Eton Pharmaceuticals, Inc.

Good day and thank you for standing by. Welcome to the Eaton Pharmaceuticals Investor Day and Fourth Quarter 2024 Earnings Results Conference Call. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. 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. I would now like to hand the conference over to your speaker today, David Krempa, Chief Business Officer.

Hello, everyone, and welcome to Eaton's fourth quarter 2024 results and 2025 Investor Day conference call. Before we begin the presentation, please take a look at our safe harbor statement. Our comments today may contain forward-looking statements and involve risks and uncertainties that could cause actual results to differ materially from those presented. Please see the forward-looking statements disclaimer in our earnings release and the risk factors in the company's filings with the SEC. With that, I will now turn the call over to Shawn Fringelson, our CEO, to begin the presentation. Thank you, David, and thank you, everyone, for joining us today. It's an exciting time for us to be hosting this call, and we have a lot of important items to discuss. We'll begin by reviewing our transformational last six months, our corporate vision, and our three-pillar strategy for long-term growth. And James will discuss our fourth quarter and full-year 2024 financial results. After that, we will provide a deep dive into the significant potential we see with the recently closed Increlix acquisition. Next, we will cover the Outlook for Adrenal Insufficiency franchise, and I'll tell you about our latest acquisition, Gelson, and the untapped opportunity we see within Wilson Disease. We'll then discuss our recently announced ET600 clinical results and upcoming planned NDA submission, as well as the update on the rest of the pipeline, including two new products that we are disclosing for the very first time. We'll wrap up with James discussing our financial outlook for 2025 and beyond, and then we will open up for Q&A. Today, you will not only hear from me, but also the rest of our executive team. James Gruber, our Chief Financial Officer, David Krempa, our Chief Business Officer, and also Ipek Erdogan, our Chief Commercial Officer. Okay, let's get started. Our vision is clear. We want to build a large, leading, ultra-rare disease company that brings as many new treatments to patients as possible. We intend to do that by putting patients first. Eaton operates on the philosophy that every patient that wants and needs our products will get it, regardless of insurance status or access barriers. I believe we have one of the most generous, high-touch patient-assisted programs in the industry. This goes beyond just $0 copays. It includes free drug programs for under or uninsured patients and free bridge shipments while reimbursement paperwork is being worked through. Our laser-sharp focus is on the rarest of conditions, which is an area where we think we can have the greatest impact on patients. All conditions our products target currently have fewer than 10,000 patients in the United States, and some have even fewer than 1,000. Many of these patient populations have been overlooked by big pharma for years because of the smaller size of these opportunities. However, we are determined to fill these gaps. I take pride in being able to fulfill an unmet need and deliver new treatment options to these patients that have been overlooked for far too long. And we want to solidify that commitment as many times as possible. Eaton is not a single product company. We now have seven treatments on the market, and we intend to continue growing that number, bringing in as many new therapies to market as possible, which allows us to make the greatest impact to patients. There are more than 5,000 rare diseases out there without any current treatments, so there's a lot of workforce to do and many patients that can benefit from Eaton bringing in new therapies to market. Over the last few months, we've acquired two high-value commercial products, Increlix and Galzen, which will both have significant and immediate impacts on our 2025 revenue. We've also added three late-stage pipeline assets, which help us deliver even greater long-term growth. And Neaton continues to deliver with our existing business. Our commercial team continues to produce organic sales growth while also preparing for major product launches and integrating our new products. And our R&D and regulatory teams have made exceptional progress advancing our pipeline assets towards the market. Our strategy remains the same. The way we've grown the business to date is how we'll continue to grow it in the future. Since the launch of our product years ago, we've had a three-pillar growth strategy. Number one, organic growth of existing products. Two, development of internal pipeline programs. And three, external acquisitions and licensing transactions. Starting with organic growth of the products we've already launched. We've seen 16 straight quarters of product revenue growth. That's every quarter since we launched Elkindi Sprinkle. And we believe Alkindi, Galzen, and Incralax, which have great organic growth prospects, will keep that streak alive. All three products have captured a relatively small percentage of their target market opportunities and have long runways ahead. Eaton also has a strong track record of developing and progressing products internally, with ET400 the best example of our internal competencies. With ET400, our team fully developed the product from scratch to FDA filing in a fast-paced and cost-effective manner. If approved, and we have every reason to believe that it will be, ET400 will add a very promising and high-revenue product to a portfolio for a fraction of what it would have cost to acquire a product with the same characteristics. However, our internal pipeline includes much more than ET400. We also expect to see near-term value realized from our other pipeline products, including ET600, ET700, ET800, Mglidia, and Venial, all of which we will talk about today. Finally, we will continue to pursue strategically aligned business development opportunities to acquire or license new products. This has been a crucial part of our growth story so far. And we've demonstrated success in identifying and acquiring undervalued products, making these acquisitions pay off quickly. We begin with Alcandia Sprinkle and Kirk-Lumic Acid, both of which had a very short payback period and will generate lifetime profits at many multiples of their purchase prices. We anticipate similar or better returns on our recently closed Inculex and Gelson transactions. Our business strategy has proven repeatable and we expect to continue finding and acquiring attractive assets on a go-forward basis. In many ways, we are actually in a better position to execute on business development activities today than ever before. With our strong financial position, we have greater access to capital and our increased commercial infrastructure and recent track record of commercializing rare disease products has made us an even more attractive partner. We expect acquisition and licensing transactions to remain a central part of the Eaton growth story. Our commercial strategy is one of our core competitive advantages and makes us particularly well-suited to delivering life-saving treatments for patients suffering from the rarest of diseases. Concentrated prescriber bases means a limited number of specialists. We could cover all of them with a highly targeted, efficient Salesforce efforts. Eaton has also established long-standing relationships in the pediatric endocrinology and metabolic genetics communities, a significant advantage when trying to drive awareness and adoption. This also gives us a strong competitive edge when launching new therapies. It's also why the Incolex acquisition was such a no-brainer. More than 90% of doctors who treat this condition were already our existing targets. Another distinctive competence we bring is our meaningful partnerships with patient advocacy groups. Many of the conditions we pursue are so rare that there is limited available to parents of newly diagnosed patients. These parents turn to and rely heavily on patient advocacy groups for education and updates on their condition and new treatment options. Our strong partnership with these groups has helped drive increased awareness. We also work closely with key opinion leaders. They provide valuable insight into cutting-edge treatment practices. Our close work with these thought leaders also allows us to better understand the shortcoming of existing treatments. This allows us to identify areas of unmet need. For example, the idea for EP600 product candidate came out of discussions with leading pediatric endocrinologists. Our Eaton Cares program, patient support program, is a point of difference for Eaton, offering best-in-class personalized support for patients and offices and removes access and affordability barriers. Through Eaton Cares, we offer a $0 copay for commercial patients, quick start and bridge programs, a nurse hotline, monthly patient check-in, and exclusive distribution through a high-touch specialty pharmacy. We truly believe our commercial strategy sets us apart and would not be easy to replicate. We've intentionally curated one of the broadest ultra rare disease portfolios in the industry. In fact, I cannot think of another player in the ultra rare disease space that has 13 approved or late stage ultra rare products in their portfolio. Of the 13 products, seven are commercial, and that should increase to eight with the upcoming expected approval of ET400. Five of these 13 products have been added in just the last six months. There were three acquisitions, INCRELEX, MGLIDIA, and GALSIM, plus two new internal programs, ET700 and ET800, which we initiated last year and will discuss for the first time today. Here are the results that showcase the effectiveness of our strategy and the excellence of our execution. We've made tremendous progress over the past few years, growing from just $3 million in product sales revenue in 2021 to $39 million in 2024. We are very proud of this accomplishment, but really are just getting started. Those of you who have followed us for a while know that we have ambitions to reach levels much higher than we are today. With the additions of Acrolux skeleton and ET400 on top of our existing approved products, we believe there's a clear path for us to reach 100 million in revenue in the near term, and ultimately much higher levels than that as our product pipelines come to market in the coming years. We look forward to spending this morning explaining why we're so confident in the near-term growth opportunity and laying out additional details on how we plan to get there. We will be taking an in-depth look into the market opportunities for our new products and our commercial strategies to ensure we can quickly unlock the next wave of growth for Eaton. Before we dive into our portfolio in more detail, I'll turn it over to James to discuss our record fourth quarter results.

