Aquestive Therapeutics Inc

Previous wording

These forward-looking statements include, but are not limited to, statements regarding the advancement and related timing of our product candidate Anaphylm™ (epinephrine) Sublingual Film through clinical development and approval by the FDA, including submission of supporting clinical studies and the NDA for Anaphylm in the near term and the following launch of Anaphylm, if approved by the FDA; that Anaphylm will be the first and only oral administration of epinephrine and accepted as an alternative to existing standards of care, if Anaphylm is approved by the FDA; the commercial opportunity of Anaphylm; the advancement and related timing of our Adrenaverse pipeline epinephrine prodrug product candidates, including AQST-108, through clinical development and regulatory approval process, including holding a pre-IND meeting with the FDA for AQST-108; the commercial opportunity of our Adrenaverse epinephrine prodrug platform and its ability to transform the Company; the continued expansion of market access and coverage, commercial and distribution capabilities and future market opportunity for Libervant™ (diazepam) Buccal Film for the indicated epilepsy patient population aged between two and five years; the advancement and related timing of Libervant for these epilepsy patients aged between six and eleven years through the clinical development and regulatory approval process; the approval for U.S. market access of Libervant for this patient population aged twelve years and older and overcoming the orphan drug market exclusivity of an FDA approved nasal spray product of another company extending to January 2027 for Libervant for these epilepsy patients six years of age and older; the focus on continuing to manufacture Suboxone®, Emylif®, Sympazan®, Ondif® and other licensed products and continued growth of these products over several years in the future and our ability to support the manufacture and supply of these products in the U.S. and abroad; the potential benefits our products could bring to patients; our cash requirements, cash funding and cash burn; short-term and longer term liquidity and the ability to fund our business operations; our growth and future financial and operating results and financial position, including with respect to our 2024 financial outlook; and business strategies, market opportunities, and other statements that are not historical facts.

Current wording

These forward-looking statements include, but are not limited to, statements regarding the advancement and related timing of our product candidate Anaphylm™ (epinephrine) Sublingual Film through clinical development and approval by the U.S. Food and Drug Administration (FDA), including the timing of submission of supporting and pediatric clinical studies, holding a pre-New Drug Application (NDA) meeting with the FDA and filing the NDA for Anaphylm with the FDA, and the following launch of Anaphylm, if approved by the FDA; that the results of the Company’s clinical studies for Anaphylm are sufficient to support submission of the NDA for approval of Anaphylm by the FDA; that Anaphylm will be the first and only oral administration of epinephrine and accepted as an alternative to existing standards of care, if Anaphylm is approved by the FDA; the expected growth of the U.S. epinephrine market including in value and the opportunity such growth presents to the Company should Anaphylm be approved by the FDA; the advancement and related timing of our Adrenaverse pipeline epinephrine prodrug product candidates, including AQST-108, through clinical development and FDA regulatory approval process, including holding a pre-IND meeting with the FDA for AQST-108 and the following launch of AQST-108, if approved by the FDA; the potential sale or outlicensing of Anaphylm, Libervant or other product candidates; the advancement and related timing of our product candidate Libervant® (diazepam) Buccal Film for the indicated epilepsy patient population aged between six and eleven years through clinical development and FDA regulatory approval and the following launch of Libervant for this patient population if approved by the FDA; the approval for U.S. market access of Libervant for this patient population aged six years and older and overcoming the orphan drug market exclusivity of an FDA approved nasal spray product of another company extending to January 2027 for Libervant for these epilepsy patients six years of age and older; the advancement, growth and related timing of our Adrenaverse™ pipeline of epinephrine prodrug product candidates, including AQST-108 (epinephrine) Topical Gel, through clinical development including design and timing of clinical studies including those necessary to support the targeted indication of alopecia areata for AQST-108, and holding a pre-investigational new drug application meeting (IND) with the FDA, and the following launch of AQST-108, if approved by the FDA; the commercial opportunity of Libervant, Anaphylm, AQST-108 and our other product candidates, including potential revenues (including projected peak annual sales) generated from commercialization of these products and product candidates should these product candidates be approved by the FDA; the potential growth of our patent portfolio including the extension of patent protection for Anaphylm should the pending patents be approved by the U.S. Patent and Trademark Office (PTO…

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Previous wording

These forward-looking statements are based on our current expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Such risks and uncertainties include, but are not limited to, risks associated with our development work, including any delays or changes to the timing, cost and success of our product development activities and clinical trials and plans, including those relating to Anaphylm (including for pediatric patients), AQST-108, Libervant for patients aged between six and eleven years, and the Company's other product candidates; risks associated with the Company’s distribution work for Libervant, including any delays or changes to the timing, cost and success of Company's distribution activities and expansion of market access to patients aged two to five for Libervant; risk of litigation brought by third parties relating to overcoming their orphan drug exclusivity of an FDA approved product for pediatric epilepsy patients between two to five years of age; risk of delays in advancement of the regulatory approval process through the FDA of Anaphylm, including the filing of the NDA for AQST-108 and our other product candidates or failure to receive FDA approval at all of any of these product candidates; risk of the Company’s ability to generate sufficient data in its PK/PD comparability submission for FDA approval of Anaphylm; risk of the Company’s ability to address the FDA’s comments on the Company’s future clinical trials and other concerns identified in the FDA Type C meeting minutes for Anaphylm, including the risk that the FDA may require additional clinical studies for approval of Anaphylm; risk of the success of any competing products; risk that we may not overcome the seven year orphan drug exclusivity granted by the FDA for the approved nasal spray product of another company in the U.S. in order for Libervant to be granted U.S. market access for patients aged between two and five years until the expiration of the exclusivity period in January 2027 or for other reasons; risks and uncertainties inherent in commercializing a new product (including technology risks, financial risks, market risks and implementation risks and regulatory limitations); risk of development of a sales and marketing capability for commercialization of our product Libervant and other product candidates including Anaphylm; risk of sufficient capital and cash resources, including sufficient access to available debt and equity financing, including under our ATM facility and the Lincoln Park Purchase Agreement, and revenues from operations, to satisfy all of our short-term and longer-term liquidity and cash requirements and other cash needs, at the times and in the amounts needed, including to fund commercialization activities relating to Libervant for patients between two and five years of age and to fund future clinical development and …

