Aquestive Therapeutics Inc (AQST) 2025 Q3 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Q3 2025 Aquestive Therapeutics Inc earnings conference call. (Operator Instructions) Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Brian Korb. Please go ahead, sir.

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 the company's recent business developments and performance for the third quarter of 2025, followed by a Q&A session. During the Q&A session, the team will be joined by Dr. Gary Slatko, Interim Chief Medical Officer; Sherry Korczynski, Chief Commercial Officer; Lori Braender, Chief Legal Officer; and Peter Boyd, Chief People Officer.

As a reminder, the company's remarks today corresponded with 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 third quarter 2021 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 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 other sections included in the company's annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K filed with the US Securities and Exchange Commission.

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 its 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. Good morning, everyone, and thank you for joining us today. This morning, we are holding our earnings call from the American College of Asthma, Allergy and Immunology Annual Conference here in Orlando, Florida. This is one of the largest allergy-focused conferences in the US, and we are proud to be here supporting the college at their annual gathering. We have almost 20 colleagues on site this week and a host of events, including multiple poster presentations, a fully staffed medical affairs booth on the exhibition floor and multiple engagements with investigators. This truly is an exciting week for the Aquestive team.

This is also emblematic of the increased awareness of our Anaphylm dibutepinephrine Sublingual Film program within the allergy community. In fact, our latest data suggests most allergists are now aware of our sublingual film program and over 25% have even completed our continuous medical education, or CME presentation offered through Medscape, the leading provider of CME materials for physicians.

As we approach our FDA scheduled action date of January 31 for Anaphylm, we are well positioned from an allergist awareness perspective. In case anyone hasn't been paying attention, Anaphylm, if approved by the FDA, will be the first and only oral medication for the treatment of severe allergic reactions including anaphylaxis. Today, health care providers, caregivers and patients must choose between two types of medical devices, auto-injectors and nasal sprays. We believe our portability, low barrier to use and fast absorption profile creates a transformational offering for the allergy community.

Following our equity raise and strategic financing agreement that we announced this past August, our prelaunch activities have accelerated and remain on track for a first quarter 2026 launch if Anaphylm receives FDA approval. Our marketing materials are ready to go and are only awaiting a final label. We are in the process of hiring our district managers and will hire sales reps upon FDA approval. Our market access team is in full swing and interacting with payers under acceptable preapproval guidelines. Our supply chain is prepared to rapidly produce material once final labeling has been provided by the FDA. And importantly, our medical affairs team is fully deployed, as you heard from my opening statements, regarding this week conference. Simply put, we are ready to go.

Now let's turn to the FDA. Given the government shutdown, we requested the FDA to provide us with a status update on the review timing of our filings. I am pleased to say that as of this last update, the FDA confirmed they are aiming for an on-time review of our application. As we reported to you in September, the FDA has informed us that we will not have an Advisory Committee meeting. However, we remain ready to provide further information if necessary to the FDA reviewers. We will keep everyone appropriately updated as we learn more and as we get closer to our action date.

As we begin looking towards 2026, there are two very important priorities in our business, one, putting together the best possible launch of Anaphylm. And two, exploiting the science behind our Adrenaverse platform. If you recall, we made the strategic choice to slow down our Adrenaverse pipeline initiatives in the first half of 2025, while we work on fully funding our launch.

Now it is time to get going. To better accomplish these goals, I announced several leadership changes earlier this week. First, to better support Anaphylm, I've asked Dr. Gary Slatko to become our interim Chief Medical Officer. Gary has the perfect blend of medical affairs expertise and deep understanding of our Anaphylm development program. Some of you may recall, Gary was previously our Chief Medical Officer from 2018 to 2023. I have also promoted Peter Boyd to Chief People Officer. This is a critical role as we expand our organization to include a full commercial team.

On the Adrenaverse side, I am very excited to announce the addition of Dr. Matthew Davis as our Chief Development Officer. Matthew and his team will be very focused in 2026 on kick-starting our R&D efforts and driving clinical proof points that show the value our Adrenaverse platform can create. While Anaphylm is transformational to the allergy community and to Aquestive, it is just the beginning of our story. Through the efforts of Matthew and his team, I am confident there are multiple significant programs yet to come.

The first of these programs is our AQST-108 development program for the treatment of alopecia areata. We have completed the pre-IND meeting process with the FDA and we'll be submitting our IND shortly. We expect to be in the clinic with our next study, a safety study in men starting in January, and expect this study to complete rapidly. With the funding just received by the company, we will look to advance our progress on this front.

