Aquestive Therapeutics - Earnings Call - Q2 2025

Executive Summary

• FDA accepted the Anaphylm NDA; PDUFA action date is January 31, 2026, with potential AdCom; commercial launch targeted for Q1 2026 if approved.
• Q2 2025 revenue was $10.00M vs Wall Street consensus of $11.32M (MISS); diluted EPS was -$0.14 vs consensus -$0.17 (BEAT). Manufacturing & supply revenue grew 19% YoY to $9.6M, offsetting Suboxone declines. Values from S&P Global estimates marked with an asterisk.*
• Full-year 2025 guidance maintained: total revenue $44–$50M and non-GAAP adjusted EBITDA loss $47–$51M; cash was $60.5M, with management pursuing non-dilutive launch financing and ex-U.S. partnering.
• Strategic catalysts: clarity on AdCom post mid-cycle review, payer access build (including cash-pay program), EMA/Health Canada interactions, and potential EU-only or global rights transactions to fund launch.

What Went Well and What Went Wrong

What Went Well

• NDA acceptance and on-track reviews: “We recently submitted our 120‑day safety update… there was nothing new or of consequence… we believe the FDA is about to conclude its mid-cycle review”.
• Commercial readiness and market shaping: “We will be taking a patient‑first approach. On day one, we will have a cash pay program available to patients and caregivers”.
• Base business resilience: Manufacturing & supply revenue increased to $9.6M, primarily on Ondif growth, helping offset Suboxone declines.
• Management confidence in clinical package: “We probably have one of the largest epinephrine studies… 10 independent studies… well over 930+ dosings… a strong package”.

What Went Wrong

• Reported YoY revenue declined due to one-time deferred revenue recognized in Q2 2024; total revenue fell from $20.10M to $10.00M (ex-one-time, +3% YoY).
• SG&A increased to $12.7M (+$1.3M YoY) on commercial, regulatory, and personnel costs; non-GAAP adjusted EBITDA deteriorated to -$9.3M (vs +$1.8M in Q2 2024).
• Continued net loss of -$13.5M and need for additional launch financing; management evaluating EU-only rights, refinancing, and revenue-interest options.

Transcript

Speaker 7

Thank you for standing by. Welcome to the Aquestive Therapeutics Second Quarter 2025 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's 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 advising your hand is raised. To withdraw your question, please press *11 again. Please be advised that today's conference is being recorded. I will now hand the conference over to our first speaker today, Brian Korb. Please go ahead.

Speaker 8

Thank you, operator. Good morning and welcome to today's call. On today's call, I'm joined by Dan Barber, Chief Executive Officer, and Ernie Toth, Chief Financial Officer, who are going to provide an overview of recent business developments and performance for the second quarter of 2025, followed by a Q&A session. During the Q&A session, the team will be joined by Dr. Carl Kraus, Chief Medical Officer, and Sherry Korczynski, Chief Commercial 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 will be made available on the Aquestive Therapeutics website within the Investors section shortly following the conclusion of this call. To remind you, the Aquestive Therapeutics team will be discussing some non-GAAP financial measures this morning as part of its review of second quarter 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 the Aquestive Therapeutics 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 quarterly report on the Form 10-Q filed with the Securities and Exchange Commission on August 11, 2025. 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 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. Now, I would like to turn the call over to Dan.

Speaker 0

Thanks, Brian, and good morning, everyone. We are now less than six months away from our FDA action date for Anaphylm Epinephrine Sublingual Film, potentially the first and only oral product for the treatment of severe allergic reactions, including anaphylaxis. As a reminder, our action date is scheduled for January 31, 2026. I'm pleased to tell you this morning that we are on track across the important elements of Anaphylm. We are on track in our FDA review process, our Anaphylm advisory committee preparations, which may or may not occur, and our pre-commercial launch activities. We are on track in responsibly securing launch financing for the company, and we are on track in our international expansion efforts for Anaphylm. Let's start with the FDA review of our Anaphylm application. We recently submitted our 120-day safety update to the FDA.