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Current wording

These forward-looking statements are based on our current expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Such risks and uncertainties include, but are not limited to, risks associated with our development work, including any delays or changes to the timing, cost and success of our product development activities and clinical trials and plans, including those relating to Anaphylm (including for pediatric patients), AQST-108, and the Company's other product candidates; risks associated with the Company’s distribution work for Libervant, including any delays or changes to the timing, cost and success of Company's distribution activities and expansion of market access to patients aged two to five for Libervant; risk of delays in advancement of the regulatory approval process through the FDA of our product candidates, including the filing of the respective NDAs, including for Anaphylm, AQST-108, Libervant for patients aged between six and eleven and other product candidates, or failure to receive FDA approval at all of any of these product candidates; risk of the Company’s ability to generate sufficient clinical data for approval of our product candidates, including with respect to our PK/PD comparability submission for FDA approval of Anaphylm; risk of the Company’s ability to address the FDA’s comments on the Company’s future clinical trials and other concerns identified in the FDA Type C meeting minutes for Anaphylm, including the risk that the FDA may require additional clinical studies for approval of Anaphylm; risk of the success of any competing products; risk that we may not overcome the seven year orphan drug market exclusivity granted by the FDA for the approved nasal spray product of another company in the U.S. in order for Libervant to be granted U.S. market access for patients aged six years and older until the expiration of the orphan drug market exclusivity period of the nasal spray product due to expire in January 2027, or for other reasons; risk of loss of U.S. market approval of Libervant for patients aged between two and five resulting from a legal challenge relating to U.S. orphan drug market exclusivity by the owner of the approved nasal spray product with respect to the FDA’s approval for U.S. market access of Libervant for this pediatric patient population, or for other reasons; risks and uncertainties inherent in commercializing a new product (including technology risks, financial risks, market risks and implementation risks and regulatory limitations); risk of development of a sales and marketing capability for commercialization of our product Libervant and other product candidates, including Anaphylm and AQST-108; the potential impact on the value of the Company of the sale or outlicensing of our product and product candidates, including Libervant and Anaphylm and other product candidate…

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Previous wording

Aquestive is a pharmaceutical company advancing medicines to bring meaningful improvement to patients’ lives through innovative science and delivery technologies. We are developing pharmaceutical products to deliver complex molecules through administrations that are alternatives to invasive and inconvenient standard of care therapies. We have a proprietary commercial product, Libervant for ages two to five, which was launched in April 2024. We have five licensed commercial products that are marketed by our licensees in the U.S. and around the world. We are the exclusive manufacturer of these licensed products. Aquestive also collaborates with pharmaceutical companies to bring new molecules to market using proprietary, best-in-class technologies, like PharmFilm®, and has proven drug development and commercialization capabilities. We are advancing a product pipeline for the treatment of severe allergic reactions, including anaphylaxis, and our Adrenaverse epinephrine platform. Our production facilities are located in Portage, Indiana, and our corporate headquarters and primary research laboratory facilities are based in Warren, New Jersey.

Current wording

"Anaphylm™", and our Adrenaverse epinephrine prodrug pipeline platform. We have five licensed commercial products that are marketed by our licensees in the U.S. and around the world. We are the exclusive manufacturer of these licensed products. Aquestive also collaborates with pharmaceutical companies to bring new molecules to market using proprietary, best-in-class technologies, like PharmFilm®, and has proven drug development and commercialization capabilities. Our production facilities are located in Portage, Indiana, and our corporate headquarters and primary research laboratory facilities are based in Warren, New Jersey.

Previous wording

•Anaphylm™ (epinephrine) Sublingual Film – the first and only non-device based, orally delivered epinephrine product candidate that has shown clinical results comparable to auto-injectors (such as EpiPen® and Auvi-Q®) for the emergency treatment of allergic reactions, including anaphylaxis. Epinephrine is the standard of care in the treatment of anaphylaxis and is currently administered via intramuscular injection (IM) including auto-injectors, such as EpiPen and Auvi-Q, which require patients or their caregivers to inject epinephrine into the patient’s thigh during an emergency allergic reaction. As a result of this route of administration, many patients and their caregivers are reluctant to use currently available products. However, Anaphylm would, if approved by the FDA, allow a patient to simply place a dissolvable strip, approximately the size and weight of a postage stamp, under the tongue, providing an appropriate medication where it is needed, when it is needed and in a form preferred by patients.

Current wording

•Anaphylm™ (epinephrine) Sublingual Film – the first and only non-device based, orally delivered epinephrine product candidate that has shown clinical results comparable to auto-injectors (such as EpiPen® and Auvi-Q®) for the emergency treatment of allergic reactions, including anaphylaxis. Epinephrine is the standard of care in the treatment of anaphylaxis and is typically administered via intramuscular injection (IM) including auto-injectors, such as EpiPen and Auvi-Q, which require patients or their caregivers to inject epinephrine into the patient’s thigh during an emergency allergic reaction. As a result of this route of administration, many patients and their caregivers are reluctant to use injectable products. In August 2024, a nasal spray device was approved by the FDA for the treatment of severe allergic reactions including anaphylaxis. However, Anaphylm would, if approved by the FDA, allow a patient to simply place a dissolvable strip, approximately the size and weight of a postage stamp, under the tongue, providing an appropriate medication where it is needed, when it is needed and in a form preferred by patients.