Our international efforts for Anaphylm as well continue to gather steam. We had a positive interaction with Health Canada in the third quarter and are excited to share that no further studies are required for filing our application. We anticipate filing in Canada in the first half of 2026. We have also continued our interactions with the European Medicines Agency, or EMA, and expect to have full feedback regarding the application process by early in the first quarter of 2026. We will continue to advance our regulatory interactions as we work towards the appropriate partnerships in these territories.

Our base business continues to be an important provider of cash flow and capabilities and we expect this to continue in 2026. We continue to see stable demand from Indivior, our largest base customer. We have also seen significant growth in our South American partnership focused on the Brazilian market. Our manufacturing team is prepared to take a leading role in supply of Anaphylm to our commercial team and eventually around the world.

Finally, from a financing perspective, we are now well positioned to fully fund our business through the commercial launch of Anaphylm, if approved by the FDA. As Ernie will discuss with you in a moment, one of the last pieces to the puzzle in locking in our finances is refinancing our existing debt. We are well on our way with this effort. And as of today, I expect this to close before the end of the year.

So to summarize, as we look forward, you should expect the following. We will be ready to launch in the first quarter if Anaphylm is approved on time by the FDA. We will begin to make rapid progress on our broader Adrenaverse platform and advance our pipeline. We will continue to actively progress our regulatory applications for Anaphylm outside the US. And our base business along with our financing from August have us financially well positioned for 2026 and beyond.

Now I will turn the call over to Ernie.

Thank you, Dan, and good morning, everyone. By now, you 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 third quarter 2025 results into Q&A.

During the third quarter, we continued to execute on our strategy to support the continued development of Anaphylm, our lead epinephrine product candidate that has no needle, is not a device, is orally administered and is easy to carry. This includes the completion of the pediatric trial and supporting pre-approval launch activities for Anaphylm to increase awareness among physicians, payers and the advocacy community as we approach the PDUFA action date scheduled for January 31, 2026.

To support the Anaphylm launch, we completed two financings during the third quarter. First, we completed an equity raise for $85 million, led by RTW Investments and included participation from Samsara BioCapital, EcoR1 Capital, Perceptive Advisors, Sio Capital Management, Capital Management and Nantahala Capital.

Secondly, we completed a commercial launch financing of $75 million with RTW Investments that is subject to FDA approval of Anaphylm and satisfaction of certain refinancing and other customary conditions related to the company's existing debt. Under the terms of the agreement, RTW will receive a tiered single-digit percentage of annual net sales of Anaphylm in the US for the treatment of type one allergic reactions including anaphylaxis, subject to a stated cap.

These two financings provide critical capital that will support the company through 2027, enabling us to successfully bring Anaphylm to market if approved by the FDA and delivering new treatment option for patients in need. As required by the commercial launch financing, we are pursuing a refinancing of our existing debt. We have found the debt capital markets to be robust for our financing and hope to be in a position to announce a new debt partner in the near future.

Aquestive's manufacturing business remains steady with a gradual decline of our licensee products, Suboxone, which accounts for the substantial part of our current operating revenue, being offset by growth across newer collaborations, including for the licensed products Ondif and Sympazan. In addition, the company being a US-based manufacturer with intellectual property domiciled in the US has a supply chain, which currently remains largely 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 third quarter results. Excluding the impact of onetime recognition of deferred revenue in the third quarter of 2024, total revenues increased by $0.5 million or 4% year-over-year to $12.8 million in the third quarter of 2025. As a reminder, the onetime recognition of deferred revenue in the prior year was due to the termination of a licensing and supply agreement.

Including the deferred revenue recognized in the prior year, total revenues decreased to $12.8 million in the third quarter 2025 from $13.5 million in the third quarter of 2024. Manufacturer and supply revenue increased to $11.5 million in the third quarter of 2025 from $10.7 million in the third quarter 2024, primarily due to increases in Sympazan and Suboxone revenues.

Total revenues decreased to $31.5 million for the nine months ended September 30, 2025, from $45.7 million for the nine months ended September 30, 2024, due to onetime recognition of deferred revenue in the prior year. Excluding this onetime recognition of deferred revenue, total revenues decreased by $2.6 million or 8% year-over-year. Manufacturer and supply revenue decreased to $28.2 million for the nine months ended September 30, 2025, from $29.3 million for the nine months ended September 30, 2024, primarily due to decreases in Suboxone revenues, partially offset by increases in Ondif revenues. Research and development expenses decreased to $4.5 million in the third quarter of 2025 from $5.3 million in the third quarter of 2024. The decrease in research and development expenses was primarily due to lower clinical trial costs associated with the Anaphylm program, partially offset by increases in share-based compensation.

