Eton Pharmaceuticals (NASDAQ:ETON) reported fourth quarter 2025 product revenue of $21.3 million, an 83% increase from $11.6 million in the prior-year period, as the company highlighted continued growth in its base business, contributions from recent product relaunches, and the early rollout of its newly approved therapy DESMODA.
Fourth quarter performance and profitability trends
Management said fourth quarter revenue was driven by increased sales of Alkindi Sprinkle and the addition of revenue from Increlex, Galzin, and KHINDIVI. CFO James Gruber noted that, excluding a prior-quarter contribution from Increlex outside the U.S. tied to a licensing transition, U.S. product sales grew 8% sequentially in the fourth quarter versus the third quarter.
Eton posted GAAP net income of $1.5 million for the quarter, compared with a GAAP net loss of $0.6 million in the year-ago period. On a non-GAAP basis, net income was $5.4 million versus $0.7 million a year earlier. Adjusted EBITDA was $6.2 million, or 29% of revenue, up from $2.1 million, or 18%, in the prior-year quarter.
Operating cash flow swung to an $11.6 million outflow in Q4 from a $12.0 million inflow in the prior quarter. Gruber said the quarter included $12.4 million in Medicaid rebate payments (covering multiple quarters of Increlex rebates), $3.5 million of FDA program fees, and $1.4 million of inventory payments linked to a one-time transition of ex-U.S. Increlex distribution in Europe. Eton ended the quarter with $25.9 million in cash.
DESMODA approval and launch: early traction and adult pilot
CEO Sean Brynjelsen emphasized the late-February FDA approval and commercial launch of DESMODA, an oral liquid formulation of desmopressin for central diabetes insipidus. He said dosing is patient-specific and historically required workarounds such as tablet splitting or crushing due to a lack of accurate low-dose options, positioning DESMODA as a precision, consistent, and convenient alternative.
According to Brynjelsen, Eton launched DESMODA within two weeks of approval using its established pediatric endocrinology rare disease sales team, and he described early demand and institutional engagement as “incredibly encouraging,” including outreach from institutions that were previously unreceptive to sales visits. He also highlighted that DESMODA received a label with no age restriction, including adults. Management estimated the addressable market includes 3,000–4,000 children and 9,000–10,000 adults in the U.S. living with central diabetes insipidus.
While Eton’s historical $30 million to $50 million peak sales forecast was based only on the pediatric population, Brynjelsen said the adult opportunity could be incremental for patients who have difficulty swallowing tablets, need precise titration, or prefer a liquid option. The company said it is launching a 90-day pilot to target high-prescribing adult endocrinologists and will decide whether to expand commercial efforts based on traction.
On the call, Chief Commercial Officer Ipek Erdogan-Trinkaus said the company’s pediatric endocrinology relationships are already aligned with DESMODA’s prescriber base, and she said Eton added more than 3,000 new targets in the adult endocrinology space at launch. Brynjelsen also said the company expects to net an average of about $80,000 per patient per year, though dosing varies, and he reaffirmed the $30 million to $50 million peak sales guidance. Management added that DESMODA is supported by multiple patents extending to 2044.
Portfolio updates: Increlex, adrenal insufficiency franchise, and Galzin
Eton described continued momentum for Increlex following its acquisition in December 2024 and relaunch in January 2025. Brynjelsen said the product had 67 patients on therapy at acquisition and now has “over 100” patients on treatment, with a goal of reaching 120 by year-end. He also said the company has reduced the average age at which patients start therapy and has seen a decline in patient age-outs and closures compared with earlier levels referenced in the fourth quarter of 2025.
Management outlined a potential U.S. label harmonization effort for Increlex, noting that U.S. label criteria are defined as IGF-I levels more than three standard deviations below the median, compared with two standard deviations below the median in Europe. Brynjelsen said a December FDA meeting was viewed positively, and Eton submitted a final proposed study protocol in February. The company expects FDA feedback later in the month, with a first patient dose anticipated in the third quarter of the year if cleared. The planned open-label study would enroll about 30 patients and track them for five years or until full adult height, with a primary endpoint focused on change in annual height velocity at month 12 versus pretreatment. Management estimated the study cost at about $1 million per year and said compelling interim data could support discussions with the FDA after a couple of years.
In adrenal insufficiency, management said Alkindi Sprinkle delivered its strongest year yet in 2025 in terms of patients on therapy and new referrals. Eton also discussed KHINDIVI, which it described as the first and only FDA-approved oral solution of hydrocortisone, developed for patients who prefer a liquid option or have an aversion to Alkindi’s granules. For the combined franchise, management said the target market is about 5,000 U.S. children under eight, with Eton estimating it has captured around 12% so far. The company reiterated confidence in peak annual sales of at least $50 million for the franchise, which it said would require roughly 20% market share.