Previous wording

Throughout 2022 and 2023, we reported positive topline data from several clinical studies evaluating multiple oral film formulations and dosage strengths of Anaphylm in healthy adult subjects, including cross over studies comparing the pharmacokinetics (PK) and pharmacodynamics (PD) of epinephrine delivered via Anaphylm compared to current standards of care, EpiPen® and manual intramuscular (IM) injectors. These studies demonstrated that treatment with Anaphylm was well tolerated, with no serious adverse events, significant medical events, or treatment-related severe adverse events reported. The data from these clinical studies formed the basis for the End-of-Phase 2 (EoP2) meeting with the FDA in December of 2022, which provided clarity as to the FDA’s expectations regarding key clinical program areas for design of revised dosing instructions expected for use in our pivotal clinical trial.

Current wording

Throughout 2022 and 2023, we reported positive topline data from several clinical studies evaluating multiple oral film formulations and dosage strengths of Anaphylm in healthy adult subjects, including cross over studies comparing the PK and PD of epinephrine delivered via Anaphylm compared to current standards of care, EpiPen® and manual intramuscular (IM) injectors. These studies demonstrated that treatment with Anaphylm was well tolerated, with no serious adverse events, significant medical events, or treatment-related severe adverse events reported. The data from these clinical studies formed the basis for the End-of-Phase 2 (EoP2) meeting with the FDA in December of 2022, which provided clarity as to the FDA’s expectations regarding key clinical program areas for design of revised dosing instructions expected for use in our pivotal clinical trial.

Previous wording

In January 2024, we successfully completed a Type C meeting with the FDA in which the FDA found that we had adequately addressed the FDA’s previous concerns noted in the EoP2 meeting, including addressing (1) the impact of any product hold time, (2) the potential for emesis (vomiting), and (3) the impact of potential mouth conditions such as angioedema (swelling), by removing product hold time from the administration instructions and providing additional information on how to characterize emesis in our NDA submission with the FDA. Regarding mouth conditions, the FDA recommended administering Anaphylm after oral exposure to a known allergen and assessing PK performance thereunder. This study replaced our previously planned angioedema study. In those comments, the FDA did not outline any new clinical development requirements for the Anaphylm program. The FDA reserved judgement on the sufficiency of the Anaphylm clinical development program until completion of ongoing and planned studies, the results of which are expected to be presented at a pre-NDA meeting with the FDA, which is expected to occur in the second half of 2024.

Current wording

In January 2024, we successfully completed a Type C meeting with the FDA in which the FDA found that we had adequately addressed the FDA’s previous concerns noted in the EoP2 meeting, including addressing (1) the impact of any product hold time, (2) the potential for emesis (vomiting), and (3) the impact of potential mouth conditions such as angioedema (swelling), by removing product hold time from the administration instructions and providing additional information on how to characterize emesis in our NDA submission with the FDA. Regarding mouth conditions, the FDA recommended administering Anaphylm after oral exposure to a known allergen and assessing PK performance thereunder. This study replaced our previously planned angioedema study. In those comments, the FDA did not outline any new clinical development requirements for the Anaphylm program. The FDA reserved judgement on the sufficiency of the Anaphylm clinical development program until completion of ongoing and planned studies, the results of which are expected to be presented at a pre-NDA meeting with the FDA, which is scheduled for the fourth quarter of 2024.

Previous wording

In June 2024, we reported positive topline pharmacokinetic (PK) data from the temperature / pH study of Anaphylm™. The single-dose, five-period, randomized crossover study was designed to compare the PK and pharmacodynamics (PD) of Anaphylm just after consuming normal water at different temperatures (hot, cold, and room temperature) as well as water of different pHs (acidic- lemon water, and basic- baking soda water). The most consumed beverages, such as soda, milk, coffee, and juice, have acidity between lemon water and normal water. The primary PK parameters were the maximum amount of epinephrine measured in plasma (Cmax) and exposure, or the area under the curve (AUC), at predefined time points after dosing, in 30 healthy adult subjects. Topline PK and PD data from the study showed no statistically significant difference in PK and PD results between the different groups based on temperature and pH variability in the mouth.

Current wording

In June 2024, we reported positive topline PK data from the temperature / pH study of Anaphylm™. The single-dose, five-period, randomized crossover study was designed to compare the PK and PD of Anaphylm just after consuming normal water at different temperatures (hot, cold, and room temperature) as well as water of different pHs (acidic- lemon water, and basic- baking soda water). The most consumed beverages, such as soda, milk, coffee, and juice, have acidity between lemon water and normal water. The primary PK parameters were the maximum amount of epinephrine measured in plasma (Cmax) and exposure, or the area under the curve (AUC), at predefined time points after dosing, in 30 healthy adult subjects. Topline PK and PD data from the study showed no statistically significant difference in PK and PD results between the different groups based on temperature and pH variability in the mouth.

Previous wording

On April 26, 2024, the FDA approved Libervant for U.S. market access for the acute treatment of intermittent, stereotypic episodes of frequent seizure activity (i.e., seizure clusters, acute repetitive seizures) that are distinct from a patient’s usual seizure pattern in patients with epilepsy between two and five years of age. The only other current FDA approved product for these epilepsy patients between two and five years of age is a diazepam rectal gel. We launched Libervant for patients between the ages of two and five years and expect to expand our commercial activities for this pediatric patient population with up to ten sales representatives in the third quarter of 2024. We are also expanding our distribution network and expect to have national retail distribution capabilities in place by the fourth quarter of 2024, as well as broadening Medicaid and commercial coverage in the coming months. Medicaid accounts for up to fifty percent of all prescriptions among this pediatric patient population.

