Aquestive (AQST) Q4 2025 Earnings Call Transcript

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Date

March 5, 2026 at 8:00 a.m. ET

Call participants

• President and Chief Executive Officer — Dan Barber
• Chief Financial Officer — Ernie Toth
• Chief Medical Officer — Dr. Matt Greenhawk
• Senior Vice President, Regulatory Affairs — Molina Chaffee
• Chief Commercial Officer — Sherry Korczynski
• Chief Development Officer — Dr. Matthew Davis

Takeaways

• Total revenue -- $13.0 million, a 10% increase year over year, driven primarily by higher manufacturer and supply revenue.
• Manufacturer and supply revenue -- $12.0 million, up from $10.7 million, reflecting revenue growth in Suboxone and ONDEEF.
• Cash position -- $121.2 million as of December 31, 2025, with runway to support ANNAFILM NDA resubmission and related activities.
• SG&A expenses -- $32.8 million in the quarter (including $13.6 million one-time legal expenses), up from $16.0 million, driven by legal, commercial, personnel, and regulatory spending.
• Net loss -- $31.9 million (including one-time legal expenses) for the quarter, or $0.26 per share; excluding legal expenses, net loss was $18.7 million, or $0.15 per share.
• Non-GAAP adjusted EBITDA loss -- $14.1 million for the quarter (excluding legal expenses), up from $11.0 million in the prior year; excluding both adjusted R&D and legal expenses, loss was $10.8 million.
• Guidance for 2026 -- Projected total revenue between $46.0 million-$50.0 million, and non-GAAP adjusted EBITDA loss of $30.0 million-$35.0 million.
• Commercial launch preparation -- Sales force at launch expected to increase by 50% to 75 reps, compared to prior guidance of 50, for broader market coverage and efficiency.
• RTW investment extension -- RTW extended the $75.0 million revenue interest financing option through June 30, 2027, and agreed to a new $5.0 million strategic investment.
• ANNAFILM regulatory milestones -- Type A FDA meeting requested, resubmission targeting third quarter, and corresponding filings in Europe and Canada expected after U.S. resubmission.
• Legal developments -- Settlement reached in a nine-year defamation lawsuit, removing a longstanding legal overhang.
• R&D expense trend -- Research and development expenses decreased to $3.2 million in the quarter, reflecting lower clinical trial and share-based compensation costs.
• Market data -- Prescription growth: EpiPen and generic auto-injectors rose by approximately 5%, while the overall allergy market grew just over 9% in 2025.

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Risks

• Chief Financial Officer Toth stated, "Including the one-time legal expenses, selling, general, and administrative expenses increased to $32.8 million in the fourth quarter 2025 from $16.0 million in 2024," highlighting significant cost escalation due to legal matters.
• Toth also reported, "Including one-time legal expenses, Aquestive Therapeutics's net loss for the fourth quarter 2025 was $31.9 million, or $0.26 for both basic and diluted loss per share," showing a sharp deterioration in profitability versus prior year.
• Toth referenced, "Including one-time legal expenses, Aquestive Therapeutics's net loss for the full year 2025 was $83.8 million, or $0.78 for both basic and diluted loss per share," indicating sustained financial losses beyond legal costs.
• Toth guided, "Current guidance does not include costs associated with the sales and marketing of ANNAFILM if approved by the FDA," signaling potential for higher-than-disclosed expenses upon launch.

Summary

Aquestive Therapeutics (NASDAQ:AQST) reported a 10% year-over-year revenue increase for the quarter, driven primarily by growth in manufacturer and supply revenue from Suboxone and ONDEEF. The company ended the year with $121.2 million in cash and extended its RTW agreement, securing both a $75.0 million financing option and a $5.0 million strategic investment to support potential ANNAFILM commercialization. Management confirmed submission of a Type A FDA meeting request, outlined third-quarter resubmission timing for the ANNAFILM NDA, and expects filings in Europe and Canada thereafter. Preparation for commercial launch will include a 50% increase in planned sales reps, now totaling 75, to improve market penetration and efficiency. The recent settlement of a longstanding defamation lawsuit removes a legal obstacle, while quarterly and annual net losses widened materially due to one-time legal and commercial preparation expenses.

• Toth confirmed, "Total revenues increased to $13.0 million in the fourth quarter 2025 from $11.9 million in the fourth quarter 2024," supported by manufacturer and supply revenue growth.
• Barber said, "We are reiterating today our commitment to filing our resubmission in the third quarter of this year," providing explicit clarity on ANNAFILM regulatory timing.
• Barber noted, "we expect to have 75 reps at launch versus the previous guidance of 50," specifying the expanded commercial footprint.
• Chaffee clarified, "the FDA guidelines state that the agency should meet with the sponsor within 30 days from the date that we submitted our meeting request and our briefing book," ensuring process transparency.
• Toth stated, "RTW has also agreed to an additional strategic investment of $5.0 million in Aquestive Therapeutics," strengthening the company's financing base.
• Toth projected, "We expect to end 2026 at approximately $70.0 million, excluding any additional proceeds from RTW or out-licensing transactions," indicating financial runway into the following year.
• Barber explained, "the citizen petition that was filed by a competitor was denied by the FDA last week," representing regulatory validation for the company's data package and clinical approach.