Research and development expenses decreased to $14 million for the nine months ended September 30, 2025, from $15.4 million for the nine months ended September 30, 2024. The decrease in research and development expenses was primarily due to a decrease in clinical trial costs associated with the Anaphylm program, partially offset by increases in share-based compensation, increases in product research expenses and increases in personnel costs.

Selling, general and administrative expenses increased to $15.3 million in the third quarter of 2025 from $12.1 million in the third quarter of 2024. The increase primarily represents higher pre-commercial spending of approximately $1.8 million, higher legal fees of approximately $1 million, higher regulatory expenses related to Anaphylm of approximately $0.6 million, higher personnel costs of approximately $0.2 million, higher share-based compensation expenses of approximately $0.2 million, partially offset by lower regulatory and licensing fees of $0.5 million and lower consulting fees of approximately $0.2 million.

Selling, general and administrative expenses increased to $47 million for the nine months ended September 30, 2025, from $34.2 million for the nine months ended September 30, 2024. The increase primarily represents higher commercial spending on prelaunch activities for Anaphylm of approximately $6 million, higher regulatory fees related to the Anaphylm PDUFA fee of approximately $4.3 million, higher personnel costs of approximately $1.1 million, higher regulatory expenses related to Anaphylm of approximately $1 million, higher share-based compensation expenses of approximately $0.7 million, higher legal fees of approximately $0.6 million and higher regulatory and licensing fees of approximately $0.6 million, partially offset by decreases in severance costs of approximately $1.1 million and lower insurance expenses of approximately $0.6 million.

Aquestive's net loss for the third quarter of 2025 was $15.4 million or $0.14 for both basic and diluted loss per share compared to the net loss in the third quarter of 2024, of $11.5 million or $0.13 for both basic and diluted loss per share. Excluding the impact of onetime recognition of deferred revenue, the net loss in the third quarter 2024 was $12.7 million. Aquestive net loss for the nine months ended September 30, 2025, was $51.9 million or $0.51 for both basic and diluted loss per share compared to the net loss for the nine months ended September 30, 2024 of $27.1 million or $0.32 for both basic and diluted loss per share. Excluding the impact of onetime recognition of deferred revenue, the net loss for the nine months ended September 30, 2024 was $38.6 million.

Non-GAAP adjusted EBITDA loss was $8.6 million in the third quarter of 2025 compared to non-GAAP adjusted EBITDA loss of $6.6 million in the third quarter of 2024. Excluding the impact of onetime recognition of deferred revenue, non-GAAP adjusted EBITDA in the third quarter 2024 was a loss of $7.8 million. Non-GAAP adjusted EBITDA loss was $35.5 million for the nine months ended September 30, 2025, compared to non-GAAP adjusted EBITDA loss of $11.9 million for the nine months ended September 30, 2024. Excluding the impact of onetime recognition of deferred revenue, non-GAAP adjusted EBITDA for the nine months ended September 30, 2024 was a loss of $23.4 million.

Cash and cash equivalents were $129.1 million as of September 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. As a reminder, our revenue guidance for 2025 no longer includes revenue for Libervant for ARS patients aged between two and five years, and our 2024 revenue included onetime nonrecurring recognition of deferred revenue related to termination of certain licensing and supply agreements.

Our non-GAAP adjusted EBITDA loss guidance for 2025 include significant preapproval launch spending for Anaphylm, costs associated with the submission of the Anaphylm NDA and related filing fee, completion of the Anaphylm pediatric clinical trial and costs associated with the preparation for the potential Advisory Committee meeting that is no longer 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.

(Operator Instructions)

David Amsellem, Piper Sandler.

Just a couple for me. First, any new comments on your competitors' citizens petition and how that may or may not impact the timing of the FDA decision? And also, have you responded to the citizens petition? Just kind of latest thoughts there.

And then secondly, I wanted to ask you about pricing and access just given whatever learnings you might have had from the experience of your competitor in its launch. How are you thinking about pricing relative to the nasal spray and the generic EpiPen? And also how does that play into your strategy on access? Yes.