I'm pleased to say that there was nothing new or of consequence to report in this safety update. We also believe the FDA is about to conclude its mid-cycle review. While we do not participate in this review, we would expect to have more clarity on whether we will have an advisory committee meeting once the FDA has fully processed its mid-cycle review meeting. In terms of advisory committee meeting preparations, we recently completed our first in-house mock or practice advisory committee meeting, including participation from our key opinion leaders. We were pleased with the results and continue to strengthen our discussion points every week. It's also worth noting that we have included our pediatric study data in the supplemental materials on our website.

As we have discussed before, this data was in line with expectations and, importantly, enabled us to submit our NDA for patients down to 30 kilograms or approximately seven years of age. Now, let's turn to our pre-commercial activities. As a starting point, it's important to remember that we continue to believe the rescue market for severe allergic reactions is poised for growth for years to come. Before the launch of a nasal spray last year, there had been very little innovation and very little physician detailing in this space for quite some time. When we launch, if we are approved by the FDA, there will be only a few companies detailing physicians and highlighting the need for patients to carry and use rescue medications for severe allergic reactions.

I believe that this, along with the underlying market growth, should propel the market from roughly 5 million prescriptions a year to as many as 10 million prescriptions a year. Using the estimated current net prices of today's epinephrine products, this could be as much as or more than $2 billion a year in the global market. A recent survey conducted by an expert research analyst in this space concluded that 90% of the market will move from injectables to non-injectable products over the years to come. In our surveys, we found that when patients are presented with a choice between injectables, nasal sprays, and oral films, they favor the convenience, size, durability, and oral administration of Anaphylm. We believe this market remains a compelling opportunity for Aquestive Therapeutics and its stakeholders, especially patients and caregivers, if approved by the FDA. Let's focus on patients and caregivers for a moment.

According to one of the leading allergy advocacy groups, the Allergy and Asthma Network, an estimated 225 Americans die each year from anaphylaxis. Sadly, it seems that this rate has not improved in decades. We believe the way to improve bad outcomes is to, one, improve the carry rate, two, lower the barrier to use, and three, ensure broad availability and coverage. We think the inherent characteristics of Anaphylm will address the first two items because Anaphylm fits patients' lives. Unfortunately, the third item, market access, is harder. We have been disappointed to see the number of barriers that the most recently approved epinephrine product has faced when it comes to market access. Pricing and product access should not prevent patients from having access to life-saving medicines.

Delayed tactics, NDC blocks, and prior authorization documentation are just a few ways that payers make it hard for patients to get the drugs that they need. For pharmaceutical manufacturers like us, these barriers add significant costs to putting our products into the hands of patients. Simply put, Americans are not getting the coverage they expect through the healthcare insurance that they pay for. In fact, some companies have indicated that the average healthcare plan deductible for a single person has risen from roughly $900 in 2010 to $1,800 in 2024. It is still climbing. As you can imagine, the deductibles are considerably higher for a family. That is why for Anaphylm, we will be taking a patient-first approach. On day one, we will have a cash-pay program available to patients and caregivers.

While we are not announcing our pricing today, we will do everything we can to make sure that patients have immediate access to Anaphylm, even if their provider puts up barriers to access. We will share more details on this program as we get closer to approval and launch. Additionally, our market access group possesses significant enterprise-level pricing, contracting, coding and reimbursement, trade and distribution, patient services, and government affairs experience. The team is engaging with payers, as you would expect at this point, in the approval process of Anaphylm. Now let's turn to financing the launch. As you saw in our press release, we ended the last quarter with $60 million in cash. While this is sufficient for the initial launch, we will need more funding to appropriately support Anaphylm.

Ernie will talk more about our financials, but I do want to give you my perspective on our pathways to financing the launch. We currently have multiple proposals in process, including for EU-only rights and alternate financing vehicles. We are working through the pathways available to the company and will select the best pathway when the time is right. However, as of today, we remain confident that launch financing is available to the company and that we will have secured financing prior to launch. The final update for Anaphylm is on the international front. We have secured meetings in both Canada and the EU for discussion on the filing packages necessary with each regulatory body. Our plan remains to complete these meetings by the end of the year and then begin the work to prepare and submit filings. Regarding the remainder of our business, we continue to make progress.