Eton also provided an update on efforts to expand KHINDIVI’s label. Brynjelsen said KHINDIVI is approved for patients five and older, but that the largest unmet need is in children under five. He said Eton developed a new formulation with substantially lower levels of excipients, met with the FDA in the fourth quarter, and was asked to run a bioequivalence study before submitting a supplement to the existing NDA. Eton dosed the first patient in that bioequivalence study last week and expects to submit the supplement when the final study report is available, currently expected in the third quarter. Management said the FDA indicated the submission would receive a 10-month review, aligned with a potential launch by mid-2027.
For Galzin, Brynjelsen said the product exceeded internal expectations following its March 2025 relaunch, helped by investments in physician education, patient awareness, and access support through Eton Cares. He said Eton reached 300 active patients on Galzin about one year after launch and estimated at least 800 Wilson’s disease patients in the U.S. are on zinc therapy (potentially over 1,000), with most still using non-FDA-approved zinc products. Erdogan-Trinkaus said she believes Eton could capture about half of the remaining OTC-treated population within the timeframe discussed, citing established relationships at Wilson’s centers of excellence and collaboration with the Wilson Disease Association.
HEMANGEOL acquisition and May relaunch plan
Eton also discussed its acquisition of HEMANGEOL, the only FDA-approved treatment for infantile hemangiomas requiring systemic therapy. Management said an estimated 5,000–10,000 infants are treated with HEMANGEOL annually in the U.S. Brynjelsen said Eton paid $14 million for the asset entirely with cash on hand, avoiding dilution and incremental debt, and said the company is preparing for a May 1 relaunch.
Management outlined several operational and commercial changes intended to improve economics and access. A key focus is shifting HEMANGEOL away from a traditional pharmaceutical distribution model—using large national wholesalers, open pharmacy distribution, and significant payer rebating—to Eton’s rare disease-focused model to reduce costs, improve the patient and provider experience, and reduce gross-to-net deductions. Eton also said it will implement its Eton Cares patient support program, including a zero commercial copay, versus “most patients” currently paying $55 per month.
HEMANGEOL also creates a new commercial call point for Eton in pediatric dermatology, with management estimating roughly 400 pediatric dermatologists and a smaller number of specialized pediatric hematology-oncology physicians involved in care. Eton said it is hiring seven commercial employees who previously supported HEMANGEOL for the seller, with a start date of April 1. In response to an analyst question about growth assumptions, Brynjelsen said Eton expects to increase the number of patients on therapy through lower copays, increased awareness efforts, and more aggressive detailing, while noting pricing decisions had not been finalized.
Guidance and updated long-term goals
For 2026, Eton guided to revenue exceeding $110 million and an adjusted EBITDA margin of at least 30%. Gruber said the company expects to generate significant operating cash flow throughout 2026 and beyond, and he noted the company will begin making debt principal payments in 2026.
Management also discussed the impact of FDA annual program fees. Gruber said Eton no longer qualified for orphan fee exemptions beginning with the October 1, 2025 assessment, and that for fiscal year 2026 the fee is $442,000 per strength for NDA products. As of the assessment date, Eton had eight unique strengths for a total annual fee of $3.5 million, with $0.9 million recorded in SG&A expense in Q4 2025. The company estimated these fees will add about $2.8 million to SG&A in 2026 versus 2025. Separately, the HEMANGEOL acquisition is expected to add about $3.5 million in annualized SG&A (about $2.5 million in partial-year 2026), while Eton said its base SG&A would otherwise have increased by less than 10% in 2026.
Brynjelsen said Eton has now reached 10 commercial products following the HEMANGEOL acquisition and expects to exceed $100 million in revenue in 2026, meeting two prior long-term targets. The company introduced new goals, including expanding to 13–14 commercial products, exiting 2027 at a $200 million revenue run rate, reaching a 50% adjusted EBITDA margin in 2028, and achieving $500 million in revenue by 2030. On the call, Brynjelsen said the $200 million run rate target is “entirely achievable” primarily based on the current portfolio, citing continued growth from Alkindi/KHINDIVI, Increlex, Galzin, and momentum from DESMODA and HEMANGEOL.
About Eton Pharmaceuticals (NASDAQ:ETON)
Eton Pharmaceuticals, Inc is a specialty pharmaceutical company focused on developing, manufacturing and commercializing generic and proprietary pharmaceutical products for patients with rare and underserved diseases. Headquartered in West Palm Beach, Florida, the company leverages its expertise in hormone therapies and complex molecules to address treatment areas where patient need is high and competition is limited. Since its founding in 2016, Eton has sought to build a diversified portfolio that combines established generic medicines with targeted branded offerings.
The company’s product lineup includes thyroid hormone replacements such as desiccated thyroid and liothyronine, as well as pyrimethamine tablets indicated for toxoplasmosis.