David, so let me start in more general place and then I will come to your specific question. We're sitting here today with the team here in Orlando, Florida, the college, the ACAAI conference. What's exciting is everything is coming together. So if you look at the pieces and the parts of what we're trying to accomplish, what you're seeing today is how they're starting to intertwine. So the FDA review is in good shape. We'll talk about that in a minute with your comment.

Our financing is in place. The market grew by almost 9% last quarter. We've expanded our patent coverage. We're bringing in the right team. And our prelaunch activities, as I'm sure you'll hear from Sherry throughout the Q&A, are in great shape. So we're incredibly excited with where we are right now.

Now so let's turn then -- let's take that excitement and let's turn it to the CP that our competitor put into the FDA, which you asked about. So think about -- and David, I don't know if you read all 16 pages of that document. But think about what it took to create that document. A very expensive DC-based law firm was hired. That law firm had to write the document, put it together, review it with the organization and then finalize it and send it to the FDA. And I will tell you that was a significant -- my belief is that was a significant amount of resources by our competitor, by the law firm and probably a big bill.

So companies only do that if there's a reason to do it. I don't think they did it because they felt a civic duty to do it. I think they did it in my personal opinion because they're worried. Because they're worried about what we're bringing to the market and what it does to them. Now why should they worry? What can I focus on to say they should be worried?

If you look in the supplemental materials that we put out, you'll see that our latest survey work, and I'm sure they're doing their own survey work, shows that when you send a mockup, a nonpromotional version of the nasal spray and the film to a person who's familiar with this space and ask them what product they would prefer, in our survey, which was 35 individuals, 33 of them said they would prefer the film. One of them said they would prefer the nasal spray and one said that they were indifferent to whether it was the nasal spray or the film. So when I look at that and I look at why that CP was put in, that makes sense to me.

Now in terms of the content of the CP, we have taken the time -- it was definitely a kitchen sink approach so we have taken the time to unwind all of it and look at it. And in terms of our review of what they have put forward, it is factually incorrect in a variety of places and misinformed. We think that hurts the credibility with the FDA. And from our perspective, we've seen zero impact to our review and expect zero impact.

So now let me turn to your second question, which was on pricing and access, and I'll hand that over to Sherry.

David, thank you for the question. While we have not disclosed our WAC price, we do believe there is significant value in our innovation. As you know, the branded epinephrine market has been set by the currently available product. So with that being said, we understand the challenges, and we plan to price responsibly with a patient-first approach to our pricing. We have and we're continuing to explore a lot of options to ensure that there is broad access, which includes cash pay, co-pay savings program. And we're actively working with the payers for coverage.

So we do plan to have a range of options for patients to be able to access Anaphylm. But as you know, the path to a patient having an Anaphylm or any product in hand takes a lot of work. And so access and patient support is critical. We have been spending our time and our resources with payers engaging in preapproval information exchange with our clinical team and the clinical teams of payers. We have what we believe is a very strong value prop and our strategy is beneficial to patients. So we will continue to -- we'll come back to you at the right time with what will set pricing. But I think that you can certainly look around us to get an idea.

Kristen Kluska, Cantor Fitzgerald.

This is Rick Miller on for Kristen. We'll have one here and then a follow-up on potential partnerships ex US, you're moving forward with these regulatory interactions. So how do you think about the optimal timing from a value perspective as to when to partner out ex US? And maybe give a sense of what those potential partner conversations have been like at this stage? And then we'll have another follow-up.

Sure. So obviously, we see Anaphylm as being a global product. We think it can be broadly distributed across a variety of markets. And so we've started that work now to go into the major markets outside the US. Clearly, EMA, Canada, the UK, Japan, those are the key places from a value perspective, but obviously, even broader across the world, the need is real. In terms of -- and we have also publicly stated, just to remind everyone, that we're not interested in having an international footprint of our own so we will license outside of the US.

In terms of when the right time is to partner, those conversations are always ongoing. Clearly, the closer you are to an approval, the more valuable the product and the partnership can be. So from my perspective, we need to get farther along with our regulatory interactions. In Canada, we'll have a filing, we believe, in the first half. In Europe, we'll know shortly if there's any work to do in addition to what we've done to be prepared for our filing and then we'll move on to a filing. So I think as we move towards those steps, that's a good inflection point for the conversations that are already active to get to something that is meaningful and real for the organization.

And maybe then you mentioned being at the conference right now. What are some of the takeaways you're hearing around the conference, especially around your medical affairs booth as it relates to excitement for new potential additional needless epinephrine options?