We continue to believe AQST-109, our epinephrine topical gel, could provide a compelling improvement for patients with alopecia areata. We are on track to open our IND with the FDA before the end of the year and begin our next human studies in early 2026. Our base business grew year over year in the second quarter when adjusted for one-time revenue events. This was driven by strong growth in our international products. We continue to work towards offsetting the decline of Suboxone with new business opportunities. In conclusion, we remain on track for a launch of Anaphylm in the first quarter of 2026, if approved by the FDA. Our focus remains on our interactions with the FDA, finalizing our launch financing, and pre-commercial activities. Now, I will turn the call over to Ernie.

Speaker 9

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 second quarter of 2025 results in the Q&A. During the second quarter, we continue to execute on our strategy to support the continued development of the recently filed NDA for Anaphylm, our lead product candidate that has no needle, is not a device, is orally administered, and is easy to carry. This includes supporting pre-approval launch activities for Anaphylm to increase awareness among physicians, payers, and the advocacy community as we approach the PDUFA action date of January 31, 2026. As Dan mentioned, we continue to evaluate all financing alternatives to support the commercial launch of Anaphylm if approved by the FDA.

This includes non-dilutive alternatives such as the sale of global rights, EU-only rights, refinancing our existing debt, additional debt, as well as revenue interest financing. We are evaluating all options to find the best financing structure to support the future growth of Aquestive Therapeutics. Aquestive Therapeutics' manufacturing business remains steady, with the gradual decline of Suboxone being offset by growth across newer collaborations, including for the licensed products Ondif, Synthesan, and Emolif. Aquestive Therapeutics' manufacturing facility continues to diversify its operations to support a broader range of products and collaborations. In addition, the company, being a U.S.-based manufacturer with intellectual property domiciled in the U.S., has a supply chain which currently remains unaffected by both implemented and proposed tariffs, providing continued reliability and stability in production and global distribution for the near term. Now, let's turn to the second quarter results.

Excluding the impact of one-time recognition of deferred revenue in the second quarter of 2024, total revenues increased by $0.3 million, or 3% year over year, to $10 million in the second quarter of 2025. As a reminder, the one-time recognition of deferred revenue in the prior year was due to the termination of licensing and supply agreements. Including the deferred revenue recognized in the prior year, total revenues decreased to $10 million in the second quarter of 2025 from $20.1 million in the second quarter of 2024. Manufacturer and supply revenue increased to $9.6 million in the second quarter of 2025 from $8.1 million in the second quarter of 2024, primarily due to increases in Ondif revenues, partially offset by decreases in Suboxone revenues.

Total revenues decreased to $18.7 million for the six months ended June 30, 2025, from $32.2 million for the six months ended June 30, 2024, due to one-time recognition of deferred revenue in the prior year. Excluding this one-time recognition of deferred revenue, total revenues decreased by $2.8 million, or 13% year over year. Manufacturer and supply revenue decreased to $16.8 million for the six months ended June 30, 2025, from $18.6 million for the six months ended June 30, 2024, primarily due to decreases in Suboxone revenues, partially offset by increases in Ondif revenue. Research and development expenses in the second quarter of 2025 remain relatively consistent compared to the second quarter of 2024. Research and development expenses decreased to $9.5 million for the six months ended June 30, 2025, from $10.1 million for the six months ended June 30, 2024.

The decrease in research and development expenses was primarily due to a decrease in clinical trial costs associated with the continued advancement of the Anaphylm program, partially offset by increases in personnel costs and an increase in share-based compensation. Selling, general and administrative expenses increased to $12.7 million in the second quarter of 2025, from $11.4 million in the second quarter of 2024, primarily due to higher commercial spending for pre-commercial activities of approximately $2 million, higher regulatory and licensing fees of approximately $0.8 million, higher personnel costs of approximately $0.4 million, higher share-based compensation expenses of approximately $0.2 million, and higher consulting fees of approximately $0.2 million, partially offset by lower legal fees of approximately $2.5 million and lower insurance expenses of $0.2 million.

Selling, general and administrative expenses increased to $31.8 million for the six months ended June 30, 2025, from $22 million for the six months ended June 30, 2024.

