Title

Presentation

Eton Pharmaceuticals, Inc. misses on earnings expectations. Reported EPS is $0.07 EPS, expectations were $0.09.

Operator: Good afternoon and welcome to Eton Pharmaceuticals First Quarter 2025 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.

David Krempa: Thank you, operator. Good afternoon, everyone and welcome to Eton’s first 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 Erdogan-Trinkaus, our Chief Commercial Officer. 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.

Sean Brynjelsen: Thank you, David. Good afternoon, everyone and thank you for joining us today. If you were aware or with us for our Investor Day in March, you heard about Eton’s transformational 2024 and I’m proud to say the momentum has continued into 2025. Our existing products are generating strong growth. We recently added 2 high-value commercial assets to our portfolio with the acquisition and relaunch of Increlex and Galzin and we’ve advanced our pipeline candidates, setting the stage for 2 potential approvals in the next 9 months. We’ve seen now sequential growth in product revenue for 17 straight quarters since the launch of Alkindi Sprinkle. Though we are very proud of this track record of commercial execution, we are just getting started.

With attractive growth prospects for our existing products and a strong late-stage pipeline, we expect this streak to continue well into the future and we’re very excited about what lies ahead. I’d like to begin with one of our important new products, Increlex. Increlex is a complex biologic product used in treating patients 2 years of age and older who suffer from severe primary insulin-like growth factor 1deficiency. SPIGFD affects an estimated 200 children in the United States. When we signed the transaction in the fourth quarter, we were very excited about the deal given the strong strategic fit within pediatric endocrinology and what we saw is a very attractive growth opportunity. We are now nearly 5 months into the transaction and I am pleased to say that it is exceeding our expectations.

Eton saw a tremendous opportunity to leverage our existing pediatric endocrinology sales force and commercial infrastructure as well as make new investments into community initiatives to raise awareness of this ultra-rare condition which unfortunately had seen an increased number of children going undiagnosed in recent years. At its peak, more than a year or a decade ago, Increlex had 185 patients in the United States but that number has been declining for years and was at only 67 patients when we completed our acquisition in late December. With the significant investments we have made plus the hard work of our commercial team over the last 5 months, I am pleased to say that the trend appears to have reversed. We’ve now reached over 90 active patients and remain confident that we can reach our goal of 100 patients by the end of this year and even higher levels in the years to come.

Missed diagnoses have been a long-standing problem with this condition. When physicians are presented with short of stature patients and IGF-1 deficiency is not necessarily top of mind. And there’s an ingrained habit of automatically prescribing growth hormones, SPIGFD patients generally have normal growth hormone levels, so this treatment is ineffective and delays a proper diagnosis, causing SPIGFD patients to miss the Increlex treatment window. We feel that it’s important for all shorter stature patients to be screened for severe primary IGF-1 deficiency and are using our deep relationships in the pediatric endocrinology community to drive greater awareness of SPIGFD and push for the screening. Eton is also working to expand access for U.S. patients by seeking to harmonize the U.S. and EU labels.

The definition of what constitutes severe primary IGF-1 deficiency differs between the regions. While the height criteria is consistent, the IGF level is not. In the United States, a patient’s IGF level must be at least 3 standard deviations below the median. While in the EU, patients must be in the bottom 2.5 percentile for their age and gender which translates to approximately 2 standard deviations. We have completed statistical analysis of the patient registry that has tracked hundreds of Increlex patients over the last decade and we believe it shows that the product is safe and effective in the slightly broader EU label population. We expect to submit a supplemental filing to the FDA in the second half of 2025. By harmonizing the 2 definitions, we estimate that up to 1,000 U.S. patients could clinically benefit, significantly expanding treatment opportunities beyond the current 200 patients.

