Aquestive (AQST) Q3 2026 Earnings Call Transcript

Image source: The Motley Fool.

DATE

Wednesday, Nov. 4, 2026

CALL PARTICIPANTS

• Investor Relations - Faith Pomeroy Ward
• President and Chief Executive Officer - Daniel Barber
• Chief Financial Officer - A. Ernest Toth Jr.
• Chief Medical Officer - Dr. Matt Greenhawt
• Senior Vice President, Regulatory Affairs - Melina Cioffi
• Chief Commercial Officer - Sherry Korczynski
• Chief Development Officer - Dr. Matthew William Davis

TAKEAWAYS

• Total Revenue -- $7.6 million, down 41% due to quarterly fluctuations in Suboxone product orders.
• Net Loss -- $16.5 million or $0.13 per share, compared to a net loss of $15.4 million or $0.14 per share, reflecting lower revenue and increased interest expense.
• Cash and Cash Equivalents -- $90.3 million as of Sept. 30, 2026, which does not include a $10 million Libervant upfront payment received in October.
• Year-End Cash Guidance -- More than $70 million, reflecting disciplined spending and the inclusion of the Eton Pharmaceuticals upfront payment.
• Full-Year Revenue Guidance -- $46 million to $50 million, maintained by management for the 2026 fiscal year.
• Full-Year Non-GAAP Adjusted EBITDA Loss Guidance -- $35 million to $30 million, consistent with previous expectations.
• Anaphylm PDUFA Date -- March 16, 2027, following the FDA's acceptance of the resubmitted New Drug Application as a Class 2 response.
• Libervant Upfront Payment -- $10 million, received from Eton Pharmaceuticals for exclusive U.S. commercialization rights.
• Libervant Contingent Milestones -- Up to $47.5 million, available through contingent regulatory and commercial milestones under the Eton agreement.
• Libervant Royalty Rate -- Mid-teens royalty on annual U.S. net sales, secured through a long-term licensing and supply agreement.
• RTW Strategic Funding -- $75 million, accessible upon FDA approval of Anaphylm and satisfaction of other conditions.
• Oaktree Debt Facility -- $20 million, available to the company under a term loan facility following potential Anaphylm approval.
• Manufacture and Supplier Revenue -- $6.7 million, down from $11.5 million primarily due to lower Suboxone volume partially offset by higher Ondissolve revenue.
• License and Royalty Revenue -- $800,000, compared to $1 million, reflecting lower estimated royalty income.
• Nine-Month Total Revenue -- $35.8 million, up 14% driven by higher royalty revenue including $5 million related to Zevra.
• SG&A Expenses -- $14.2 million, a decrease from $15.3 million due to lower legal fees, commercial spending, and regulatory expenses.
• R&D Expenses -- $4.3 million, down from $4.5 million as lower share-based compensation offset higher clinical trial costs for Anaphylm.
• Quarterly Manufactured Doses -- 26 million doses, compared to 44 million doses in the third quarter of 2025.
• Anaphylm Sales Force Plan -- 75 representatives, targeting approximately 8,000 to 8,500 high-prescribing physicians including allergists and pediatricians.
• Anaphylm Pharmacodynamic Response Time -- 5 to 8 minutes for blood pressure peak and 8 to 11 minutes for heart rate peak in clinical studies.
• International Regulatory Filings -- Q4 2026 for Health Canada and Q1 2027 for the European Union, representing the company's global expansion strategy.
• Adjusted EBITDA Loss -- $12.2 million, compared to a loss of $8.6 million in the prior year period, reflecting the quarterly decline in revenue.
• Loss on Debt Extinguishment -- $11.7 million, incurred during the first nine months of the year related to refinancing 13.5% notes.

Need a quote from a Motley Fool analyst? Email pr@fool.com

RISKS

• Barber stated, "We do not control the FDA's timelines or how they prioritize their workload," regarding the March 16, 2027, goal date for Anaphylm.
• Management noted that access to $95 million in contingent funding from RTW and Oaktree is subject to the FDA approval of Anaphylm by the applicable deadline and the satisfaction of other conditions.

SUMMARY

Aquestive Therapeutics, Inc. (NASDAQ:AQST) reported the resubmission of its Anaphylm New Drug Application with a PDUFA date of March 16, 2027, and finalized a licensing agreement for Libervant with Eton Pharmaceuticals. Management stated that the company is refocusing resources on the Anaphylm commercial launch while maintaining its manufacturing and supply revenue base. CFO Ernie Toth indicated that existing liquidity and contingent funding agreements provide a clear capital path to support launch preparation and initial commercialization. The organization is currently expanding its sales leadership and engaging in preapproval discussions with major payers to secure market access for its lead epinephrine candidate.

• CEO Barber noted that the organization is now hiring district sales managers and preparing for a U.S. launch of Anaphylm following the potential approval.
• Management reported engaging in preapproval information exchange discussions with the top four pharmacy benefit managers in the country along with many downstream plans.
• The company intends to focus more energy on the AdrenaVerse pipeline, with a goal of providing meaningful clinical data for AQST-108 in atopic dermatitis in 2027.
• Melina Cioffi stated that the FDA's review focus in a resubmission is strictly on the complete response items outlined in the agency's previous letter.
• Matthew Greenhawt noted that the clinical message for Anaphylm focuses on speed of response, stating, "What we are seeing and what we believe we have with our product is something that works fast."
• Management highlighted that the manufacturing facility in the U.S. remains unaffected by current government tariffs and continues to support global product supply.

