Executive Summary / Key Takeaways

• Aquestive Therapeutics is strategically pivoting towards proprietary assets, leveraging its differentiated PharmFilm and Adrenaverse technologies, with Anaphylm epinephrine sublingual film as the primary near-term value driver.
• The Anaphylm NDA has been filed with the FDA, with acceptance anticipated in June 2025 and a potential action date in early 2026, positioning the company for a planned Q1 2026 launch if approved.
• Anaphylm demonstrates compelling differentiation through its non-invasive oral administration, portability, durability (low water content), and rapid onset shown in clinical studies, addressing significant unmet needs compared to existing auto-injectors and nasal sprays.
• Near-term financial performance reflects significant investment in Anaphylm pre-commercialization and R&D, alongside revenue from a streamlined base business facing Suboxone erosion and the impact of the recent regulatory setback for Libervant in the 2-5 age group.
• The company is focused on managing liquidity through existing cash, ATM facility, and exploring non-dilutive options like ex-U.S. Anaphylm out-licensing and debt refinancing to support the Anaphylm launch and operations into 2027.

Aquestive Therapeutics: A Strategic Evolution Driven by Film Technology

Aquestive Therapeutics is a pharmaceutical company undergoing a strategic evolution, transitioning from a foundation built on licensed and partnered products towards a future increasingly defined by its proprietary pipeline. At the core of this transformation is the company's innovative PharmFilm technology, a versatile platform enabling the non-invasive delivery of complex molecules via thin, dissolvable oral films. This technology is particularly relevant in therapeutic areas where traditional administration methods, such as injections or large tablets, present challenges for patients. The company's strategic focus is now firmly set on advancing a pipeline of differentiated product candidates, most notably Anaphylm for severe allergic reactions and assets derived from its Adrenaverse epinephrine prodrug platform, while simultaneously optimizing its existing revenue streams.

The competitive landscape in specialty pharmaceuticals is dynamic, characterized by established players with broad portfolios and significant market presence. In the CNS space, where Aquestive has historically operated with products like Sympazan and Libervant, companies like Jazz Pharmaceuticals (JAZZ), Alkermes (ALKS), and Teva Pharmaceutical Industries (TEVA) command larger market shares and possess extensive commercial infrastructure. Similarly, the emergency epinephrine market, traditionally dominated by auto-injectors from companies like Viatris (VTRS) (formerly Mylan (MYL)), is seeing the emergence of new non-injectable alternatives, including nasal sprays. Aquestive's strategy is to carve out a distinct position within these markets by leveraging the unique advantages of its film technology, aiming to address specific unmet patient needs that existing therapies do not fully satisfy.

The PharmFilm technology offers tangible benefits over conventional delivery methods. For orally administered drugs, it can potentially provide faster absorption compared to tablets and offer a more patient-friendly format, particularly for individuals with dysphagia or those requiring rapid onset of action. In the context of emergency medicine, as highlighted by Anaphylm, the film format enables unparalleled portability and durability. While precise, directly comparable manufacturing cost advantages across all competitor technologies are challenging to ascertain, Aquestive's in-house manufacturing capabilities in Portage, Indiana, provide operational control and potential efficiency. The company's R&D efforts, particularly within the Adrenaverse platform, are aimed at extending the application of this technology to new molecules and indications, with stated goals of developing novel, differentiated therapies like AQST-108 for alopecia areata. These technological advancements and ongoing R&D are foundational to Aquestive's competitive moat, offering a basis for potential market share gains and contributing to its long-term growth strategy by creating a pipeline of future product candidates.

Anaphylm: The Near-Term Catalyst

The most significant near-term catalyst for Aquestive is Anaphylm, the company's epinephrine sublingual film product candidate for the emergency treatment of severe allergic reactions, including anaphylaxis. Anaphylm represents a potential paradigm shift in this critical market, offering a non-invasive, needle-free, and device-free alternative to current standards of care like epinephrine auto-injectors and recently approved nasal sprays.