James? Thank you, Sean. I am pleased to share that the fourth quarter was another record quarter for Eaton, representing our 16th straight quarter of sequential product sales growth. Revenue was $11.6 million, all from product sales, representing a year-over-year increase of 59%. These strong results were driven primarily by the continued robust growth of both cargumic acid and Alkendi sprinkle. The Incurlex acquisition closed on December 19th and contributed less than $200,000 of revenue to the quarter, and the Galzen acquisition closed on December 31st so our new products did not have a material impact on Q4 revenue. Gross profit increased by 78% year-over-year, including the negative impact of stepped-up inventory values and increased IP amortization reported in cost of goods sold. SG&A expense increased to $6.7 million in the quarter, which included some one-time transaction costs related to the Incrulex product acquisition. In addition, investments in additional headcount and commercial infrastructure were made in the fourth quarter to support our three expected product launches in 2025. R&D expense for the quarter was a negative $900,000 as we were granted an orphan drug designation for ET400, which resulted in a refund of the NDA submission fee that we had paid in expense in the second quarter of 2024. Operating income was a positive $600,000 in the quarter. Our full fourth quarter results are available in our earnings press release that was issued this morning. And for detailed full year 2024 results and disclosures, please see the company's Form 10-K, which was filed with the SEC earlier today. I'll now hand it over to our Chief Commercial Officer, Ipek Trinkets, to discuss a recent acquisition of INCRALEX.

Thank you, James. When I joined Eaton nearly four months ago, one of my key imperatives was the integration and relaunch of INCRALEX, which we closed in late December. We found INCRALEX to be a uniquely compelling opportunity for Eaton. One, we are incredibly excited to add to our portfolio for three key reasons. One, its attractive therapy characteristics. INCRALEX is used to treat pediatric patients two years of age and older who suffer from severe primary insulin-like growth factor I deficiency, or SPIGFD. It is estimated that approximately 200 children in the United States suffer from SPIGFD. We recently met with the mother of a former INCRALEX patient, a college-age young lady now. This mom still remembers to this date how INCRALEX made a difference for her daughter over the several years she was on therapy. She shared how on her last day of injection, her daughter was in bittersweet tears because INCRALEX became such a big part of who she was, her identity, and her daily routine. And now her journey was over with her reaching her goals. This therapy truly serves a critical unmet need that is recognized both by healthcare professionals, patients, and caregivers. There are no other treatment alternatives for these patients. Incralex is also a complex biologic product, which makes it a highly durable asset. Given the relatively small size of the patient population, we believe it will be extremely unlikely to ever see a biosimilar competitor. The second reason that made INCRELEC such a compelling opportunity for us was its strategic and close fit with our commercial infrastructure and go-to-market competencies. As Sean mentioned, we have spent the last four years building up strong relationships with the pediatric endocrinology community through our efforts in commercializing alkyndesprinkles. We built a high-performing rare disease sales organization who were already calling on 94% of the INCRALEX prescriber targets. This team is now 100% dedicated to pediatric endocrinology. We have developed deep partnerships with key professional societies and patient advocacy groups. We have strong omnichannel marketing capabilities in place to complement our field sales team. INCRALEX offered such an attractive opportunity to leverage all of these commercial competencies. Finally, in all our acquisitions, we want to be greatly confident that we can add significant value to the product and unlock growth beyond just incremental. With INCRALEX, we believe we have multiple avenues to do that. It starts with increasing adoption through focused sales and marketing. The previous ownership of INCRALEX has significantly reduced promotional activities over the last five years. Among pediatric endocrinology community, there are physicians today who thought the product was no longer in the market and fellows in training who may not know this therapy exists. We see a huge unlock for us to leverage our existing infrastructure to increase awareness and education of SPI-GFD and Incralax and drive accelerated adoption. We've also made a price adjustment for our therapy to align with its demonstrated value and the significant investments we are making in its commercialization. As Sean mentioned in our opening, we put patients first. Ensuring patient affordability will always be our non-negotiable priority. By expanding financial assistance options, including our $0 copay program and streamlining access pathways, We anticipate that we will improve patients' ability to obtain and adhere to the treatment. The final avenue for creating value will be through the potential to broaden treatment access by harmonizing the U.S. and European labels. This would enable a broader patient population in the U.S. to benefit from INCRELEX clinically. Our Chief Business Officer, David Krempa, will speak to our plans in detail shortly. Now, let's look at the history of Incralex revenue. Under Ipsen ownership, Incralex peaked at 185 active patients in the U.S. in 2012, but fell sharply following a product shortage in 2013 and never fully recovered. Around 2019, previous ownership's corporate focus shifted, and the company decided to stop promoting the product. When we acquired the product at the end of last year, there were 67 active patients in the US. As you can see here, we estimate returning to the previous high of 185 patients, which would generate around $50 million in annual revenue in the United States. We are confident that we have the right strategy, plan, and capabilities in place to capture a much larger share of this market opportunity. A few weeks after closing our acquisition, we brought together a group of leading pediatric endocrinology toad leaders with specific expertise in treatment of severe primary IGF-1 deficiency who also are intimately familiar with INCRA-Lex. It was imperative for us to shape our U.S. relaunch plan with their input and to gain their insights on our U.S. label harmonization initiative. Historically, SPI-GFT has been an underdiagnosed and undertreated condition. Through our discussions, it was evident that there is low awareness among pediatrician community about this condition, which results in delayed diagnosis and referral to pediatric endocrinology for appropriate treatment. Since there are various causes of short stature, when presented with a patient who is short in stature, and IGF-1 deficiency is not necessarily top of mind. There is also an ingrained habit of prescribing growth hormones for short-stature patients, which may not help through SPI-GFT patients who have normal growth hormone levels. Because they are prescribed growth hormones, SPI-GFT patients may miss their window to begin Incralax treatment to reach their full growth potential. These patients are typically not re-evaluated via IGF-1 testing, which leads to late therapy start or therapy ineligibility. These discussions help us sharpen our 2025 focus. Given our relationships in the community and the coverage we already have with most of the doctors treating the condition, we see a prime opportunity to drive awareness among stakeholders especially at the key leverage points across the patient journey to trigger therapy adoption and optimize patient outcomes. There is also strong consensus among thought leader community on how critical harmonizing the U.S. and European labels would be to appropriately diagnose and treat SPIGFT population in the U.S. Our brand strategy is straightforward in design, yet impactful in effect. It is anchored around activating the most critical leverage points across the patient journey to drive awareness, adoption, and adherence. It starts by re-engaging the pediatric endocrinology community to ensure all short-stature patients are screened for severe primary IGF-1 deficiency and they consistently and appropriately use IGF-1 testing to accurately diagnose SPI-GFT patients. Once these patients are diagnosed, our goal is that healthcare professionals use INCRELEX in all of their SPI-GFT patients. In addition to our dedicated sales force, we have omnichannel plans in place to deliver on this first pillar, peer-to-peer education being a critical one. We also close to collaborate with key professional societies, such as Pediatric Endocrine Society, Pediatric Endocrine Nursing Society, and American Academy of Pediatrics to maximize our healthcare professional reach. Our second key imperative is driving patient awareness and engagement. Receiving a diagnosis for an ultra-rare disease can be intimidating, and we want to make sure patients and families are equipped with knowledge on this diagnosis, and are empowered to ask for Incralax for their loved ones with SPIG-FD. We have solid partnerships in place with key patient advocacy groups, such as Human Growth Foundation and MAGIC, to amplify our efforts. Final pillar of our strategy is to establish our company as the best-in-class partner in severe primary IGF-1 deficiency space. offering the best therapy experience as possible to patients, caregivers, and healthcare providers in their journey. You've already heard about the Eaton Cares program, which is also available to NCLEX patients, offering a $0 copay for eligible patients and best-in-class patient and office support. We will ensure that all pediatric endocrinology offices are aware of the access and affordability benefits of Eaton Cares, and caregivers take full advantage of these benefits to ease the disease burden for their families, financially and emotionally. We've already built quite a bit of momentum in the past 90 days since day one of our acquisition. Our specialty pharmacy partner was fully operational, ready to dispense 48 hours after the acquisition closing. We immediately transferred 67 current patients in one week from multiple pharmacies. Our sales team was trained and deployed on the same day, reaching over 600 pediatric endocrinologists across the country. We are thrilled to report that as of mid-March, we are at 81 active patients. We activated personalized prescriber engagement and education campaigns to complement the efforts of our sales force of 11 rare disease specialists, and we are encouraged by the response and receptiveness of the physician community we are already seeing. We are now a mission alliance partner of the Pediatric Endocrine Society, and we'll have strong company presence at upcoming national conferences with PES, PENS, ENDO, and AAP. with peer-to-peer education activities focusing on INCRA-LAX. We've already started in January partnering with Human Growth Foundation in their endocrinology education days for physicians and key institutions, and we'll be participating in all of their patient events through this year. The first 90 days of product launches are critical, serving as a litmus test for our strategic planning and execution capabilities. It allows us to assess the effectiveness of our approach, make necessary adjustments, and build momentum. We are highly confident that our performance during this phase not only validated our strategy, but also set the stage for future success of INCRALEX. With that, I'll now turn it over to our Chief Business Officer, David Krempa, to discuss a key growth initiative for INCRALEX, the U.S. label harmonization.