INDUSTRY GLOSSARY

• Anaphylm: Aquestive's orally delivered epinephrine sublingual film candidate for the treatment of severe allergic reactions.
• Libervant: A buccal soluble film formulation of diazepam indicated for the treatment of seizure clusters.
• PDUFA: Prescription Drug User Fee Act, referring to the deadline by which the FDA intends to complete its review of a drug application.
• AdrenaVerse: Aquestive's proprietary platform containing a library of over 20 epinephrine prodrugs.
• PharmFilm: Aquestive's proprietary technology for delivering medications via oral film.
• NDA: New Drug Application, the formal proposal to the FDA to approve a new pharmaceutical for sale and marketing in the U.S.
• PBM: Pharmacy benefit manager, a third-party administrator of prescription drug programs.

Full Conference Call Transcript

Operator: Good day, and thank you for standing by. Welcome to the Q3 26 Aquestive Therapeutics Inc Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press *11 on your telephone. You will then hear an automated message. Message advising your hand is raised. To withdraw your question, please press *11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Faith Pomeroy Ward from Aquestive. Please go ahead.

Faith Pomeroy Ward: Thank you, operator. Good morning, and welcome to today's call. On today's call, I am joined by Daniel 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 third quarter ended 09/30/2026 and a business update on recent developments. Followed by a Q&A session. During the Q&A session, the team will be joined by Dr. Matt Greenhawt, chief medical officer Melina Cioffi, senior vice president, regulatory affairs, Sherry Korczynski, chief commercial officer, and Dr. Matthew William Davis, chief development officer. As a reminder, the company's remarks today correspond with the earnings release that was issued after market closed yesterday.

In addition, a recording of today's call and related supplemental materials will be made available on Aquestive's website within the Investors section shortly following the conclusion of this call. To remind you, the Aquestive team will be discussing some non GAAP financial measures this morning as part of its review of third quarter 26 results. A description of these measures along with the reconciliation to GAAP can be found in the earnings release issued yesterday, which is posted on the Investors section of Aquestive'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 yesterday'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, and in its subsequent quarterly reports on Form 10-Q and current reports on Form 8-K. 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 or any person acting its behalf are expressly qualified in their entirety by this caution cautionary statement and the cautionary statements contained in the earnings release issued yesterday. The company assumes no obligation to update its forward looking statements or outlook or guidance after the date of this conference call whether as a result of new information, future events or otherwise, except as required under applicable law. Now I would like to turn the call over to Daniel.

Daniel Barber: Good morning, and thank you for joining us today. This morning, I am pleased to tell you that we continue to execute right on schedule. In March, I told you that we would resubmit our Annamil epinephrine sublingual film application before the end of the third quarter and we did. I also told you that we would outlicense Libervant diazepam buccal film rather than launch it ourselves. And we did. I told you that we would refinance our debt before principal payments, became due in June, and we did.

I told you we expected to have 70 million or more of cash and cash equivalents at year end, and I am pleased to tell you that we now expect to end the year with more than $70 million in cash and cash equivalents. In fact, as we sit here today, we are right where we expected to be. Our lead asset, ANNAFILM, is under review with the FDA has an assigned goal date that is only 100 and 32 days away. Or if you are an investor, since this is our earnings call, only 88 trading days. We are now focused on the next set of deliverables in our execution story.

Our organization is ramping up for the US launch of ANNAFILM following FDA approval and we are now hiring our district sales managers We expect to file Annamil in Canada before the end of the year and we are on track to file in Europe in the first quarter of next year. Our ex US licensing activities also continue and we expect to have more to say in the months to come. Now let's talk more about Annamil in the US. Everywhere I go, and everyone I talk to in the allergy community can align behind 1 important concept.

When a person is having a severe allergic reaction, the only thing they care about is making it stop as fast as possible. that is it. And that is where we believe ANNAFILM will shine if approved by the FDA. Stopping a severe allergic reaction is a function of many things including having a rescue product with you, using the rescue product without hesitation, and having your symptoms abate quickly. That is why we believe speed is the ultimate differentiator and we will continue to focus on this as we interact with the allergy community. Our presentations at the upcoming American College of Asthma Allergy and Immunology in Phoenix this month will highlight these views.

This is also why I continue to see the opportunity for Annamil as significant I continue to believe the market will transition from auto injectors to new and improved technologies like Annamil. The market remains large and growing, We expect the overall US market for epinephrine products measured by total prescriptions to once again grow year-over-year in 2027 and we see plenty of opportunity for continued market growth in the years to come. From a development standpoint, we are answering the FDA's information requests as we receive them and will continue to do so. At this time, we have nothing new to report on the review.

In terms of timing, the FDA has assigned a 6 month review period, we remain prepared and hopeful for the possibility of an earlier decision. However, we do not control the FDA's timelines or how they prioritize their workload Therefore, we are keeping our expectations on receiving its decision by March 16, 2027. In terms of expectations, we recognize that our story in 2027 will be 1 of execution. As we look towards a spring launch of Annamil, if approved by the FDA, I would like to outline for you how we will judge success in 2027. In other words, what are the green shoots to look for in 2027?

