Conference Transcript - ETON 2026-06-04

Zach Uffberg, Analyst — Conference Moderator

Welcome to the Jeffreys Global Healthcare Conference. My name is Zach Uffberg. It's my pleasure to introduce Sean Brangelison, the CEO of Eaton Pharmaceuticals.

Sean Brynjelsen, CEO

Thank you. Thank you, everyone. So let's, we have a, this advances it, I'm assuming? So Eaton Pharmaceuticals was started with the vision of really three main pillars. One is patients first. everything we do is revolved around patients it was uh seemed to us that many of these patients these ultra rare disease patients had no therapies and um that was because it was ultra rare and the large pharma was focusing on larger markets and for us we saw for the market 20,000 patients and below, a very limited opportunity. So that brings us to the ultra rare focus. Making the greatest impact for us was one that I had a passion for, our team has a passion for, and in order to make that a reality, it was to decide that today we wanna be the company with the largest rare disease portfolio in America across all different indications. So although this is the vision today, and we've stated that we want to have one of the broadest rare disease portfolios in industry, I'd like to take a minute to talk about the end game. For me, the end game would be having a rare disease product in every single therapeutic area. So, you're talking about hematology. You're looking at products not just in, we're at today, pediatric endocrinology, metabolic disorders, nephrology, hepatology. really you know each segment has unique rare diseases there's over 10 000 rare diseases today 95 of those qualify as ultra rare disease meaning 20 000 patients and below on an annual basis so you know for us to say we want the largest rare disease portfolio in industry is really a vision that is only a starting point i would see i would say that you know 10 years from now um who do we want to be we want to be a company that has you know 100 products on market we want to be a company that is not lost their vision but to focus um where in the space where these patients are not being served today and we've started that mission with you know these 11 products we have on market you know soon we have two more product launches later this year we'll have several product launches next year and that will bring us to more than 15 products on market so at that point we will have the largest portfolio in industry from a rare disease standpoint but that really is much lower than where we intend to go so you've seen a couple of products we have up here uh incrolex is a biologic it's a growth hormone disorder product uh it's a product that is for a unique aspect of it where human growth hormone is not doing the trick uh this is a product that is igf1 deficiency and what we saw with that product was um you know a large company that had it in their portfolio but really was you know under commercializing it there was a you know know, not a dedicated rare disease team on it. And it's one that we felt we could step in and it would be a good fit for the company. Secondly, Alkandi Sprinkle, that's really what got us started in this space. So, you know, why, why focus on rare disease? Well, it's a small prescriber base, you're looking at a small SG&A footprint, you typically have competitive pricing, These are, you know, an area where we can then reinvest and we can grow the market, which brought us to KINDIVI. We thought the Alkindi Sprinkle for adrenocortical insufficiency was, you know, certainly an unmet need. But then to have an oral solution on that for patients that didn't want the sprinkles made sense to us. And so we're in the midst of getting the five and under. We were approved for five and above. we expect to file that product in the near future and really capture that entire market the company also does internal development I'll talk about that in a little bit Desmota which is a oral solution of Desmopressin was a disease called diabetes insipidus this is a disease that's nothing to do with traditional diabetes but it really is a vasopressin deficiency disease. So it's a disease where you're not regulating, the body doesn't regulate vasopressin. And so desmopressin is an analog, and that would allow the proper utilization of water throughout the body. We think that market is north of 50 million, and we see that continuing to grow. It's been actually one of our most successful launches in our company's history. Hemangiol. Hemangiol is a product that brought us into a new therapeutic area. We're looking at, you know, now addressing the needs of pediatric dermatologists with regards to hemangiomas. Hemangiol has over 8,000, you know, you could say patients a year. And this is a quite remarkable product. It's a product that can take a child with a significant hemangioma and really remove that hemangioma, by and large. If you look at the before and after pictures, you'll certainly see a drastic change. And then I won't go by all these products. There's a number of them. And as our company continues to grow and expand, you'll see that there'll be 20, 30 products on market, All of them sourced from around the world. We've become the rare disease company of choice. Companies come to us to license their products when they don't have a U.S. partner, and we would expect to launch and grow those markets in the United States. That's another point I want to bring up is that we are a U.S.