Industry glossary

• ANNAFILM: Aquestive's orally delivered epinephrine film product candidate for allergic reactions, currently under FDA review.
• Type A meeting: A formal meeting with the FDA requested by a sponsor to address critical regulatory issues, typically after receipt of a Complete Response Letter.
• RTW revenue interest financing: A funding arrangement providing capital in exchange for a portion of future product revenues, contingent upon regulatory approval.
• CRL (Complete Response Letter): An official FDA communication indicating that the NDA cannot be approved in its current form and specifying required actions.

Full Conference Call Transcript

Faith Pomeroy Ward: Thank you, operator. Good morning, and welcome to today's call. On today's call, I am joined by Dan Barber, President and Chief Executive Officer, and Ernie Toth, Chief Financial Officer, who are going to provide an overview of the company's reported financial results for the fourth quarter and full year ended 12/31/2025 and a progress update on the company's key 2026 objectives, followed by a Q&A session. During the Q&A session, the team will be joined by Dr. Matt Greenhawk, Chief Medical Officer, Molina Chaffee, Senior Vice President, Regulatory Affairs, Sherry Korczynski, Chief Commercial Officer, and Dr. Matthew Davis, Chief Development Officer.

As a reminder, the company's remarks today correspond with the earnings release that was issued after market close yesterday. In addition, a recording of today's call and related supplemental materials will be made available on Aquestive Therapeutics, Inc.'s website within the investor section shortly following the conclusion of this call. To remind you, the Aquestive Therapeutics, Inc. team will be discussing some non-GAAP financial measures this morning as part of its review of fourth quarter and year-end 2025 results. A description of these measures along with a reconciliation to GAAP can be found in the earnings release issued yesterday, which is posted on the investors section of Aquestive Therapeutics, Inc.'s website.

During the call, the company will be making forward-looking statements. We remind you of the company's safe harbor language as outlined in today's earnings release as well as the risks and uncertainties affecting the company as described in the Risk Factors section and in other sections included in the company's Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission on 03/04/2026. As with any pharmaceutical company with product candidates under development, and products being commercialized, there are significant risks and uncertainties with respect to the company's business and the development, regulatory approval, and commercialization of its products and other matters related to operations.

Given these uncertainties, you should not place undue reliance on these forward-looking statements, which speak only as of the date made. Actual results may differ materially from these statements. All forward-looking statements attributable to Aquestive Therapeutics, Inc. or any person acting on its behalf are expressly qualified in their entirety by this cautionary statement and the cautionary statements contained in the earnings release issued yesterday. The company assumes no obligation to update its forward-looking statements after the date of this conference call, whether as a result of new information, future events, or otherwise, except as required under applicable law. I will now turn the call over to Dan Barber. Thanks, Faith.

Dan Barber: Good morning, everyone, and thank you for joining us. Today, my message to you is simple and clear. This is a great moment in Aquestive Therapeutics, Inc.'s evolution, and I am filled with optimism for our future. I am filled with optimism because I believe our path has never been clearer. I believe our risk profile has never been lower. I believe our transparency allows all of you to see this as well. Let me walk you through where we are today on bringing ANNAFILM to market here in the U.S. as well as around the world. We believe we have a very clear and achievable set of from the FDA on resubmission of our NDA.

We have submitted our Type A meeting request and expect to have a discussion with the FDA within the next 30 days. We have already selected our clinical research organizations for both the human factor study and PK study and continue to prepare for dosing. We are agreeing to everything the FDA requested with one minor clarification on the arms required for the PK study. We have already modified our packaging to make the pouch easier to open, and this has no impact on stability or durability. We are reiterating today our commitment to filing our resubmission in the third quarter of this year.

You can also find more specific details on our program, including pictures of the revised packaging, in our supplemental materials found on our website. While it is great to have a clear path and plan, you also need the right team. And I am fortunate that we have a fantastic development team here at Aquestive Therapeutics, Inc. With the recent addition of Dr. Matt Greenhawk, a world-renowned allergist and this year's recipient of the prestigious Distinguished Clinician Award by the American Academy of Allergy, Asthma, and Immunology, or Quad AI, and the addition late last year of Dr.

Matthew Davis, a seasoned development leader from large established organizations, we have the clinical expertise to efficiently conduct our development studies, interact effectively with the FDA, and appropriately inform the medical community of our clinical results. This is by far the strongest clinical team Aquestive Therapeutics, Inc. has ever had. In fact, it will be important that we get our scientific and medical information out to the community as broadly and deeply as possible this year. That is why, in addition to Dr. Greenhawk joining us, we are more than doubling the size of our medical affairs organization.

This will allow us to attend more conferences, educate more physicians on our data, and provide the community with more scientific publications in the coming months. This clinical and medical prowess also aligns with our work outside the U.S. We remain on track to file in Europe and Canada before the end of the year. We also will be meeting with the U.K. Health Authority, known as MHRA, in the coming weeks. We are confident that ANNAFILM can benefit all humans, and we want to expand access to our product outside of the U.S. as rapidly as possible. Now, let us turn to the commercial side. Launching a prescription drug in the U.S. is extremely difficult.

It requires considerable capital, patience to work through the complexities of the payer world, and significant marketing efforts across a variety of channels. Similar to development, this takes having the right people. As you may recall from my comments a month ago, Sherry Korczynski, our Chief Commercial Officer, and I made the decision to keep the core commercial leadership team intact following our CRL. That team continues to do great work and prepare for launch. This extra preparation time allows us to think bigger, and we are guiding today that we will launch with 50% more sales reps upon approval compared to our previous guidance.