Thank you, Ipek. As Ipek mentioned, we see a tremendous opportunity in harmonizing the U.S. and European labels. While INCRELEX is approved for severe primary IGF-1 deficiency in both regions, the definition of what constitutes severe primary IGF-1 deficiency is different between the two regions. In both regions, there are two criteria that must be met, the first of which is based on height. In both regions, patients need a standard deviation score of less than or equal to negative three. The second criteria is based on a measurement of each patient's IGF levels. In the US, a patient must be at least three standard deviations below the median IGF level. In the EU, patients must be in the bottom two and a half percentile for their age and gender. If you convert the two and a half percentile to a standard deviation score, it's approximately negative two. As you can imagine, a requirement of only negative two standard deviations rather than negative three results in a significantly greater patient population. Based on the current definitions, it's estimated that there are only 200 patients in the US, but more than 1,000 in the EU. If the FDA were to adopt a broader definition, we estimate that the potential patient population in the US would expand from 200 to approximately 1,000. We feel optimistic about the prospects for this realignment because we have compelling real-world data to show the safety and efficacy of Increlx within this slightly broader patient population. As part of a post-approval commitment tied to its 2007 approval, European regulators required Increlx's owner to maintain a patient registry tracking long-term safety and efficacy of patients taking the drug. The registry has now collected more than 15 years of data from over 350 patients. We believe this data will allow us to provide compelling real-world evidence to convince the US FDA that Incolex is a critical, effective, and safe treatment for patients that meet the height index criteria and have IGF levels that fall between negative two and negative three on the standard deviation score. We are currently aggregating the patient registry data to support a meeting with the FDA to discuss this topic in the middle of 2025. Assuming we reach alignment with the FDA, we would aim to submit a supplemental filing in the second half of this year. We expect this supplement to receive a six-month review, which could allow for an updated label in the first half of 2026. While we are optimistic about the prospects for this label harmonization, it's only one of our many growth levers for Incolex. and we expect that the product will deliver significant long-term growth with or without the label change. When we acquired the product, it was at about a $10 or $11 million run rate in the US. Based on our optimized price and the new patients we've already added this year, we think starting in the second quarter of this year, the product will be operating at around a $20 million revenue run rate in the US. We're proud of this quick progress, but as you've heard, we think we've only captured about 40% of the patient population in the U.S. So we think there is still much more to come. If we were to capture all 200 patients, we estimate that the total revenue opportunity is around $55 million. As Ipek mentioned, we're working hard to increase adoption of the product, and early indications have given us confidence that we can drastically increase the share of patients on treatment and capture more of this $55 million market. And of course, if we are successful harmonizing these labels, we think the market opportunity expands roughly fivefold to more than $250 million per year. I hope it's now clear why we're so enthusiastic about this acquisition. We secured a durable biologic product at a fair price with multiple levers for growth. With our specialized pediatric endocrinology commercial team and capabilities, we think we're well positioned to capitalize on this opportunity. Now sticking with our pediatric endocrinology products, let's talk about our adrenal insufficiency franchise of Alkindi Sprinkle and ET400. Adrenal insufficiency, or AI, is a condition that occurs when one's body does not produce enough cortisol naturally. As a result, the patient must be on daily hydrocortisone replacement therapy for life. In 2020, we launched Alkindi Sprinkle, a proprietary formulation of hydrocortisone granules that is FDA approved as a replacement therapy for adrenocortical insufficiency in patients under 17 years of age. It was and still is the only hydrocortisone treatment specifically designed to help provide accurate doses for newborns and children, addressing a significant unmet need. Prior to LKINDI, the lowest dose of hydrocortisone was a five milligram tablet. However, young children often need lower doses of one milligram or even less. Caregivers and patients were forced to split or crush tablets or utilize a compounded pharmacy to get a suspension, all of which can result in inaccurate dosing. Alkindi has been a game changer for many patients and their caregivers. Patients can now accurately dose as low as half a milligram. However, despite Alkindi's success, there remains a strong demand for an FDA-approved oral liquid product. A liquid formulation is ideal for many patients, including those who dislike the texture of granules, have difficulty swallowing tablets, or are on a G-tube. We continue to see very strong interest from patients and physicians that are eagerly awaiting an FDA-approved liquid. We believe the launch of ET400 will completely change the trajectory of this franchise and allow us to rapidly capture a much greater portion of this large market. We believe there's around 10,000 pediatric AI patients in the U.S., and we have conservatively stated that our target market is the younger half of its population, roughly 5,000 children, zero to eight years old, where low dosing is most prevalent. At Alkindi's current average revenue per patient of approximately $45,000 per year, this younger market alone represents an addressable market of more than $200 million. However, we do still expect to capture a meaningful portion of the older patients aged 9 through 17. Currently, 16% of our Alkindi patients are over 9 years old. Since introducing Alkindi in 2020, we've seen consistent, steady growth with no signs of slowing. In fact, January of this year recorded the second highest month of patient referrals since our product launch. We believe we still have only captured a small piece of this 5,000 or so target market. so the product has a very long runway ahead of it. The growth continues to come from both adding new prescribers and seeing increased scripts from existing prescribers. We believe having a sales force that is now 100% focused on pediatric endocrinologists in 2025 will help further boost these metrics. We've been able to accomplish this continued growth despite a relatively high discontinuation rate for the product. We estimate that roughly 40% of patients that start on Alkindi discontinue in short order. By far the largest reason we hear is complaints about the texture of the granules. Many patients that discontinue end up going back to a compounded liquid product that they find to be more convenient to administer. We estimate that the launch of ET400 would solve more than half of the discontinuation that we have historically seen with Alkindi sprinkle. Reducing these discontinuations would result in hundreds more active patients on fraud. This will be a nice benefit from ET400, but by far the even bigger opportunity is the thousands of patients that have never even tried out KindiSprinkle because they strongly prefer a liquid dosage form. Through our conversations with physicians and parents over the years, the need for a liquid product was abundantly clear, and that's why we initiated the development of ET400 many years ago. We knew the compounded use was rampant and represented a huge market opportunity. But since compounded products aren't typically covered by insurance, their usage is not tracked very well in conventional data sets like insurance claims or IQVIA data. And it was always challenging to fully quantify the usage. The last month, one of the adrenal insufficiency patient groups conducted a survey that finally helped quantify the market. 156 caretakers in the US with children four years old or younger were asked how they give hydrocortisone to their children. Thirty percent used tablets in a solid state, either to take the whole tablet or attempt to cut it in halves or quarters. Twenty-eight percent reported using a liquid suspension from a compounding pharmacy. Another 22 percent reported making their own homemade suspension by crushing tablets and dissolving them in water or food. And 21 percent reported using Alkindi sprinkles. A combined 50% reported using a liquid, either purchased from the compounding pharmacy or made at home. We believe this group represents the prime candidate to switch to ET400 upon approval. This verifies and adds some additional color to what we have already heard for years from patients and caregivers. We believe Alkindi plus an FDA-approved oral liquid like ET400 would have a good chance of serving this 70% of survey participants. or approximately three and a half times the current LKMD usage. In addition, we have heard from some doctors and caretakers that they would prefer a liquid formulation but are concerned about the dangers of the current unapproved compounded product and have reluctantly stuck with the tablets. So we do believe there will be some patients switching from the tablet bucket into ET400. Based on FDA guidance, once ET400 is approved, Compounding pharmacies should not be allowed to compound hydrocortisone in the manner that they currently do. However, the success of ET400 will not be reliant on any enforcement actions. We expect to take the majority of the compounded market regardless of whether or not the FDA takes any action. The merits of the ET400 product stand on their own and provide a significant benefit over any compounded product in nearly every way. For example, ET400 is a true oral solution while the compounded product is a suspension, which means that the active ingredient is floating around in the liquid and must be shaken vigorously prior to each use. There have been many cases of caretakers not properly shaking the product, which leads to the active ingredient settling at the bottom of the bottle. As a result, these caretakers were underdosing their child at the start of the month when they were pulling liquid from the top of the bottle, and then they were overdosing their child when they were at the bottom of the bottle when they got to the bottom of the bottle where all the active ingredient had settled. Secondly, our product will be FDA approved and tested for safety and efficacy, unlike compounded products. The FDA's own test has found that a shocking 31% of compounded products failed potency testing. This means the actual amount of drug in the compounded product did not match what was claimed by the pharmacy. We believe most doctors understand and appreciate the safety concern, and have a strong preference for prescribing FDA-approved products over compounded products whenever possible. However, the risks and differences between compounded products and FDA-approved products is not as well understood among parents. So in tandem with the ET400 launch, we will be implementing awareness campaign to help educate caretakers on this subject. Thirdly, ET400 should drastically lower out-of-pocket costs for patients. Compounded products are usually not covered by insurance, and we have heard from patients that they are typically paying $40 to $80 per month for their compounded hydrocortisone. By contrast, we will be offering zero copays and free drug for uninsured patients. Now, Kimby Sprinkle has seen very strong reimbursement coverage of more than 95%, and we expect to see a similar favorable status with ET400. So upon ET400's approval, we certainly hope that pharmacies will be following FDA guidelines that have been put in