The Anaphylm development program has progressed steadily, supported by a robust clinical data package. Pivotal Phase 3 studies demonstrated PK biocomparability to intramuscular injection and auto-injectors, meeting the primary endpoint, and also met secondary endpoints evaluating PK sustainability following repeat dosing, safety, and tolerability. Supportive studies further highlighted key differentiators: the temperature/pH study showed no statistically significant difference in PK/PD results despite variability in mouth conditions, and the self-administration study indicated rapid absorption with a median Tmax of 15 minutes for both self-administered and HCP-administered film, compared to 50 minutes for IM injection. Crucially, the oral allergy syndrome (OASIS) challenge study demonstrated that Anaphylm's PK/PD profile remained consistent even in the presence of allergen-induced oral physiological changes and showed rapid symptom resolution, beginning as early as 2 minutes post-administration, with median full symptom resolution at 12 minutes compared to 74 minutes at baseline without Anaphylm.

A key technological advantage highlighted by the company is Anaphylm's durability. With only an estimated 2% water content compared to approximately 98% for EpiPen, Anaphylm has the potential for enhanced stability across a broad spectrum of real-world temperature and environmental conditions, addressing a significant limitation of existing liquid formulations. This durability, combined with its small size and flexibility allowing it to be carried easily on the back of a phone or in a wallet, directly addresses the critical unmet need for improved carry rates among patients at risk of anaphylaxis. Physician survey data supports this differentiation, with almost 100% of surveyed HCPs believing their patients would be interested in Anaphylm, and a significant majority indicating they would prescribe a film option, expecting prescriptions to increase.

The regulatory path for Anaphylm is well-defined. Following positive pre-NDA feedback from the FDA in November 2024, which did not indicate the need for additional adult clinical trials for submission, the company completed the NDA filing in the first quarter of 2025. FDA acceptance of the NDA is anticipated in June 2025, with an assigned action date expected in late January or early February 2026. While the FDA noted that an advisory committee meeting may be necessary due to the novel route of administration, the company is actively preparing for this possibility. Pre-commercialization efforts are ramping up, focusing on building the commercial team, increasing awareness among healthcare professionals and advocacy groups through conferences and publications, and engaging with payers, leveraging existing contracts established during the Libervant launch. The planned launch in Q1 2026, if approved, is strategically timed ahead of the typical spring allergy season peak.

Libervant and AQST-108: Navigating Challenges and Building Future Potential

Beyond Anaphylm, Aquestive's proprietary pipeline includes Libervant diazepam Buccal Film for the acute treatment of seizure clusters and AQST-108, an epinephrine topical gel from the Adrenaverse platform.

Libervant received FDA approval in April 2024 for patients aged two to five years, marking it as the first and only orally administered rescue product for this specific pediatric age group. The company initiated a launch for this population, establishing national retail distribution and building a dedicated sales team. Initial payer engagement efforts were successful, securing Medicaid coverage in all 50 states and agreements with two of the top three PBMs. However, this progress was significantly impacted by a federal court ruling in February 2025, stemming from a lawsuit filed by Neurelis (developer of Valtoco nasal spray), which vacated the FDA's approval for the 2-5 age group. As a result, the FDA converted the approval to tentative status, and Aquestive has ceased marketing activities for this population while pursuing an appeal and engaging with the FDA on a path forward. This legal and regulatory uncertainty presents a significant near-term challenge for Libervant's commercialization in this age group. Despite this setback, the company remains committed to the product, believing in its value for patients, and expects to be able to provide Libervant to all age groups (including those 6 years and older) after the competitor's orphan drug exclusivity for Valtoco expires in January 2027, regardless of the outcome of the current legal proceedings.

AQST-108 represents the potential of the broader Adrenaverse platform beyond Anaphylm. This epinephrine topical gel is being developed for the treatment of alopecia areata (AA), an autoimmune disease causing hair loss. The competitive landscape in AA is currently dominated by systemic JAK inhibitors, which carry black box warnings and significant side effects. Aquestive believes AQST-108, as a locally absorbed topical treatment, could offer a differentiated profile without these systemic adverse events. Following positive initial human clinical trial data and pre-IND feedback from the FDA in Q4 2024, the company plans to open an IND in Q4 2025 and initiate a Phase 2a clinical trial in H1 2026, with the goal of assessing changes in the Severity of Alopecia Tool (SALT) score. While the company remains committed to AQST-108, development efforts are being temporarily de-emphasized during the critical Anaphylm launch period to free up capital for commercial activities, a strategic decision reflecting the company's focus on its most advanced asset.