-focused company, and what that means is if there are needs outside the U.S., we don't ignore those, but we provide that product either through distribution partners, local distribution partners, or we can do it under like a special patient access program. On the commercial side, you know, the results speak for themselves. You're looking at us achieving north of 120 million in sales in 2026. We continue to ramp that up. We're going into an unprecedented period of growth over the next 12 months. And we had indicated uh that we would be on a run rate basis towards the end of 2027 of exceeding 200 million a year in sales so you know the aspect and the revenue is fine but what that really means is that we're launching products that means that we're serving our patients that we're growing our pipeline you know we have a mission in the company uh which is uh you know to serve our patients and we have some unique aspects of eaten pharmaceuticals that you won't see at any other pharmaceutical company and especially when we get to our eaton carers program for example you'll see margins uh ebitda margins continue to grow uh north of uh 30 percent in 2026 i think as we get towards the end of 2027 and go into 2028 uh those ebitda margins will go north of 50 percent now um on the commercial strategy, I mentioned the Eaton support program, Eaton Cares program, is unique in the sense that there's zero copay for eligible patients. This is, I guess, a program that I really had promoted early on in Eaton's history in that if a patient gets a prescription and the doctor judges, they need that product. Let's remove all barriers from access. Let's get the product to the patient. We'll deal with the paperwork and the reimbursement and all of these other aspects of it a little bit down the road. So a doctor knows that if they're working with Eaton Pharmaceuticals, their patients are not going to come back and complain that they couldn't get the product because of reimbursement, or, you know, they couldn't work through the specialty pharmacy or whatever the situation may be. You know, the philosophy is to get the product in the patient's hands, really, next day, ideally. And, you know, we're normally within a very short period of time. So you won't, you won't find a another program like that in industry. We work very closely with patient advocacy groups so when we take on a new product acquisition or let's say a new product launch we immediately try to go where the patients are and making sure that they have awareness of the products sad to say many doctors may know about a new therapy for a given disease due to workload whatever the reasons are many of the patients don't get that word so we realize we need to reach out directly to patients where possible. And the best way to do that is through the patient advocacy groups. This is where we can go and directly make a difference. And, you know, even through holding, for example, on our Kendi and Al Kendi program, you know, we have a specific day set aside throughout the year where we bring patients in and we do this thing called Camp Cortisol. And we let the patients share each other's experiences. We have representatives that are there. And what we found is a lot of those patients had never even heard of Alcindia or Candibi because their doctors had never communicated that. So that gives us an opportunity to promote that message in those situations. So this is one where I'm proud of our support for advocacy groups we've been invited to attend as a keynote speaker for example at a wilson disease conference next year we're the number one supporter of the wilson disease patient advocacy group and we're um you know we're very much tied in with them and then we look at our commercial strategy and concentrated prescriber bases so you know how can we be in all these different places How can we promote and market to all these different groups? Well, that's because many of these patient bases may only have two, three, or four centers of excellence that are addressing those needs. So having a small number of specialists allow us to deploy a sales team of three, four, five reps, and then all of a sudden you're in a new call point. so there's no no reason that we can't continue to do that and and build our company you know that way each product is profitable on its own it's one of those where we watch the p&l but you can think of each product almost as its own business one of the questions we get from larger companies and institutions is how can you guys launch all these different products it's just the way we've set up our company, allows us to do that. And these are three disease areas we focus on today, pediatric endocrinology, metabolic sales, pediatric dermatology. I think you'll find us in others in the future, cardiovascular and hematology. Ideally, I'd like to see 12 different call points where we've got products, as you can see, in each of these buckets. So how do we do all of this and what's the real takeaway? If you were to leave today and just take away three points, I would focus on this. We grow our company through three mechanisms. One is the existing commercial products. That's our organic growth of our existing products. Frequently, we have only 10%, 15% market penetration. We have an excellent chief commercial officer. EPEC Trinkhouse has really done a fantastic job of just growing that. Secondly, our internal pipeline and development. Desmota, for example, was an internally developed product. Candivi was an internally developed product. And then the third mechanism is our acquisitions and licensing. So we've become, that really is a core competency. We believe we do better than anyone else. um david krempa our chief business officer is here today and he uh has uh him and his team will go and find out transactions and acquisitions that uh you know i would say uh probably have had the biggest impact in our portfolio certainly more than even our internal development we are working on several transactions at the moment we hope to um to make some