place to protect patient safety. But as you can see, we will be offering a superior product that we are confident can win over the market either way. ET400's producer date is May 28th, and we are fully prepared for launch in anticipation of approval. We have responded to all information requests, and there are no deficiencies or requests outstanding. Operationally, we are ready to go. We have already manufactured our launch inventory, and we have our marketing campaign teed up and ready to go live. Our goal is to launch the product within one week of its approval date. ET400's launch has many things going in its favor that should position it for a quick uptake. For one, we already have very strong relationships with the existing adrenal insufficiency doctors. When we first launched Alkindi in 2020, we were going into the market cold without relationships. Secondly, we are launching a known and trusted molecule in a preferred and widely used dosage form. This is not a product launch with complicated messaging that requires a heavy lift to educate the market and change prescribing habits. With these tailwinds, we expect to see significant patient conversion in the first 12 to 18 months post-launch. However, it will not be an immediate revenue boost within the first few months of launch. We think many patients will switch to ET400 at their next regularly scheduled checkup, which could take place one to three times per year. Many of these pediatric endocrinologists book appointments two to four months out, so even a patient looking to convert immediately upon approval may take a few months to get an appointment and a new prescription. In addition, the first month's shipment is often a non-revenue bridge shipment while reimbursement paperwork is being handled. As a result of this, our expectations for revenue contribution from ET400 is relatively modest in 2025, but significant in 2026 and beyond. Based on all our market research, patient surveys, and extensive discussions with prescribers, we remain convinced that the franchise will combine for sales of more than $50 million per year. I'll now hand it back over to Sean to discuss our exciting new gals and opportunity. Thank you, David. Wilson disease is a rare genetic disorder that causes excessive copper accumulation. Ordinarily, when copper is ingested, it leaves the body through the urine, but patients suffering from Wilson disease do not metabolize copper normally, and their bodies essentially act like a sponge, with the copper soaking it up and preventing it from leaving the body. This can lead to hepatic and neurological symptoms, and typically patients do not know about it until the consequences are dire. Gelatin is FDA approved for the maintenance treatment of patients with Wilson disease who have been initially treated with a chelating agent. It is the only FDA approved zinc therapy for Wilson disease. We were drawn to this acquisition because we saw significant opportunities for Eaton to add value, grow the product, and improve outcomes for patients. First, we saw issues of patient support, access, and affordability, which we knew we could solve with our Eaton Cares program and provide a significantly superior patient experience. Secondly, lack of promotion for years led to low awareness and education, and despite the superior efficacy of Galazine, patients were taking inferior, unapproved supplements with no clinical safety or efficacy. Thirdly, there are complex barriers to entry for competition. The product side of action is in the intestine, and because of that, traditional blood level and bioequivalency studies are not indicative of zinc bioavailability, which would require considerable investment for a possible entrant. Fourthly, this lifelong condition is severely underdiagnosed. We expect to see greater diagnosis rates in the future with increased genetic testing. And lastly, we saw a compelling opportunity for us to invest in Wilson disease and improve the therapy options for patients through development of a next generation product, ET700, which we will discuss today for the first time. Here is the market opportunity as we see it. Wilson disease is estimated to impact roughly 1 in 30,000 people or approximately 10,000 people in the United States. Right now, we estimate that only around 2,000 of these patients are diagnosed and actively on a therapy, which is a very low diagnosis rate. And today, unfortunately, most patients are diagnosed for the first time when they are in their 20s and 30s. Symptoms have started to present themselves after years of excessive copper buildup, and this delayed diagnosis can lead to worse outcomes, including neurological damage, liver failure, and sometimes requiring a liver transplant. Fortunately, with the increased frequency of genetic testing in recent years, more and more patients have started being diagnosed prior to symptoms and liver damage presenting. These patients can proactively start zinc therapy and see improved long-term outcomes. We expect to see this diagnosis rate continue to increase substantially in the future with more awareness, increased genetic testing, and even recently launched initiatives in some states to push for newborn screening for Wilson disease. Due to its milder side effect profile, we believe zinc is the preferred treatment for asymptomatic patients, so any increase in diagnosis rates could be a strong tailwind for long-term Gelsen usage. Of the roughly 2,000 currently treated patients, we estimate 800 are currently on a zinc therapy, while the remainder are on chelating agents. Remarkably, due to historic challenges with access, affordability, and awareness, the majority of patients on zinc therapy actually appear to be using over-the-counter zinc supplements rather than the FDA-approved prescription product. These supplements contain a different salt form, and they are not indicated for use in Wilson disease. Studies have found that the OTC forms are not as clinically effective as Galzin at managing Wilson disease. Unfortunately, many patients are unaware of this. And since Galzin was not previously promoted, there's never been an educational or awareness campaign to make this known. Other patients simply couldn't afford their Galzin co-pays and were forced to sacrifice safety and efficacy and taking an OTC supplement because it was cheaper. Gelson also experienced a drug shortage in 2020, which drove even more patients to switch to OTC supplements. These historic challenges have set up an attractive opportunity for us to make a difference for Wilson disease patients. We believe we now have the ability to double or triple the number of patients on Gelson in the coming years. With its superior efficacy, a new top-of-the-line patient support program dedicated rare disease specialists and the launch of our active education and awareness campaign, I believe we will see the majority of zinc users back on FDA-approved galson in short order. As I've mentioned, zinc therapy historically had multiple challenges for patients, and our goal is to reduce all of them. Access was the first problem. Because the product has extremely low volumes but was distributed through the traditional pharmacy model, most pharmacies did not even carry the product and had to special order it every time they received a script. As a result, it was surprisingly difficult and time consuming for patients to get their medication. 42% of patients reported trouble even finding the product at their local pharmacy. Secondly, affordability was an issue. Despite Gallatin having an extremely low list price for an orphan drug of around $4,000 per year compared to around $300,000 a year for other branded Wilson disease products, Gallatin was still frequently classified as a specialty medication that resulted in very high out-of-pocket co-pays for some patients. With no patient support services to help them out, many of the patients were forced to purchase a cheaper OTC supplement. We have now solved both of these problems. The product is now available exclusively through our specialty pharmacy and all patients receive the Eaton Cares patient support program which includes zero dollar co-pays, prior authorization support, direct overnight shipments, and free medication for all uninsured or underinsured patients including those on Medicare. For the first time ever, every Wilson disease patient who wants Gelson product will now be able to get it regardless of insurance status. We were excited to implement this change to drastically improve the patient experience, and so far it has been extremely well received by patients, physicians, and patient advocacy group partners. However, we think there's even more we can do to improve the lives of Wilson disease patients. After access and affordability, the two biggest complaints we heard were the burdensome dosing requirements and unpleasant GI side effects. Eaton set out to tackle these challenges, and we believe we are on our way to doing so with ET700. Currently, zinc has to be taken three times per day, and patients must fast before and after taking the medication. As you might imagine, this can be very inconvenient and lead to compliance issues. Patients report relatively high rates of missed doses, particularly the middle of the day dose. There is also a meaningful portion of patients that report GI side effects with zinc therapy, which can lead to discontinuation or poor compliance. We don't want patients to miss out on this critical treatment, and so we're developing EP700, an extended release form of zinc acetate, which we think may be able to both reduce the number of doses per day and also lessen the GI side effects. EP700 is a program we initiated last year, even prior to the acquisition of Galzen. Once we identified a significant unmet need among patients in the large market opportunity, we knew it was a program we wanted to pursue. Eaton has developed a proprietary extended release zinc acetate formulation that we believe will effectively reduce the dosing burden for patients. We are also optimistic that the slow release of the zinc rather than a bolus dose from the immediate release product can lower GI side effects for patients. We have filed a patent on our proprietary formulation and are also advancing this program at full speed. Eaton has been working with the top key opinion leaders in Wilson's disease to prepare our clinical study program, and we also plan to meet with the FDA this summer to discuss the proposed clinical path. Eaton expects to manufacture registration batches of the product later this year, and we will be ready to initiate a clinical study by the end of this year or early next year. If everything goes as planned, we could submit the product's NDA in 2027. We believe that if approved, ET700 would convert the vast majority of current zinc users, as well as potentially gain some patients that are currently on chelating agents. I would expect ET700 to capture 500 to 1,000 patients, and with pricing in line with other branded Wilson disease products, it clearly has the potential to be more than a $100 million revenue-generating product. Now, let's switch gears back to today and our growth strategy for Galzen. Following our acquisition closing in January, we set the date to relaunch Galzen under our commercial strategy and model on March 3rd. Our first and foremost priority was to ensure a smooth transition of existing patients on Gallatin. We wanted every provider who treats Wilson disease patients, starting with the Centers of Excellence, to become aware of Eaton's commercial support behind Gallatin and the seamless process we are putting in place to access our therapy. Eaton wanted all Gallatin patients to be familiar with the financial support and the therapy support they would be receiving through Eaton Cares. It was also critical that we establish a strong collaboration with Wilson Disease Association, the leading patient advocacy group that advances several key causes that make a difference for Wilson's disease community. Once we successfully convert the existing Gallatin patients, our next critical