We are proud of the team’s hard work to close, integrate and relaunch Increlex that the growth achieved in such a short period of time is impressive and it is clear that the long-term growth opportunity remains with or without the label harmonization. During the quarter, we announced the out-licensing of Increlex’ international rights to Esteve Pharmaceuticals for an upfront payment of $4.3 million. Increlex’s international opportunity is relatively small, highly fragmented across more than 30 different countries and has slim margins. In addition, the out-licensing eliminated the need for Eton to make a multi-million [ph] G&A investment to support global infrastructure, maintain foreign regulatory approvals and facilitate commercial and distribution activities.

We believe the transaction will be far more additive to Eton’s profitability than if we had commercialized the product internationally ourselves. The transaction also provided us with a $4.3 million upfront payment, recouping a meaningful portion of our initial purchase price and providing excess capital that can be reinvested into our attractive pipeline opportunities. And finally, it eliminated the distraction and resource burden that would have come with managing more than 30 territories and several other team members to fully dedicate their time and attention to our 3 high-value U.S. product launches in 2025. Esteve shares a similar philosophy of putting patients first. So we are confident that they will be a good partner for the product and ensure that the international patients have access to this meaningful therapy.

Turning now to Alkindi. This has been a strong growth driver for us for 17 straight quarters with no signs of slowing down. In fact, the pace of referrals has actually increased in 2025. As you may remember, beginning in January, we made our existing sales force 100% focused on pediatric endocrinology. We believe this has driven increased efficiency which is apparent not only in the strong launch of Increlex but also in an increased rate of new Alkindi Sprinkle prescriptions. Through April, the number of new patient referrals received this year exceeds the first 4 months of any other year since launch. Despite the relatively high discontinuation rate, we have still added a significant number of new patients this year and are quickly closing in on our 500 active patients.

Eton has been encouraged by Alkindi’s strong start to the year and are expecting the rate of new patient adds to our adrenal insufficiency franchise to accelerate even further in the second half of 2025 with the anticipated launch of ET-400. As we have discussed at length, we continue to see a large portion of the market using unapproved compounded hydrocortisone due to the preference for a liquid dosage form. We believe approximately 50% of young children are using a non-FDA liquid hydrocortisone today. With an estimated 5,000 adrenal insufficiency patients under 9 years of age, we continue to see a very compelling market opportunity for ET-400. ET-400’s PDUFA date is just 2 weeks away and we are prepared to launch quickly upon potential approval.

We’ve manufactured our launch inventory in our specialty sales force and promotional campaigns are ready to go live. We have been engaged in communications with the agency throughout the review and we’re optimistic that they will meet their PDUFA goal date of May 28. It’s a very exciting time at Eton. After many years of hard work, our team is very excited to be on the cusp of making this important medication available to the patients in need. Transitioning now to another significant opportunity. The treatment of Wilson’s disease or Wilson disease, more correctly, a rare genetic disorder that causes excessive copper accumulation in the body. Patients suffering from this condition do not metabolize copper normally with their bodies absorbing the copper instead, prevents it from leak in the body and Galzin is an FDA-approved treatment for patients with Wilson disease who have been initially treated with a chelating agent.

It is the only FDA-approved zinc therapy for Wilson disease today. As with Increlex, we were driving [ph] Galzin as an acquisition because we saw significant opportunities for Eton to add value, grow the product and improve the outcomes for patients. And similar to severe primary IGF-1 deficiency, Wilson disease is a severely underdiagnosed condition with a lack of product investment leading to inadequate awareness and education. Wilson disease is estimated to impact approximately 10,000 people in the United States but we estimate that only 2,000 of those patients are diagnosed and actively on a therapy today. Unfortunately, most patients are not diagnosed until they are in their 20s or 30s when symptoms begin to present after years of excessive copper buildup.

This delayed diagnosis leads to worse outcomes, including neurological damage and liver failure. The increased frequency of genetic testing in recent years has led to earlier diagnosis, allowing patients to proactively start zinc therapy before liver or other damage occurs but an unmet need still remains. Of the roughly 2,000 patients that have been diagnosed and are on treatment, we estimate approximately 800 use zinc therapy, while the remainder are on chelating agents. However, due to historical challenges with access, affordability and awareness, most patients on zinc therapy appear to be using over-the-counter supplements rather than the FDA-approved prescription product. The nutritional supplements are a different form of zinc which have been shown to be less effective than Galzin.