Current wording

On April 26, 2024, the FDA approved Libervant for U.S. market access for the acute treatment of intermittent, stereotypic episodes of frequent seizure activity (i.e., seizure clusters, acute repetitive seizures) that are distinct from a patient’s usual seizure pattern in patients with epilepsy between two and five years of age. Libervant is the first and only orally administered rescue product for the treatment of seizure cluster in patients between ages two and five. The only other current FDA approved product for these epilepsy patients between two and five years of age is a diazepam rectal gel. In October 2024, Libervant 5mg, 7.5mg, 10mg, 12.5mg and 15 mg for patients between two to five years of age became available through multiple retail distribution channels. Market access activities have broadened coverage. Libervant is available nationwide with retail distribution capabilities in place. For Medicaid patients, Libervant is available in all states. Commercial patient access to Libervant continues to expand based on health plan reviews and Pharmacy Benefit Manager agreements.

Previous wording

Our portfolio also includes other products and product candidates that we have licensed, or will seek to license, or for which we have licensed our intellectual property for commercialization. In the years ended December 31, 2023 and 2022, our licensed product portfolio generated $50.6 million and $47.7 million in revenue to Aquestive, respectively. In the six months ended June 30, 2024 and 2023, our licensed product portfolio generated $32,152 and $24,375 in revenue to Aquestive, respectively. Those products include:

Current wording

Our portfolio also includes other products and product candidates that we have licensed, or will seek to license, or for which we have licensed our intellectual property for commercialization. In the years ended December 31, 2023 and 2022, our licensed product portfolio generated $50.6 million and $47.7 million in revenue to Aquestive, respectively. In the nine months ended September 30, 2024 and 2023, our licensed product portfolio generated $45,694 and $37,377 in revenue to Aquestive, respectively. Those products include:

Previous wording

•Suboxone® – a sublingual film formulation of buprenorphine and naloxone, respectively an opioid agonist and antagonist, that is marketed in the United States and internationally for the treatment of opioid dependence. Suboxone was launched by our licensee, Indivior, in 2010. Suboxone is the most prescribed branded product in its category and was the first sublingual film product for the treatment of opioid dependence. We are the sole and exclusive supplier and manufacturer of Suboxone and have produced over 2.7 billion doses of Suboxone since its launch in 2010. As of June 30, 2024, Suboxone branded products retain approximately 29% film market share as generic film-based products have penetrated this market. We have filed patent infringement lawsuits against certain companies relating to generic film-based products for buprenorphine-naloxone. More details regarding these lawsuits are described in the accompanying unaudited condensed financial statements, Note 19, Contingencies, contained herein.

Current wording

•Suboxone® – a sublingual film formulation of buprenorphine and naloxone, respectively an opioid agonist and antagonist, that is marketed in the United States and internationally for the treatment of opioid dependence. Suboxone was launched by our licensee, Indivior, in 2010. Suboxone is the most prescribed branded product in its category and was the first sublingual film product for the treatment of opioid dependence. We are the sole and exclusive supplier and manufacturer of Suboxone and have produced over 2.7 billion doses of Suboxone since its launch in 2010. As of September 30, 2024, Suboxone branded products retain approximately 28% film market share as generic film-based products have penetrated this market. We have filed patent infringement lawsuits against certain companies relating to generic film-based products for buprenorphine-naloxone. More details regarding these lawsuits are described in the accompanying unaudited condensed financial statements, Note 19, Contingencies, contained herein.

Previous wording

In March 2022, we announced the grant of an exclusive license to Haisco for Haisco to develop and commercialize Exservan for the treatment of ALS in China. Haisco is a China-based public pharmaceutical company. Haisco will lead the regulatory and commercialization activities for Exservan in China. Aquestive was the exclusive sole manufacturer and supplier for Exservan in China. Under the terms of license agreement with Haisco, as amended, Aquestive received a $7.0 million upfront payment in September 2022, and was to receive regulatory milestone payments, double-digit royalties on net sales of Exservan in China, and earn manufacturing revenue upon the sale of Exservan in China. In June 2024, the Company and Haisco mutually agreed to terminate the Haisco Agreement. See Note 5, Material Agreementsto our accompanying unaudited condensed financial statements for details.

Current wording

In March 2022, we announced the grant of an exclusive license to Haisco for Haisco to develop and commercialize Exservan for the treatment of ALS in China. Haisco is a China-based public pharmaceutical company. Haisco led the regulatory and commercialization activities for Exservan in China. Aquestive was the exclusive sole manufacturer and supplier for Exservan in China. Under the terms of license agreement with Haisco, as amended, Aquestive received a $7.0 million upfront payment in September 2022, and was to receive regulatory milestone payments, double-digit royalties on net sales of Exservan in China, and earn manufacturing revenue upon the sale of Exservan in China. In June 2024, the Company and Haisco mutually agreed to terminate the Haisco Agreement. See Note 5, Material Agreementsto our accompanying unaudited condensed financial statements for details.

Previous wording

October 26, 2022, the Company entered into the Assertio Agreement with Otter Pharmaceuticals, LLC, a subsidiary of Assertio Holdings, Inc., pursuant to which the Company granted an exclusive, worldwide license of its intellectual property for Sympazan to Assertio during the term of that agreement for an upfront payment of $9.0 million. Additionally, the Company subsequently received from Assertio a $6.0 million milestone payment upon the Company's receipt of a notice of allowance from the United States Patent and Trademark Office of its patent application U.S. Serial No. 16/561,573, and payment of the related allowance fee. The Company is the exclusive sole manufacturer and supplier of Sympazan for Assertio and will receive manufacturing fees from Assertio for the product through the expiration of such supply agreement.