This means we expect to have 75 reps at launch versus the previous guidance of 50. Our planning process indicates we should be able to do this from a close to cash neutral position by 2027. Speaking of cash, as stated before, launching a drug takes tremendous amounts of capital. Accessing this capital means making sure you have the right investors who believe in your product, your story, and your team. That is why we were excited to announce today that RTW has extended their revenue-sharing agreement with us to consummate any time before 06/30/2027 and has also agreed to invest additional capital in the company.

We appreciate the faith put in us by the RTW team, and like all of our investors and shareholders, take this responsibility seriously. This, along with our cash guidance that Ernie will discuss in a few minutes, we believe positions us well for a potential launch. In terms of the underlying allergy market, we continue to see overall prescription growth. EpiPen and generic auto-injectors grew by approximately 5% in 2025, and the overall market grew by just over 9%. Importantly, we also continue to see a market that seems to be waiting for the first oral epinephrine product. Over 90% of prescriptions remain with auto-injectors. And obviously, the entire market continues to use medical devices.

As I have stated in the past, we believe seeing is believing with our oral medication. When patients have the physical film in front of them, our data indicates they will almost always choose the film over auto-injectors and nasal sprays. Given the potential near-term launch of ANNAFILM in the U.S., if approved by the FDA, we will continue to both simplify and grow our overall business where possible. From a litigation standpoint, this means we will continue to seek ways to simplify our workload while also appropriately defending our business. In December, we reached a settlement agreement in a nine-year long defamation lawsuit brought by a competitor, and I am pleased to remove this distraction from the business.

This marks the fourth lawsuit we have been able to have withdrawn, get thrown out of court, or reasonably settled over the last four years. We are also guiding that due to the timing of a potential ANNAFILM launch, our initial focus with Libervant will be licensing the product in the U.S. We have several parties already interested and actively engaged in discussions. We will keep you updated on this as the year progresses. We continue to believe Libervant is a tremendous product that can meaningfully improve patients' lives. We also note that the two nasal spray products available for the treatment of seizure clusters are forecasted to exceed over $400,000,000 in sales this upcoming year.

We continue to progress nicely with multiple parties in Europe for a license of ANNAFILM and expect to use a licensing approach for that market. Finally, we also have our eyes towards the long-term future of the company. We continue to believe in the long-term multiproduct potential of Adrenoverse, our prodrug epinephrine platform. We successfully opened an IND for AQST-108 in December 2025, completed dosing of our initial safety study last month, and expect to have top-line clinical data in the near future. We will keep you informed on this program as we move forward. In summary, now is a great time for Aquestive Therapeutics, Inc. We have a clear path to market for ANNAFILM.

We have a clear path to the necessary capital to launch ANNAFILM if approved by the FDA. We have the right clinical, regulatory, and commercial leaders to effectively execute on our strategy. We are focused on out-licensing activities for Libervant and ex-U.S. for ANNAFILM, and we continue to progress our long-term pipeline. I will now turn the call over to Ernie.

Ernie Toth: Thank you, Dan, and good morning, everyone. By now, you have seen our financial results in our earnings release that was issued last evening. As we typically do, we will address most of the discussion related to the fourth quarter 2025 and full year 2025 results in the Q&A.

During 2025, we made great progress in positioning Aquestive Therapeutics, Inc. for future success, including submitting the NDA for ANNAFILM, the first and only noninvasive, orally delivered epinephrine product, if approved by the FDA; closing an $85,000,000 equity raise from high-quality institutional healthcare investors; secured $75,000,000 in revenue interest financing from RTW upon approval of ANNAFILM; and ended 2025 at $121,000,000 with cash runway to support costs associated in preparing for the ANNAFILM NDA resubmission, including the new human factors validation study and supportive PK study; precommercial infrastructure costs to increase awareness of ANNAFILM through the execution of its medical affairs strategy, including presenting scientific data in medical forums throughout 2026; planned regulatory submissions in Canada and in the EU; and the 108 Phase 1 clinical trial.

As outlined in the press release issued last night after market close, we announced an extension until 06/30/2027 of our agreement with RTW. This extension secures the availability of the revenue interest financing to support the commercial launch of ANNAFILM if approved by the FDA. RTW has also agreed to an additional strategic investment of $5,000,000 in Aquestive Therapeutics, Inc., showing continued confidence in the company. Now let us turn to the recap of our quarterly and full-year financial results. Total revenues increased to $13,000,000 in the fourth quarter 2025 from $11,900,000 in the fourth quarter 2024. This 10% increase in revenue was primarily driven by increases in manufacturer and supply revenue.

Manufacturer and supply revenue increased to $12,000,000 in the fourth quarter 2025 from $10,700,000 in the fourth quarter 2024, primarily due to increases in Suboxone revenues and ONDEEF revenues. Excluding the impact of one-time recognition of deferred revenues during the full year 2024, total revenues decreased by $1,500,000, or 3%, to $44,500,000 for the full year 2025. As a reminder, the one-time recognition of deferred revenue in the prior year was due to the termination of a licensing and supply agreement. Including the deferred revenue recognized in the prior year, total revenues decreased to $44,500,000 for the full year 2025 from $57,600,000 for the full year 2024.