We acquired Galzin because we feel that we are the right company to address this dynamic. We relaunched the product in March with robust patient services, including a $0 co-pay. For the first time ever, every Wilson disease patient who wants Galzin can access it regardless of insurance status. We believe Eton Cares is one of the most generous high-touch patient assistant programs in the industry and one of the many things that sets us apart from other rare disease companies. Our relaunch has received a warm reception from the community, including patient advocates and leading Wilson disease physician. We are currently migrating patients to Eton’s commercial infrastructure and Eton Cares program. This migration kicked off in March and will be a multi-month process as the previous pharmacies work through inventories that remained in the channel.

We expect the conversion to be largely complete by the end of the quarter — or the third quarter, at which time Galzin should begin producing meaningful revenue. I’m pleased to be able to solve the access and affordability issues that have impacted Galzin users for more than a decade. However, we believe that there is more that can be done to improve the lives and outcomes of Wilson disease patients. After access and affordability, the 2 most common complaints about zinc therapy are the burdensome, dosing requirements and unpleasant GI side effects. We’ve set out to tackle these challenges with the development of ET-700 which we disclosed for the first time in March. ET-700 is an extended-release version of Galzin which we believe will eliminate the need for 3 times per day dosing as well as potentially reduce the GI side effects that are reported by some patients on zinc therapy today.

We initiated ET-700 development last year prior to the acquisition of Galzin and have now filed a patent on our proprietary formulation. We’re now advancing this program at full speed and working with the top Wilson disease thought leaders to prepare a clinical study protocol. We are preparing for the manufacturing registration batches later this year and have a meeting with the FDA in the second quarter to discuss our proposed clinical program. If everything goes as planned, we expect to file an NDA in 2027. We believe this product candidate has the potential to generate more than $100 million of peak revenue. Our metabolic portfolio which includes Carglumic Acid, Betaine, Nitisinone and GoLike continues to provide steady revenue and cash flow.

The group of products produced a solid year-over-year growth in the first quarter but will have reduced significance to Eton going forward due to the rapidly increasing revenue contributions from our high-margin pediatric endocrinology products. Turning now to our development pipeline. During the quarter, we were pleased to report that ET-600 passed its pivotal bioequivalency study which allowed us to submit an NDA for the product in late April. ET-600 is Eton’s proprietary patented oral solution of desmopressin under development for the treatment of central diabetes insipidus. Leading pediatric endocrinologists have long expressed the need for this product because it allows for the small precise and titratable doses required to treat pediatric patients.

ET-600 is the same pediatric endocrinology prescriber base as Alkindi Sprinkle, ET-400 and Increlex. This should provide an important head start once commercialization activities begin. We expect our application to be assigned a 10-month review which would allow for an approval and launch potentially as early as the first quarter of 2026. Pre-launch commercial activities are already underway and we are excited about the prospects for this important product. Eton is also continuing to advance Amglidia which we acquired late last year. Amglidia is designed for the treatment of the ultra-rare condition of neonatal diabetes mellitus which impacts an estimated 300 children in the United States and is within our pediatric endocrinology call plan.

Although the product has been approved in the EU since 2018, there are currently no FDA-approved oral treatments for the condition and therefore, it is not possible for infants in the U.S. to receive the correct dose in an FDA-approved manner. Today, caregivers must either obtain a suspension from a compounding pharmacy or crush adult tablets to create a suspension at home. Similar to ET-400 and ET-600, Amglidia gives an opportunity to bring a liquid formulation to the market to provide precise and accurate pediatric dosing. Our acquisition terms allow us to have an FDA meeting to receive confirmation of the clinical pathway before any payment occurred. This meeting occurred in April and we were pleased with how it went. The FDA was receptive to what we believe is a feasible clinical pathway to bring this critical treatment to patients in the U.S. In the first quarter, we also unveiled another new internal development program, ET-800.