Financial Performance, Liquidity, and Outlook

Aquestive's financial performance reflects its stage of development and strategic investments. For the three months ended March 31, 2025, total revenues decreased to $8.72 million compared to $12.05 million in the prior year period. This decrease was primarily driven by lower manufacture and supply revenue ($7.19 million vs. $10.52 million), largely due to a decrease in Suboxone orders, and lower license and royalty revenue ($0.79 million vs. $1.13 million), impacted by lower Azstarys royalties and the termination of a prior licensing agreement. These declines were partially offset by an increase in Ondif revenue and the initial proprietary product revenue from Libervant for the 2-5 age group ($0.32 million vs. $0 million).

Operating expenses saw notable shifts. Research and development expenses decreased to $5.36 million in Q1 2025 from $5.93 million in Q1 2024, primarily due to lower clinical trial costs for Anaphylm, partially offset by increased product research, preclinical expenses, and personnel costs. Selling, general and administrative expenses, however, increased significantly to $19.07 million in Q1 2025 from $10.69 million in Q1 2024. This surge was driven by regulatory fees, including the Anaphylm PDUFA fee ($4.31 million), higher legal fees ($2.25 million), increased commercial spending ($2.13 million), and higher personnel and share-based compensation costs, partially offset by reduced severance and insurance expenses. The net result was a loss from operations of $19.37 million in Q1 2025, compared to $8.96 million in Q1 2024, leading to a net loss of $22.93 million ($0.24 per share) for the quarter, compared to $12.83 million ($0.17 per share) in the prior year period. For the full year 2024, total revenues were $57.56 million, and the net loss was $44.14 million ($0.51 per share).

As of March 31, 2025, Aquestive held $68.66 million in cash and cash equivalents. The company has a history of net losses, with accumulated deficits totaling $386.14 million. Management indicates that existing cash, coupled with expected revenues and access to equity markets via the ATM facility, provides liquidity for at least the next twelve months.

However, achieving long-term profitability will require significant external financing. The company's cash requirements include ongoing R&D, manufacturing, regulatory, and commercialization costs, as well as debt service obligations on its 13.50% Senior Secured Notes, with principal payments commencing in June 2026, and royalty obligations projected through 2034.

The company's outlook for 2025 reflects the strategic focus and recent developments. Revised full-year 2025 guidance, issued in May 2025, projects total revenue between $44 million and $50 million and a Non-GAAP Adjusted EBITDA Loss between $47 million and $51 million. This revision primarily accounts for the cessation of marketing activities and associated revenue for Libervant in the 2-5 age group following the court ruling. The guidance incorporates significant planned pre-commercial spending for the Anaphylm launch, costs related to the NDA submission and pediatric study, preparations for a potential AdComm, and expected erosion in Suboxone revenue. The strategic decision to de-emphasize AQST-108 studies is intended to free up capital to support these Anaphylm-focused commercialization efforts. The company is actively exploring non-dilutive funding options, including ex-U.S. out-licensing of Anaphylm and debt refinancing, to extend its cash runway beyond the initial launch period.

Key risks to the investment thesis include the uncertainty surrounding the Libervant legal and regulatory situation, potential delays or negative outcomes in the Anaphylm FDA review process (including the possibility of an AdComm or requests for additional data), continued erosion of the legacy Suboxone business, the need for substantial future funding, and potential impacts from broader industry factors like tariffs and regulatory changes.

Conclusion

Aquestive Therapeutics stands at a pivotal juncture, with its future increasingly tied to the successful commercialization of its proprietary pipeline, spearheaded by Anaphylm. The company's differentiated PharmFilm and Adrenaverse technologies provide a foundation for developing novel, patient-friendly therapies that address significant unmet needs in large markets like emergency epinephrine and potentially alopecia areata. The Anaphylm program has achieved critical development and regulatory milestones, culminating in the NDA filing and anticipated FDA decision in early 2026. While the recent legal setback for Libervant in the pediatric population presents a near-term challenge and has necessitated a revision to financial guidance and a reallocation of resources, the company remains focused on its core strategic objectives.

The investment thesis hinges on the successful approval and market uptake of Anaphylm, which management is actively preparing for through targeted pre-commercialization efforts and exploration of funding options to support the launch. The potential of the Adrenaverse platform, exemplified by AQST-108, offers future growth avenues, although its development timeline is currently secondary to Anaphylm. Investors should monitor the Anaphylm FDA review process, progress on securing funding to support the launch, and any developments regarding the Libervant legal situation and future market access for older age groups. The company's ability to leverage its technological edge and execute on its commercial strategy for Anaphylm will be critical in transforming its financial trajectory and maximizing value for shareholders amidst a competitive landscape and ongoing operational challenges.