First, we are determined to show ongoing progress with payers by both percentage of covered lives and quality of coverage. We will update you as these happen. We have engaged in the preapproval information exchange or PIE discussions with the top 4 PBMs in the country along with many downstream plans. And we will continue to advance productive dialogue as much as possible prior to approval. Second, we want to see uptake in the places where we show up. Post launch, we will provide you with a view of our progress among the physicians our sales reps are calling on. This is a place we must show progress. Third, we will track the efficiency of our spending.

How many dollars are we spending versus the uptake we see? This will be an important measure as we look to scale our launch quarter by quarter. Now let's briefly talk about Libervant, We are excited to have out licensed Libervant diazepam buccal film to Eton Pharmaceuticals. We have waited a long time for Libervant to be available to patients and we expect this to finally come to fruition in 2027, if approved. We believe Eton is the right commercial team to launch Libervant and we look forward to working with them in 2027 and beyond.

While Libervant is not central to our growth story, it is an important product for patients and can also be an important cash contributor to the company. Now let's turn to the pipeline. Long term, our goal is to become the leading provider of cutting edge medications for patients who need to control their immune responses. We intend to do this through not only becoming a full fledged commercial organization, with deep expertise in allergy dermatology, and pulmonology, but also through building a new pipeline of development assets. We see 2027 as a pivotal year for our AdrenaVerse pipeline.

In 2027, we would like to provide meaningful clinical data on AQST-108 for atopic dermatitis as well as bring additional AdrenaVerse driven indications through proof of concept utilizing our library of epinephrine prodrugs. Now that our development team has resubmitted the Annamil application in the US, we expect to focus more energy on these efforts. So if you look at where we are going, there is a lot to be excited about.

We are only a few months away from our FDA goal date for Annamil, We are expanding into ex US territories, We have managed our cash tightly and remain on track to fund Annamil's launch, if approved, and we will have more focus on our pipeline as we move into 2027. With that, I will turn the call over to Ernie.

A. Ernest Toth Jr.: Thank you, Daniel, and good morning, everyone. By now, you will have seen our third quarter 26 financial results in the earnings release issued last evening And detailed in our Form 10-Q. As we typically do, we will address most of the detailed discussion during our Q&A. I will focus my remarks on our financial performance, operating expenses, and the disciplined capital allocation that supports our next phase of execution. As Daniel outlined, we continue to execute against the commitments we made at the beginning of the year. We resubmitted the ANNAFILM application before the end of the third quarter, We completed the Libervant licensing transaction.

We refinanced our debt in May before scheduled principal payments under the prior notes would have begun And through disciplined management, of our spending and liquidity, we now expect to end 2026 with more than $70 million in cash and cash equivalents. We believe our existing liquidity together with potential access to additional capital under the RTW and Oaktree agreements, If Annamil is approved, and other applicable conditions are satisfied, positions us to support launch readiness and initial commercialization activities for Annamil, if approved, continuing to advance our pipeline. Before turning to the quarter, I want to briefly highlight the financial aspects of our recently announced Libervant transaction with Eton Pharmaceuticals.

Under the agreement, Eton received exclusive US rights to commercialize Libervant, subject to applicable regulatory approvals. We received a $10 million upfront payment and are eligible to receive up to an additional $47.5 million in contingent regulatory and commercial milestone payments. We will also receive a mid-teens royalty on annual US net sales of Libervant. Importantly, Aquestive will remain the exclusive manufacturer and supplier of Libervant to Eton under a long term supply agreement. So in addition to the upfront payment, potential milestones, and royalties, the transaction preserves an ongoing manufacturing relationship around the product. We believe this is a capital efficient structure for Aquestive.

It places responsibility for US commercialization with Eton while allowing us to participate in the product's future value and remain focused on our primary commercial priority, the potential launch of Annamil. Now let me begin with revenue. Total revenue was $7.6 million in the third quarter of 26, compared with $12.8 million in the third quarter of 25. This decrease was primarily driven by the quarterly fluctuation of Suboxone product orders. Manufacturer and supplier revenue was $6.7 million in the third quarter, compared with $11.5 million in the prior year period. This primarily reflects lower Suboxone revenue partially offset by higher Ondissolve revenue.

License and royalty revenue was $800 thousand in the third quarter compared to $1 million in the third quarter of 25 primarily reflecting lower royalty revenue received during the period. Codevelopment and research fees were approximately $100 thousand compared with approximately $300 thousand in the prior period. For the first 9 months of 26, total revenue increased 14% to $35.8 million compared with $31.5 million for the same period in 2025. This increase was primarily driven by higher license and royalty revenue including $5 million of Zevra related royalty revenue partially offset by lower manufacturer and supply revenue and lower co development and research fees.

Manufacturer and supplier revenue for the first 9 months was $27.4 million compared with $28.2 million in the prior year period. License and royalty revenue increased to $7.5 million from $2.7 million primarily due to royalty revenue from Zevra. Turning to operating expenses. Our results reflect the deliberate choices we have made as we prepare for a potential Annamil launch while continuing to manage our overall spending carefully. Research and development expenses were $4.3 million in the third quarter compared with $4.5 million in the third quarter of 25.

