Eton Pharmaceuticals, Inc.

Good afternoon, and welcome to the Eaton Pharmaceuticals Third Quarter 2025 Financial Results Conference Call. At this time, all participants are in listen-only mode. Following the formal remarks, we will open the call up for your questions. Please be advised that this call is being recorded at the company's request. At this time, I'd like to turn it over to David Grimpa, Chief Business Officer at Eaton Pharmaceuticals. Please proceed.

Thank you, operator. Good afternoon, everyone, and welcome to Eaton's third quarter 2025 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 Bridgelson, our CEO, James Gruber, our CFO, and Ipek Trinkas, our chief commercial officer. 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 the 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 Bridge-Elson.

Shawn Bridge- Thank you, David. Good afternoon, everyone, and thank you for joining us today. I'm thrilled to report another record quarter for the company with triple-digit year-over-year revenue growth. I look forward to discussing the underlying drivers in more detail and highlighting some of our initiatives that help deliver this growth. In addition, we will have made significant progress with our development activities, which are not reflected in this quarter's numbers, but will propel our revenue and earnings growth for many years to come. Third quarter product revenue was $22.5 million, an increase of 129% year-over-year and up 19% compared to the second quarter. It was our 19th straight quarter of sequential product revenue growth driven by strong year-over-year growth from Elkindi Sprinkle and Curgumic Acid, as well as additions from the recently acquired products, Incrolex and Galzen, which are both tracking ahead of our deal models. Elkindi Sprinkle has delivered reliable growth for many years and shows no signs of stopping. Curgumic Acid had previously plateaued, but we had a few new patient ads in recent months that helped deliver the year-over-year increase, which was nice to see. In addition to delivering on the top line, we remain focused on profitability, and I am pleased to share that we generated $12 million of cash from operations in the quarter. Eaton is committed to controlling our expenses, and I am proud to report that even though our revenue is growing rapidly, we were able to reduce our adjusted SG&A expense sequentially from the second quarter to the third quarter. Continued control of our operating expenses in tandem with strong revenue growth will position us for significant margin expansion. We reported adjusted EBITDA of $2.9 million in the quarter, and this figure was weighed down by some non-recurring INCRELEX-X US transition costs that James will provide more details on, so we expect to deliver even stronger EBITDA in the quarters ahead. Now turning to product-specific commentary, I'll start with Increlx, which has been our largest revenue contributor this year. Increlx revenue and patient count continue to track well ahead of our original projections for the product. Prior to our acquisition, the product and the condition have suffered from low awareness. Our efforts to improve education and awareness have paid off, allowing us to deliver significant growth so far this year. Our commercial team has done an excellent job on the relaunch. Through our rare disease specialist outreach to healthcare providers, our conference engagements, and peer-to-peer presentations, as well as collaborating closely with patients and patient advocacy groups, we have been able to substantially grow awareness and increase product usage in a matter of months. When Eaton took the product over in December 2024, there were only 67 active patients on therapy. By August, we shared that we had reached our 100-patient goal, five months ahead of schedule. We continued to add a number of new patient starts during the last three months, but we saw a higher number of patients age out and discontinue treatment during the same period, which resulted in our net active patient count remaining relatively flat around 100. In severe primary insulin growth like factor one deficiency, success is partially measured not only by how many patients are on therapy, but in addition, what truly drives outcomes is how early the treatment begins and how well it's optimized. Early initiation during the critical growth window and appropriate vial utilization are key to maximizing efficiency during the treatment duration. Since we have inherited several older pediatric patients in December during transition, we saw a large group of age-outs coming through from that cohort. Our focus remains on both expanding new patient starts and driving growth through earlier diagnosis and optimized dosing to ensure every patient achieves their full therapeutic potential. We believe these efforts will increase the average duration of treatment, I expect to continue bringing new patients into treatment and continue growing that patient count. As a reminder, INCROLEX is approved for pediatric patients aged two and up with severe primary IGF-1 deficiency. These are patients who represent with extremely short stature and need IGF supplementation to grow. INCROLEX is very effective in increasing patient height during their growing years but it's no longer needed once patients reach their adult height, which is typically around 18 years old. We