Good afternoon, and welcome to the Eton Pharmaceuticals, Inc. fourth quarter 2025 financial results conference call. At this time, participants are in a listen-only mode. Following the formal remarks, we will open the call for your questions. Please be advised that this call is being recorded at the company’s request. I will now turn the call over to David Krempa, Chief Business Officer at Eton Pharmaceuticals, Inc. Please proceed.

Thank you, Operator. Good afternoon, everyone, and welcome to Eton Pharmaceuticals, Inc.’s fourth quarter 2025 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, James Gruber, our CFO, and Ipek Erwan, our Chief Commercial Officer. In addition to taking live questions on today’s call, we will also be answering questions that are emailed 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. I will now turn the call over to our CEO, Sean Brynjelsen.

Thank you, David. Good afternoon, everyone, and thank you for joining us today. As you have seen, it has been a very active time at Eton. A number of major developments in recent weeks. We have some exciting topics to discuss today. During the call, we will review fourth quarter results, provide additional color on the Hemangiol acquisition, and an update on our recent FDA approval and commercial launch of Desmota. We will also cover growth trends in our on-market products and provide an update on clinical development programs. And finally, we will provide 2026 financial guidance and unveil our new long-term goals for the company. Let me start with our financial results. It was another strong quarter for Eton, capping off an outstanding year. 2025 was truly another transformational year for our company as we successfully launched three new products, Incrolex, Galzyn, and Kinduvi. These were not minor products. They represent important cornerstones of our long-term growth plan. These new products helped us more than double our revenue in 2025 compared to 2024 and set us up for major growth in 2026 and beyond. Our fourth quarter product revenue was $21.3 million, an increase of 83% year over year, driven by continuing strong performance from Alkindi Sprinkle and the addition of revenue from Incralex, Galzyn, Kandivy, and Kandivy. Galzen and Incrolex have continued to be great success stories for Eton. Both products were relaunched by Eton in early 2025 and contributed revenue well beyond our initial expectations for the year. A key goal for us is continuing to drive strong revenue growth while maintaining our focus on profitability through disciplined cost management and expanding margins, and I am pleased to report that we made meaningful progress on that in the fourth quarter, as our adjusted EBITDA margin was 29%,…

Thank you, Sean. Our fourth quarter revenue increased 83% to $21.3 million, compared to $11.6 million in 2024, and revenue was comprised entirely of product sales in both periods. Revenue growth in the quarter was driven primarily by increased sales of Alkindi Sprinkle, plus the addition of sales from Incralex, Galzan, and Candivy. As we discussed previously, our third quarter revenue included a meaningful contribution from Incralex outside the U.S., tied to the transition of that business to a new licensing partner. Looking strictly at U.S. product sales, our revenue grew sequentially by 8% in the fourth quarter relative to the third quarter. We expect our reported total revenue to resume sequential quarterly growth in 2026 and continue to ramp throughout the year. Cost of sales for the fourth quarter was $8.2 million, compared to $5.2 million in 2024. Adjusted gross profit, which adjusts for the impact of acquired inventory step-up adjustments and intangible amortization, was $15.5 million in 2025, or 73%, compared to adjusted gross profit of $6.8 million and 59% in the prior-year period. The margin improvement was driven by favorable product mix, as well as manufacturing cost efficiencies as the products grow. Hemangiol and Desmota are both expected to have margin profiles well above our company average, so they should be positive contributors to future gross margins. We may still see a slightly lower adjusted gross margin in early 2026 due to margin-dilutive orders of Incralex outside the U.S. as our licensing partner ramps up their distribution efforts in more countries. But on a full-year basis, we expect adjusted gross margin to be comfortably above 70%, and this margin is expected to continue to ramp and reach between 75% and 80% in the coming years. R&D expenses for the quarter were $1.8 million, an increase of $2.7…

We will now open for questions. To ask a question, please press star-1-1 on your telephone. To remove yourself from the queue, you may press star-1-1 again. Our first question comes from the line of Chase Knickerbocker of Craig-Hallum. Your line is open, Chase.

Good afternoon. Congrats on all the progress here. A lot to get to. But maybe just first on Hemangiol. You mentioned that that could be one of your largest products in 2027. That implies quite a lot of growth from kind of the roughly $12 million in 2025 sales. Can you walk us through your assumptions on how the product gets there? What do you think from a volume perspective? And then what does that assume as far as any actions on price or gross-to-net improvements? Thanks.