Our French development partner, CROSSJECT, will continue to work on advancing the Zeneo hydrocortisone auto injector and separately Eton will manage the development of this injectable vial product which we are calling ET-800. In addition to the large retail opportunity for hydrocortisone injection which we have discussed extensively, there was an even greater use in the hospital setting. A total of more than 5 million vials per year and approximately $100 million in sales today. Today, hospitals use a lyophilized for freeze dried powder vial which must be manually reconstituted prior to administration. We have developed and filed a patent on a proprietary ready-to-use liquid formulation that we believe will save time, reduce risk of medical errors and is an important factor as hydrocortisone is often used in the emergency room and operating rooms.

If development activities progress as planned, we expect to make registration batches in the coming months and submit an NDA in early 2027. On the business development front, we expect acquisition and licensing transactions to remain a central part of our long-term story and we continue to evaluate new opportunities. We’ve demonstrated that we can successfully execute value-creating transactions and we expect to continue to do so. However, our strong position allows us the luxury to remain disciplined and focus solely on products that are aligned with our ultra-rare disease strategy and can meet our high threshold for financial returns and value creation opportunities. As you have heard today, it’s a very busy time at Eton; we have made great strides in our mission to bring as many new rare disease treatments to patients as possible.

With 2 major product launches, relaunches already underway this year and the largest launch in our history, potentially a matter of days away, there’s never been a more exciting time for the organization. Following the expected launch of ET-400, we see a clear path to reaching $100 million of revenue in the near term and much higher levels as our pipeline products come to market. Through years of hard work, our team has built an extraordinary organization and we continue to make progress every day toward our goal of becoming one of the leading ultra-rare disease companies in the world. With that, I’ll turn it over to James, our Chief Financial Officer, to discuss the financials and to discuss the tariff questions. James?

James Gruber: Thank you, Sean. I’ll start by addressing the tariff situation in the U.S. since that seems to be at the top of everyone’s list of questions right now. We believe Eton would see minimal impact from any of the tariff proposals discussed to date. The majority of our products are produced in the U.S., Eton does not hold any IP in any foreign countries and we do not have any intercompany transfer pricing arrangements. Our primary exposure will be with Increlex and Alkindi which are both manufactured in Europe. However, the anticipated cost of products purchased from Europe represents less than 5% of our forecasted revenue. So a 20% tariff on European purchases would impact total company gross margin by less than 100 basis points and the potential impact would likely be even smaller in future years since our late-stage pipeline products, ET-400 and ET-600, will also be manufactured within the U.S. In short, we are not concerned about the impact of tariffs but we will continue to monitor the situation closely.

Turning to our financial results. Our first quarter revenue was $17.3 million compared to $8.0 million in the first quarter of 2024, an increase of 117%. Net sales during the quarter included $3.3 million of licensing revenue, of which $1.8 million was from the licensing of Increlex rights outside of the U.S. Although Eton is receiving $4.3 million upfront, accounting guidance results in recording $1.8 million immediately with the remaining $2.5 million recognized over the licensing term. We also recorded $1.5 million of licensing revenue from a regulatory milestone event associated with our previous divestiture of DS-200. There was no licensing revenue recognized in the prior year quarter. Product sales were $14.0 million for the first quarter of 2025 compared with $8.0 million in the first quarter of 2024, an increase of 76%.

This growth was driven primarily by increased sales of Alkindi Sprinkle and the addition of Increlex which was acquired in late December. We expect product sales to continue growing quarter-over-quarter throughout the rest of 2025 and beyond and we continue to expect to exit 2025 at an approximately $80 million annual revenue run rate. Gross profit for the quarter was $9.9 million compared with $5.0 million in the prior year period, primarily due to increased product sales. Adjusted gross profit which excludes the impact of acquired inventory step-up adjustments and intangible amortization, was $12.0 million or 69.5% of total revenue versus $5.2 million of adjusted gross profit or 65.6% of total revenue in the prior year period. This increase was driven by continued growth of higher-margin Alkindi Sprinkle and the recognition of higher-margin licensing revenue in the first quarter of 2025.