announcements in the coming months and launch normally two to three products annually. That's really our goal. So if we can do two to three, ideally, I want to do more than that. That's great. But so far, so good. And then next, I'd like to talk about a little bit longer term growth. We expect to hit 500 million plus in potential peak sales by 2030. That will mean that we have executed on the plan I've outlined to you guys today. This is something that we believe is extremely achievable, not even including the acquisitions and licensing. So if you just look at our internal pipeline, our existing commercial infrastructure, that 500 million plus in peak sales is very achievable. The acquisitions and licensing allow us to sort of provide a little bit of insurance policy on hitting those numbers. This isn't a company where if you choose to invest in that, you need to be worried about looking at the stock on a week-by-week basis. But it's one of those where you can be relatively comfortable owning that for many years to come. This isn't a short-term strategy. We believe this strategy is a 5, 10, 20-year-plus strategy. And we believe our company will be the rare disease company in the United States in the near future. So a couple of key products that drive our growth are Incrolex. This is our number one product right now, but we only have 51% of the patients. We're looking at reaching the 200 potential patients, and we're growing that product also through a series of label expansion studies. I'm also looking at the product as another indication in a disease called infantile spasms. There's certain universities that have studied McCasserman, which is IGF-1, for helping to alleviate infatel spasms of patients that are resistant to it. That's one we're going to take a look at down the road. L-Kindy Sprinkle and Kandivy, we've said publicly, we believe that we'll do north of 50 million in sales, but we only have 12% of the patient population. Right now, other patients can do compounded product, they can break up tablets that can do those types of things. This is a far easier option for them. So we see that growth continue. Galzin and Wilson disease, we're making good inroads on that. We think we can hit at least 600 plus patients over the next 24 months. And we're well on our way to doing that. And then Desmota just launched. So it's too early to tell. But so far, so good. We actually have a number of patients on product, and I see that reaching our, I think we said our 30 to 50 million sales run rate, and we'll be well on our way to doing that as we enter into 2027. These are just a few examples. Obviously, as the portfolio grows larger and larger, we're not going to be able to address each and every product, but I wanted to give an idea of what happens when two of these were acquired, Incrolex and Galzin. The other products, Alkindi, Kandivi, Desmota, well, at least Kandivi and Desmota done internally. Alkindi, we acquired that while it was under review. And we've done that product a lot of justice. So margin expansion, you know, 30%, I said, EBITDA over the next couple of quarters and then really hitting a 50% EBITDA margin by 2028 you can see how we can do this you know just across the board these are numbers that do not rely on any kind of spectacular feeds by us anybody that knows the company understands that we're not we don't like to oversell we really want to give you guys numbers that give bus credibility are numbers that we can sign up for and i don't need to you know make the numbers bigger than they are these numbers are numbers that we're all very comfortable with we want to exceed these numbers you know that's all i'll say on that point um and then as you know we kind of come to the uh you know last few slides here i want to talk about our 2026 goals and critical initiatives you know so does motor approval and launch check acquire and relaunch from angiel check we've got that well underway that actually could be our biggest product next year in sales so and we're transitioning the patients to a specialty pharmacy that's a product that we felt was not in let's say it wasn't in a dedicated rare disease company's hands and we felt having it. At Eaton Pharmaceuticals, we can better serve customers, patients. They had like 17 plus pharmacies. We've got one point of contact for pharmacies. And we're making sure that, you know, this product is going to certainly serve customers going forward. Initiate and complete the ET700 pilot study. I would pay very close attention to that. We expect results in the coming months, probably maybe at eight weeks that product is a extended version of galzin i believe that product can do north of 100 million in sales we plan to file that next year if this pilot clinical study is successful it will show the proof of concept it will demonstrate that the product works it's one that is essentially a twice a day dose versus the three times a day dose and it's a product that should have fewer GI issues as patients are experiencing today. So that's an exciting product for us. You know, look, continuing on down the line there, submission of Condivi label. I mentioned that we were approved for five and above, even though the market is largely five and below. So for us, that is a critical initiative. We expect to submit that in the third quarter hopefully in august and then launch that five and under label in the middle of next year thereabouts we expect that product to add another 20 million plus in sales just in that franchise alone and then the incrolex label harmonization study for those of you who are not familiar with incrolex label harmonization what i'm talking about is in europe the label allows for a much broader definition of what a patient