Manufacturer and supply revenue increased to $40,200,000 for the full year 2025 from $40,000,000 for the full year 2024, primarily due to increases in ONDEEF revenues partially offset by decreases in Suboxone revenues. R&D expenses decreased to $3,200,000 in the fourth quarter 2025 from $4,900,000 in 2024. The decrease in R&D expenses was primarily due to a decrease in clinical trial costs associated with the continued advance of the ANNAFILM development program and a decrease in share-based compensation. R&D expenses decreased to $17,200,000 for the full year 2025 from $20,300,000 in the full year 2024.

The decrease in R&D expenses was primarily due to lower clinical trial costs associated with the continued advancement of the ANNAFILM development program partially offset by increases in product research expenses and share-based compensation. Excluding one-time legal expenses, selling, general, and administrative expenses increased to $19,600,000 in the fourth quarter 2025 from $16,000,000 in 2024.

Including the one-time legal expenses, selling, general, and administrative expenses increased to $32,800,000 in the fourth quarter 2025 from $16,000,000 in 2024, primarily due to higher legal expenses of approximately $13,600,000, higher commercial spending of approximately $3,700,000 in preparation for the launch of ANNAFILM, higher personnel expenses of approximately $800,000, and higher share-based compensation of approximately $200,000, partially offset by lower severance expenses of approximately $1,700,000 and lower regulatory and licensing fees of approximately $500,000. Excluding one-time legal expenses, selling, general, and administrative expenses increased to $66,600,000 for the full year 2025 from $50,200,000 for the full year 2024.

Including one-time legal expenses, selling, general, and administrative expenses increased to $79,800,000 for the full year 2025 from $50,200,000 for the full year 2024. The increase primarily represents higher legal fees of approximately $14,300,000, higher commercial spending of approximately $9,600,000 in preparation for the launch of ANNAFILM, the ANNAFILM PDUFA fee of $4,300,000, higher personnel expenses of approximately $1,900,000, higher regulatory expenses related to ANNAFILM of approximately $1,000,000, and higher share-based compensation expenses of approximately $900,000, partially offset by decreases in severance expenses of approximately $2,800,000 and lower insurance expenses of approximately $600,000.

Excluding one-time legal expenses, Aquestive Therapeutics, Inc.'s net loss for the fourth quarter 2025 was $18,700,000, or $0.15 for both basic and diluted loss per share, compared to the net loss for the fourth quarter 2024 of $17,100,000, or $0.19 for both basic and diluted loss per share. Including one-time legal expenses, Aquestive Therapeutics, Inc.'s net loss for the fourth quarter 2025 was $31,900,000, or $0.26 for both basic and diluted loss per share, compared to the net loss for the fourth quarter 2024 of $17,100,000, or $0.19 for both basic and diluted loss per share.

The increase in net loss was primarily driven by increases in selling, general, and administrative expenses, and manufacturer and supply expenses, partially offset by decreases in research and development expenses and increases in revenue and interest income and other income. Excluding one-time legal expenses, Aquestive Therapeutics, Inc.'s net loss for the full year 2025 was $70,600,000, or $0.66 for both basic and diluted loss per share, compared to the net loss for the full year 2024 of $44,100,000, or $0.51 for both basic and diluted loss per share.

Including one-time legal expenses, Aquestive Therapeutics, Inc.'s net loss for the full year 2025 was $83,800,000, or $0.78 for both basic and diluted loss per share, compared to the net loss for the full year 2024 of $44,100,000, or $0.51 for both basic and diluted loss per share. The increase in net loss was primarily driven by increases in selling, general and administrative expenses, and manufacturer and supply expenses, and decreases in revenue, partially offset by decreases in R&D expenses and increases in interest income and other income. Excluding one-time legal expenses, non-GAAP adjusted EBITDA loss was $14,100,000 in the fourth quarter 2025, compared to non-GAAP adjusted EBITDA loss of $11,000,000 in the fourth quarter 2024.

Non-GAAP adjusted EBITDA loss, excluding adjusted R&D expenses and one-time legal expenses, was $10,800,000 in the fourth quarter 2025, compared to non-GAAP adjusted EBITDA loss, excluding adjusted R&D expenses, of $6,600,000 in the fourth quarter 2024. Excluding one-time legal expenses, Aquestive Therapeutics, Inc.'s non-GAAP adjusted EBITDA loss was $49,700,000 for the full year 2025, compared to non-GAAP adjusted EBITDA loss of $23,000,000 for the full year 2024. Non-GAAP adjusted EBITDA loss, excluding adjusted R&D expenses and one-time legal expenses, was $34,400,000 for the full year 2025, compared to non-GAAP adjusted EBITDA loss, excluding adjusted R&D expenses, of $4,000,000 for the full year 2024. As of 12/31/2025, cash and cash equivalents were at $121,200,000.

As outlined in the press release issued last night after market close, our outlook for 2026 is total revenue of $46,000,000 to $50,000,000 and non-GAAP adjusted EBITDA loss of $30,000,000 to $35,000,000. We expect to end 2026 at approximately $70,000,000, excluding any additional proceeds from RTW or out-licensing transactions. Our non-GAAP adjusted EBITDA loss guidance for 2026 includes costs associated with the resubmission of the NDA for ANNAFILM, continued precommercial infrastructure spending for ANNAFILM, clinical trial costs for AQST-108, and regulatory applications for ANNAFILM in Canada and the EU. Current guidance does not include costs associated with the sales and marketing of ANNAFILM if approved by the FDA. I will now turn the line back to the operator.