We expect to report full year 2025 adjusted gross margin of approximately 70% and long-term adjusted gross margin to exceed 75% by 2028. R&D expenses for the quarter were $1.2 million compared with $0.7 million in the prior year period, primarily due to increased expenses associated with our ET-700 and ET-800 project development activities. It’s worth noting that in April, we paid a $2.2 million NDA application fee related to our ET-600 submission. That cost will be fully recorded as R&D expense in the second quarter and we also expect to record a $500,000 expense for an Amglidia licensing payment in the second quarter of 2025. Besides these 2 one-time items, we expect R&D spending to remain largely in line with historical levels for the remainder of 2025.

General and administrative expenses for the quarter were $9.2 million compared with $5.2 million in the prior year period. As mentioned in our fourth quarter call, increased SG&A expenses in 2025 were planned and necessary to build out the infrastructure needed to support the significant growth in our product portfolio and revenue base. These incremental investments include our new dedicated 5-person metabolic sales team which launched on January 2, commercial investments made in the product relaunches of Increlex and Galzin, investment in our ET-400 launch readiness activities and additional corporate staff to support the growing portfolio in the areas of quality, regulatory and finance. On an adjusted basis which removes the impact of share-based compensation, transaction-related costs and other one-time expenses, G&A expense was $7.3 million compared to $4.4 million in the prior year period.

In addition to the planned increases in our infrastructure, SG&A expenses during the quarter were also affected by relaunch and prelaunch commercial activities in the period. We are not planning to make further significant investments in SG&A this year and anticipate that adjusted G&A spending will remain flat or slightly decline for the remainder of 2025. We believe that the investments we’ve made in G&A during the quarter will support revenue levels much higher than where we are today. And as a result, we expect to return to minimal G&A growth in 2026 and beyond. Adjusted EBITDA for the first quarter of 2025 was $3.7 million compared to $0.5 million in the first quarter of 2024. Total company net loss was $1.6 million for the quarter compared to a net loss of $0.8 million in the prior year period.

Net loss per basic and diluted share was $0.06 during the quarter compared to net loss per basic and diluted share of $0.03 in the prior year period. On a non-GAAP basis, we reported net income of $2.4 million for the first quarter of 2025 compared to $0.2 million in the prior year period and diluted earnings per share of $0.07 for the first quarter of 2025 compared to $0.00 in the prior year period. Eton finished the first quarter with $17.4 million of cash-on-hand and we generated $2.1 million of operating cash flow during the quarter. This concludes our remarks on first quarter results. And with that, we’ll turn it over to the operator for Q&A.

Operator: [Operator Instructions] Our first question coming from the line of Chase Knickerbocker with Craig-Hallum.

Chase Knickerbocker: Congrats on the results here. Just first on Increlex. Sean, have you had your meeting with FDA to discuss that label expansion at this point?

Sean Brynjelsen: The meeting request has gone in. So we’ll be looking forward to having that, I would say, in the coming weeks, possibly most likely July, in my opinion and then it would follow ideally with the submission in the third quarter of the actual update. We believe the data we have is compelling. It’s based on patient registry data out of Europe and should support that label change.

Chase Knickerbocker: Great. And maybe staying on the FDA front. I appreciate the commentary on ET-400. Any additional color on any recent interaction with FDA that you can give us? I mean, are things progressing as you would expect with the review at this latest stage as in things like manufacturing inspections and final label discussions, et cetera?

Sean Brynjelsen: Yes. The — typically, the last step in a review process of an NDA drug application would be the labeling discussions. And so the FDA provides commentary on your label and what I mean by that is the package insert. We’ve received that commentary. We have already had the submission sent back to the agency. And so we believe that should be the final step. I mean we could hear of something else but it seems, to me, that we are on track for approval here in 2 weeks or less.