This decrease primarily reflects lower share based compensation partially offset by higher clinical trial costs associated with the human factors validation study and the pharmacokinetic study completed for the Annamil NDA resubmission. For the first 9 months of 26, research and development expenses decreased to $12.4 million from $14 million in the prior year period. This decrease primarily reflects lower product research expenses associated with the ANNAFILM program and lower share based compensation partially offset by higher personnel costs. Selling, general, and administrative expenses were $14.2 million in the third quarter compared with $15.3 million in the prior year period.

The year over year decrease primarily reflects approximately $1.5 million of lower legal fees, approximately $1.4 million of lower commercial spending, and approximately $600 thousand of lower Annamil-related regulatory expenses. These decreases were partially offset by higher personnel costs share based compensation, and consulting and outside services expenses. For the first 9 months of 2026, selling, general, and administrative expenses decreased to $39.2 million from $47 million in the first 9 months of 2025. The decrease primarily reflects approximately $6.1 million of lower commercial spending the absence of the $4.3 million 1-time Annamil PDUFA fee incurred in the prior year period.

Approximately $2.8 million of lower legal fees, approximately $1.5 million of lower regulatory and licensing fees related to Libervant, and approximately $1 million of lower Annamil-related regulatory expenses. These decreases were partially offset by higher personnel costs severance costs, share based compensation, and consulting and outside services expenses. Turning to the bottom line, Our net loss for the third quarter of 26 was $16.5 million or $0.13 per basic and diluted share. This compares with a net loss of $15.4 million or $0.14 per basic and diluted share in the third quarter of 25.

For the first 9 months of 26, our net loss was $47.4 million or $0.38 per basic and diluted share compared with a net loss of $51.9 million or $0.51 per basic and diluted share for the same period in 2025. Just a reminder, the 2026 year to date results include a onetime loss on the extinguishment of debt of $11.7 million related to the repayment of our 13.5% notes. Excluding that onetime item, our net loss for the first 9 months of 2026 was $35.7 million non-GAAP adjusted EBITDA loss was $12.2 million in the third quarter of 26, compared with a non GAAP adjusted EBITDA loss of $8.6 million in the third quarter of 25.

For the first 9 months of 2026, non GAAP adjusted EBITDA loss narrowed to $19.2 million compared with a non GAAP adjusted EBITDA loss of $35.5 million in the prior year period. Please refer to the reconciliation of net loss to GAAP adjusted EBITDA loss included in our earnings release. Let me finish with liquidity and capital allocation. We had $90.3 million in cash and cash equivalents at 09/30/2026. This amount does not include the $10 million upfront license fee received from Eton in October in connection with the Libervant transaction. As Daniel noted, we have managed our cash tightly and expect to finish 2026 with more than $70 million in cash and cash equivalents.

This expectation includes the $10 million Eton upfront license fee received in October, and does not assume receipt of the contingent RTW or Oaktree funding. If Annamil receives FDA approval, by the applicable deadline, and we satisfy the other conditions under the relevant agreements, we expect to have access to $75 million under the RTW strategic funding agreement and an additional $20 million under the Oaktree term loan facility. Together with our existing liquidity, we believe these sources would support launch preparation and initial commercialization activities for Annamil, if approved, while allowing selective investment in our development pipeline. We are maintaining our full-year 2026 financial guidance.

For 2026, the company continues to expect total revenue of $46 million to $50 million and non GAAP adjusted EBITDA loss of $35 million to $30 million Looking ahead, our capital allocation priorities are clear. First, we will fund the activities necessary to maintain launch readiness and prepare for the potential US commercialization of Annamil if approved. Second, we will continue to support the medical, regulatory, market access, and payer work needed to prepare for commercialization following potential approval and to advance our regulatory strategy outside the United States. Third, we will invest selectively in the AdrenaVerse pipeline with an emphasis on the programs that we believe have the potential to generate meaningful clinical data and create long term value.

And finally, we will continue to manage our liquidity and capital carefully as we advance these priorities. With that, I will now turn the call back to the operator to open the line for questions.

Operator: Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you need to press *11 on your telephone and wait for your name to be announced. Withdraw your question, please press *11 again. Our first question comes from the line of Roanna Ruiz of Leerink Partners. Your line is now open.

Roanna Ruiz: So a couple for me. First is with the upcoming PDUFA for ANNAFILM, could you give us an update of what commercial initiatives you plan to use out of the gate? And generally what the overall split could be between digital advertising, prescriber targeting, and other field rep initiatives?

Daniel Barber: Sure. Roanna, did you have a second question, or that was the question you wanted to put out?

Roanna Ruiz: Oh, that was the first 1. The second 1, I did have a question about pre-approval information exchange with the PBMs. Much does that set up coverage discussions, and can you give us a little color around that?

