Good day, and thank you for standing by. Welcome to the Aquestive Therapeutics Second Quarter 2025 Earnings Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Brian Korb. Please go ahead. 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 to the earnings release that was issued after market close yesterday. In addition, a recording of today's call will be made available on Aquestive's website within the Investors section, shortly following the conclusion of this call. To remind you, the Aquestive 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 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 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.

Thanks, Brian, and good morning, everyone. We are now less than 6 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 MAC 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 7 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 has 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 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. And 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 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 2 items because Anaphylm fits patients' lives. Unfortunately, the third item, market access, is harder. We have been disappointed to see the number of barriers at 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. Delay 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. And 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 health care insurance that they pay for. In fact, some companies have indicated that the average health care plan deductible for a single person has risen from roughly $900 in 2010 to $1,800 in 2024, and 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 1, 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-108, 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.

Thank you, Dan, and good morning, everyone. By now, you will 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 2025 results in the Q&A. During the second quarter, we continued 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 it's 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 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. Aquestive's manufacturing business remains steady with the gradual decline of Suboxone being offset by growth across newer collaborations, including for the licensed products Ondif, Sympazan, and Emylif. Aquestive's 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 that 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. Manufacture 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, partially offset by decreases in Suboxone revenues. Total revenues decreased to $18.7 million for the 6 months ended June 30, 2025 from $32.2 million for the 6 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. Manufacture and supply revenue decreased to $16.8 million for the 6 months ended June 30, 2025 from $18.6 million for the 6 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 '25 remained relatively consistent compared to the second quarter of 2024. Research and development expenses decreased to $9.5 million for the 6 months ended June 30, 2025 from $10.1 million for the 6 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 prelaunch 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 6 months ended June 30, 2025 from $22 million for the 6 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 prelaunch 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's net loss for the second quarter 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 2024 was $13.2 million. Aquestive's net loss for the 6 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 6 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 6 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 6 months ended June 30, 2025, compared to non-GAAP adjusted EBITDA loss of $5.4 million for the 6 months ended June 30, 2024. Again, excluding the impact of one-time recognition of deferred revenue, non-GAAP adjusted EBITDA loss for the 6 months ended June 30, 2024 was $15.8 million. Cash and cash equivalents were $60.5 million as of June 30, 2025. Aquestive's 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 Libervant for ages between 2 and 5. As a reminder, our 2024 revenue included one-time nonrecurring 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.

I wanted to check in regarding the potential FDA Advisory Committee meeting before the PDUFA date. Could you share more details on the chances of the Advisory Committee being needed and your level of confidence in your clinical data package as you approach this?

Sure. And this is Mazi, right? So in terms of the likelihood of an Ad Comm, 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, and 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 Ad Comm or not. So 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 Ad Comm 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.

Yes. 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. So we're very proud of it, and we believe it's a strong package.

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

So just have a couple. Interested in your comments regarding out-of-pocket exposure for patients and just the payer landscape. And 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? So that's number one. And then number two, regarding the cash pay initiative, I guess my question here is, how much of the intranasal business is actually cash pay? And what kind of cash pay market do you think is going to evolve into over time? And just trying to get a better understanding of your thought process here.

Sure, thanks, David. Let me start by discussing our current efforts. Sherry Korczynski, who is here with me this morning, and her team have been excellent in engaging with payers. We have strong expertise in-house, and as long as the pre-commercial environment allows us to interact with payers, we are indeed doing so. However, these discussions do not currently reach a point where we can talk about coverage or what that might entail, as that cannot occur until we receive approval. Therefore, our focus with payers right now is solely on building awareness. When it comes to out-of-pocket exposure in the payer landscape, my comments apply to the entire industry. I don't believe there is a single drug being launched at this moment that doesn't face concerns regarding how patients can access the necessary products without encountering significant complications in the supply chain. This is not specific to just the nasal spray. As for cash pay, I will leave it to our competitor to disclose what percentage of their business is cash pay versus non-cash pay. From our perspective, cash pay plays a crucial role in any product launch in the near future. Given the trends in the payer landscape, we expect this to persist. Over time, we anticipate that the cash pay segment will continue to grow significantly for most drugs, except for those with extremely high prices. The potential for cash pay regarding Anaphylm will ultimately depend on market dynamics.