Current wording

•Sympazan®– an oral soluble film formulation of clobazam used for the treatment of seizures associated with a rare, intractable form of epilepsy known as Lennox-Gastaut syndrome, or LGS, in patients aged two years of age or older, was approved by the FDA on November 1, 2018. We commercially launched Sympazan in December 2018. On October 26, 2022, the Company entered into the Assertio Agreement with Otter Pharmaceuticals, LLC, a subsidiary of Assertio Holdings, Inc., pursuant to which the Company granted an exclusive, worldwide license of its intellectual property for Sympazan to Assertio during the term of that agreement for an upfront payment of $9.0 million. Additionally, the Company subsequently received from Assertio a $6.0 million milestone payment upon the Company's receipt of a notice of allowance from the United States Patent and Trademark Office of its patent application U.S. Serial No. 16/561,573, and payment of the related allowance fee. The Company is the exclusive sole manufacturer and supplier of Sympazan for Assertio and receives manufacturing fees from Assertio for the product through the expiration of such supply agreement.

Previous wording

Our revenues to date have been earned from our manufactured products made to order for licensees. Revenues are also earned from our product development services provided under contracts with customers, and from the licensing of our intellectual property. These activities generate revenues in three primary categories: manufacture and supply revenue, co-development and research fees, and license and royalty revenue.

Current wording

Our revenues to date have been earned from our manufactured products made to order for licensees. Revenues are also earned from our product development services provided under contracts with customers, and from the licensing of our intellectual property. These activities generate revenues in four primary categories: manufacture and supply revenue, license and royalty revenue, co-development and research fees, and proprietary product revenue, net.

Previous wording

We work with our licensees to co-develop pharmaceutical products. In this regard, we earn fees through performance of specific tasks, activities, or completion of stages of development defined within a contractual arrangement with the relevant licensee. The nature and extent of these performance obligations, broadly referred to as milestones or deliverables, are usually dependent on the scope and structure of the project as contracted, as well as the complexity of the product and the specific regulatory approval path necessary for that product.

Current wording

Co-development and research fees are earned through performance of specific tasks, activities or completion of stages of development defined within a contractual development or feasibility study agreement with a customer. The nature of these performance obligations, broadly referred to as milestones or deliverables, are usually dependent on the scope and structure of the project as contracted, as well as the complexity of the product and the specific regulatory approval path necessary for that product. Accordingly, the duration of our research and development projects may range from several months to approximately three years. Although each contractual arrangement is unique, common milestones included in these arrangements include those for the performance of efficacy and other tests, reports of findings, formulation of initial prototypes, production of stability clinical and/or scale-up batches, and stability testing of those batches. Additional milestones may be established and linked to clinical results of the product submission and/or approval of the product by the FDA and the commercial launch of the product.

Previous wording

We expect to continue to seek to rationalize and manage costs to prepare for a potential decline in Suboxone volumes as the generics in that market continue to take market share, at least partially offset by anticipated manufacturing revenue of our licensed products including Sympazan, subsequent to the Assertio Agreement in October 2022. In addition to our proprietary products coming online, we may add licensee products which may need additional resources to manufacture. If such growth should occur for higher volume product opportunities such as Suboxone and Ondansetron, we would incur increased costs associated with hiring additional personnel to support the increased manufacturing and supply costs arising from higher manufactured volumes from licensed products.

Current wording

We expect to continue to seek to rationalize and manage costs to prepare for a potential decline in Suboxone volumes as the generics in that market continue to take market share, at least partially offset by anticipated manufacturing revenue of our proprietary and licensed products. In addition to our proprietary products coming online, we may add licensee products which may need additional resources to manufacture. If such growth should occur for higher volume product opportunities such as Suboxone and Ondansetron, we would incur increased costs associated with hiring additional personnel to support the increased manufacturing and supply costs arising from higher manufactured volumes from licensed products.

Previous wording

We expect our research and development expenses to continue to be significant over the next several years as we continue to develop existing product candidates such as Anaphylm, AQST-108 and others, and we identify and develop or acquire additional product candidates and technologies. We may hire or engage additional skilled colleagues or third parties to perform these activities, conduct clinical trials and ultimately seek regulatory approvals for any product candidate that successfully completes those clinical trials.

Current wording

We expect our research and development expenses to continue to be significant over the next several years as we continue to develop existing product candidates such as Anaphylm, AQST-108 and others, and as we identify and develop or acquire additional product candidates and technologies. We may hire or engage additional skilled colleagues or third parties to perform these activities, conduct clinical trials and ultimately seek regulatory approvals for any product candidate that successfully completes those clinical trials.

Previous wording

Interest income and other income, net consists of earnings derived from an interest-bearing account, and other miscellaneous income and expense items. The interest-bearing account has no minimum amount to be maintained in the account nor any fixed length of period for which interest is earned.

Current wording

Interest income and other income, net consists of earnings derived from an interest-bearing account, investments in money market Treasury mutual funds and other miscellaneous income and expense items. The interest-bearing account and money market Treasury mutual funds have no minimum amounts to be maintained in the accounts nor any fixed length of period for which interest and dividends are earned.

Previous wording

Comparison of the Three and Six Months Ended June 30, 2024 and 2023

Current wording

Comparison of the Three and Nine Months Ended September 30, 2024 and 2023

Previous wording

For the three months ended June 30, 2024, total revenues increased 52%, or $6,858 compared to the same period in the prior year due to certain one-time increases in license and royalty revenue and co-development and research fees, partially offset by decreases in manufacture and supply revenue.

Current wording

For the three months ended September 30, 2024, total revenues increased 4%, or $540 compared to the same period in the prior year primarily due to a certain one-time increase in license and royalty revenue, partially offset by decreases in manufacture and supply revenue.

Previous wording

Manufacture and supply revenue decreased approximately 30%, or $3,513 for the three months ended June 30, 2024 compared to the same period in the prior year. This decrease was primarily due to a 26%, or $2,347 decrease in Suboxone revenue and a 53%, or $956 decrease in Ondif revenue that were attributable to a decrease in volume due to timing of orders.