constitutes. And so completing that study in the United States and getting that same patient population in the U.S. will increase it by a factor of eight. So you're looking at going from 200 patients on product to well north of 1,000, probably north of 1,500, which takes that product from, you know, takes that into several hundred million in sales i'll just say that assuming that we can get that done the fda has agreed on our protocol design we submitted that and we're expecting to start that study very shortly we do hope to file something after the first 12 months of the readout so i would look at this as a potential uh 2028 approval if we can get it done it is a technically a five-year study So if the FDA wants more than one year, we'll have to keep running it, but it's open label, and we think that there makes sense to file it once we have statistical significance on the growth of velocities on these patients. And then Mglitia. Mglitia is a product that's for diabetes for children. This product is sold in Europe. We felt it could be very successful in the United States. that we're submitting in the fourth quarter of this year uh completion of the et 800 study this is an adrenal cortical emergency syringe product that should do north of 100 million in sales and then um we've got a metabolic generic product which we've already announced which will launch in the fourth quarter assuming it gets approved uh this product is a great little product will be the only this will be a generic one obviously but we will have a sales and marketing team on it and a generic in this business is not like a regular pharma generic you do have to detail and promote it like a brand product and we think right now we know the brand is not being promoted or detailed at all we believe we will convert that market in its entirety uh to our product and then um uh you know david has uh checked this box as a close additional product the acquisition, I would say we could maybe have another check on that box, hopefully in the next three to four months, if we can close one of these other deals. And one thing I will say is historically, we've done a lot of these smaller types of transactions, which have been, you know, in generating 20, 30, 40 million in sales. And we're going to continue doing those as we grow the pipeline. But what we really want to do is add on these larger transactions. So it's not a matter of saying, okay, we did all the little deals, now we're going to do the big deals. That would be the wrong approach. What you really want to do is continue doing what made you successful, which is a lot of these smaller, under-the-radar transactions. They're all accretive. They all add money and revenue to the overall pool, but you still want to move up to these larger deals, which frequently will get into a bidding process, so they'll be going through some banker-led sale process, which is okay as long as we're disciplined and not overpaying for transactions. Frequently, these deals don't work out, so you have to be careful. I have a background in M&A and licensing deals. I've done several hundred of them. So as David, we've worked at several companies successfully doing these types of deals. So it is a core competency in our company to be the go-to partner of choice for rare disease. Let's see here. We've got a minute. Do I have time for questions after this, or is that a hard stop? It's a hard stop. Okay, I'm going to pause there. Rather than go into product by product, I want to take a time for any questions. If we don't, then I'll go into some of our key products. Any questions before I continue? Okay, fine. We'll talk about hemangio. so this product was acquired in february 2026 you think about the population five to ten thousand infants annually um there's uh uh it you know i mentioned earlier that we think this could be our largest product in our portfolio it's going to add it's going to be highly accretive um we think that this product um i don't know david have we given specific guidance on sales okay so i shouldn't do that but um i'll i'll leave it at that um i mean you can you can see and probably do your own uh estimate if we hit that five to ten thousand infants per year and looking at the current pricing of the product um but then again we did lower the price for patients so there's the zero copay for them um this will be a product that uh is is already in high demand we're having we're actually having a lot of trouble keeping up with shipments we're getting so many orders on this product. Okay, Elkini Sprinkle and Kandivi talked about these even as is they'll do north of 50 million in sales. These products are really where the starting point of us being into rare disease. And we think that will continue into the future. We don't see any competition. One other thing I want to bring out as we end up here is that many of these products, the pool is really too small to add other competitors so we've kind of created a moat around the business in the sense that in order to displace these products someone else would have to come out with the sales team want to promote and try to really you know move us out of that simply getting a product approved won't do that by the nature of the business uh you know you're in specialty pharmacy these doctors are writing their scripts they're sending to the specialty pharmacy we have the relationships with doctors and the patients which i'm very proud of and i think uh what you'll see is this franchise continue to grow as it is on this slide um should i stop there are we good okay well uh i'd like to thank everybody for their attendance today and we are available after uh the presentation if you have any questions you want to stop by please feel free to do thank you