We will now open for questions.

Operator: Thank you. To ask a question, you will need to press *11 on your touch-tone telephone. To withdraw your question, simply press *11 again. Please standby while we compile the Q&A roster. Our first question comes from the line of Roanna Ruiz with Leerink Partners. Your line is now open.

Roanna Ruiz: So a couple for me, starting with the Type A meeting with the FDA. I just wanted to confirm I heard it correctly. It sounds like you submitted a request, but it has not been scheduled yet, but that could happen soon. And secondly, could you elaborate a bit on your main goals going into this meeting? And is there any additional information you need to prepare for the FDA for this meeting?

Dan Barber: Sure. Good morning, Roanna. I will hand it over to Molina in a second here. Just a couple of basic things. We have submitted. We expect that meeting to happen shortly. I will let Molina walk you through the contract that the FDA has to uphold. From a goals perspective, we do not need a lot out of this meeting, and I will also let Molina elaborate a little bit on that.

Molina Chaffee: Thank you, Dan. So in terms of the timing, the FDA guidelines state that the agency should meet with the sponsor within 30 days from the date that we submitted our meeting request and our briefing book. So if they go according to the timeline, we should be able to meet with them towards the end of this month or very early April. In terms of the goals of the meeting, we shared with them our briefing book that outlined our commitment to conduct the two studies that they requested in the CRL.

And we also asked questions to ensure that we walk away essentially from this meeting with clear alignment on how best to execute for the purpose of the research.

Dan Barber: Right. And Roanna, I would just remind you and those on the call, it has been 31 days since we received our CRL. And in those 31 days, we have not only written the protocols, contracted our CROs, changed our packaging, written a briefing book, resubmitted that briefing book to the FDA, but obviously also brought on a new Chief Medical Officer, and we designed our deal with RTW. So we feel really good that we are on track in every way. And the Type A meeting is just one part of that.

Roanna Ruiz: Yep. And a follow-up on that, I think you mentioned doing a modification to the proposed protocol that the FDA mentioned in the CRL? Or could you just explain a bit more about that? Is it relatively straightforward? And, you know, how should we think about it moving with the FDA interaction with you coming up?

Dan Barber: Yeah. That is in my view. So we will not get into the exact question. We will obviously be able to share that in a few weeks here. But that is literally the only question we have for the FDA, and we are fine with the answer either way. So the minor modification Matthew Davis and his team just want to make sure they understand how the FDA is thinking about it. And once we have the answer, there is nothing more we need.

Operator: Okay. Great. Thank you so much. Our next question comes from the line of Kristen Kluska with Cantor Fitzgerald. Your line is now open.

Kristen Kluska: Good morning, everybody. Thanks for taking my questions. I have a couple as well. First, on the RTW, great to see you extended that option. I noticed that the language was through June next year. You had told us that your expectation is that it would be a six-month review upon submitting. Is the timeline here just to give you a little bit of buffer room on the back end? And then, also, can you just confirm that it is still $75,000,000 and that those terms have not changed?

Dan Barber: Yeah. The second question, I will turn over to Ernie in a second. But in terms of the timing of why 06/30/2027, that is easy, because it is easy to modify by one year. We in no way expect to need anywhere near that amount of time to bring our product to market, but it is just an easy way to update the contract. But I will let Ernie talk about any other changes. Sure.

Ernie Toth: Hi, Kristen. Yes. We confirm that none of the terms have changed. I think the important thing is here, with the additional purchase of $5,000,000, you know, we appreciate their continued support as we move forward through the process this year of resubmission and, hopefully, an approval and launching the product next year.

Kristen Kluska: Okay, thank you. And then I know Sherry and team have been doing a lot of work in terms of mapping territories this past year. So I wanted to ask a little bit more on this decision to add 50% more sales reps. Was this just driven by seeing new pockets where you think you would need more boots on the ground, or is there anything specific that led to the decision as well as the specific percent more that you will be adding?

Dan Barber: Sure. I will let Sherry pick that.

Sherry Korczynski: Hi, Kristen. How are you? Thanks so much for asking this question. We are very excited about our decision. Why did we do it? We went back, as we have been doing with all of our commercial work that we were preparing for launch, to say how many more reps would we need to cover much deeper, penetrate much deeper into the allergist market, and in the same regard ensuring that the reps will be calling on the pediatricians that are the high-decile pediatricians. We took a look at the reach and frequency that we are able to achieve by moving towards approximately 75 reps. There are a couple reasons why that made sense.

One was obviously, with smaller territories, it allows our reps to have greater efficiency, as that will allow them not to have to travel hours to see all the important physicians. So one, it is greater efficiency. Two, it closes white space. So as I am sure you can imagine, with 50 reps, we would have had a lot of white space. We would have handled that through inside sales reps. However, again, by moving to the 75 reps, it gives us much greater coverage.