Daniel Barber: Sure. Absolutely. Well, first, good morning, and appreciate that you instantly went to, of course, where our focus is on the commercial launch Look, we feel great right now. We feel like we have managed our cash. We have got a strong cash position. We have maintained guidance. We are under review. Sherry and her team are preparing for launch. So you are absolutely right that the commercial initiatives are a place of focus. And Sherry is right here with me, and I will let her walk you through the digital advertising and sales thoughts she has.

Sherry Korczynski: Good morning, Roanna. Thanks again for the question. We are so excited here. I. You think about it, never has a product offered what ANNAFILM will offer to both the allergist community as well as to caregivers and patients. it is truly a 360-degree approach to anaphylaxis management that has never been done before. And so it is critically important for us as we are completing the build of our senior staff, our district sales managers, our sales training, our supply chain is all ready to go. And as you know, it is based in the US. We are working diligently to prepare for the sales force and those non personal promotion efforts.

While I am not going to get into the details as far as the split as far as spend. As we have mentioned before, the allergists are key, and we will have approximately 75 representatives calling on around 8 thousand customers. These are the top tier allergists, some pediatricians, and otolaryngologists. So we know and absolutely believe that having surround sound with those key customer targets is very, very important. So not only will our sales representatives be addressing my medical colleagues are out at conferences and they will continue to be out. And with the allergists to continue to drive our message around our clinical efficacy as well as the other key benefits of the product.

Being that it is so easy to carry. it is very easy to use. So you will see a nice split, Roanna, amongst the marketing initiatives and those Salesforce initiatives. If the deep question is really, are we going to be launching into TV and things like that, you know, that. There will be a time and a place for major DTC efforts. As Dan has mentioned, we plan to be efficient with our spend. As we see those opportunities, we will begin to invest further.

Daniel Barber: So let me Roanna, take the second question, which was around the preapproval PBM interactions. These are and what I believe your question was what is the extent of what you can do there. These are really important engagements And tying into what Sherry just outlined, we feel very strongly that the opportunity in this space is to bring healthcare providers and patients back to the clinical data. The auto injector has been the de facto leader for 45 years because it is the only thing out there, not because the data is the reason for that product. So we have an opportunity in our preapproval interactions with the PBMs to show them our data.

And I am very fortunate to work with a great team including Melina Cioffi and Matt Greenhawt, who are here with me this morning, who will walk that clinical data with our PBMs and really show them why we think we are differentiated. So we. We are not-- we understand that the dance to get to contracting is a difficult 1 for any pharmaceutical company. However, we do believe that clinical data can lead the way for us as we move forward.

Roanna Ruiz: Sounds great. Thanks.

Operator: Thank you. Our next question comes from the line of Kristen Kluska of Cantor. Your line is now open.

Kristen Kluska: Hi. Good morning, everybody, and congrats on the resubmission acceptance. 2 questions for me. The first is when you received that acceptance, did you get any word or comments about whether the FDA would kinda be reviewing everything from scratch or really the key focus is on the new data and information that you have shared. And then the second question is, I am just curious, this past year has given you more time and you have obviously collected more data as a company.

What would you say has changed the most in terms of your expectations on what this launch or product could look like versus where you were at a year before you had done these additional studies and work?

Daniel Barber: Thanks very much. Thanks, Kristen. So in terms of the acceptance I will turn it over to Melina in a second, and she can she can walk you through her thoughts. I will say this with the FDA. We have obviously been we think, appropriately vocal is the way I would put it. That this is a pretty limited package. And we believe there is an opportunity especially with where the FDA is publicly talking about speed of review and transparency and all of the things they want to do, we do believe there is an opportunity for a faster review here. We do not control that. So that is completely up to them.

But I want to make sure everyone knows that we are advocating for that and doing it appropriately we believe. But I will let Melina give you give you her thoughts.

Melina T. Cioffi: Sure. Good morning, Kristen. So in terms of the focus of the review, in the context of a resubmission, the focus is simply the complete response items that were outlined in the complete response letter. So when we hear from the agency in terms of the acceptance of the submission, they are informing us that our response is complete to facilitate their review. And the focus of said review will be strictly or intended to be strictly on the resubmission scope. So I hope that gives a little bit of clarity in terms of the scope of, the data that will be reviewed consistent with what Daniel had mentioned.

Daniel Barber: Yeah. Thanks, Melina. So I will let Sherry give you some thoughts on learnings in a second here, but I just want to give in my mind, what I think is the most important learning And I will go back to Matt Greenhawt joining us in February. And I do not know that this is due necessarily to having to deal with the packaging CRL that we are having to deal with. But more from what is important to allergists. And I think Matthew has really championed in our company that the clinical data we have is really compelling. And so that is why you have heard us.

If you go back through what we talk about on these calls over the last 4 to 6 quarters, we have really moved from this idea of okay, we have interesting PK comparison data Let's really talk about the pharmacodynamic data and what it means to patients. And you heard in my prepared remarks we really do understand and believe the only thing a patient cares about is that their severe allergic reaction. Stops. And that is about the pharmacodynamic measures that we have not necessarily PK comparisons. But I know Sherry has a lot of thoughts as well, so I will let her add on hers.