Current wording

Manufacture and supply revenue decreased approximately 6%, or $738 for the three months ended September 30, 2024 compared to the same period in the prior year. This decrease was primarily due to a 13%, or $1,412 decrease in Suboxone revenues and a $690 decrease in Sympazan revenues, partially offset by a $1,123 increase in Ondif revenue that was attributable to an increase in volume.

Previous wording

License and royalty revenue increased 658%, or $9,739 for the three months ended June 30, 2024 compared to the same period in the prior year. This increase was primarily due to the one-time recognition of deferred revenues of $7,000 due to the termination of the Licensing and Supply Agreement with Haisco and of $3,317 due to the termination of the Licensing Agreement with MTPA. This increase was partially offset by a $500 decrease in license revenue recognized in the prior period for Azstarys from Zevra.

Current wording

License and royalty revenue increased 96%, or $1,059 for the three months ended September 30, 2024 compared to the same period in the prior year. This increase was primarily due to the one-time recognition of deferred revenue of $1,227 due to the termination of a licensing and supply agreement.

Previous wording

For the six months ended June 30, 2024, total revenues increased 32%, or $7,777 compared to the same period in the prior year. The increase was primarily due to certain one- time increases in license and royalty revenue and co-development and research fees, partially offset by decreases in manufacture and supply revenue.

Current wording

For the nine months ended September 30, 2024, total revenues increased 22%, or $8,317 compared to the same period in the prior year. The increase was primarily due to certain one-time increases in license and royalty revenue and increases in co-development and research fees, partially offset by decreases in manufacture and supply revenue.

Previous wording

Manufacture and supply revenue decreased approximately 13%, or $2,757 for the six months ended June 30, 2024 compared to the same period in the prior year. This decrease was primarily due to a 74%, or $2,452 decrease in Ondif revenue attributable to a decrease in volume due to timing of orders and a 3%, or $490 decrease in Suboxone revenue mainly due to retroactive price increases in the prior period. These decreases were partially offset by a $457 increase in Exservan revenues from Zambon. As part of the Indivior Amendment 11 to the Commercial Exploitation Agreement, we received retroactive price increases related to 2022 Suboxone purchases in the amount of $1,682 which was recognized in Manufacture and supply revenue in the six months ended June 30, 2023. There were no retroactive price adjustments included in Manufacture and supply revenue for the six months ended June 30, 2024.

Current wording

Manufacture and supply revenue decreased approximately 11%, or $3,495 for the nine months ended September 30, 2024 compared to the same period in the prior year. This decrease was primarily due to a 39%, or $1,329 decrease in Ondif revenue attributable to a decrease in volume and a 7%, or $1,902 decrease in Suboxone revenue mainly due to retroactive price increases in the prior period that were not present in 2024. These decreases were partially offset by a $684 increase in Exservan revenues from Zambon. As part of the Indivior Amendment 11 to the Commercial Exploitation Agreement, we received retroactive price increases related to 2022 Suboxone purchases in the amount of $1,682 which was recognized in Manufacture and supply revenue in the nine months ended September 30, 2023. There were no retroactive price adjustments included in Manufacture and supply revenue for the nine months ended September 30, 2024.

Previous wording

License and royalty revenue increased 415%, or $9,952 for the six months ended June 30, 2024 compared to the same period in the prior year. This increase was primarily due to the one-time recognition of deferred revenue of $7,000 due to the termination of the Licensing and Supply Agreement with Haisco and of $3,317 due to the termination of the Licensing Agreement with MTPA. These increases were partially offset by a $500 decrease in license revenue recognized in the prior period for Azstarys from Zevra.

Current wording

License and royalty revenue increased 314%, or $11,011 for the nine months ended September 30, 2024 compared to the same period in the prior year. This increase was primarily due to the one-time recognition of deferred revenues of $11,544 due to the terminations of licensing and supply agreements. These increases were partially offset by a $500 decrease in license revenue recognized in the prior period for Azstarys from Zevra.

Previous wording

Co-development and research fees increased 101% or $582 for the six months ended June 30, 2024 compared to the same period in the prior year. The increase was driven by the timing of the achievement of research and development performance obligations which are expected to fluctuate among reporting periods.

Current wording

Co-development and research fees increased 55% or $584 for the nine months ended September 30, 2024 compared to the same period in the prior year. The increase was driven by the timing of the achievement of Co-development and research performance obligations which are expected to fluctuate among reporting periods.

Previous wording

Manufacture and supply costs and expenses decreased 32% or $2,091 for the three months ended June 30, 2024 compared to the same period in the prior year. The decrease was largely due to lower volume of strips sold, changes in product mix and lower costs related to production.

Current wording

Manufacture and supply costs and expenses decreased 8% or $361 for the three months ended September 30, 2024 compared to the same period in the prior year. The decrease was largely due to lower volume of strips sold, changes in product mix and lower direct production costs.

