Eton Pharmaceuticals Announces Sale of Hospital Products
24 June 2022 - 9:30PM
Eton Pharmaceuticals, Inc (Nasdaq: ETON), an innovative
pharmaceutical company focused on developing and commercializing
treatments for rare diseases, today announced that it has sold its
hospital products to Dr. Reddy’s Laboratories SA, a subsidiary of
Dr. Reddy’s Laboratories, Ltd. (collectively, “Dr Reddy’s”) (NYSE:
RDY) for total payments of up to $50 million.
“The sale of our hospital products allows us to focus our
resources on our core rare disease business, which is rapidly
growing, and also provides an attractive opportunity to monetize
the value we have created with our hospital products. The proceeds
from the transaction put us in an even stronger financial position
and provide significant capital to further invest in additional
rare disease products,” said Sean Brynjelsen, CEO of Eton
Pharmaceuticals.
Transaction Terms
Under terms of the transaction, Dr Reddy’s purchased the
Biorphen®, Rezipres®, and Cysteine Hydrochloride products. Dr
Reddy’s will immediately take ownership of Eton’s rights and
interests in the products. Eton will continue to sell its existing
Biorphen ampule inventory until the end of 2022.
Eton received approximately $5 million at closing, and will
receive additional payments of up to $45 million, based on the
achievement of certain event-based and sales-based milestones:
- $20.0 million upon launch of Cysteine hydrochloride injection,
assuming a successful court outcome relating to an ongoing
litigation and commercial launch within six years from the
transaction closing.1
- $5.0 million if no competing Cysteine injection products are
marketed other than the innovator product (Elcys®) on the six-month
anniversary of Dr. Reddy’s Cysteine product launch.1
- $1.0 million upon FDA approval of Biorphen vial, provided it
occurs before January 1, 2023. If it occurs after January 1, 2023
but before March 1, 2023, Eton receives $0.5 million.
- $2.5 million upon FDA approval of Biorphen bag, provided it
occurs before July 1, 2023.
- $1.5 million upon FDA approval of Rezipres vial, provided it
occurs before January 1, 2023. If it occurs after January 1, 2023
but before March 1, 2023, Eton receives $0.75 million.
- $15.0 million of total commercial
milestones when combined net sales of all Biorphen products exceed
certain revenue targets ranging from $15 to $40 million in a
twelve-month period.2
Eton Going Forward
Following the transaction, Eton’s commercial activities will be
solely focused on rare disease products with a portfolio of four
product candidates, two of which are currently FDA-approved
commercial products.
- ALKINDI SPRINKLE®
- Carglumic Acid tablets
- Dehydrated alcohol injection: Product
candidate for methanol poisoning that has been submitted to the FDA
and has received orphan drug designation.
- ZENEO® hydrocortisone
autoinjector: Product candidate under development for the
potential treatment of adrenal crisis, which is expected to be
submitted to the FDA in 2023.
In addition to the rare disease products, Eton is entitled to
royalty milestone payments of up to $70 million including the
payments from Dr. Reddy’s mentioned above and from products that it
divested in a previous transaction with Azurity Pharmaceuticals.
Eton is also entitled to receive royalties from two commercial
products, Alaway® Preservative Free and EPRONTIA™, and two
additional product candidates that have been submitted to the FDA,
zonisamide oral suspension and lamotrigine for suspension.
137.5% of the two Cysteine related milestone payment will be
paid out to Eton’s original licensing partner on the product.
2Eton retains obligations to pay its original licensing partner
commercial milestones of up to $4.5 million based Rezipres and
Biorphen reaching certain sales levels.
About Eton Pharmaceuticals
Eton Pharmaceuticals, Inc. is an innovative pharmaceutical
company focused on developing and commercializing treatments for
rare diseases. The product currently commercializes ALKINDI
SPRINKLE® and Carglumic Acid tablets and has two additional rare
disease products under development, dehydrated alcohol injection
and the ZENEO® hydrocortisone autoinjector. In addition, the
company’s royalty segment is entitled to receive milestone payments
or royalties on six different products.
Forward-Looking Statements
Statements contained in this press release regarding matters
that are not historical facts are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995, including statements associated with the expected ability
of Eton to undertake certain activities and accomplish certain
goals and objectives. These statements include but are not limited
to statements regarding Eton’s business strategy, Eton’s plans to
develop and commercialize its product candidates, the safety and
efficacy of Eton’s product candidates, Eton’s plans and expected
timing with respect to regulatory filings and approvals, and the
size and growth potential of the markets for Eton’s product
candidates. Because such statements are subject to risks and
uncertainties, actual results may differ materially from those
expressed or implied by such forward-looking statements. Words such
as "believes," "anticipates," "plans," "expects," "intends,"
"will," "goal," "potential" and similar expressions are intended to
identify forward-looking statements. These forward-looking
statements are based upon Eton’s current expectations and involve
assumptions that may never materialize or may prove to be
incorrect. Actual results and the timing of events could differ
materially from those anticipated in such forward-looking
statements as a result of various risks and uncertainties, which
include, without limitation, risks associated with the process of
discovering, developing and commercializing drugs that are safe and
effective for use as human therapeutics, and in the endeavor of
building a business around such drugs. These and other risks
concerning Eton’s development programs and financial position are
described in additional detail in Eton’s filings with the
Securities and Exchange Commission. All forward-looking statements
contained in this press release speak only as of the date on which
they were made. Eton undertakes no obligation to update such
statements to reflect events that occur or circumstances that exist
after the date on which they were made.Investor
Contact:David Krempadkrempa@etonpharma.com612-387-3740
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