Hi, Chase. This is Sean. Thanks for the question. We believe we will increase the number of patients on product, partly that zero copay was preventing a lot of patients from using the product. It previously had a higher copay amount and went to other alternatives. So we think that is part of it that will certainly drive more patient adoption. We will be raising awareness, working with the advocacy groups, and certainly detailing the product at a much more aggressive level. Would you want to use that word? But to the task, we want to be able to reach out, make sure that all the patients that can use the product will get the product. And in terms of the pricing, we have not made any final decisions on that. We will launch it on May 1, and we will see where we end up on that. But our philosophy has always been to be at the lower end of rare disease pricing, and so as a general rule, that is our approach. And it is largely based upon how many patients are out there and making sure that the pricing is competitive with the rare disease products out.

Got it. And maybe just on Desmota, on how you see the pace to peak. The value proposition is pretty similar to the idea behind Kindivy. You obviously know all these physicians already, selling to multiple assets. How do you think about the time to peak sales, as far as being potentially quicker here because of those dynamics?

Well, I do not know if I could comment too much on the time to peak sales, but I can tell you the launch has gone well. We are very pleased. We are getting scripts continuously. Doctors are very excited about the product. I will say I believe the launch to peak sales will be far quicker than what we had in Alkindi. This is a very specific unmet need. Obviously, Alkindi was an unmet need in a bit of a different way. But unlike Alkindi, there were not a lot of compounders out there compounding desmopressin, so doctors are thrilled to have the product. We know that the uptake has been right according to plan, if not better. So I would say that it will be faster. We guided to that $30 million to $50 million. Million—you know, I am hoping we are well on our way there in, you know, six months or so.

Got it. And maybe just last kind of two-parter here. Maybe just one for James on how you see cash flow conversion from EBITDA in 2026. And then, Sean, just lastly, on that $200 million run rate exiting 2027, could you delineate between what might come through BD and how you see the existing portfolio today performing to get to that run rate at the end of 2027? Thanks for taking the question.

Yeah, sure. James, why do you not take the first part?

Sure. Maybe we can try to give some context on the Q3, Q4 cash flow of 2025. 2026 will firmly be in positive operating cash flow territory. We will have some timing with supplier commitments, namely with Incralex, that will be planned for the second half of the year. In the first half of the year, there should be not nearly as much as we experienced in 2025, but some of the larger-than-average volume with study orders in Europe for Incralex. But other than that, we are firmly in positive operating cash flow territory. We will start making debt principal payments, which will be new in 2026. 2025, but even with that, we will be generating a lot of positive cash flow.

Okay. And then, Chase, regarding your question on the $200 million run rate, as you know, and as I think we have demonstrated throughout the history of our company, we generally set goals which are achievable. We believe the $200 million run rate in Q4 of next year is entirely achievable, primarily based on what we have on deck. This does not really include new product deals, licensing, that type of thing. We believe that Hemangiol will be a great product for the company. We believe Desmota will continue to grow quickly. We are seeing higher sales than ever on Alkindi and Kindivy. Those continue to increase. We are very pleased with the Incralex business and how that grows, and it has been nice because we have not lost as many of the older patients, and now we are gaining momentum and going forward on that. That has been solid. And really, all areas of the business are functioning well. There are a lot of growth prospects in the coming quarters in terms of the revenue. Hitting the $200 million run rate in Q4 next year, I think, is entirely achievable. We will be providing further updates on future conference calls to try to better ascertain what is the number, what can it be, and that type of thing.

Awesome. Thanks again.

Sure. No problem. Welcome.

Thank you. Our next question comes from the line of Madison Wynne El-Saadi of B. Riley Securities. Your line is open, Madison.

Hey, guys. Thanks for taking our question, and congrats on a lot of positive updates here. Maybe to follow up on Desmota, it sounds like you are having interest both de novo and from existing. Could you characterize if the majority of interest is from the existing Alkindi population? How much of it is de novo? Also curious if you are seeing already some adult patient interest. And then secondly, on Incralex, as you prepare for this registry study, just wondering if you had any payer discussions regarding potential internal payer reimbursements for the registry patients, if that is something that is possible. Thanks.

Sure. So, Madison, I am going to have Ipek, our Chief Commercial Officer, answer the first part of your question with regards to Desmota and the pediatric versus adult.