mission is to accelerate adoption of GELTEN for all Wilson disease patients who receive zinc therapy. ETED is going to make it easy for physicians to prescribe the only FDA-approved zinc treatment versus relying on unapproved over-the-counter supplements, and we will educate Wilson disease patient community on the safety, efficacy, and access advantages of GELTEN that these alternatives cannot deliver on. Finally, I discussed earlier how there is a big opportunity to increase diagnosis rates for Wilson disease. So these patients find the answers they're looking for sooner in their disease journey and get timely treatment before it's too late. We are already initiating partnerships with organizations that are working on advancing this cause through genetic and newborn screening. In parallel, our team is working on leveraging innovative tools to support the patient discovery. With the strategy in motion, Gallatin is now officially relaunched under Eaton, and we expect nearly all existing patient conversions to occur by Q3. Our launch readiness for Gallatin has so far been a strong example of Eaton's agile commercialization in a short period of time from acquisition to market. If you look at our day one launch imperatives, left side here represents our high-touch efforts to increase penetration and enhance access. All Gallatin customers now have access to Eaton Cares and our exclusive specialty pharmacy. Gallatin is the superior product and Eaton Cares will make it more accessible than it has been in the past. Our dedicated sales force is already out in the field contacting all 267 targets who are currently prescribing Gallatin or who have high Wilson disease patient population while our inside sales team is contacting an additional 300 potential prescribers. On the right side, you will see what we have already accomplished in the first two weeks of the relaunch to accelerate awareness and adoption of this under-treated condition. Eaton has complemented our Salesforce efforts by reaching out to all stakeholder groups via various channels from email campaigns for our collaborative outreach with Wilson Disease Association. Our team is investing in peer-to-peer education and speaker programs and securing prominent company presence at key liver, GI, and neurology conferences. In fact, tomorrow, I will be traveling to San Antonio with our commercial team leader for the Chronic Liver Disease Foundation Liver Connect Conference to discuss Galvin with hepatologists and Wilson disease key opinion leaders. We are still in the early stages of this exciting launch and are truly encouraged by the community's warm and positive reception already. We look forward to sharing our progress on gals and growth in future calls. Wrapping up our commercial portfolio is our metabolic franchise led by Kerglimic Acid. These products played an important role in getting us to where we are today. They helped cover the cost of our commercial infrastructure build out and their cash flow contribution over the last few years helped finance acquisitions that allow us to move up the food chain to higher value, higher growth rare disease products. The growth and importance of these products will be muted from here on out as they will be overshadowed by the much larger expected profit contributions from Incrolux, Gallatin, and ET400. However, we expect them to continue generating solid revenue and cash flow for us. Now onto the rest of our development pipeline. We were pleased to find out last week that ET600 passed its pivotal clinical study. The product demonstrated pharmacokinetic equivalence to the reference tablet product in the study with 75 healthy volunteers. EC600 is a proprietary formulation of desmopressin oral solution being developed to treat diabetes insipidus. Diabetes insipidus is a rare condition that can result in excessive urination of up to 20 times the volume of an average child. In addition to being a significant quality of life hindrance if less than treated, diabetes insipidus causes excessive dehydration and can lead to organ damage and delayed or stunted growth in children. If approved, BT600 would be the only FDA-approved oral liquid formulation of desmopressin. Currently, desmopressin is approved in tablet, nasal, and injectable forms, but none of those options provide for the small, precise, and titratable doses needed for pediatric patients. As a result, many pediatric patients use unapproved liquid suspensions from compounding pharmacies or attempt to cut fractional tablets or resort to taking daily injections to get to the lower doses. Based on our discussions with doctors and our deep relationships in the pediatric endocrinology community, we believe an oral liquid formulation of desmopressin would address this patient need. Although the condition is unrelated to adrenal insufficiency, it has the same pediatric endocrinology prescriber base as Alcindia Sprinkle, ET400, and now Incolex, which make it a perfect strategic fit in Neaton's portfolio. The clinical study was the last remaining item needed for our NDA, so we are now finalizing the study report and preparing to submit the product NDA in the coming weeks. Pre-launch commercial activities are on track as we plan for potential approval in the first quarter of 2026. The market opportunity for the product remains. We estimate there are roughly 3,000 pediatric patients in the United States, and we believe the product should reach peak sales of 20 to 50 million. David will now discuss the rest of the development pipeline. David? Thank you, Sean. During the fourth quarter, we announced the acquisition of U.S. rights to amglydia, or glyburide oral suspension, which is under development for neonatal diabetes. Amglydia is a very good strategic fit for Eaton. It serves a clear unmet need for an ultra-rare population of approximately 300 children in the U.S., and it's within our existing pediatric endocrinology call point. While amglydia has been approved in the EU since 2018, There are currently no approved oral treatments for neonatal diabetes in the U.S. Today, there's no way for infants to get the correct dose in an FDA-approved manner. They either have to get a suspension from a compounding pharmacy or crush the adult tablets to make a homemade suspension. It's a very similar story to ET400 and ET600, where Eaton is bringing an oral liquid product to market for precise and accurate low doses for children. Neonatal diabetes is typically diagnosed within weeks of birth, and each patient must be titrated to a specific, unique dose, so precision dosing is extremely critical. The product's European owner, Amtech, has been running a post-approval patient study tracking the safety and efficacy of patients on treatment for the last five years. This data will be valuable to support our new drug application. The product has already been granted orphan drug designation by the FDA, And we have a meeting scheduled with the agency in April to give confirmation that they are in agreement with our clinical proposal. We've structured our licensing agreement such that no investment was required from EDEN unless we receive positive FDA feedback at this meeting. We also have full access to the commercial supply chain and development data from the on-market European product. So once we have FDA buy-in on our regulatory pathway, we think we can quickly move towards NDA submission. potentially as early as next year. If approved, we would expect to capture a good portion of the estimated 300 patients in the U.S., and we think the product could achieve sales of $10 to $30 million per year. Turning now to hydrocortisone injection. We have talked at length about the need for a better hydrocortisone injection option for patients suffering from adrenal crisis. The current product is Solucortef, a kit that is a lyophilized vial or freeze-dried powder that must be reconstituted and mixed up prior to use. Then patients must extract and measure out the solution with a traditional syringe. This complicated process is particularly challenging for caretakers to implement during a potential life-threatening adrenal crisis situation. What we haven't talked about before today is our plan to go after the hospital channel. which is a massive market with 5.5 million vials sold per year. Today, for the first time, we will discuss how we think we can win over this market with our new ET800 product candidate. I'll start first with Xenio, our needle-free autoinjector under development for adrenal crisis. Patients with adrenal insufficiency need daily hydrocortisone, which is where Alkindi Sprinkle and ET400 come in. However, if these patients miss a dose or if they have a stress event, which could be anything from falling off their bike, getting overly nervous about a big test, or battling an illness, they could have what's called an adrenal crisis. An adrenal crisis can result in the patient's passing out, having a seizure, and even death if untreated. The treatment is an emergency rescue dose of hydrocortisone injection. Xenio continues to be one of our most highly requested products because of the challenges with the SoluCortef product today. We often hear from patients and parents how big of a life changer Xenio would be for them. Many kids suffering from adrenal insufficiency are homeschooled or unable to participate in extracurricular activities because their parents are concerned that the chaperone or coaches are not going to be able to use the complicated SoluCortef kit if an adrenal crisis occurs, but anyone could be easily trained to use the two-step Xenio autoinjector. To go with the Xenio device, our partner was able to develop an innovative liquid hydrocortisone formulation. This critical advancement eliminated the need for reconstitution, and it's going to be important for our ET800 product opportunity. Unfortunately, as a complicated drug-device combo, the Xenio development has not moved as quickly as we would have liked. The delays, which included a forced change of the contract manufacturer, are primarily related to manufacturing equipment required to fill the unique cartridge of the device and are not related to the liquid formulation itself. We are hopeful that our partner will be able to work through these challenges and manufacture registration batches later this year or early next year to advance towards NDA submissions. The market opportunity for Xenio remains quite attractive. Currently, 225,000 vials per year are sold through the retail channel, and we think demand would increase with a simple-to-use auto-injector device. Using conservative price estimates for a life-saving auto-injector device, we believe it is easily a $100 million market opportunity. As we watch the progress of the Xenio development and started to collect more positive stability data on the proprietary liquid formulation, we realized that there would be an opportunity for us to take the proprietary formulation, fill it in a vial, and deliver a superior product to the hospital market. This will provide hospitals with a simple, ready-to-use liquid product that does not need to be manually reconstituted. This should save time and reduce the risk of errors, which is particularly important given that hydrocortisone injection is often used in the stressful environments of the emergency room or operating room. Based on IQVIA data, the hospital market is 5.5 million vials per year and more than $100 million. We feel confident that once approved, our ready-to-use product would be able to convert most of this usage. We've already completed formulation activities, we've filed a patent, and manufactured pilot batches of ET800. We are now scheduled to manufacture the full registration batches later this summer. If development activities continue to go as planned, we would expect to submit an NDA in late 2026 or early 2027. We believe ET800 adds another compelling, relatively low-risk product opportunity to our pipeline, and we are excited to continue updating you on our progress in the coming quarters. With that, I'll now hand it back over to James to discuss our financial outlook.