Chase Knickerbocker: Great. And on the Amglidia front, it sounds like you liked what you heard there. Does that mean you expect to just need a fairly simple kind of PK study to support an NDA filing there? Or just kind of any additional color?

Sean Brynjelsen: Yes. The — so we like the feedback from the agency because you can tell during the tone, they would like to see us develop and get this product on market. They provided a pathway. It didn’t seem like there were — it seemed fairly clear to us and what we need to do. We did have a few clarifying questions. So we are planning a follow-up meeting with the agency to ensure that we’re doing what they want and what their expectations are. But I was very encouraged by that, by the comments that we received back and I do expect that would just be a fairly straightforward PK study, as you indicated.

Chase Knickerbocker: Got it. Pretty impressive continued progress on Increlex, I think you said 90 patients. If I pursue through the commentary on Increlex, on Sprinkle, I mean, it doesn’t take much to — for that $80 million run rate in Q4 to start looking pretty derisked. Is there anything I’m missing there? Or maybe any comments that you would have on that Q4 run rate?

Sean Brynjelsen: No. I think at the appropriate time, we’ll — we feel very comfortable with the number to first address your question there. The question is, will we be revising that number at some point? I think we’re going to leave it where it is right now and we’ll see where the sales go in the second quarter but we’re feeling pretty good about our sales. They’ve been strong across the board and we couldn’t be happier with the Increlex launch and the quick addition of patients. And we think the coming weeks here will help us to maybe provide some update on the next conference call.

Operator: And our next question coming from the line of Madison El-Saadi from B. Riley.

Madison El-Saadi: Yes. So could you maybe provide an update on the recent weekly Increlex prescription trends? I mean it really looks like March was a tremendous month. Is that kind of the proxy barometer going forward? And then…

Sean Brynjelsen: Yes. Sure. On that point, I would say that we have significantly increased the number of patients. Now we’re — as we increase, we expect that rate would go down. You’re getting closer to that whatever that 185 potential patients, let’s say, that are in the U.S. So you would — we would expect that. But as it stands today, we’re firing at all cylinders in terms of the launch on that product. We expect to hit our goals — revenue goals or exceed them — this year, I think we’ll exceed those goals. I’d like to get a few more months under our belt and then we’ll provide an update. And I think we probably — we did indicate that we’re now in the 90s on the patient front. We’ll give further updates on that rate and better answer your question in terms of the trajectory of it.

Madison El-Saadi: Got it. Understood. And then on ET-400, if we assume approval is on time, what’s the expected timing to the first commercial revenue that you would book? Do you think this could be an end of 2Q story or maybe early 3Q?

Sean Brynjelsen: I’m thinking more of a Q3. We will be launching it essentially right around the approval date. So we would expect a June, let’s say, first week of June launch on the product. It takes a little bit of time for the patients to get the prescription because it’s — patients have to come back to the office and the doctors have to prescribe it. So I would say there’s a bit of a lag between the initial launch and then the actual revenue coming in. So from a revenue standpoint, I would really think more about that sort of Q3, Q4. It will, we believe, have a rapid uptake. We know that it’s something that there’s a lot of pent-up demand for an oral solution. So let’s — maybe I’ll leave it there and it give you an idea. It won’t have a massive impact in terms of revenue this year but we think it will have a much more significant impact in the quarters after that.

Madison El-Saadi: Got it. And then lastly, I really appreciate the color on the tariff risk exposure which looks to be really a nonstory. Any commentary to theoretical exposure to the White House Executive Order, the most favored nation policy?

Sean Brynjelsen: Yes. Thanks for the question. It’s probably the same question on others’ minds. When I first heard about that, I was — really didn’t know what to make of it. There weren’t enough details that were released around that. But now that we got a chance to look and digest that and I’ve also been able to do a little bit more background research on it, I do not believe it will have a meaningful impact to us. We only sell in the U.S. So we’re not selling products overseas to foreign customers at lower prices than we sell in the U.S. We believe that alone is pretty strong in the sense that we don’t have dual pricing as big pharma does. So in my opinion, this is something that would potentially impact big pharma. But we’re also less reliant on Medicare, Medicaid than most pharma companies.