The increase primarily represents regulatory fees related to the Anaphylm PDUFA fee of approximately $4.3 million, higher commercial spending on pre-launch activities for Anaphylm of approximately $4.2 million, higher regulatory and licensing fees of approximately $1.5 million, higher personnel costs of approximately $0.8 million, higher share-based compensation expenses of approximately $0.5 million, and higher consulting fees of approximately $0.3 million, all partially offset by decreases in severance costs of approximately $1.1 million, lower insurance expenses of approximately $0.5 million, and lower legal fees of approximately $0.4 million. Aquestive Therapeutics' net loss for the second quarter of 2025 was $13.5 million, or $0.14 for both basic and diluted loss per share, compared to the net loss for the second quarter of 2024 of $2.7 million, or $0.03 for both basic and diluted loss per share.

Excluding the impact of one-time recognition of deferred revenue, the net loss in the second quarter of 2024 was $13.2 million. Aquestive Therapeutics' net loss for the six months ended June 30, 2025, was $36.5 million, or $0.37 for both basic and diluted loss per share, compared to the net loss for the six months ended June 30, 2024, of $15.6 million, or $0.19 for both basic and diluted loss per share. Excluding the impact of one-time recognition of deferred revenue, the net loss for the six months ended June 30, 2024, was $26 million. Non-GAAP adjusted EBITDA loss was $9.3 million in the second quarter of 2025, compared to non-GAAP adjusted EBITDA income of $1.8 million in the second quarter of 2024. Excluding the impact of the one-time recognition of deferred revenue, non-GAAP adjusted EBITDA loss in the second quarter of 2024 was $8.6 million.

Non-GAAP adjusted EBITDA loss was $27 million for the six months ended June 30, 2025, compared to non-GAAP adjusted EBITDA loss of $5.4 million for the six months ended June 30, 2024. Again, excluding the impact of one-time recognition of deferred revenue, non-GAAP adjusted EBITDA loss for the six months ended June 30, 2024, was $15.8 million. Cash and cash equivalents were $60.5 million as of June 30, 2025. Aquestive Therapeutics' full-year 2025 financial guidance remains unchanged. The company expects total revenue of $44 million to $50 million, and non-GAAP adjusted EBITDA loss of $47 million to $51 million. Our revenue guidance for 2025 no longer includes revenue for Rivervent for ages between two and five. As a reminder, our 2024 revenue included one-time non-recurring recognition of deferred revenue related to the termination of certain licensing and supply agreements.

Our non-GAAP adjusted EBITDA loss guidance for 2025 includes significant pre-approval launch spending for Anaphylm, costs associated with the recent submission of the Anaphylm NDA and related filing fee, completion of the Anaphylm pediatric clinical trial, and preparations for a potential advisory committee meeting, if required by the FDA for approval of Anaphylm. With that, I will now turn the line back to the operator to open the line for questions.

Speaker 7

Thank you. At this time, we'll conduct the question-and-answer session. As a reminder, to ask a question, you will need to press *11 on your telephone and wait for your name to be announced. To withdraw your question, please press *11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Rona Ruiz of Lirinc. Your line is now open.

Speaker 8

Hello. Yes, good morning. I just wanted to touch base. This is Maisie on for Rona Ruiz. I just wanted to touch base. We mentioned the possible FDA ADCOM meeting ahead of the PDUFA. Could you provide any more details on the likelihood of the ADCOM being required and how confident you are in your clinical data package going into this?

Speaker 0

Sure. This is Maisie, right?

Speaker 8

Yes, it is.

Speaker 0

Nice to hear your voice.

Speaker 8

Thanks.

Speaker 0

In terms of the likelihood of an ADCOM, nothing has changed on that front since our last conversation. As you know, the FDA obviously accepted our application back in June, where they reiterated that they may or may not want to have an advisory committee meeting. By our math, the FDA should be just about in the process of having its mid-cycle review. We would continue to believe that in the coming weeks, to a month, call it, we would have an indication from them whether they want an ADCOM or not. Again, from our perspective, the important part is to be ready, and we have focused a lot of energy and time on making sure that we are ready for any ADCOM if the FDA desires. In terms of how we feel about our clinical package, I will pass it over to Carl to give you his high-level view.