Sherry Korczynski: No. Just to really add on to Daniel is what has changed the most in the last year, Kristen? What I would say is with bringing Matthew on and really like, having great deep understanding of this PD data, we have so much confidence in the differentiation. Annamil has for patients and caregivers. And so what I would say is we have to lean into the importance of trust and confidence. And so 1 of the key learnings that we have had is do patients feel that they have to carry multiple devices? Some do. Are physicians really confident in the data of the newer products?

And so for us, our ability to lean into the data into having physicians and caregivers, patients alike trust and be confident that ANNAFILM is going to work in an emergency rescue situation. That is first and foremost. Look. The fact that we can carry it on the back of our phones, that it is very durable, that it is easy to use. that is all icing on the cake. We really truly believe that ANNAFILM delivers confidence. it is carried differently. So I would say overall, that is that is our biggest learning in the last year, Kristen.

Kristen Kluska: Thanks very much, everyone.

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

David Amsellem: Hey. Thanks. So 2 for me. First, in terms of the commercial launch, and also your access initiatives. Can you talk about what you are going to do differently relative to ARS and its experience with Neffy, both in terms of physician targeting, promotion, and access strategy. Love to hear how you are taking learnings from their experience and applying it to ANNAFILM. So that is number 1. And then secondly, on the AdrenaVerse platform, I know that you have talked about being judicious about spend on the programs here.

But as you think about atopic derm and that development program, can you give us a little insight into what other potential indications you can see yourself moving into for the platform and what you are going to prioritize, over time. Beyond AD. Thanks.

Daniel Barber: Thanks, David. Great to hear your voice. So I would say. And I am gonna hand it over to Sherry in a second here to talk about targeting and promotion in particular. I would say the focus as a global comment, the focus that we will bring of where the place to start our story in this community is probably the number 1 thing that compared to anyone who is come out in the past years, you will you will see from us. But I will let Sherry give you her thoughts.

Sherry Korczynski: Hi, David. Yes. Thanks so much for the questions. As it relates to you know, we have discussed a lot about what our learnings over time from the device, the nasal device launch. What I will share again is our strategy is around depth in the allergist and high prescribing epinephrine writers community. And so, we are going with a very targeted approach at about 8 thousand to 8.5 thousand key targets. And our sales team will be very focused on all the execution.

Seeing the right targets with the right frequency and providing with them with the right resource in order for them to have the confidence that ANNAFILM will work in a situation and a patient quite frankly, will have it on them. In the event that a situation occurs. So I do see that as our launch as compared to the other launch, that is a difference. From a promotion perspective, we talk about, again, we have a. Our value proposition is not based around just 1 thing. It is not a singular value prop.

Our value proposition is focused on efficacy, to drive trust and confidence for the prescriber and their patients, and caregivers. it is around the ease of carrying and always having with you should an allergic reaction occur. And then the ease of use and durability of the product. So we do believe from a promotion perspective that all of our promotional materials, our NPP, our work that we are going to be that we are doing currently in marketing for the reps to have and promotions are all going to be tied around the this value proposition.

And as it relates to the payers, as Daniel mentioned, look, we want as many patients to have access to ANNAFILM, and it is a top priority for us. Obviously, payer coverage is key. Managing the friction at our HEP offices is very important. And so we continue to have very robust discussions with payers and the PBMs who continue to tell us there is significant interest in ANNAFILM. it is important to us to look at this holistically and set up a best in class hub and patient support service strategy And all of that work, David, is underway. We had the luxury, if you would say, of time.

And so our team has picked apart every piece of this launch and so that we are we are very, very well prepared when the approval comes.

Daniel Barber: So just, David, want to circle a little bit more on the market access piece of this. And I will I will say something that perhaps the cynics in our industry would not buy into, but I do believe from my interactions with the PBMs I do believe they want to allow innovative products to be in the hands of the patients that they support from a payer perspective. They do want that. But they have a job to do. They have something that they are trying to manage, and that is the cost of the medical and health care community.

So while we may not agree on exactly how to approach any particular product, when you are going to a PBM and you are saying you have an innovation and you are asking for a premium to a generic auto injector, you have to tell them why. You have to tell them why your product should be in that category. And that, again, is where we really believe the clinical data and talking about how that clinical data manifests itself in the community is an important factor in our market access story. So we will we will continue those conversations. And look forward to seeing how they unfold. And then the AdrenaVerse question? Thank you, David.

I even wrote it down, and I did not. I forgot to address it, so my apologies. Yeah. We are really excited about the long term potential of the epinephrine platform. it is been frustrating, quite frankly, especially with having to deal with the CRL. That we have not been able to more quickly focus on the AdrenaVerse while we get ANNAFILM through the regulatory process. The atopic derm is an entry point in our mind. As you know, we started with alopecia areata, but when you look at dermatology, atopic derm is a typical spot with a new mechanism of action or a new way of approaching something. That you get into the space.

So we will, again, continue to show with our atopic derm product that in 2027, we can show real proof of concept data that people can buy into. We also think outside of dermatology that there are some really interesting indications, 1 that I know is near and dear to Matt Greenhawt's heart, We are not prepared today to say what that is, but we are working on it and look forward to hopefully bringing forward in 2027. Alright. Thank you.