Thank you, David. Let's begin by taking a look at our non-GAAP gross margin percentage, which we expect to improve over time. Starting with the first quarter of 2025, Eaton will begin reporting adjusted non-GAAP earnings results. This is intended to provide investors with a clear picture of the earning power of our business without certain non-cash or one-time expenses. Our gross profit adjustments will include items such as the reversal of acquired inventory stepped-up values, which represent a significant non-cash expense, and the amortization of intangible assets related to product acquisitions. Eaton's adjusted gross margin declined slightly from 2023 to 2024, as carglymic acid grew more than Alkindi sprinkle and made up a larger portion of the company's revenue in 2024 compared to 2023. However, in 2025, we expect to see a significant improvement in adjusted gross margins. The expected addition of revenue from higher-margin products such as Incralex, Galzen, and soon-to-be ET400, combined with the fact that lower-margin cargluomic acid will make up a smaller percentage of the company's overall revenue, will result in a significant increase in the company's adjusted gross margins. We expect 2025 adjusted gross margins to increase throughout the year, with the full year number ending at approximately 70%. As a reminder, cargluomic acid has a 50% profit share and is recorded as cost of goods sold, so the product has reported gross margins in the mid-40s. Our high-growth products, Alkindi Sprinkle, Incralex, Galzen, and ET400, all have, or are expected to have, adjusted gross margins in the range of 70 to 80 percent. We expect this favorable trend to continue over the long term since our higher gross margin products will be the primary drivers of increased revenue in the coming years. They will make up an increasingly larger percentage of our total revenue. Based on our current expectations, we believe that we can reach an adjusted gross margin level of approximately 75 percent by 2028. Now turning to SG&A expenses. If you followed our story, you know that we pride ourselves on being fiscally responsible and being able to quickly grow revenue while maintaining disciplined spending and striving for profitability. Our focus has always been on profitable growth rather than growth at all costs, and we are proud of our track record in this area. This graph does a good job demonstrating the leverage that is inherent in our business model. Over the last 12 quarters, product sales have grown more than 400%, while our SG&A has only increased by 36%. Almost all of our SG&A growth came in the fourth quarter of 2024 as we began making infrastructure investments ahead of our three planned product launches in 2025. Likewise, We expect SG&A expenses to increase throughout 2025 due to the following. Our new dedicated five-person metabolic sales team, which launched on January 2nd. Investments in the relaunches of and promotional activities for both Incrolex and Galzen. Investment in ET400 launch readiness activities. And we have added and plan to add additional corporate staff to support our growing portfolio, including headcount and quality, regulatory, and finance. While we are forecasting increased SG&A in 2025 to support our significantly higher revenue, SG&A expenses will increase at a much slower rate than revenue, and we expect to return to a low rate of annual SG&A growth in 2026 and beyond. As you have heard today, We expect our continued organic growth and new product launches to deliver significant revenue growth in 2025. We expect revenue to steadily increase throughout the year with a few key drivers. U.S. Increlx revenue will begin contributing at its post-transition run rate in Q2. The Galzen relaunch transition is likely to be completed and start contributing material revenue in Q3. and ET400 should start contributing revenue in the second half of the year. With several product launches underway, we still have several moving parts in the coming months, but we feel confident that we can exit 2025 at an approximately $80 million annual revenue run rate. With that, I'll turn it back over to Sean, who will wrap up the presentation and open the call for questions.