I appreciate the question. I believe we may have commented on that last discussion as well, which is that the package is quite robust. We probably have one of the largest epinephrine studies conducted to date. The package consists of 10 independent studies, well over 930-plus exposures, and well over 350 subjects. It's a robust package. It should be able to address any and all potential questions that the agency may have. We're very proud of it, and we believe it's a strong package.

Speaker 8

Great. Thank you both for your response. We look forward to seeing it play out.

Speaker 7

Thank you. One moment for our next question. Our next question comes from a line of David M. Sellem of Piper Sandler. Your line is now open.

Speaker 1

Thanks. I just have a couple. Interested in your comments regarding out-of-pocket exposure for patients and just the payer landscape. I guess my question here is, is your commentary a function not only of what you're seeing with your competitor, the nasal spray formulation, but also a function of your discussions with payers? Maybe talk to the extent of your discussion with payers, how that's going, and how you're thinking about access issues. That's number one. Number two, regarding the cash pay initiative, I guess my question here is, how much of the intranasal business is actually cash pay? What kind of cash pay market do you think is going to evolve into over time? Just trying to get a better understanding of your thought process here. Thank you.

Speaker 0

Sure. Thanks, David. Good morning. Let me start with what we're doing, right? From discussion with payers, Sherry Korczynski, who's here with me this morning, and her team have done a great job of engaging on the payer landscape. We have some really solid expertise in-house. To the extent that the pre-commercial world allows you to engage with the payers, we are obviously engaged with the payers. Those discussions do not, at this time, get to a place where we talk about coverage or what that would look like. That's not obviously allowed until approval. Right now, our focus with payers is strictly on awareness. In terms of the out-of-pocket exposure in the payer landscape, my commentary would be for our entire industry.

I don't think there's a single drug that gets launched right now that doesn't have concerns over how their patients get the product that they need without extreme or additional issues in the chain of getting a product. I wouldn't say that is specific to just the nasal spray. In terms of cash pay, I'll leave it to our competitor to talk about what % of their business is cash pay or isn't cash pay. When we look across the landscape, our view is that cash pay is an important part of any product that is launching in the near term. We think that given the trends of how the payer world works, that is likely to continue. Over time, we would expect for most drugs, other than call it very highly priced drugs, that the cash pay portion will continue to grow and be a significant portion.

In terms of what it can ultimately be for Anaphylm, I think that will really be informed by the market.

Speaker 1

That's helpful. If I may just sneak in a follow-up to the extent that you're going to be buying down here and this is a product, right? This is a chronic treatment. As you think about that, where does copay assistance buy down play into your overall strategy? How should we think about that? Thanks.

Speaker 0

Yeah. Look, our role right now, our job right now, beyond getting the product approved and available to patients, is to make sure that they have access in a reasonable fashion. Not just us, but every company utilizes the copay assistance program. Obviously, the important part with a copay assistance program is to make sure it's balanced, that you balance it with the coverage that you are either getting or have versus where you are at that stage. I don't think you'll see us do anything that is out of the ordinary on copay assistance, but we absolutely will have it as a part of our work.

Speaker 1

Okay. Thanks, guys.

Speaker 7

Thank you. One moment for our next question. Our next question comes from a line of Kristen Klisko of Cantor Healthcare. Your line is now open.

Speaker 2

Hi. Good morning, everyone. Thanks for taking the question. Recently, former CRLs were made publicly available, including one from your peer who now has an approval. I know you're in a unique position because you're differentiated, but also you get to leverage that experience to help with your own prep. I'm curious if you reviewed any of these documents and anything that you can really gain from material beyond what we already knew, including from the ADCOM experience.

Speaker 0

Sure. Thank you, Kristen. Yes, of course, one of the benefits of being second is you get to see what the person who was ahead of you or the company that was ahead of you went through. Both from an ADCOM and a CRL perspective, we have definitely watched and tried to learn. Our biggest learning, and I'll focus on the CRL, though I think it played into the ADCOM as well, our biggest learning is kind of an age-old one for us. As a reminder, we have six FDA approvals over the years, which is listen to the FDA. Our read of the CRL is there was a study that was not completely done the way that the FDA wanted it to be done, and our competitor had to go back and do that.

