balance sheet, we believe we have significant additional capital available to us should we need it. Given our current stock price relative to our near and long-term expectations for the business, our strong preference would be to utilize debt for any larger transactions. As we wrap up the call, I hope my remarks have made it clear why I'm excited about Eaton's prospects over the coming quarters. We are rapidly nearing a critical inflection point, and I believe our future will be very bright as we execute on our three-pillar growth strategy. First, grow our existing products. These products are firing in all cylinders, as you saw with our record product sales for the quarter and 40% year-over-year growth. We expect growth to continue for the foreseeable future. Our late-stage pipeline candidates are set up to produce significant additional long-term revenue growth, starting with the major launch of ET400 in early 2025, followed closely by the anticipated approval of ET600 less than a year afterwards. Thirdly, we remain optimistic about our prospects to acquire new products through business development, which could turbocharge our growth and provide a major boost to our profitability. With the combination of these three levers, I believe we have a great opportunity to achieve our goal of reaching $100 million in revenue in the coming years. With that, I'll turn it over to James, our Chief Financial Officer, to discuss the financials. James?