Eton Pharmaceuticals, Inc. (ETON)

Business overview

Business About Eton Eton is an innovative pharmaceutical company focused on developing and commercializing treatments for rare diseases. We currently have eight commercial rare disease products: INCRELEX®, ALKINDI SPRINKLE®, KHINDIVI TM , GALZIN®, PKU GOLIKE®, Carglumic Acid, Betaine Anhydrous, and Nitisinone. We have five additional product candidates in late-stage development: ET-600, Amglidia®, ET-700, ET-800 and ZENEO® hydrocortisone autoinjector. INCRELEX® – This biologic product was approved by the FDA in August 2005 as a treatment for children who suffer from severe primary insulin-like growth factor 1 deficiency (SPIGFD). The product is approved in 40 territories, including the United States and the European Union. We acquired and launched the product in December 2024.

ALKINDI SPRINKLE® – This product was approved by the FDA in September 2020 as a replacement therapy for Adrenocortical Insufficiency (“AI”) in children under 17 years of age. The product is the first and only FDA-approved granule hydrocortisone formulation designed to help provide accurate dosing for newborns and children with AI. We acquired U. S. marketing rights to the product in March 2020 and launched ALKINDI SPRINKLE® in December 2020 with a sales force targeting pediatric endocrinologists. We believe there are approximately 10,000 children currently suffering from AI in the United States.

ALKINDI SPRINKLE® is protected by three issued patents that extend to 2032, 2033, and 2034. KHINDIVI TM – This product was approved by the FDA in May 2025 as a replacement therapy in pediatric patients five years of age and older for adrenocortical insufficiency. KHINDIVI is the only FDA-approved oral solution formulation of hydrocortisone. It comes in a 1mg/ml strength designed to eliminate the need to split or crush tablets, and to offer simple and accurate dosing specifically tailored to each patient’s needs. It does not require refrigeration, mixing, or shaking – it is a ready-to-use oral liquid solution. KHINDIVI is designed to offer administration simplicity and dosing accuracy, and to provide a therapy option for patients who have difficulty swallowing tablets or with special administration needs, such as patients with a gastric tube.

GALZIN® is FDA-approved as a maintenance treatment for patients with Wilson disease who have been initially treated with a chelating agent. It is estimated that less than 5,000 patients in the U. S. are currently being treated for Wilson disease. We acquired the product in December 2024 and assumed the commercialization of the product in the U. S.

in March 2025. We offer the product through our Eton Cares patient support program that provides high-touch, personalized service tailored for rare disease patients and their providers. PKU GOLIKE ® - In March 2024, we acquired the U. S. rights to PKU GOLIKE, which is a next generation medical formula product engineered with the patent protected, pharmaceutical grade Physiomimic™ technology for the dietary management of phenylketonuria (“PKU”) under medical supervision. PKU GOLIKE’s® taste-masked, odor-free coating technology is designed to provide a better taste and a superior experience compared to alternative PKU medical formulas.

In addition, PKU GOLIKE’s delayed amino acid release formulation is designed to keep patients full for a longer period of time. Carglumic Acid Tablets – Our Carglumic Acid product is an FDA-approved generic version of Carbaglu®. Our product is approved for the treatment of acute and chronic hyperammonemia due to N-acetylglutamate synthase (“NAGS”) deficiency . We acquired the marketing rights to the product in October 2021 and launched the product in December 2021. We promote the product with our internal sales force. Betaine Anhydrous for Oral Solution – Our Betaine Anhydrous product is an FDA-approved generic version of Cystadane® for the treatment of homocystinuria, a rare inherited condition that is estimated to impact fewer than 2,000 patients in the United States.