In our package, and Carl talked before about the completeness of our package, one of the things we really focused on is making sure we did everything that the FDA asked for. To be specific, in our oral allergy syndrome study, we did not just a single dose, but a repeat dose arm that was specifically listening to what the FDA had asked for and ties to the allergic rhinitis component of the CRL that you referenced.

Speaker 2

Thank you.

Speaker 7

Thank you. One moment for our next question. Our next question comes from a line of Andreas Eggreiz of Oppenheimer. Your line is now open.

Speaker 5

Great. Good morning. Thanks for taking our questions and the update here, guys. Just a quick one on us. You see that you provided some additional details on the pediatric study, PKPD, which is great. Can you give us a little bit more color on the safety? How confident are you in the submissions for PED as part of the NDA submission? Thank you.

Speaker 0

Sure. Good morning, Andreas. I'll pass it over to Carl in a second here. I'll just open with, as Carl said at the top of this Q&A session, we're confident in the package we put together. We think it's a robust package and the right one for what we're looking to accomplish. I'll let Carl talk on the pediatric studies.

Speaker 6

Yeah. No, thanks for the question. The pediatric study was crafted in such a way really just to provide characterization of the concentration time curve and the PK profile in that population. There was no internal competitor per se that was agreed upon with the agency, but we have done cross-study evaluations showing that it's quite comparable to the adult dose. As you saw in the supplementary slides, you can almost see overlapping concentration time curves between the pediatric and adult study. From that perspective, the powering, the addressing FDA's concerns and requests for the appropriate number of subjects, and also the subsequent PK profile that we saw at the outcome, we're extremely pleased with those data. As far as safety goes, there was no difference really in the character, frequency, or severity of outcomes that we saw in the pediatric population.

Overall, quite in line with what we were hoping for and expected.

Speaker 5

Okay. Great. That was my question. Thanks.

Speaker 7

Thank you. One moment for our next question. Our next question comes from the line of Jason Butler of Citizen JNP. Your line is now open.

Speaker 1

Hi. Thanks for taking the questions. Two from me. The first one, you mentioned that you submitted the 120-day safety update. Just wondering if there have been any other substantial data analysis or information requests from FDA during the review so far. The second, on the commercial prep, you talked about the reimbursement piece. Can you also just talk about the work you've done to increase awareness of Anaphylm and where you think you've, you know, whether or not you've moved the needle there? Thanks.

Speaker 0

Good to hear your voice. On the first one, we have had a useful back and forth with the FDA that you would expect to date. There is nothing that I would describe as a major data set or anything to that standpoint beyond the standard 120-day safety update. In terms of our awareness activities, I'll turn it over to Sherry to give you a review.

Speaker 3

Sure. Thanks so much for your question. As Dan mentioned in his comments, we continue to drive significant awareness of the brand. What we're hearing back is consistent. The feedback from the broader allergy community, both patients and HCPs, continues to be positive. We have been conducting CME, non-CME. We have published a number of, we have had a number of posters and have been very active in the medical side of things, being at local, regional, and national conferences. We have really spent the entire year increasing the awareness of Anaphylm. At the end of the day, what the HCPs continue to tell us is that they love the product. They believe it will improve the carry rate and it will decrease the barriers to use.

Speaker 1

Great. Thank you.

Speaker 7

Thank you. One moment for our next question. Our next question comes from the line of Reverend Zeraldu of H.C. Wainwright & Co. Your line is now open.

Speaker 5

Good morning. This is Dan Alteron. Thanks for taking our question. We were curious kind of in terms of business development strategy related to Anaphylm. Is Aquestive planning to partner the drug ahead of regulatory applications in the ex-U.S. territory as it waits until those filings have been submitted? How is Aquestive thinking about ex-U.S. pricing in the context of most favored nations? Thank you.

Speaker 0

Morning, Dan. Thanks for the question. We've been pretty open all along, probably for the better part of a couple of years now. From our perspective, our number one job is to make sure that Anaphylm gets put into the hands of as many patients as it can be useful for. From that perspective, we are always looking at how to have the broadest coverage and the broadest capabilities. Whether that is ultimately a launch just by the company or a launch in conjunction with another company is something we continue to talk through, as I said in my comments at the beginning. In terms of ex-U.S. pricing and most favored nation pricing, I don't see, I suppose it will have an impact on all companies in the space. I think the primary impact will be on the larger companies that have very expensive drugs.