believe with our ongoing educational and awareness campaigns, we will start seeing patients diagnosed earlier in life, which would likely lead to a longer duration of therapy. Eaton is confident in a long-term growth opportunity for the product, and as we expect to continue converting more of the estimated 200 patients in the U.S. that meet the current label. In addition, we remain committed to expanding access to even more children in need through the harmonization of the U.S. and EU definitions of severe primary one deficiency. Last month, we submitted a meeting request to the FDA with our proposed clinical study to support the harmonization. We expect to have the FDA's feedback by the end of December, and if they are in agreement, we would initiate the study in 2026. Given the European patient registry data that has been collected over the last 15 years, we believe that Increlix is a safe and effective treatment for patients with IGF-1 levels between minus 2 and minus 3 standard deviations. We are confident our proposed study would confirm that for the FDA. And if successful in harmonizing the labels, it could potentially increase the Increlix market opportunity roughly five-fold. Alkindi was another major contributor to our Q3 revenue growth, and I am proud of the team's ability to continue generating consistent growth. As you remember, starting in January, we split our sales force into two teams, one of which is now 100% dedicated to pediatric endocrinology. We think it's contributed to Alkindi Sprinkles' strong year, and 2025 is the product's fifth calendar year on market and remains on pace to be the strongest year of its history by number of patients on therapy and number of new patient referrals. So far, we have not been seeing much of any cannibalization of Alkindi from the launch of Kindivi. Though Alkindi continues to see strong growth, we developed and launched Kindivi to address the needs of patients that did not like the texture of the Alkindi granules or preferred the convenience of a liquid dosage form. Kindivi is the first and only FDA-approved oral solution of hydrocortisone. Candivi allows simple and accurate dosing tailored to patient needs and does not require refrigeration, mixing, or shaking. The FDA approved Candivi for patients five and over. The agency restricted the age due to a limited amount of existing safety data on three of the inactive ingredients in the formulation when being used in combination. Unfortunately, The largest unmet need for this product is among young children under five years old, and as a result, the label restriction has weighed on the adoption of Candivi. However, our team has been working on a plan to address this. When we first heard of the FDA's restriction this summer, we immediately developed a new formula with substantially lower levels of the excipients, and in September, we held a meeting with the FDA to discuss this new formulation. We believe the meeting was successful, as the FDA indicated they would be receptive to a label expansion with our revised formulation. In response, we will conduct a bioequivalency study, which is scheduled to start by January 2026, and I expect to submit the new formulation as a supplement to our existing NDA in the second quarter of 2026. The FDA indicated a 10-month review for the formulation, so this could allow for approval by the first quarter of 2027. we believe this label expansion would significantly accelerate adoption of the product. Even with the current Candivi label, we continue to see attractive long-term growth for our adrenal insufficiency franchise. Eaton has only converted less than 15% of the estimated 5,000 target patients in the United States, so we see a long runway of growth ahead of us. We remain confident that Alkindi and Candivi can combine for peak sales of more than 50 million with the current Condivi label, and ultimately higher levels if the label is expanded. Another bright spot in our portfolio this quarter was Galzin. As I mentioned, we're extremely pleased with its performance. It now has over 200 active patients, a number we originally set as our year-end 2025 target. The product is continuing to grow well ahead of our original expectations, and we couldn't be happier with the team's efforts to support this relaunch. During our eight months in the field actively commercializing Galzin, we've been surprised by the low level of awareness that the product had both among physicians and patients. Even though Galzin is the only FDA-approved zinc therapy for Wilson disease, many patients and prescribers were unaware of it, misinformed, or mistakenly believe the product was discontinued after a prior shortage in 2020 and subsequent lack of promotion. We view this low awareness as a positive for the long-term growth prospects for Galzen. While we have work to do educating the market, it is clear that this represents a substantial growth opportunity as we inform patients, healthcare practitioners, and caregivers and raise awareness of this critical medication. Our entry into Wilson disease has been warmly received by patients and healthcare providers. Before our relaunch, very few pharmacies stocked Gelson. Out-of-pocket costs were high, and there was a lack of support services to help patients navigate the insurance process. We have now implemented full patient support services, increased access to