Previous wording

Research and development expenses increased 20% or $689 for the three months ended June 30, 2024 compared to the same period in the prior year. The increase in Research and development expenses is primarily due to clinical trial costs associated with the continued advancement of the Anaphylm program, an increase in personnel costs, and an increase in share-based compensation. The tables below provide a breakdown of the major costs included in total Research and development expenses and project costs by type of expense for each of the main clinical development projects in which we are engaged for each period presented:

Current wording

Research and development expenses increased 65% or $2,073 for the three months ended September 30, 2024 compared to the same period in the prior year. The increase in Research and development expenses is primarily due to clinical trial costs and product research expenses associated with the continued advancement of the Anaphylm program, and an increase in share-based compensation. The tables below provide a breakdown of the major costs included in total Research and development expenses and project costs by type of expense for each of the main clinical development projects in which we are engaged for each period presented:

Previous wording

During the three months ended June 30, 2024, total project expenses for Anaphlym increased 22%, or $307 over the same period in 2023. During the three months ended June 30, 2024, Anaphlym clinical trial expenses and product research expenses increased $341 and $52, respectively, over the same period in 2023, partially offset by decreases in development and manufacturing of $86. During the three months ended June 30, 2024, clinical trial expenses for Anaphlym of $1,509 were primarily due to clinical trial costs associated with the continued advancement of the Anaphylm program. During the three months ended June 30, 2023, clinical trial expenses for Anaphlym of $1,168 were related to the activities leading up to the Phase 3 PK Study. During the three months ended June 30, 2023, product research expenses for Libervant of $209 were primarily due to data integration and modeling work.

Current wording

Total project expenses for Anaphylm increased 131%, or $1,476 over the comparable period in 2023. Anaphylm clinical trial expenses and product research expenses increased $1,290 and $347, respectively, over the comparable period in 2023, partially offset by decreases in development and manufacturing of $161. Clinical trial expenses for Anaphylm of $2,107 were primarily due to clinical trial costs associated with the continued advancement of the Anaphylm program. Product research expenses for Anaphylm increased $347, or 439%, primarily related to expenses incurred for the preparation of the NDA filing. During the three months ended September 30, 2023, clinical trial expenses for Anaphylm of $817 were related to the activities leading up to the Phase 3 PK Study.

Previous wording

R&D personnel costs increased by 23% or $327, for the three months ended June 30, 2024 compared to the same period in 2023 due to additional headcount. R&D share based compensation increased by $207, or 205% primarily related to awards granted to our Chief Medical Officer upon his commencement of employment and the effect of new grants in 2024 to R&D personnel.

Current wording

R&D share-based compensation increased by $206, or 198% primarily related to the effect of new grants in 2024 to R&D personnel. All other R&D expenses include rent, utilities, maintenance and other expenses and fees.

Previous wording

Selling, general and administrative expenses increased 54% or $3,996 for the three months ended June 30, 2024 as compared to the same period in the prior year. The increase primarily represents higher personnel costs of approximately $500, higher share-based compensation expenses of $640, higher regulatory and licensing fees of $360 related to the regulatory fee for Libervant, higher consulting costs of $660, higher expenses of $1,640 due to a change in the allocation of manufacture and supply costs compared to the prior period and other expenses, partially offset by decreases in other general and administrative costs including insurance expense.

Current wording

Selling, general and administrative expenses increased 64% or $4,741 for the three months ended September 30, 2024 as compared to the same period in the prior year. The increase primarily represents higher personnel costs of approximately $900, higher consulting and market access costs of $890, higher share-based compensation expenses of $555, higher regulatory and licensing fees of $520 related to the regulatory fee for Libervant, higher expenses of $1,484 due to a change in the allocation of manufacture and supply costs compared to the prior period and other expenses, partially offset by decreases in other general and administrative costs including insurance expense.

Previous wording

Interest expense increased 102% or $1,406 for the three months ended June 30, 2024 compared to the same period in the prior year. The increase was mostly driven by the increased amortization of debt issuance costs and discounts on the 13.5% Notes refinancing in November 2023 for the three months ended June 30, 2024 compared to the three months ended June 30, 2023.

Current wording

Interest expense increased 121% or $1,524 for the three months ended September 30, 2024 compared to the same period in the prior year. The increase was mostly driven by the increased amortization of debt issuance costs and discounts on the 13.5% Notes refinancing in November 2023 for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

Previous wording

Interest expense related to royalty obligations represents amortization of the discount on the royalty obligations. For the three months ended June 30, 2024, the amount was $1,358. This amount is due to the accounting associated with the royalty obligations as part of the 13.5% Notes issuance. There were no expenses related to the royalty obligations in thesame period in 2023.

Current wording

Interest expense related to royalty obligations represents amortization of the discount on the royalty obligations. For the three months ended September 30, 2024, the amount was $1,359. This amount is due to the accounting associated with the royalty obligations as part of the 13.5% Notes issuance. There were no expenses related to the royalty obligations in thesame period in 2023.

Previous wording

Interest expense related to the sale of future revenue was $58 and $55 for the three months ended June 30, 2024 and June 30, 2023, respectively, and represents amortization of the issuance costs. These amounts are due to the accounting associated with the sale of future revenue related to KYNMOBI royalties sold to Marathon on November 3, 2020 and do not represent or imply a monetary obligation or cash outflow at any time during the life of the transaction. In June 2023, Sunovion announced that it had voluntarily withdrawn KYNMOBI from the U.S. and Canadian markets. Therefore, the Company likely will not receive any of the additional contingent payments under the Monetization agreement. As a result, the Company discontinued recording interest expense related to the sale of future revenue in the fourth quarter of 2022. See Note 15, Sale of Future Revenue to our Condensed Financial Statements for details.

Current wording

Interest expense related to the sale of future revenue was $59 and $56 for the three months ended September 30, 2024 and September 30, 2023, respectively, and represents amortization of the issuance costs. These amounts are due to the accounting associated with the sale of future revenue related to KYNMOBI royalties sold to Marathon on November 3, 2020 and do not represent or imply a monetary obligation or cash outflow at any time during the life of the transaction. In June 2023, Sunovion announced that it had voluntarily withdrawn KYNMOBI from the U.S. and Canadian markets. Therefore, the Company likely will not receive any of the additional contingent payments under the Monetization agreement. As a result, the Company discontinued recording interest expense related to the sale of future revenue in the fourth quarter of 2022. See Note 15, Sale of Future Revenue to our Condensed Financial Statements for details.