That's helpful. If I may just sneak in a follow-up. To what extent will you be reducing co-pays here and in the product? This is a chronic treatment. As you consider this, how does co-pay reduction fit into your overall strategy? And how should we understand that?

Yes. 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. So not just us, but every company utilizes the co-pay buy-down program. Obviously, the important part with the co-pay buy-down program is to make sure it's balanced, that you balance it with the coverage that you were either getting or have versus where you are at that stage. So I don't think you'll see us do anything that is out of the ordinary on co-pay buy-downs, but we absolutely will have it as a part of our world.

So 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. So 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 Ad Comm experience?

Sure. Thank you, Kristen. And 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. So both from an Ad Comm 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 Ad Comm as well. Our biggest learning is kind of an age-old one for us. And as a reminder, we have 6 FDA approvals over the years, which is listen to the FDA. So 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. So 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. So 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.

Just a quick one on us. We see that you provided some additional details on the pediatric study, PK/PD, which is great. Can you give us a little bit more color on the safety? And then how confident are you in the submission for peds as part of the NDA submission?

Sure. Well, 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. But I'll let Carl talk on the pediatric studies.

Yes. No, thanks for the question. The pediatric study was crafted in such a way, really just to provide characterization of the concentration time curve in 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. And as you saw in the supplementary slides, you can almost see overlapping concentration time curves between the pediatric and adult studies. So 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. So overall, quite in line with what we were hoping for and expected.

I have two questions. First, you mentioned that you submitted the 120-day safety update. I'm curious if there have been any significant data analyses or information requests from the FDA during the review process so far. Second, regarding commercial preparation, you spoke about the reimbursement aspect. Could you also discuss the efforts you've made to raise awareness of Anaphylm and whether you believe those efforts have had an impact?

Jason, good to hear your voice. So on the first one, we have had the usual 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 her view.

Thank you for your question. As Dan mentioned, we are making significant progress in raising awareness of the brand. The feedback we are receiving from the allergy community, including both patients and healthcare professionals, remains positive. We have engaged in continuing medical education and other training activities, and we have published several posters. We have been active in medical conferences at various levels. This year, we have focused on elevating awareness of Anaphylm, and healthcare professionals consistently tell us that they appreciate the product. They believe it will improve the carry rate and reduce barriers to its use.

This is Denis Reznik on for Gary Nachman. So in terms of the precommercial efforts, can you just detail what the ideal physician who would be a top decile prescriber of Anaphylm looks like? Are there any characteristics about them that you highlight? And then just given some of the headwinds, it sounds like you're seeing on the payer landscape, are you still confident that you can likely get 80% coverage within the first 6 months of launch?

Yes, I will address the second question first and then let Sherry provide her insights on the ideal physician. We are confident that we will have broad coverage from a payer perspective, and this coverage will be competitive with other products in the market. Regarding the 80% coverage mark, I don't have a definitive feeling about it, but I generally believe we will achieve broad coverage among the majority of people. Now, I will hand it over to Sherry for her thoughts on the ideal physician.

It's a good question. I often say that this market is very broad but not very deep. What I mean is that there is a wide variety of physicians who prescribe epinephrine, ranging from primary care doctors who typically write 1 to 2 prescriptions, to allergists who prescribe over 200 annually. As we prepare for our launch, our primary focus will be on allergists. I have collaborated with allergists for about 15 years, and I know they are excited about the innovation that Anaphylm offers because they believe patients will carry it, which increases the chances of usage at the first signs of symptoms. Anaphylm acts quickly, and our data shows that allergists are very enthusiastic about this. Over time, we aim to scale our efforts, using insights from what our competitors have accomplished. Nevertheless, allergists are our main target for the launch.

Just perhaps kind of hanging on to the last question that was asked. I'm curious, Sherry, if you guys have done any post-neffy launch patient research, just to try and better understand 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?

Yes, it's a good question. And 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. And so 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. And then 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. And so 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. And so 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 of the growth of the rescue market to ultimately prevent those deaths that occurred due to anaphylaxis.

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

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