Sure, sure. Well, I have to say that the main part of the conference is ahead of us. So the medical booth and the exhibition hall and all of those things starts tomorrow. So we're all here getting ready and excited about it tonight. We'll actually have a bunch of our investigators together to talk about our program and what they're excited about.

I will tell you that as I walk the halls with people who are getting ready for the conference here, one, the amount of comments that are around the excitement of our product coming is palpable. And two, the desire to know and learn more is real. So to me, those are two really good signs that we've hit a need that is meaningful, and we'll obviously be continuing those conversations throughout the weekend.

Raghuram Selvaraju, H.C. Wainwright & Co.

Firstly, with respect to the Anaphylm outlook, I was wondering if you could, a, perhaps give us a sense of how you are thinking about the parameters you anticipate sharing with the investment community as and when Anaphylm gets to the market and what specific takeaways you are planning to get from the neffy commercial introduction, in particular with respect to factors that might educate how you position Anaphylm in the market upon launch. And also if you could comment on the MSN pricing situation and how this affects your approach to thinking about pricing in ex US markets.

Yes. Ram, so I'll take a few of those pieces. And in terms of the positioning in particular, I'll hand it over to Sherry in a minute. So in terms of when we plan to come to market. So our PDUFA date is January 31. Our guidance remains the same that we believe we'll be able to launch in the first quarter, so by launch, we mean have sales reps trained and in place and have our supply chain providing product to distributors for fulfillment of prescriptions.

In terms of -- let me actually go to the last piece first, the most favored nation pricing, we are following that closely. Right now, we don't see any impact on our ex US potential partnerships and how that would affect pricing here in the US. But obviously, we'll be keeping an eye on that. And as legislation or executive orders evolve, we'll make sure that our -- we're at the right stage where we can make sure we protect the US market from any of those issues that pop up.

So in terms of positioning, before I hand it over to Sherry, just a couple of global comments from me. One, we are clearly different from the medical devices that are in the market. And I'm sure Sherry will say way better than I will why we believe that so firmly. Two, when I look at the market and what happened in Q3, and it follows Q2 and Q1, this market is growing. And it's actually growing in the auto-injector space. 95% of the scripts are auto-injectors. So that is the focus. That is the spot where the market is for us to go grab, and that's where our energy will be. But I'll let Sherry talk about how we're positioned.

Yes. Thanks so much, Ram, and thanks for the question. As we think about our launch, we are taking a differentiated, focused, patient-centric approach along with a very disciplined commercial strategy. And then that puts us on track for a highly successful launch. What we know is that patients want choice. They have not had choice for decades. And so when we speak to -- when we're doing our market research, and Dan alluded to it earlier in the call, we find that the allergy community, whether it is patients, caregivers, advocacy organizations and the HCPs, they all continue to be very positive.

And why is that? Well, patients went choice, as I said. And mothers, who are the Chief Medical Officers of the home, as you know, are telling us that because Anaphylm is the easiest to carry, it's the easiest to use and it's fast acting, that Anaphylm is a great choice. And so for the millions of people that are at risk for anaphylaxis who may have avoided epinephrine, did the device and bulk and needle anxiety, the fact that Anaphylm is not a device, that form factor is so critically important, and it really removes the final barrier to people caring and having epinephrine on hand at all times.

The guidelines recommend always have two forms of epinephrine. So always carry two auto-injectors or carry two nasal devices. And so what Anaphylm does is it removes that barrier because, as you know and you've seen, it fits right in the back of your phone or in a small wallet. I think the other thing really to keep in mind that is critically important, and we continue to hear this in our market research and engagement with physicians is Anaphylm's exceptional stability profile means that Anaphylm can perform across diverse real-world conditions.

So I think there's a lot of differentiation between, we believe, and patients, caregivers and HCPs are out telling us between Anaphylm versus the devices. And we continue to -- we'll be driving that message as we launch in Q1.

Very helpful. And just very quickly on the Adrenaverse platform. I was wondering if you could comment on what the alternative routes of administration and formulations are starting to look like beyond AQST-108, if there are other topical gels or if you're looking at deploying the Adrenaverse platform via alternative routes of administration beyond the topical arena? And then lastly, just very quickly for Ernie. I was wondering, if you look at the debt refinancing initiatives, what you are prioritizing most, is it the longest possible maturity date? Or is it the lowest possible coupon? Just give us a sense of what you're looking to accomplish there.

Why don't I have Ernie take the second part and then I'll address AdrenaVerse.