thank you james the past six months have been truly transformational laying a strong foundation for accelerated growth fourth quarter marked a record high product sales and our 16th consecutive quarter of sequential growth we see a clear path to reaching 100 million in annual sales in the near term in addition we've added several exciting new products including incolex which offers strategic alignment multiple growth levers to accelerate expansion And it's already performing well, during the 1st, 90 days of launch cannot be happier on that particular launch. We're also excited about the huge lead for our general adrenal and sufficiency franchise. We'll take with the upcoming launch of 400. And with the relaunch of gals, and this gives us the opportunity to unlock a vast opportunity beyond current usage within the Wilson disease space. Our pipeline is strong, with the upcoming NDA submission for ET600 and the addition of Unglivio, as well as two other hydrocortisone pipeline candidates that could potentially unlock $150 million across hospital and retail markets. I am proud that we've built such a strong portfolio of high-margin, ultra-rare products while posting consistent revenue growth and keeping a focus on bottom-line profitability. But as much as we've accomplished, we're really only getting started, and the prospects have never been brighter for Eaton. As we conclude today's presentation, I want to express my gratitude for your continuous support and engagement. Your insights and questions are invaluable as we navigate our growth journey. Now let's open up the floor to some 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 Chase Knickerbocker with Craig Hallam. You may proceed.