Dan Barber: And, Kristen, I think you can see that our investment in the allergy community is growing in general, so it is not just the reps, but with Matt Greenhawk and the medical affairs team getting bigger as well, our ability to be out there with publications. You saw our presence at Quad AI last week. We are the furniture. We are front and center as being ready to launch.

Operator: Thanks, everyone.

Dan Barber: Thank you.

Operator: Our next question comes from the line of David Amsellem with Piper Sandler. Your line is now open.

David Amsellem: Thanks. So just a couple for me. One is maybe taking a step back, can you talk about how you settled on the trial design and are you prepared to make any modifications to the design coming out of the meeting with the FDA if necessary? Just wanted to get a window into your thought process in terms of how you designed the trial. So that is number one. Number two is, with the Salesforce, the bigger Salesforce, I wanted to ask how you are thinking about DTC. Are you going to take a more expansive approach to DTC? And that is particularly in the context of your competitor being fairly aggressive here.

So I wanted to get your thoughts on that. Then lastly, on 108, real quick question. I think you made a comment in the press release about indication selection. So just want to be clear. Is it going to be alopecia areata, or are you thinking about other indications or maybe pivoting to something else? Just wanted to clarify on that. Thank you.

Dan Barber: Sure. Good morning, David. So let me take the Salesforce DTC question first, and then I will hand it over to Matthew to talk about trial design, especially on the PK side, and how we can be ready for any modifications if necessary. So from a DTC perspective, we still believe that DTC is best served once you have a reasonable market share. And we also have a competitor, to your point, who is spending a lot of money on DTC, which we see growing the overall market. So it is growing the auto-injector market. So we continue to believe, let the competitors spend money in that area, we focus on our touches directly with reps.

But let me pass it over to Matthew on your question number one, which was how we settled on our trial design and if we have to make modifications.

Matthew Davis: Thank you very much for the question. We have the optionality of doing two things at the same time. So upon looking at the FDA's request, we have a trial design that is in line with what the information they want to seek. And we also believe, based on our 11 other PK trials that we have done, we have enough information to categorize some of that information and, with the updated human factors research that we are going to do, believe that maybe not all the arms are going to be necessary. But if the FDA at the meeting provides these trial designs to be exactly what they asked in the CRL, we are also ready to do that.

So at the end of the FDA meeting, we are going to have the clarity for the trial design. We already have protocols to take optionality into account, and we will meet our commitments that Dan has already stated for the finishing of the trial and the resubmission of Ativan. And I will actually stick with Matthew here for the third one, which is the indication selection for 108. I will say alopecia areata remains the indication we are focused on. But Matthew can give his thoughts on, as we go through the development process, if there are other opportunities we might see.

Matthew Davis: Now I am going to elaborate more once we have got the results of the current trial that we have done. But in a 50,000-foot view, not only do we look at alopecia areata, we also looked at healthy patients. And looking at the product's pharmacokinetics and safety, and other factors like proteomics. This will help inform us of future indications. So more to come on that, but we are making sure we have optionality to continue on with alopecia areata and also look at other topical indications that 108 would be designed for.

David Amsellem: Okay. That is helpful. Thank you.

Dan Barber: Okay. Thank you.

Operator: Our next question comes from the line of François Brisebois with LifeSci Capital. Your line is now open.

François Brisebois: Hey. Thanks for the questions. I was just wondering, in terms of the added reps here, the 50% more reps, can you remind us the timing of the hiring here? Is this kind of a post-approval or pre-approval? Or just remind us of your thinking?

Sherry Korczynski: Yeah. Thanks for the question. Yes. We will continue to follow the same path that we were prepared for a launch this year. We will be interviewing and going through the process so that once we do have approval, then we would flip them immediately to full-time employees. So think about it the same way. Contingent offers go out, and we are ready to go upon launch.

Dan Barber: And, François, I will just add to Sherry’s comments. Just like before, that does not delay our launch at all. So there is a natural period of a few weeks after approval, as you know, where the supply chain has to kick in, and Sherry and her team have done a great job of being ready to strike during that period and make sure we have all of our reps ready to go by the end of that supply chain work.

François Brisebois: Okay. Great. And then if I can follow up, just any updates on this citizen’s petition? Where does that stand? And then maybe if you can also touch on, you know, you were just at Quad AI. I assume it was a busy weekend. I am just wondering any takeaways from your perspective on how Quad AI went for Aquestive.

Dan Barber: Sure. Yes. So the citizen petition that was filed by a competitor was denied by the FDA last week, which to us obviously was what we expected, but it is another validating point for our data package. So, in addition to the strong outcome and the de-risking event you saw out of the CRL where it is focused on human factors, we also now see, just a matter of a couple of weeks later, a moment where the FDA is once again validating the strength of our package. So we feel really good about where we are with the FDA, especially from a clinical perspective.

As you heard from the team, we are on track, and we are ready to go. In terms of Quad AI, which was last weekend for those who are not familiar, and that is the biggest allergy conference in terms of attendance in a year, my biggest learning, and I will toss it over to Sherry in a second too—you know what, let us actually let Matt Greenhot join in as well. So in a second, I will pass it over to Matt instead of Sherry. But from my perspective, what I heard consistently were two things. One, the allergist community believes in our ability to get to approval given what was in the CRL.

And two, they cannot wait for our product. So, very excited on both those fronts. Matt, maybe you could give a couple of your thoughts. Hi. Good morning.

