Good afternoon, and welcome to Eton Pharmaceuticals' Fourth Quarter 2023 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Following the formal remarks, we will open the call up for your questions. Please be advised that this call is being recorded at the Company's request. At this time, I'd like to turn it over to David Krempa, Chief Business Officer at Eton Pharmaceuticals. Please proceed.

Thank you, operator. Good afternoon, everyone, and welcome to Eton's fourth quarter 2023 conference call. This afternoon, we issued a press release that outlines the topics we plan to discuss on today's call. The release is available on our website, etonpharma.com. Joining me on our call today, we have Sean Brynjelsen, our CEO; and James Gruber, our CFO. In addition to taking live questions on today's call, we will be answering questions that are e-mailed to us. Investors can send their questions to investorrelations@etonpharma.com. Before we begin, I would like to remind everyone that remarks made during this call may contain forward-looking statements and involve risks and uncertainties that could cause actual results to differ materially from those contained in these forward-looking statements. Please see the forward-looking statements disclaimer in our earnings release and the risk factors in the Company's filings with the SEC. Now I will turn the call over to our CEO, Sean Brynjelsen.

Thank you, David. Good afternoon, everyone, and thank you for joining us today. Our strong fourth delivered our 12th straight quarter of sequential product revenue growth and capped off an exciting and productive 2023 for Eton. 2023 brought a number of critical accomplishments and milestones for the Company, including the expansion of our internal sales force, which helped us grow revenue more than 130% to $26 million in 2023 from $11 million in 2022. Number two, the commercial launch of Betaine and acquisition of Nitisinone, which brought us from two commercial products at the start of the year to four approved products by the end of the year. We also boosted our development pipeline through the advancement of ET-400 and the acquisition of ET-600. And lastly, we reached positive operating cash flow in the second half of the year. Turning to the specific fourth quarter results. Revenue was $7.3 million, an increase of 109% over the prior year quarter, while G&A expenses grew only 5% year-over-year. demonstrating our financial discipline and the attractive operating leverage in our business. I'm also pleased to report that the fourth quarter was another quarter of positive operating cash flow. Even without the benefit of any future acquisitions, we expect our current commercial products continued growth to allow us to reach positive GAAP net income at some point in 2024. ALKINDI SPRINKLE once again delivered steady growth in the quarter. We continue to believe this growth can continue for many years to come as we have still only converted a small portion of the estimated 5,000 patients under the age of 10 who suffer from adrenal insufficiency in the United States. We are hoping to boost the growth rate with our sampling program, which just went live in February. Pediatric endocrinology offices are now able…

Thank you, Sean. Net product sales and royalty revenues for the fourth quarter of 2023 increased 109% to $7.3 million compared to $3.5 million in the prior year period, driven by growth in ALKINDI SPRINKLE, Carglumic Acid and the commercial availability of Betaine Anhydrous. Total net revenues were also $7.3 million for the fourth quarter of 2023 compared to $8.5 million for the fourth quarter of 2022. The prior year period included a $5.0 million onetime licensing revenue item and milestone payment received from Azurity Pharmaceuticals. R&D expenses for the quarter were $1.0 million compared to $0.9 million in the prior year period. General and administrative expenses for the quarter were $4.6 million compared to $4.4 million in the prior year period. The slight increase in G&A expense was primarily due to personnel additions and we expect G&A expenses to remain relatively flat going forward. Total company net loss for the fourth quarter of 2023 was $2.3 million or $0.09 per basic and diluted share compared to a net income of $0.9 million or $0.04 per basic and diluted share in the prior year period. Eton finished the fourth quarter with $21.4 million of cash on hand and generated $0.4 million of operating cash during the quarter. This concludes our remarks on fourth quarter results. And with that, we'll turn it back over to the operator for Q&A.

[Operator Instructions] All right. I don't see any questions now. I will pass it back to David for any additional questions.

Thank you, operator. We did receive a couple of questions via e-mail that we can go over now. First one is, what are you expecting for operating expense growth in 2024? And what should we expect for gross margin?

So for operating expenses, G&A should be a slight increase from 2023 to 2024, 2023 came in at $18.9 million. We should be right around $20 million for 2024. R&D spend a little less predictable just due to the timing of study expenses, but with the continued development of ET-400 and ET-600 in 2024, it should come in somewhere between $4 million and $6 million. For gross margin expectations in the current year, we should be similar to where we ended in 2023. If you adjust for the $1 million ALKINDI milestone payment that was in Q4 of last year, so between 60% and 65% margin profile for the current year, and that should continue to increase as ALKINDI and ET-400 make up a larger portion of our overall revenue.

Thanks, James. The next e-mail question is what's your confidence level in closing a business development acquisition this year?

This is Sean. Well, I feel very confident we will close a transaction, commercial revenue-generating products. We've got several, let's say, late stages. So, I would expect at that time that we would also be providing some guidance for the year, and this would be accretive to our existing revenue base. The M&A environment is actually quite strong as long as you're positioned to take advantage of it. So, it's -- we're not struggling to find deals. It's just making sure we do deals at the right price and at the right time.

Thanks, Sean. That is the end of our e-mailed questions. Thank you, everyone, for joining us for our earnings call. We look forward to talking to you next quarter.

Thank you, ladies and gentlemen. With that, you can disconnect. Thank you for joining.