Really no Medicare business to speak of, it’s only Medicaid. And on the Medicaid, we lose money on the Increlex as I think a couple of people are involved. But we make good money on Medicaid through products like [indiscernible]. There are no plans for us to sell our products overseas. So that reciprocal or most favored nation pricing would not apply, we believe, for our company [ph]. We are a rare disease company — an ultra-rare disease company, so I think that it’s a unique situation compared to more standard pharmaceuticals.

Operator: And our next question coming from the line of Swayampakula Ramakanth from H.C. Wainwright.

Swayampakula Ramakanth: This is RK from H.C. Wainwright. So I know you have had more experience with the relaunch of Increlex compared to Galzin. But, in general, what’s the feedback from the sales force on Galzin? Anything anecdotally you can tell us about how the relaunch is going and what the expectations are internally for adoption during 2025?

Sean Brynjelsen: Yes. So Galzin is an important product for the company. It’s placing us squarely in the Wilson disease space and we aspire to become a key player in Wilson disease. Beyond just Galzin, obviously, we have our ET-700 product which is an extended-release version of Galzin. That product, we think we will have clinical trial results in January. That’s a small study we’re running which will show the same efficacy, we believe, as the 3 times a day dosing with hopefully less side effects. So that is really the big opportunity is the extended release version. The Galzin itself is now — it’s been great for patients because Galzin had in the past supply issues, they no longer have that; There’s a zero co-pay; they never had that in the past.

They have that today. There’s overnight shipping, so we get the product to them very quickly. So we believe that product will add appreciable revenue in the quarters to come. The uptake and the conversion has gone well and we add patients weekly on Galzin. So we see a steady stream of patients coming off of, let’s say, over-the-counter stuff or compounded medicines. And they were forced to go there, frankly, in the past because of the inaccessibility of the medicine and the high co-pays that were charged by the prior company. We have taken away all those blockades. So, I think — and then the last thing I want to say is we’re adding a really strong relationship with the Wilson Disease Foundation and with really some of the leading prescribers in the United States that treat Wilson disease we have — we’ve been able to get there — get what their thoughts are, how we can help patients, how we can do the best job to make sure that these patients are served properly.

Swayampakula Ramakanth: Do you — by any chance, are you able to give us patient numbers that are on Galzin at this point? Or we have to wait for the next update?

Sean Brynjelsen: I think for the next update, we’ll provide patient numbers because it’s still in the transition period but I can tell you that it is going better than — according to plan and I’m very pleased with the launch and the job that our Chief Commercial Officer, Ipek, has done with the organization. We have a dedicated sales team in that space as — just like we have a dedicated sales team on our other endocrinology products.

Swayampakula Ramakanth: Perfect. A quick question for Jim. Looking through the cash flow statement, I see an increase in the Medicaid rebates and also on the receivables. So is this — just trying to understand what’s behind those numbers and how sticky are those?

James Gruber: Sure. Let’s start with the receivables. So significant increase there. Part of that was, call it, normal operating activity with the addition of Increlex. We talked about significant impact with Medicaid there. So with that product relaunch, a decent amount of addition — sorry, with Increlex receivables. With the licensing revenue, even though we only recognized $1.8 million of the Esteve licensing deal revenue in the first quarter, there is a receivable payment of $4.3 million. So we have not received that yet. So a big chunk of the $5.8 million [ph] increase in receivables was licensing revenue and then the remainder was just Increlex sales. On the Medicaid side, the increased liability was almost entirely due to Increlex, the product relaunch. So nothing out of the ordinary with the increased liability other than the fact that we have a traditional patient mix in Increlex and dollars are just higher with that product.

Swayampakula Ramakanth: Okay, thanks. Thanks for that clarification. Appreciate you taking the question folks.

Operator: Thank you. And there are no further questions in the queue at this time. Ladies and gentlemen, this concludes today’s conference call. Thank you all for your participation and you may now disconnect.