medication, and substantially reduced out-of-pocket costs for patients. These changes have resonated with the patient community and we have heard strong positive feedback and appreciation for the new programs. In October, our team attended the Wilson Disease Association Annual Summit, where patients, caregivers, and leading physicians gathered to discuss diagnosis, treatment, and management of the disease. Our team was able to engage with numerous patients and prescribers, helping to drive awareness and give us the chance to better understand the struggles that patients and prescribers are dealing with. Working to understand the needs of patients, caregivers, and healthcare providers is a top priority for us and our vision to be a champion of those in the Wilson disease community. Our expanded access and patient support services have made a major impact on Wilson disease patients, but we think we can make an even greater impact on their lives with ET700, our extended release version of Galzen. Currently, Galzen is taken three times per day, with patients fasting both before and after, and this cumbersome regimen leads to high rates of noncompliance. Eaton has heard directly from patients and caregivers just how challenging the current dosing schedule is, and we know there's a very strong interest in an extended release version. Eaton is working quickly and making meaningful progress with our development of ET700. We've already developed the proprietary formulation, filed our patents, and met with the FDA to discuss the regulatory pathway. We are now nearing production of clinical study supply and starting our clinical program with our positron emission tomography, or PET, study scheduled to begin in the first quarter. This study is a proof-of-concept study designed to verify that our proprietary delayed release formulation is able to effectively block copper absorption in patients with less frequent dosing. We expect to receive top-line results from this study in the middle of 2026, and if positive, it would support the initiation of a dose-ranging and pivotal clinical study later in the year. Switching back to our pediatric endocrinology portfolio during the quarter, we had another piece of good news when the FDA accepted our ET600 NDA submission for review and assigned it a February 25th PDUFA date. We developed ET600 in direct response to an unmet need expressed by pediatric endocrinologists for an oral solution of Desmopressin to treat central diabetes insipidus. If approved, ET600 would be the first oral liquid formulation available and would allow for the small, precise titratable doses required to treat pediatric patients. The review of the product appears to be proceeding well. and we schedule the production of inventory at risk in preparation for an anticipated commercial launch shortly after the PDUFA target action date. Pre-launch marketing activities, including key thought leader engagements, advisory boards, and patient focus groups are also underway. We recently held an ET600 advisory board with key opinion leaders at the National Endo Conference. We continue to hear positive feedback and strong excitement for the product. Since ET600 shares the same pediatric endocrinology call points as Olkindi, Kindivi, and Incralex, Eaton can leverage our well-established relationships and existing commercial footprint, and we expect to be able to hit the ground running upon launch next year. Given the growth opportunity ahead for our commercial products and the attractive pipeline and label expansion opportunities discussed today, It is clear that our business is set up for very attractive long-term growth for many years to come. However, we believe that we can accelerate our growth through additional business development transactions. I remain confident that we have the necessary skills and capabilities to execute value-creating acquisitions and believe that our track record speaks for itself. We continue to explore opportunities to acquire additional strategically aligned ultra-rare disease products where Eden is positioned to add value. With $37 million in cash on our balance sheet and a diversified growing business that is already generating strong EBITDA, we have plenty of capacity to finance acquisitions, large or small. We'll continue to approach opportunities from a position of strength and with our customary discipline. 2025 has been a transformational year for us, highlighted by three high-value commercial product launches, record levels of product sales and profitability, and the submission of an NDA for ET600. We continue to push full speed ahead to close out the year strong and position us for an even more impressive 2026. Next year, we expect a number of critical milestones, including continued strong revenue growth from Alkindi Sprinkle, Increlix, Galzen, and Condivi. increased profitability and operating margin expansion, the expected launch of ET600, the submission of our revised formulation of Condivi, the completion of our ET700 pilot study, and the initiation of our INCRLIX label harmonization clinical study. As you can see, we have some very exciting and event-filled quarters ahead of us, and we look forward to keeping all of you up to date on our progress. We thank you for your continued support. And with that, I'll hand it over to James, our Chief Financial Officer, to discuss the financials. James?