Eton Pharmaceuticals — Third Quarter 2026 Earnings Summary

Financial Performance:

• Q3 2026 net revenue reached $57.9 million, a 158% year-over-year increase from $22.5 million in the prior year period.
• Q3 2026 GAAP net income was $35.2 million ($1.06 per diluted share), compared to a net loss of $1.9 million ($0.07 per diluted share) in the prior year period.
• Q3 2026 non-GAAP net income was $16.5 million ($0.50 per diluted share), compared to $1.5 million ($0.04 per diluted share) in the prior year period.
• Gross profit for Q3 2026 was $44.3 million, a 464% increase from $7.9 million in the prior year period.
• Adjusted gross margin for Q3 2026 was 80%, compared to 45% in the prior year period.
• Q3 2026 EBITDA was $24.8 million, compared to $0.3 million in the prior year period.
• Q3 2026 Adjusted EBITDA was $28.5 million, representing a 49% margin of revenue, compared to $2.9 million (13% margin) in the prior year period.
• R&D expenses for Q3 2026 were $5.3 million, up from $1.1 million in the prior year period, driven by a $3 million payment for ASN-001 rights.
• G&A expenses for Q3 2026 were $16.0 million, up 98% from $8.1 million in the prior year period, due to higher stock-based compensation and headcount.
• Cash and cash equivalents as of September 30, 2026, were $55.6 million, up from $25.9 million as of December 31, 2025.
• Short-term debt was $11.8 million and long-term debt was $11.2 million as of September 30, 2026.

Guidance and Future Outlook:

• Raised 2026 revenue guidance to more than $175 million, up from the prior guidance of more than $145 million.
• Raised 2026 Adjusted EBITDA margin guidance to more than 40%, up from the prior guidance of more than 35%.
• Anticipates full-year 2026 adjusted gross margin to exceed 70%.
• Expects continued organic growth from existing products through the remainder of 2026 and beyond.
• LIBERVANT launch is anticipated in April 2027.
• ASN-001 New Drug Application (NDA) submission is anticipated in 2027.
• Glyburide Oral Suspension NDA submission is on track for late 2026 or early 2027.
• ET-900 Phase 2 study enrollment and dosing are anticipated to begin in the first quarter of 2027.

Business Segments and Product Lines:

• Record active patient counts achieved for all key promoted products: HEMANGEOL, INCRELEX, ALKINDI SPRINKLE, KHINDIVI, DESMODA, and GALZIN.
• Revenue growth driven by the addition of HEMANGEOL sales and higher product sales for INCRELEX, ALKINDI SPRINKLE, GALZIN, KHINDIVI, DESMODA, and Carglumic Acid.
• Q3 2026 revenue included $1.2 million from INCRELEX and GALZIN sales outside the United States.
• Launched IMPAVIDO in the United States in September with expanded patient access support.
• Acquired U.S. rights to ASN-001 for infantile hemangiomas in August, with a bioavailability study underway.
• Entered an exclusive license and supply agreement for LIBERVANT, expanding into the neurology therapeutic platform.
• FDA accepted the KHINDIVI label expansion Prior Approval Supplement (PAS) for review, with a PDUFA date of May 28, 2027.
• Initiated an INCRELEX label expansion study to harmonize U.S. and E.U. definitions of severe primary IGF-1 deficiency.
• Completed the Glyburide Oral Suspension bioavailability study; the product received Fast Track designation.
• ET-700 proof-of-concept study demonstrated a substantially lower adverse event rate compared to GALZIN.

Market and Competitive Landscape:

• The LIBERVANT market is estimated to be more than $450 million in annual sales in the United States.
• The KHINDIVI label expansion seeks to include children under five, representing a large unmet need.
• The INCRELEX label expansion could increase the addressable U.S. population from an estimated 200 to 1,000 patients.
• LIBERVANT has received Orphan Drug Designation and tentative approval for patients ages 2 to 5 and ages 12 years and older.

Risks and Challenges:

• G&A expenses increased due to higher FDA fees following the loss of eligibility for the orphan drug fee exemption.
• Forward-looking statements involve risks regarding the discovery, development, and commercialization of drugs, as well as regulatory approval timing and market acceptance.
• Actual results may differ materially from forward-looking statements due to various risks and uncertainties.

Management Commentary and Tone:

• CEO Sean Brynjelsen described the quarter as a "record quarter" with "exceptional operational execution" and "strong momentum."
• Management noted the company surpassed its $200 million annualized revenue run rate goal five quarters ahead of schedule.
• Management stated the pipeline has "never been stronger" and is positioned to drive continued near- and long-term growth.
• Management highlighted that ASN-001 has the potential to become the Company's largest revenue-generating product if approved.

Other Key Points:

• Released valuation allowance associated with federal and a portion of state deferred tax assets, resulting in a significant income tax benefit for the period.
• Paid $3 million for the rights to ASN-001, recorded as an acquired in-process research and development expense.
• Repaid $8 million in long-term debt during the nine months ended September 30, 2026.
• Proceeds from stock option exercises were $5.8 million for the nine months ended September 30, 2026.
• The Company currently has twelve rare disease products and six additional product candidates in late-stage development.