Ram, so what we're looking for most of all, besides the things that you talked about, we're always looking for a coupon and the lowest interest rate and the flexibility, is really finding a partner that we can grow with as the company grows and someone that we feel we can work with as we move forward to grow the company.

And we've been very fortunate as we've gone through this process. The number of lenders, potential lenders that we've spoken to that have wanted to partner with us and to meet those qualifications. So we feel we're in a good place. And as I said in my script, we hope to be able to announce that new debt partner in the very near future.

And to take the other question, Ram, which thank you. I appreciate you pointing that out. So the sky is the limit right now in terms of the types of delivery systems we use with our Adrenaverse platform. Now that we have -- and we've created the Chief Development Officer role, and we have someone focused on our pipeline who has the depth of experience that Matthew Davis has, we'll, of course, continue the cream gel foam work that we're doing. But there are indications that could be envisioned in a variety of different routes of administration including film, capsules, potentially even if it was something that required it, injectables are available. So we're not limiting ourselves to the route of delivery. We're much more focused on as we have been with Anaphylm, what is right for the patient for the solution we're trying to bring.

Andreas Argyrides, Oppenheimer & Co.

We'll go with a couple from us, not just the one that you guys suggested. So how are the current launch dynamics with neffy informing your initial commercialization strategy? Particularly, what are some of the tools you can use to create awareness? Are you considering DTC? And then in your dialogue with the FDA, can you remind us what components of the data they are focused on and key considerations for approval? And then lastly, given the product profile, how should we think of scripts per patient per year? Is it multipack? I'll stop there.

Sure, Andreas. And I'll have to find out the question that we recommended to you. I'm kind of curious to know what that was. But having said that --

It was limiting -- Dan, it was limiting you to one question per analyst.

Got you. I thought we were giving you questions. How about that. That was news to me. I think that was more trying to manage the time. But Andreas, of course, happy to answer your questions and spend time with you. So let me take a couple of those. In terms of awareness, I will hand that over to Sherry in a minute here.

In terms of where the FDA has been focused, it has -- and just to remind everyone, we have six FDA approvals in our past. So when you go through the FDA approval process, there's a cadence, there's a pace, there's a feel. And you look for the questions to come from a variety of areas. And that's what we're seeing here that the different functions in the FDA are doing their jobs, completing their checklists and asking us the questions you would expect. So that feels really good.

In terms of DTC, when I hear DTC, I will admit I default to big television ads like the World Series or the Super Bowl and splashy campaigns. Sherry and I are very aligned. We're not doing that in 2026. Now in 2027, 2028, who knows? But before I hand it over to Sherry, that stuff, you won't see. And that's where we'll be very efficient. But let me have Sherry tell you more about her thoughts on awareness.

And thanks for the question. One of the benefits of being second is that you get to see what those ahead of you went through. And so our teams continue to systematically assess and gather insights from the most recent launch to inform our commercialization plans. But I'm going to go back to -- and I'm going to keep coming back to our plan is very differentiated in that we are going to be very focused, very disciplined and have a patient-centric launch.

And so while our competitors may have gone out with be very broad in all of their sales and marketing tactics, we're applying this very disciplined approach to focus on and drive adoption among the most productive prescribers at launch. And as I said a lot of times, the epinephrine market is an inch deep and about 10,000 miles wide. Prescribers range from primary care physicians who write one to two prescriptions annually to allergists who prescribe 200-plus prescriptions of epinephrine per year.

And so the allergists are the most productive segment, and so we are taking a very disciplined approach with the allergists to launch. And so what you'll find is we will -- as we drive our results, as we -- our market access and payer coverage comes on board, we will have the ability to scale. And so that is a different approach that we're employing.

As it relates to DTC, Dan and I always -- we do laugh about this, what is DTC? At the end of the day, we're applying that same disciplined approach to DTC. Our prelaunch plans and activities have been focused on HCP. Dan mentioned the CME activities. We've also been driving non-CME programs, publications, congresses, being with the community KOLs and state level allergy associations and congresses.

Our plan post launch is to drive awareness, number one, and most importantly, with those allergists and to get them ready to prescribe as they see the patients that come in who are patients who will benefit from Anaphylm. That's very important. Over time, we will layer in then that strong consumer and caregiver awareness. But there is a disciplined, timed approach to it. So you will see DTC from us, not necessarily TV in year one, but there will be a number of activities, digital, print, et cetera, that are aimed at the consumer.