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

François Brisebois: Hi. Thanks for all the details here on the questions. I just wanted to actually go into more detail if that is okay on a prior question because when you talk about what the learnings of the last year and how to differentiate it seems like there is a strong emphasis now, from the PK to now PD side of things. Can you explain a little bit why you think that is more important? And how. You know, this is kind of a 3 part question. Like, why do you think the PD is so important and so relevant And then 2, is it.

Is that thought process appreciated? what is the evolution of the appreciation from the medical community, especially with Matthew going around and speaking to people about this? Has that evolved for them in the past year? as well? And, yeah, I guess that. Just to start with that, it is fine.

Daniel Barber: Sure. Well. And I am gonna pass it over to Matthew, but I will just say globally, I really do think that the simplest way to describe the concept is how fast can you stop a severe allergic reaction. And PD is obviously the first way to show that, but I will I will let Matthew pick it up from there.

Matthew Greenhawt: Good morning. Yeah. I mean, when you think about why do you give somebody epinephrine, they are they are having a reaction. They are starting to go into shock, showing other signs of hemodynamic distress. This is what epinephrine does. It abruptly raises blood pressure and heart rate. And the speed of that response makes all the difference. As a clinician, that is really all I cared about every time I gave epinephrine to a patient. The blood levels are a related to regulatory point. But it really has limited clinical translation. What we are seeing and what we believe we have with our product is something that works fast.

And the resulting increases in heart rate and blood pressure are strong. And this difference you know, it is time is of the essence, and you really. You want that to kick in as fast and as high as possible. that is how you get somebody out of danger. So I am I am really excited. You know, we have some data that we are going to present next week at the college meeting that better translates some of this from our OASIS study. To show sort of really where that breakdown is of how, if you focus too much on PK, you are really missing most of the story. In terms of resonation in the field, this resonates well.

This is, again, every clinician. This is what you want to hear. Not what the PK is, but how fast is it going to work? How fast is my patient going to respond? that is that is a very tangible message. it is very approachable. I think the PK probably has been the harder thing for most of us to wrap our heads around for years. I think how long I have consulted and worked with the company going back to 2018. You know, the TMac story is great. And, yes, we do. We. PK, we certainly have great numbers on. You know, our Tmax is very fast, and our Cmax is high.

But, again, that is not what really matters to the patient. So I think we have been able to flip that message and either because of me or in spite of me, think people are responding to it. And, again, you know, this is. This was my area of expertise for years, and to hear it from me, I think, with the work that I have done in anaphylaxis, I think, hopefully, it is helping.

Daniel Barber: I let's see.

François Brisebois: But that is great. that is super helpful. And then can you just remind us how you compare to others on the PD side?

Matthew Greenhawt: Sure. Our Tmax, which is the timing of the peak of the heart rate and blood pressure, is fast. Depending on the study, we are ranging between about 5 to 8 minutes. Depending on the blood pressure parameter, depending on the study, and then the heart rate response is 8 to 11 minutes. If you look in our 3 zero 1 study, our 02/2006 study, for the comparators that we looked at, The earliest is the heart rate peak coming in at around 11 minutes, and everything else is pushed out past 19 minutes. Understood. Thank you. that is a very big gap. Yep.

Daniel Barber: Thank you.

Operator: Thank you. Our next question comes from the line of Mazahir Alimohamed of Oppenheimer. Your line is now open.

Michael: Hi. Thanks for taking my question. This is Michael on for Cassie. First question is, could you share anything about pricing relative to other auto injectors and Neffy and your expectations on formulary access in the first year. And would you be offering, like, cash pay or co pay programs?

Daniel Barber: Sure. Thank you, Michael. So, look, and this will be similar to what you heard me say in the August earnings call. We are obviously spending a lot of time on the market access piece of our launch, engaging in the allowable preapproval interactions. In terms of how we are going to price the product, that is the 1 piece we are going to keep to ourselves for right now. I think there are obvious dynamics in the marketplace that people can assess and come to their own conclusion on.

In terms of expectations on formulary, Look, any drug that is going to be launched there are a variety of PBMs that need to believe in your story, and you need to have arrangements and ability to contract with them, and we are going through that process. So as Sherry outlined before, when we get into 2027, how we are able to show progress on that front will be an important thing we bring to this forum.

In terms of the tools we will use, Sherry and her team, of course, we are going to have the typical tools for patients whether it is, as Sherry mentioned, having a hub or it is allowing people to use copay cards, things like that, It will, of course, be in our toolkit. The specifics and which ones we will use and not use, we are not going to outline today. But I would say there is just typical things you do in a launch that you will see us do, and I do not think that will be surprising to people.

Michael: Thank you.

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

Raghuram Selvaraju: Firstly, with respect to Annamil, I was just wondering if maybe Sherry could comment on which specialist prescriber subpopulation is likely to be the most receptive, kind of the earliest group of adopters, if you will, among the discrete groups of specialist prescribers that she mentioned in her prepared remarks. I also wanted to ask if the company could comment on the anticipated commercial receptivity for Libervant, which obviously is likely to be launched in the hands of your new partner, Eton.

But I wanted to see if you could comment perhaps on the degree to which the market is likely to be receptive to Libervant, in particular in the context of the other formulations and routes of administration for diazepam. Within the target indications for which Libervant is expected to be labeled. And lastly, if you could comment on the degree to which you expect the commercial presence of ANNAFILM and regulatory familiarity with the ANNAFILM regulatory package to potentially provide you with any advantages going forward as you seek to develop and optimize the value of the AdrenaVerse platform? Thank you.