Matt Greenhawk: As usual, the Quad AI is a very busy and intense meeting. There are a lot of allergists, not only from the U.S., but globally, so it is a good draw. What I observed was a lot of excitement and curiosity about a new option for treating patients. As a practicing allergist, something like this adds a lot of potential to how we can help serve patients. So to be able to interact with allergists and other people coming up to the booth and seeing us walking through the halls, the feedback is very consistent with what Dan just said, that there is excitement, there is curiosity. So it is exciting.

In a year from now, I think it will be even more exciting.

Operator: Excellent. Thank you. Thank you. Our next question in queue comes from the line of Andreas Argyrides with Oppenheimer. Your line is now open.

Andreas Argyrides: Good morning, and thanks for taking our questions. A couple from us here. So how are you viewing the requirements of the PK study as diverging from previous PK studies, including chewing and with or without water intake? How are you thinking about addressing the FDA's concerns around tolerabilities despite what you point to are minimal cases? And you recently presented additional data at Quad AI around diastolic blood pressure, citing no dip there. Can you elaborate on the importance of these data with regards to the FDA? Thanks so much.

Dan Barber: Sure. Good morning, Andreas. So I will spread the wealth with these three questions. I will have Matthew in a second talk about the requirements from PK prior, including chewing. I will ask Matt to talk about diastolic blood pressure, and then I will finish up on tolerability. But Matthew, why do you not start?

Matthew Davis: So this would be our twelfth trial on this product. So like the other studies, we are going to use the same vendor that we had excellent experience with. We are going to use the same laboratory that we had excellent experience with. We are going to, as the FDA requested, have all patients have healthcare-administered ANNAFILM. Like the FDA requested, we are going to have all patients also have an injection of intramuscular epinephrine, and we have done this for our other pharmacokinetic drugs.

As the FDA requested, we are also going to have patients, some patients, receive self-administered epinephrine ANNAFILM that is going to follow the new updated Instructions for Use that are going to be tested and validated in the human factors form. In addition, the FDA has requested top of tongue, and that was by far our largest observation in the last human factors trial. Of course, we will be doing this. We will have a discussion with the FDA on your other question on chewing.

We believe that this information can already be informed in the labeling by the fact that patients have already been tested and swallowed ANNAFILM with eight ounces of water, and those patients did reach a therapeutic level of above 100 grams per milliliter. So we will have that discussion with the FDA. If the FDA believes that we have enough information to inform the label, as we believe, then we will proceed with the design that I just stated. If the FDA would like us to continue with the design that they stated, we also will do what they request. Either way, we are ready for this trial.

Matt Greenhawk: Diastolic blood pressure is one of these interesting things clinically. You need your diastolic blood pressure to help maintain feeding blood to your coronary arteries during the shock. So one of the things that has been observed now for a number of years, with additional data with auto-injectors, is that with the injectable route you see a slight dip for a couple of minutes where the diastolic blood pressure goes down and then comes up. And film operates a little bit differently than that, in that there is no initial shift. So what that may lead to is potential improvements in something called mean arterial pressure, which in shock, it is a distributive shock. You think about your plumbing system.

There is runoff downstream, and there is low pressure. You want to increase your mean arterial pressure. It will help perfuse your coronaries. It will keep the system running at a higher pressure. When you are resuscitating a patient, that is really what you are aiming for. So you seem to see fairly ideal properties that one would want on paper for how you would resuscitate somebody. And, you know, it is exciting to be able to report those data. These are very interesting studies. You learn a lot about the epinephrine space with each of these studies that gets reported.

Dan Barber: And, Andreas, let me take the tolerability piece. One of the things we did not overly focus on in our original submission is what tolerability looks like across all of the products. So it is interesting when you step back and you look at the experience with the medical devices, there are multiple tolerability issues that occur, and we do not need to go into the specifics for each product on this call. But in our resubmission, we will definitely be making sure we characterize our product versus the alternatives that are available. And then, as we stated in the supplemental material that you can see, if you go back to our study, there are very few cases.

There are four individuals who had any ability to point to tolerability, one of the individuals who said unprompted, well, if my life was at risk, I would leave the product in as long as I needed to. So I think on this issue, I would put it at much ado about nothing. And we will make sure that we better characterize the current state in this space in our resubmission.

Andreas Argyrides: Great. Thanks, guys.

Operator: Thank you. Our next question comes from the line of Raghuram Selvaraju with H.C. Wainwright. Your line is now open.

Raghuram Selvaraju: Thanks so much for taking our questions. Firstly, I was wondering if you could comment on any fundamental changes in your anticipated promotional campaign for support of ANNAFILM as and when the product gets approved in the context of the revised Salesforce sizing. And if you see any recent moves by the folks promoting Nessie that would guide promotional decisions that you are making in advance of the ANNAFILM launch?

Dan Barber: Sherry, you want to take that?

Sherry Korczynski: Sure. Thanks so much for the question. As Dan mentioned earlier, our commercial infrastructure has mainly stayed intact. And so because of that, it is giving us time to go back and really refine our launch plan, aligned with having 75 reps and being well positioned if ANNAFILM is approved by the FDA. I do think, though, that it continues, as you know, to be—there is a significant unmet need in what continues to be a growing market. And as Dan had mentioned, with the competitive DTC, they continue to grow the market. And so that is a really positive thing. But there is still a need for an oral, easy to carry, easy to use, non-needle, non-device.