We acquired the product in September 2022 and launched the product in May 2023. Nitisinone – Our Nitisinone product is an FDA-approved generic version of Orfadin® for the treatment of tyrosinemia type 1, an ultra-rare inherited condition that is estimated to impact fewer than 500 patients in the United States. We acquired the product in October 2023 and launched the product in February 2024. ET-600 – In July 2025, ET-600’s NDA was accepted for review by the FDA and assigned a PDUFA target action date of February 25, 2026. The Company has scheduled the production of launch inventory for the first quarter of 2026 in preparation for a commercial launch shortly after the anticipated approval. The Company recently held an ET-600 advisory meeting with leading healthcare practitioners within the pediatric endocrinology community. […]

Management discussion and analysis

Management ’ s Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion and analysis together with our financial statements and the related notes thereto included in “ Item 8. Financial Statements and Supplementary Data ” in this Annual Report on Form 10-K. The following discussion contains forward-looking statements that involve risks and uncertainties. For a complete discussion of forward-looking statements, see the section above entitled “ Forward Looking Statements. ” Our actual results could differ materially from those expressed or implied in any forward-looking statements as a result of various factors, including those set forth under the caption “ Item 1A. Risk Factors.

” Overview Eton is an innovative pharmaceutical company focused on developing and commercializing treatments for rare diseases. We currently have eight commercial rare disease products: INCRELEX®, ALKINDI SPRINKLE®, KHINDIVI TM , GALZIN®, PKU GOLIKE®, Carglumic Acid, Betaine Anhydrous and Nitisinone. We have five additional product candidates in late-stage development: ET-600, Amglidia®, ET-700, ET-800 and ZENEO® hydrocortisone autoinjector. Results of Operations Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 During the twelve months ended December 31, 2025, we had $80. 0 million in total revenues that generated a gross profit of $42. 7 million, compared to total revenues of $39.

0 million during the twelve-months ended December 31, 2024 that generated a gross profit of $23. 4 million during the period. During the twelve-months ended December 31, 2025, we had product sales and royalties, net of $76. 7 million, compared to product sales and royalties, net of $38. 5 million during the twelve-months ended December 31, 2024, an increase of $38. 2 million.

The increase in product sales and royalties, net was the result of increased sales volume of our INCRELEX®, ALKINDI SPRINKLE® and GALZIN® products in the current year. Licensing revenue during the twelve-months ended December 31, 2025 was $3. 3 million, compared to $0. 5 million in licensing revenue during the twelve-months ended December 31, 2024. The increase in licensing revenue during the twelve-months December 31, 2025 was due to $1. 8 million from our out-licensing of INCRELEX® rights outside of the U.

S. and $1. 5 million from the recognition of a development milestone event associated with our divestiture of DS-200. During the twelve-months ended December 31, 2024, we recognized $0. 5 million in licensing revenue associated with the sale of our DS-200 product candidate in September 2024. Cost of Sales During the twelve-months ended December 31, 2025, total costs of sales was $37.

2 million, compared to $15. 6 million in total costs of sales during the twelve-months ended December 31, 2024. The increase in total costs of sales during the twelve-months December 31, 2025, was due to increases in INCRELEX® and ALKINDI SPRINKLE® product sales and higher commissions with respect to our out-licensing of INCRELEX® rights outside of the U. S. Gross profit during the twelve-months ended December 31, 2025 was $42. 7 million or 53.

5% as a percentage of total net revenues, compared to gross profit of $23. 4 million or 60. 0% as a percentage of total net revenues during the twelve-months ended December 31, 2024. The decrease in gross profit during the twelve-months ended December 31, 2025 was primarily attributable to higher commission with respect to our out-licensing of INCRELEX® rights outside of the U. S. Research and Development Expenses We currently have twelve employees that support our overall product development function.

The majority of our spend in research and development (“R&D”) expenses is to third parties we contract with to develop, test our products and the development of partner milestone payments. During the twelve-months ended December 31, 2025, we incurred $7. 8 million of R&D expenses, compared to $3. 3 million during the twelve-months ended December 31, 2024. The increase in R&D expenses was primarily due to a $2. 2 million NDA filing fee for ET-600 and increased expenses associated with our ET-700 and ET-800 project development activities.