And Andreas, I'll take a question one part D. So in terms of the number of scripts, rather than -- so the way we look at it, there is a desire among this patient population to have multiple scripts because they want to have product put in different places, at grandma's house, in their child bag, at the nurse's office, in their bag or on the back of their phone. And so there's a reality around pricing and market access that all of us, not just Aquestive, but all of us have to work through. But our goal is to enable people to have as many scripts as possible.

Francois Brisebois, LifeSci Capital.

So just a couple. Can you -- Sherry, you kind of talked about a more targeted approach. Can you break down a little bit more on the allergist front? And just how many are there? And are they tiered in terms of like certain allergists are definitely the ones to target at first? And then can you touch on how many reps could help you get to that point?

Yes. It's a good question. Thanks so much for answering that. As I mentioned, the allergists are the most productive segment. They prescribe on average 200 prescriptions annually. That's a lot of prescriptions. So our reps will be focused in the allergy space to call on all of the allergists. Now obviously, within that allergist pool, there are some prescribers that are more productive than others.

But overall, we know that by -- and based on my experience, as you probably know, I ran the EpiPen brand team for a number of years where we grew the market from about 1.5 million scripts to 3 million scripts. And so what we know is and what I know is that allergists space is key. When you think about the prescriber base, that prescriber base of about 5,000, we would expect to launch with the sales force, as we've said publicly before, between that 50 to 60 reps and managers.

Okay. Great. And then maybe, Dan, you touched on the growth of the market. I think that's coming up a lot. A lot of people are interested in whether or not this market, just you're taking share of it or you're growing the whole thing. Can you help us understand where the 9% you mentioned come from?

Yes. Yes, Frank. So to give a little bit more precise when we just look at the script data that's in the systems we can access, 8.8% growth in Q3, 7.5% growth year-to-date in the space. When you break that down into where the growth is coming from, by far, the larger number of script growth is in auto-injectors. So I think what you're seeing is as awareness is pulled into the space, that just grows -- it's the rising tide raises all boats is our interpretation of what we're seeing.

The second biggest category, of course, is the nasal spray scripts. So we do think that you're seeing the two elements play out. One is the switch over from one product to another, and two is just the expansion of the overall market. So we think that's a very healthy place to be. 95% of scripts remain auto-injectors, and that's what we'll target.

Jason Butler, Citizens.

First one, when you speak to physicians, when you do your market research, aside from the advantages of the administration route and convenience of administration, what are the aspects the physicians -- product profile the physicians are really focusing on? To what extent is it PK profile versus safety tolerability versus anything else? And then just another question on your comments about the Adrenaverse platform. Does part of this effort involves applying the prodrug technology to any other molecules beyond epinephrine?

Yes. Jason, so I'll give my initial thought, but I'll ask Dr. Gary Slatko, to give his view on what will be most important from physicians from an efficacy or safety profile perspective. So what I've seen is that you have a product with EpiPen that's been in the market for 45 years, right? So the HCPs want to make sure that the product we're bringing to market has the same ability to help patients that the product that's been out there for 45 years has done. And I think we have a really compelling package that does that.

And I'll let Gary add his thoughts.

Yes. I think many of the products in the epinephrine class are intended to stabilize the cardiovascular system in the event of anaphylaxis and reverse the mast cell degranulation that's occurring that's underlying the allergic reaction. And the characteristics we've seen in terms of blood levels and pharmacodynamic effects are very similar across the board to the comparator products. Anaphylm has a couple of interesting characteristics that might translate into clinical benefit, but would need further studies such as its speed of increase in its blood level and early time to maximum concentration and its sustained effect as well are both could bode well for having a treatment benefit in patients who need an early robust intervention.

I think the other thing that -- the question that clinicians might have it has to do with can it be administered -- can it be administered and is it safe? And administration, we have a very robust human factors program, which has looked at everything which way about different conditions of administration, self-administration and the like. And all of them have shown that this product can be administered in the field by patients successfully. And the safety profile, as with all epinephrines, is consistent with what we see with all the existing product. So I think we've got a very comparable profile overall and some interesting potential advantages.

Yes. And let me move on to the second question, Jason, you had, which was around Adrenaverse. So look, just prodrugs is not that unique in our space. So I don't know -- our intellectual property estate really is around epinephrine in a prodrug form because that's the white space we found and created. So I think in the near term, you'll see us focus on solely epinephrine.

But with the significant resources and expertise we're bringing into our development area, we, of course, are always looking at what other technologies or expansion in technologies can we meaningfully use to bring better products to the patients.