Hi, Madison. So I think you are right. From our script, more than 97%–98% of our existing relationships with pediatric endocrinology are actually our target prescribers for central diabetes insipidus, which is for Desmota. So these relationships are already there from day one of launch, which was March 9. Our team was already talking to these physicians. There is a lot of excitement from key writers, thought leaders, big institutions already in the past two weeks. What we are excited about is call points that our team traditionally have not gone after, which are the adult endocrinologists, like Sean mentioned. We gave our team, two weeks ago when we launched the product, more than 3,000 new targets, and they just started going after those. We talked to several who are big in the adult space. Some of them actually end up still keeping the pediatric patients. So they definitely see room, and it is the right therapy for several adult patients as well, and they also see the pediatric patients based on the region and institution. So there is definitely a dual-path opportunity that is incremental to our relationships there.

Understood. And remind me again the second part of your question.

And then on Incralex, if there have been any early payer discussions related to—

No. Yeah. The payer discussions have not happened because we feel it would not be any different. If we get the label expansion, there should not be any issues with payers. Right now, if a doctor has to even prescribe something off label from time to time due to a medical need and can demonstrate that, there will be reimbursement. But generally speaking, what we want to do is initiate that study as soon as possible. That protocol feedback should happen by the end of this month. And I am quite confident that we will be undertaking the study later this year. And obviously, it is going to have a huge impact on our Incralex sales. We are hoping that when we are a portion of the way into the study—it is open label—we can go to the agency and get that label updated as soon as possible.

Got it. Congrats again, guys.

Thank you. Thank you.

Our next question comes from the line of Swayampakula Ramakanth with H.C. Wainwright. Your line is open, RK.

Thank you. This is RK from H.C. Wainwright. Good afternoon, Sean and James. So, I mean, obviously, there is a lot of things to chew here, and all good stuff. In terms of the ongoing business, especially focusing on Galzin, you said you have already eclipsed 300 active patients at this point. And then we can still see about 500 remaining out there and possibly on OTC products. What portion of that is achievable in the immediate couple of quarters? And how much contribution of that are you assuming going into 2027, when you are trying to hit that $50 million per quarter in the fourth quarter?

Thanks, RK, for the question. Obviously, we got to 300 patients much faster than we had expected. It continues to increase week over week. I am going to ask Ipek, actually, to comment a little bit more on the second part.

Hi, RK. I think your diagnosis of the fact that the next chapter of growth needing to come from the OTC products is correct. The good part is, in the Wilson disease space, the centers of excellence are pretty established. And at this point, after a year into launch, we have pretty strong relations and ongoing initiatives with several of these Centers of Excellence health leaders and the top prescribers. So we do know where some of these patients—some of that Wilson population—is. I think based on our projections, I am confident to say within that time frame that you mentioned, we would be able to get to half of the remaining population out there who are on zinc therapy or some form that is not FDA approved. Between everything that we are doing in the field with these prescribers, as well as the awareness and education initiatives that we are closely working on with the Wilson Disease Association, which is the key patient advocacy group—really a lot of patients are very much in sync and present in that community as part of this community.

Great. So my next question is on the label expansions or the indication expansions that you are trying to achieve. One is on Incralex. What specific feedback do you need from the FDA at this point in terms of harmonizing the definition of SPIGFD and to get your study going? And the second part is on the Kindivy one. If the patient population gets increased successfully below age five, what sort of population are we assuming that you will have access to?

Sure. On Incralex, we have already received feedback from the agency on that. We took the feedback and put that in the form of a protocol. So, they send you feedback, the general letter—they say we want to see this and this and this. Then you formalize that in a scientific protocol. That takes a number of weeks, then you submit it to the agency. They then should look at that, make sure that they feel you incorporated their thoughts and comments. And hopefully when we get it back, there are few or no changes. If that is the case, which it should be unless they change their mind, then our belief is we can start the study. We hope to have that protocol back by the end of this month. So that is that one. And then regarding the Tyndivi formulation, we should have that wrapped up for the study here shortly, get it submitted in the third or fourth quarter—maybe third quarter; I am guessing third quarter submission—and then it will launch next year. The population is really intended for under five. That is really what the whole product was about. We believe it will do in excess of $20 million of additional revenue in a rather short quarter.

Okay. And then the last question is on the inventory burn-off. How much is the remaining inventory step-up from the acquisitions, and to be fully amortized through the P&L?

Yeah. Very well. There will be a slight amount remaining in early 2026, but a small fraction. We burned through most of it in 2025.

Perfect. Thank you. Thanks for taking all my questions.

Thanks.

Thank you. That is all the time we have for Q&A today and does conclude today’s conference call. Thank you for participating. You may now disconnect.