Previous wording

Manufacture and supply costs and expenses decreased 21% or $2,439 for the six months ended June 30, 2024 compared to the same period in the prior year. The decrease was largely due to lower volume of strips sold, changes in product mix, and lower costs related to production.

Current wording

Manufacture and supply costs and expenses decreased 17% or $2,800 for the nine months ended September 30, 2024 compared to the same period in the prior year. The decrease was largely due to lower volume of strips sold, changes in product mix, and lower direct production costs.

Previous wording

Research and development expenses increased 44% or $3,074 for the six months ended June 30, 2024 compared to the same period in the prior year. Research and development expenses are driven primarily by the timing of clinical trial and other product development activities associated with our pipeline. The tables below provide a breakdown of the major costs included in total Research and development expenses and project costs by type of expense for each of the main clinical development projects in which we are engaged for each period presented:

Current wording

Research and development expenses increased 50% or $5,147 for the nine months ended September 30, 2024 compared to the same period in the prior year. The increase in Research and development expenses is primarily due to clinical trial costs associated with the continued advancement of the Anaphylm and AQST-108 programs, increases in personnel costs, and an increase in share-based compensation. The tables below provide a breakdown of the major costs included in total Research and development expenses and project costs by type of expense for each of the main clinical development projects in which we are engaged for each period presented:

Previous wording

During the six months ended June 30, 2024, total project expenses for Anaphlym increased 57%, or $1,753 over the same period in 2023. During the six months ended June 30, 2024, clinical trial expenses for Anaphlym increased 75% or $1,920 over the same period in 2023 offset by decreases in development and manufacturing and product research expenses of $142 and $25, respectively. During the six months ended June 30, 2024, clinical trial expenses for Anaphlym of $4,484 were primarily due to clinical trial costs associated with the continued advancement of the Anaphylm program. During the six months ended June 30, 2023, clinical trial expenses for Anaphlym of $2,564 were related to the activities leading up to the Phase 3 PK Study. During the six months ended June 30, 2024, total project expenses for AQST-108 increased $789 over the same period in 2023 and were related to feasibility work for AQST-108. During the six months ended June 30, 2023, product research expenses for Libervant of $215 were primarily due to data integration and modeling work.

Current wording

Total project expenses for Anaphylm increased 77%, or $3,229 over the comparable period in 2023. Clinical trial expenses and product research expenses for Anaphylm increased $3,210 and $322, respectively, over the comparable period in 2023 offset by decreases in development and manufacturing of $303. Clinical trial expenses for Anaphylm of $6,591 were primarily due to clinical trial costs associated with the continued advancement of the Anaphylm program. Clinical trial expenses for Anaphylm of $3,381 were related to the activities leading up to the Phase 3 PK Study. Total project expenses for AQST-108 increased $784 over the comparable period in 2023 and were related to feasibility work for AQST-108. During the nine months ended September 30, 2023, product research expenses for Libervant of $215 were primarily due to data integration and modeling work.

Previous wording

R&D personnel costs increased by 16%, or $458, for the six months ended June 30, 2024. as compared to the same period in 2023, due to additional headcount. R&D share-based compensation increased by $305, or 176%, which was primarily related to awards granted to our Chief Medical Officer upon his commencement of employment and the effect of new grants in 2024 to R&D personnel.

Current wording

R&D personnel costs increased by 12%, or $507, for the nine months ended September 30, 2024. as compared to the same period in 2023, due to additional headcount. R&D share-based compensation increased by $511, or 184%, which was primarily related to awards granted to our Chief Medical Officer upon his commencement of employment and the effect of new grants in 2024 to R&D personnel. All other R&D expenses include rent, utilities, maintenance and other expenses and fees.

Previous wording

$1,600, one-time severance costs of approximately $1,100, higher share-based compensation expenses of $1,260, higher regulatory and licensing fees of approximately $360, higher expenses of $2,570 due to a year-over-year change in the allocation of manufacture and supply costs, and higher consulting expenses of approximately $940 and other expenses, partially offset by lower legal fees of $830, and decreases in other general and administrative costs including insurance expense.

Current wording

Selling, general and administrative expenses increased 54% or $11,971 for the nine months ended September 30, 2024 as compared to the same period in the prior year. The increase primarily represents higher personnel costs of approximately $2,500, higher consulting and market access costs of approximately $1,830, higher share-based compensation expenses of $1,800, one-time severance costs of approximately $1,100, higher regulatory and licensing fees of approximately $880 related to the regulatory fee for Libervant, higher expenses of $4,100 due to a year-over-year change in the allocation of manufacture and supply costs, and other expenses, partially offset by lower legal fees of $940 and decreases in other general and administrative costs including insurance expense.

Previous wording

Interest expense increased 98% or $2,755 for the six months ended June 30, 2024 as compared to the same period in the prior year. The increase was mostly driven by the increased amortization of debt issuance costs and discounts on the 13.5% Notes refinancing in November 2023 for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

Current wording

Interest expense increased 105% or $4,279 for the nine months ended September 30, 2024 as compared to the same period in the prior year. The increase was mostly driven by the increased amortization of debt issuance costs and discounts on the 13.5% Notes refinancing in November 2023 for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

Previous wording

Interest expense related to royalty obligations represents amortization of the discount on the royalty obligations. For the six months ended June 30, 2024, the amount was $2,716. This amount is due to the accounting associated with the royalty obligations as part of the 13.5% Notes issuance. There were no expenses related to the royalty obligations in thesame period in 2023.

Current wording

Interest expense related to royalty obligations represents amortization of the discount on the royalty obligations. For the nine months ended September 30, 2024, the amount was $4,075. This amount is due to the accounting associated with the royalty obligations as part of the 13.5% Notes issuance. There were no expenses related to the royalty obligations in thesame period in 2023.