Good morning. Thanks for the comprehensive presentation here. A lot to kind of get through. I've got a lot of questions here. Maybe just to start, on Incralex, You know, if you look at that kind of chart that you guys gave as far as the patient numbers that were on, you know, in the early years of Ipsen's launch, it looks like they were adding, you know, 40, 60 patients a year, you know, in the first couple of years there. You've already added 14 so far in the two or three months that you've had the product. I mean, Sean, how quickly do you think you can get back to 185? I mean, you've made a lot of progress already so far. Maybe just help us think about kind of the pace to get there.

I think getting over 100 patients this year is very achievable. How much further we go over 100 patients, that will be determined. But I'm optimistic that it won't take as long as we initially thought. The product launch has gone very well, as we had indicated. Many physicians weren't aware that the product was on the market. They're actually very excited. And there are a number of patients that could be using this product that haven't had it in the past month. may have been given growth hormone, for example, but that's not really what they needed. And I think doctors needed to hear from us, you know, when it's appropriate. You know, it's a constant education. It's a constant reminder of what, you know, the product can do and how it can benefit. So we feel very good about the transaction, and we feel really good about the uptake. Right now, it's no signs of slowing.

And so maybe just to understand that uptake a little bit better, I mean, how often are these patients seeing their physicians? Is this something where when you re-engage with physicians, they quickly, you know, identified the patients that, you know, may have been misdiagnosed? Or I guess, how are you able to add kind of 20% to the patients so quickly?

Yeah, APEC, maybe you can comment on that. APEC's our two commercial officers, you know.

Hi, Charles. So I think in terms of first part of your question, there's What we know from pediatric endocrinologists that we've been meeting with is they are seeing these patients every three to six months. So there's definitely now, it's been three months, so they are definitely going to be seen by their doctors, by their specialists. Because they are growing, if you look at the average age, these kids are definitely in a rapid growth stage of their lives. So weight phase adjustments, needs to happen.

So it's quite frequent visits that are happening. Got it. Thanks. And Sean's on. Good. Oh, sorry. Go ahead, Sean.

If we just think about the label expansion opportunity or label consolidation opportunity there between Europe and the U.S., Can you give us an idea of how penetrated Incralex is in those 1,000 patients in Europe where the label is broader and kind of what's the right way for us to think about if you are successful there, you know, what that penetration could look like here?

So, Chase, I'm going to turn this one over to David. He's done a lot of the analysis on it. I think he'd be the best person to answer that. Hey, Chase, there are significantly more patients on the product in Europe. Many multiples are coming in the U.S., but it is still, you know, relatively low penetrated, and we think that's primarily due to the same general themes of the condition being underdiagnosed, undertreated, and it's also not promoted in Europe, so they're facing the same issues. They have, I would say, a relatively similar penetration rate, just with about, you know, four or five times the number of patients.

Got it.

And on ET600, good to see a lot of detail there. You know, a similar opportunity to ET400 as far as the value proposition. I mean, what's the right way for us to think about penetration into those 3,000 or so patients? You know, how many are on a compounded oral suspension today? And then can you give us a thought on pricing as far as kind of what you assume in that range that you mentioned from a $20 million to $50 million in peak sales opportunities?

Sure.

So the product, we believe the pricing would be higher than what we currently charge for Alkindi because the number of patients is lower. So what we try to do is benchmark against other rare disease and orphan direct products and make sure that the pricing reflects the number of patients. So the general theory is that if you have fewer patients, like 80 patients, for example, the pricing per product is going to be much higher. But the But as an overall, we like to be at the lower end of open drug pricing. So with this product, I would imagine it would be a little bit higher than what we currently charge for Altindi, which has 5,000 to 10,000 patients. This product has 3,000 patients. You know, we try to be fair and transparent across the board. Ultimately, our goal is to make sure all patients receive the product regardless. So the patient accessibility is number one beyond anything. That's what we're about.

Any thoughts on penetration there, Sean?

As far as what you think is reasonable, how many patients are on the oral? Penetration is going to be significant. A lot of these patients are already taking various forms of crushed or dissolved suspension-type products. So I think the uptake is going to be... very quick. I think that our aspirations for the product were being, let's just say, conservative. But from what we've told, there's a lot of pent-up demand for the product. So if you're asking me about ramp rate, I won't give you that because it's, you know, Elkindi took a little time to ramp. We obviously think the oral solution is going to ramp much faster than Elkindi ramp. But sometimes, you know, it depends on the detail and changing habits of doctors. But we have spent time with key opinion leaders in this area, and there aren't that many that treat diabetes insipidus. So they all know about the product. They know it's coming. I would imagine that you're going to see a very nice launch in short order, hopefully in the first quarter of next year.

And then, James, just last, and I'll jump back in the queue here. Can you give us maybe a little bit more granular detail as far as what you're thinking from an SG&A perspective in 25? You know, is 25, 30% growth kind of the right way to think about it? And then as we kind of exit 25 and you said, you know, kind of moderating SG&A growth from there, I mean, what's the right way to think about it longer term? Is it a kind of low double-digit, low-teens kind of growth rate? Or, I mean, how are you thinking about the model longer term on SG&A?

Yeah, there will definitely be a bigger step up from 24 to 25 than when we look beyond 2025. We started in Q4 of last year, pretty heavy investment into self-marketing activity ahead of the three launches or relaunches in 2025. We split the sales force. We added those new five metabolic reps. So directionally, We're looking at, you know, probably the 30 to 40 percent range in 2025. And then, you know, low double digits or even high single digits beyond 2025.

Great. Congrats on all the progress here, guys. Thanks. Thank you.

Our next question comes from Madison Elisade with B. Riley. You may proceed.

Hey guys, thanks for taking our question and thanks for the detailed update today. First on INCRELEX, kind of wondering what are the gating factors to this INCRELEX US-EU label unification? Maybe that would be helpful. And you mentioned Ipsen had recorded 15 years of post-marketing data. Could you kind of lay out what is the typical minimum FDA requirement to be awarded one of these unifications, and then a follow-up.

Thanks. Thanks for the question. In terms of gating factors, one piece for us is just aggregating the data from 15 years of the registry, so we're in the process of doing that. And then we're going to have an FDA meeting middle of this year to discuss it and share our findings with the FDA and have a discussion about what we want to do and why we think we have very strong justification for it. I would say on the second part of your question, there's no clear framework of exactly what you need to get a label harmonization. It's unique for every product, especially in the ultra rare disease products. When you're talking patient populations in the hundreds or up to a thousand, every case really is unique. So we're going to have a discussion with the FDA. And we're cautiously optimistic that they'll be receptive since we do have strong data to support it.

And it's been used that way in Europe for 20 years now.

Got it. That's very helpful. And then if I could ask.

I'll also add, I guess I'll add one thing. This is Sean. We have a very experienced, let's say, regulatory advisors on this that know this product very well. they feel very optimistic about this label. I guess you just call it update, getting approved. It makes sense for patients, first and foremost. The data and the science is there. Many years of this being used successfully in Europe on those patients. The worst part is if it doesn't get approved, it's not about the revenue, the money, or anything else. The worst part is actually for patients. If my son suffered from this disease, It would be very sad if they weren't able to access it because, you know, the insurance companies wouldn't reimburse if the label doesn't follow exactly what's on there. So our goal, first and foremost, is to make sure this product is available to patients in need.

Understood.

Thank you, Sean. And then, secondly, I wanted to ask about the ET400 round, similar to prior discussion, just kind of asked in a different way. Maybe it's an expectation during those first three months post-approval, it's a bit slower, and then in this kind of second three months, as patients go back to their routine visits, do we start to see almost a bolus-type ramp? or would it be more of a kind of steady state growth quarter to quarter? Thanks.

If I wanted to comment on that.

Yes, I think the medicine, the first three months, you're absolutely correct. I think there's definitely going to be a slow second half or slower ramp up in the second half of this year once we get the approval. Just because those patients are coming back and learning about the product, then we are also educating the pediatric endocrinologist. But after that, we definitely think that there is a pent-up demand use. So it's already at 50% of the parents today are using some sort of a liquid hydrocortisone. So there's definitely going to be a more accelerated ramp-up that we are expecting the first half of 2020.

Understood. Thanks for taking our question, and congrats again on all the progress.

Thank you.

Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.