Daniel Barber: Sure. Thanks, Ram. So I will let Sherry first start on the prescriber piece.

Sherry Korczynski: Hey, Raghuram. Thank you so much for the question. As we stated previously, we are focused on the allergist community first and foremost. We will be calling on approximately 8 thousand physicians with our 75 or so reps. Again, predominantly the allergist, as they are the highest prescribers, and then from there, there are also pediatricians and otolaryngologists that are high prescribers of epinephrine. Again, our launch is very focused. It is a big, big market However, we, with our team, will be focused on that community. Thanks, Sherry.

Daniel Barber: So from a Libervant perspective, and Ram, you and I have known each other a long time. We have talked about Libervant for a number of years. This is a product that we feel very attached to here at Aquestive. So we think from a patient perspective, it is an important product. The product, as you know, when approved, will be labeled for seizure clusters-- for seizure clusters in the epilepsy space. This is a population that is in need of good solutions and solutions that will help them. So we are very excited to get it in the hands of patients and allow them to benefit from it. Why Eton?

We did have a multi bidding situation, so we had other companies we could have gone with. What I think Eton has done well, if you follow their story, is they have. Just like us, where I opened in my prepared remarks today with we are executing. We are hitting the things we said we would do, I think Eton is a company that does that as well. So in their launches, they have demonstrated they can put product into patients' hands in an effective way. We really like that. And I also like their culture. I like that they put patients at the center of what they are doing and I think that bodes well with our culture.

So we are very excited to see how that launch unfolds once approved in 2027. From an AdrenaVerse perspective, your point is well taken. there is no doubt that as Melina and Matthew and the team work through the FDA interactions as well as Melina who is championing the ex US interactions we learn more and more about ANNAFILM epinephrine prodrugs, what the possibilities are And also, we are making the regulatory bodies more comfortable the pro drug approach. So I definitely would agree that as time goes on, the familiarity with that platform will only help us as we spread into other indications.

Raghuram Selvaraju: Thank you.

Operator: As a reminder, to ask a question, you will need to press 11 on your telephone. Our next question comes from the line of Thomas Flaten of Lake Street Capital Markets. Your line is now open.

Thomas Flaten: Hey, good morning guys. Thanks for taking the questions. Just to follow-up on the previous question, Sherry, with respect to early adopters. How did you weight Neffy prescribing in arriving at that target list of 8 thousand-8.5 thousand prescribers? And then secondly, for Daniel, has FDA communicated anything to you about a preapproval in inspection of your manufacturing facility? Thanks.

Daniel Barber: Thanks.

Sherry Korczynski: Thank you so much for the question. Obviously, with the nasal device launch about 2 years ago at this time, it is a component of how we looked at the targeting for our sales representative. The larger component is obviously the size, the amount of epinephrine. That a physician prescribes on an annual basis. But of course, we did look at it and made consideration.

Daniel Barber: And, Thomas, before I pass it over to Melina to talk about a potential PAI, just adding on to Sherry's thoughts, 1 thing I think that sometimes gets lost in the sauce in this space we have done a lot of survey work, and I am sure the other branded products in this space have as well. None of the surveys do we get information back from patients saying, we love auto injectors. We want to keep them. So there is a big opportunity here. And we believe in that opportunity even more today than we did a year ago.

And when I watched Sherry and her team really think about how do we bring health care providers and patients into a world where they use a product like ANNAFILM, these more innovative products I think the position we have is compelling. it is gonna take time. But the opportunity is there. But I will let Melina talk about the PAI question.

Melina T. Cioffi: Sure. So in terms of inspection activity, we did go through first round, the 10 month review. Interactions with the inspection group at FDA. And the focus was certainly on more of the routine clinical sites, which I recall us communicating previously. Here, there is a 6 month review timeline. We know that the inspection activity is still possible. Particularly from a clinical site perspective. When it comes to the manufacturing plant, as you know, we have a US based manufacturing facility It supported over the years not only products that are under review by the US FDA, but certainly globally as well.

We are well prepared for when and if the agency wants to come to our manufacturing site during this review.

Daniel Barber: And I will just add on to Melina's point. Just remember, Thomas, from a manufacturing perspective, our base business remains steady and strong. In fact, on a year to date basis, Suboxone is actually up. It is a declining product over time. But year over year on year to date basis, it is actually up. Ondissolve, it is growing nicely. And we will have Libervant coming into the plant as well along with Annamil. So that part of our business remains important and strong. Thank you.

Operator: I am showing no further questions at this time. I would now like to turn it back to Daniel Barber for closing remarks.

Daniel Barber: Thanks, Steven. Thank you to everyone for joining us this morning. As you just heard, we continue to gain momentum as we rapidly approach our March 16 action date for ANNAFILM As Sherry outlined and Matthew as well, the market opportunity remains compelling. We have the financing in place for our launch. And our base business remains stable. So we look forward to keeping you updated on our launch progress over the next few months And with that, we will close today's call.

Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. Parts of this article were created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.

The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.