(Operator Instructions)

Gary Nachman, Raymond James.

This is Denis Reznik on for Gary Nachman. So you recently announced two new patents for Anaphylm. Can you just talk more about them and how important these two specifically are for the overall patent portfolio? And then on supply chain, assuming an on-time approval, how quickly could you get drug into channel? And then how quickly can you get the first prescription filled?

And then if I could just squeeze in one more. Regarding the uncertainty at the FDA that we've been hearing about recently, can you just mention if there's been any high-level individuals that are involved in your review that have been either replaced or have moved on?

Sure. Thanks, Dennis. So in terms of the patents, yes, we had two new patents issued just over a month ago. And both of those patents are focused on the ability to gain absorption and then rapid release of epinephrine cleavage of -- enzymatic cleavage of epinephrine back into its native form. So we believe those are significant Orange Book listable patents. When we're approved, that will be very expansive and blocking for the product. So definitely fundamental to our position.

From a supply chain perspective, look, there's a little bit of work that has to happen, right, when you get approval. So you have to work on the final label, get all the pieces and parts together. We have a great supply chain component of our business. It does go to the core of where we've come from as an organization. I think you know we manufacture in-house. So that will be something we're very ready for and will allow us to have supply in the channel in Q1.

And then the third question, the uncertainty at the FDA, I'm actually -- thank you, Dennis, for bringing it up. I'm actually, I guess, pleasantly surprised that we got this far into the Q&A before that question came up. Clearly, the FDA is going through some pains. From our perspective, our review group has remained the same. We did -- as you heard in my prepared comments at the beginning, we've heard from our project manager that our application is not affected.

Obviously, we saw the Head of CDER left over the weekend. But from our perspective, the leadership at CDER is more of just a sign-off on our application than an active reviewer. So we continue to believe we're in good shape on that front.

(Operator Instructions)

James Molloy, Alliance Global Partners.

Let me follow up a little more on the manufacturing capacity. What do you guys -- at the capacity on approval, can you guys supply the whole market on approval? And where do you guys -- where is Anaphylm manufactured? And then I don't know if you guys have given any -- on the Anaphylm, what's the pushback that you've gotten from docs on Anaphylm? Because seems like the feedback is very positive to date.

Sure. So I think I heard your first question, right, Jim. Good to hear you voice. Manufactured capacity and where is it manufactured? Capacity-wise, so we, this year, will make 150 million doses of film for all of our other partnerships and arrangements. So when you look at the entire epinephrine market being less than 10 million doses, that means we have plenty of space to make this product. In terms of where it's manufactured, our manufacturing is in Indiana. We do have some component manufacturers that go into our products that are all US-based. So we are a completely US-based manufacturer.

And from Anaphylm, I think your question was what are we hearing from physicians that may be a little bit of pushback or need to be convinced. And I would go back to what Gary said before. With any new product, the first thing you need physicians to feel comfortable with is the safety and efficacy of the product. So that's foundational. We understand that. You heard the depth that Gary brought to how he thinks about it. That's what our medical affairs team is doing every day. And we're prepared to make sure we do a really good job with that piece.

Great. And then maybe just a quick follow-up on 108. Can you talk a little bit on Phase II time you said first half '26 and then sort of the size and the duration of that trial should it get started?

Yes, yes. And thank you. I love when I get questions on AQST-108, which is our alopecia areata program. And I look forward in future calls having Matthew Davis here to talk in depth about it. But I felt on day four, it was probably unfair for me to have him here. So we -- the first study we'll do is a small safety study, which is in just a handful of men who are bald just to make sure we have the safety data we need to fulfill the FDA's requirements. We will then quickly go into our Phase IIa.

Right now, our design is to have it be a 24-week study. We will have data along the way. And that study will look at hair follicle growth over different periods of time. In terms of the size, we're still scoping that out. But I would think of it as somewhere between 40 and 60 individuals.

Thank you. And I would now like to hand the conference back over to Dan Barber for closing remarks.

Thanks, Michelle. And thank you again to everyone for joining us this morning. We really enjoyed the robust interaction from all the Q&A. And as I said earlier in the call, this is a really exciting time where we really feel everything coming together for the company. We have the right financing, the right people and the positive FDA interactions as of today to remain excited about not just our near-term prospects but our long-term prospects. We look forward to interacting with you again in the near future. And with that, we hope you have a wonderful day.

This concludes today's conference call. Thank you for participating. You may now disconnect.