I think if you look at this rescue market, you have a rescue treatment that is usually only filled once a year, so it's not a chronic medication. The price point on the product is obviously way below some of the high-priced biologics or something like that. I don't think we're the target of those activities, and I wouldn't expect them to be a major component of how things play out here.

Speaker 5

Thank you.

Speaker 7

Thank you. One moment for our next question. Our next question comes from a line of Gary Nashman of Raymond James. Your line is now open.

Speaker 4

Hey, guys. Good morning. This is Dennis Resnick on for Gary Nashman. Thanks for taking our questions. In terms of the pre-commercial efforts, can you just detail what the ideal physician who would be a top desktop prescriber of Anaphylm looks like? Are there any characteristics about them that you'd highlight? Given some of the headwinds and sounds like you're seeing on the payer landscape, are you still confident that you can likely get 80% coverage within the first six months of launch? Thanks so much.

Speaker 0

Morning, Dennis. Let me take the second one first, and then I'll pass it over to Sherry for the ideal physician. We are confident that from a payer perspective, we will have broad coverage and that coverage will be competitive with the other products available in the space. The 80% mark, I don't know how to feel about that, but I would generally say, yes, we'll have broad coverage across most people. Why don't I pass it over to Sherry? She can give you her thoughts on the ideal physician.

Speaker 3

It's a good question. I always like to say that this market is an inch deep and about 10,000 miles wide. What I mean by that is you have a very, very broad range of physicians that prescribe epinephrine, everyone from the primary care physician that on average prescribes two prescriptions to the allergist on average that prescribes 200-plus prescriptions annually. As we look at where our focus will be upon launch, it will certainly be in the allergist space. We know, and I've worked with allergists for the better part of 15 years, we know how excited they are about the innovation that Anaphylm brings to the marketplace because they absolutely believe that patients will carry. If patients carry the product, then they are more likely to use the product at the first signs and symptoms.

Because Anaphylm works so quickly, as you've seen in our data, the allergists are very, very excited. Over time, we will look to scale, and you can only look as far as what our competitors have done as you think about that. That allergist is our key target upon launch.

Speaker 4

Thanks so much.

Speaker 7

Thank you. One moment for our next question. As a reminder, to ask a question, you'll 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.

Speaker 5

Yeah. Thanks for taking the question. Just perhaps kind of hanging on to the last question that was asked. I'm curious, Sherry, if you guys have done any post-Anaphylm launch patient research just to try and better understand, you know, what is it that activates that patient? Is it a recommendation from a physician? Are they seeing ads out there? I'm just trying to understand who those patients are that are coming in and actually filling that prescription for a needle-free alternative.

Speaker 3

Yeah. It's a good question. I'm sure we'll hear more from the competition in their call. However, as we've looked at it and as we've talked to patients and physicians alike, patients want choice first and foremost, and they want a choice that is easy to carry, easy to use. As we think about this, the ability to, one, convince the physician that epinephrine is epinephrine is epinephrine, and I think our competition is doing a good job that alternative forms of epinephrine work. Obviously, from a consumer perspective, moms who are the Chief Medical Officers of the home want a medication and epinephrine that their kids will carry. Again, as you think about the physicians and the patients and moms, they want a product that the patients will carry and have with them.

I do believe that all of the consumer education, the direct-to-consumer that our competition has started and is doing a great job of, quite frankly, is increasing that awareness. That will only help, as Dan mentioned in his opening comments, the growth of the rescue market to ultimately prevent those deaths that occur due to anaphylaxis.

Speaker 5

Great. Thank you.

Speaker 7

Thank you. I'm showing no further questions at this time. I'll now like to turn it back to Dan Barber for closing remarks.

Speaker 0

Thank you, Marvin. We appreciate everyone joining us this morning. As you heard, we remain excited about where we are, and we're looking forward to continuing to update everyone on our progress in the weeks and months to come. Take care.

Speaker 7

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