We heard it over and over again this weekend at Quad AI. So what I would say, there are not fundamental changes in the work we are doing or the messaging, but we are taking the time, Ram, to really refine our positioning and refine all of the tactics that our reps will take to launch. As it relates to the competitors, look, we are always looking at the tactics and the promotional efforts, and it is informing us, looking at their share of market, and evaluating what is working and what is maybe not working as well. And so that is all going to inform our launch plan.

Raghuram Selvaraju: Very helpful. Thank you. Secondly, I was wondering if you could just clarify how you are thinking about the timeline for future clinical development of AQST-108 relative to the timeline for the ANNAFILM NDA resubmission and potential approval and launch timing for ANNAFILM. Are you thinking about these two things completely independently? If they are connected in any way, can you give us a sense of how? And maybe just provide some granularity regarding the timing with which you expect to conduct the next stage of clinical development with AQST-108. Thank you.

Dan Barber: Yeah. No, thanks, Ram. And look. Given the size and the focus of our organization, the only answer to this one is they absolutely are linked. And ANNAFILM is always going to win when there is a competition between ANNAFILM and 108. I am lucky to sit in this room with some great executives, as you have heard this morning, but they are the same executives who are over 108. So we will prioritize ANNAFILM, both from a resource perspective and a monetary perspective in the short term.

Having said that, we do have the ability to keep 108 moving, to keep learning, as Matthew talked about, around what we have got on our hands and how many different ways we can use it. And to keep progressing it clinically once we get past the ANNAFILM resubmission and we really hand over ANNAFILM to the commercial side, I think that is when you will see the workload on 108 pick up with our development team.

Raghuram Selvaraju: Okay. Great. And then just two very quick ones. Can you indicate perhaps, through the commercial evidence with regard to at least one or more of the diazepam-based formulations that are currently available on the market, if this provides any kind of market intel or foreshadowing, as it were, of what the future peak sales potential could be for Libervant in the United States? And then also, if you could just clarify for us whether the specific amount of the settlement with Norellis was actually disclosed. Thank you.

Dan Barber: Yeah. I will start with the second one. Unfortunately, as tends to happen with these litigation settlements, it is confidential, so we cannot disclose the settlement terms. Obviously, you can see our financial disclosures and make your own assessment. What I would say is we put into our press release what we were happy about and what led us to getting to the settlement is from a 2026 perspective, we believe it is cash neutral. So whether we had done the settlement or not, same place on cash. In terms of Libervant and looking at that opportunity and what peak sales could be for Libervant, this one is bittersweet, Ram. I would love to launch Libervant.

And we have put our heart and soul into what we believe is a great product that will help patients in this space. But we cannot launch Libervant and ANNAFILM within a month of each other, it is just not humanly possible for companies even much larger than us. So we have made the decision that ANNAFILM is the priority. We do have some great potential partnerships and licensing opportunities that our team is looking at. I do think that if you look at how Valtoco and NAYZILAM have penetrated in that market, there is still a great opportunity, especially where portability, convenience, speed of use are important, for this product to become an important component in that space.

Operator: Thank you. Our next question comes from the line of Thomas Flaten with Lake Street Capital Markets. Your line is now open.

Thomas Flaten: Good morning, everybody. Thanks for taking the questions. Are there any current analogs that give you some faith in a potential accelerated approval? I know FDA in its current incarnation can be a little bit confusing.

Dan Barber: Sure. That is an easy one—our competitor. Our competitor got a CRL and resubmitted with a six-month clock and got their approval in four months. So we will do it nicely, but we will definitely be reminding this review division that they did that. And that our expectation is we are hitting in a very thin package to meet their requests. And it should not take six months to review. Now whether they act fast or not, Thomas, to your underlying point, is completely up to them.

Thomas Flaten: Got it. And then is it safe for us to assume that any submissions outside the U.S. will be after the full package has been resubmitted to FDA, just timing-wise?

Dan Barber: Yes. Yes. We are guiding that Europe and Canada will be in 2026, but they will come after the U.S. Canada literally, we could put in whenever we get it done. But it has just got to come after the U.S. So some of this is just making sure we prioritize the U.S. over everything else.

Thomas Flaten: Got it. And then, I guess, regardless of approval time, can you clarify a little bit? Because I know there are a few things going on, including hiring reps and some of the product-related work you have to do. So from approval to full commercial launch, can you give us a sense of what that timing will look like?

Dan Barber: Yeah. Approval to—if by full commercial launch you mean reps in the field and product in distribution—I think it is the same timeline we guided to this last go around, which was, if you think about it, around an eight-week window. So precisely, it is under eight weeks. It is all dependent on how much we lean forward ahead of approval. So call it zero to eight weeks.

Thomas Flaten: Got it. Appreciate that. Thank you.

Operator: Thank you. I am showing no further questions in the queue at this time. I will now turn the call back over to Dan Barber for any closing remarks.

Dan Barber: Thank you, operator, and thank you, everyone, for joining us today. As you heard, we are on track in every way right now. The epinephrine market continues to grow. And we are excited for patients to have access to ANNAFILM as soon as it is approved by the FDA. We look forward to keeping you updated on our progress in the weeks and months to come. And with that, operator, let us end the call.

Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, and you may now disconnect.

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