33 General and Administrative Expenses General and administrative expenses (“G&A”) expenses consist primarily of employee compensation expenses, selling and advertising/promotional expenses, legal and professional fees, business insurance and FDA fees associated with approved products. We anticipate that our G&A expenses will increase to support our business growth, particularly with respect to sales and marketing activities and additional personnel. During the twelve-months ended December 31, 2025 and 2024, we incurred $35. 8 million and $22. 8 million, respectively, of G&A expenses. […]

Key risk disclosures

Risk Factors We operate in a dynamic and rapidly changing environment that involves numerous risks and uncertainties. Certain factors may have a material adverse effect on our business, financial condition and results of operations, and you should carefully consider them. Accordingly, in evaluating our business, we encourage you to consider the following discussion of risk factors, in its entirety, in addition to other information contained in this Annual Report on Form 10-K and our other public filings with the SEC. Other events that we do not currently anticipate or that we currently deem immaterial may also affect our results of operations and financial condition. Risks Relating to Pricing, Reimbursement and Market Access The Inflation Reduction Act and related Medicare reforms may adversely affect the prices we realize and the demand for our products.

The Inflation Reduction Act of 2022 (the “IRA”), and related federal and state healthcare reforms, have introduced new and evolving mechanisms that may affect the prices we realize for our products and the demand for our products over time. These mechanisms include, among others, inflation-based rebates under Medicare Parts B and D that can require payments when certain reported prices increase faster than inflation; changes to the Medicare Part D benefit beginning in 2025 that redistribute financial liability among manufacturers, plans and the government while capping patient out-of-pocket costs; and a program under which certain drugs may become subject to price negotiation on a defined timetable. The applicability and impact of these mechanisms will evolve over time based on our portfolio mix and the characteristics of individual products.

For example, whether and when a product becomes subject to the Medicare drug price negotiation program depends, among other factors, on the time elapsed since FDA approval and other selection criteria, and inflation‑based rebates in Medicare Parts B and D apply when prices increase faster than inflation. Changes in our portfolio, utilization and payer mix could therefore alter our exposure to negotiation, inflation‑based rebates, and the redesigned Medicare Part D benefit, including our financial responsibility under the new benefit structure. Implementation will occur through ongoing regulatory actions, the outcomes of which remain uncertain. Even where our current products are not immediately selected for negotiation or have limited Medicare utilization, these changes may alter channel economics, increase our obligations, reduce the net prices we realize, and adversely affect patient access and demand.

Certain statutory exemptions may apply to particular products based on their indications, approval history or other factors; however, exemptions are narrow and can change with future legislation, guidance or changes in our product portfolio. The IRA, its implementing regulations and related guidance continue to evolve, and the scope and timing of their impact on our business remains uncertain. Our participation in U. S. government price reporting and discount programs imposes complex and evolving obligations that could adversely affect the net prices we realize and expose us to significant liabilities. Our participation in U.

S. government price reporting and discount programs materially affects the net prices we realize and requires us to comply with complex and evolving legal and reporting obligations. For example, under the Medicaid Drug Rebate Program, we must calculate and report Average Manufacturer Price (“AMP”) and, where applicable, Best Price, and pay rebates to states. Recalculations or restatements—whether due to errors, new interpretations, government audits or other factors—can be retroactive and may require us to pay additional rebates. These obligations can also affect pricing and refund requirements under the 340B Drug Pricing Program, including through recalculation of ceiling prices and controls intended to prevent duplicate discounts. In addition, our products may be subject to pricing and discount requirements under the U.

S. Department of Veterans Affairs and Federal Supply Schedule programs, including obligations tied to Non-Federal Average Manufacturer Price (“Non-FAMP”), Federal Ceiling Price (“FCP”) and related certifications, as well as TRICARE rebate requirements. Government authorities continue to increase scrutiny of these programs, and noncompliance (including inaccurate reporting, failure to timely report changes, or failure to implement required controls) may result in significant refunds, civil monetary penalties, contractual damages, suspension or termination from participation in government programs, reputational harm, and potential liability under the False Claims Act. Third-party coverage and reimbursement and healthcare cost containment initiatives, including formulary controls and utilization management, may constrain our future revenues. Our ability to successfully commercialize our products and product candidates depends in significant part on the extent to which governmental authorities, commercial insurers and other third-party payors provide coverage for, and establish adequate reimbursement levels for, our products. […]

Source and methodology

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