Aquestive Therapeutics, Inc. (NASDAQ:AQST) is a pharmaceutical company that is advancing innovative drug delivery technologies to improve patient outcomes. The company's proprietary PharmFilm technology has enabled the development of a diverse pipeline of product candidates that address significant unmet medical needs. Aquestive's strategic focus on developing novel formulations of existing molecules has positioned the company for potential long-term success.
Business Overview and History
Aquestive Therapeutics, Inc. was originally established as MonoSol Rx, LLC in 2006 and later changed its name to Aquestive Therapeutics, Inc. in 2018 when it became a publicly traded company. The company's mission has been to advance medicines that bring meaningful improvement to patients' lives through innovative science and delivery technologies.
One of Aquestive's early milestones was the development and commercialization of Suboxone, a sublingual film formulation used for the treatment of opioid dependence. In 2008, the company entered into a commercial exploitation agreement with Reckitt Benckiser Pharmaceuticals, Inc. (later succeeded by Indivior) to manufacture and supply Suboxone on an exclusive basis. This agreement has been a significant source of revenue for Aquestive over the years, with Suboxone accounting for a substantial portion of the company's total revenues.
In addition to Suboxone, Aquestive has developed and commercialized several other licensed products, including Emylif (an oral film formulation of riluzole for the treatment of ALS) and Sympazan (an oral soluble film formulation of clobazam used for the treatment of seizures associated with Lennox-Gastaut syndrome). The company has also collaborated with other pharmaceutical companies to bring new molecules to market using its proprietary PharmFilm technology.
One of the key challenges Aquestive has faced is the development and regulatory approval of its proprietary product candidates. The company has invested significant resources into the development of its product pipeline, including the development of Libervant, a buccally administered soluble film formulation of diazepam for the treatment of seizure clusters in patients with epilepsy. Despite facing setbacks and delays, Aquestive was able to obtain FDA approval for Libervant for the treatment of seizure clusters in pediatric patients between two and five years of age in April 2024.
Aquestive's proprietary PharmFilm technology allows for the precise delivery of active pharmaceutical ingredients through various routes, including buccal, sublingual, and lingual administration. The company has leveraged this technology to build a diverse portfolio of both licensed and proprietary products.
Financials
Financial Performance and Outlook
Aquestive's financial performance has been marked by both successes and challenges. In the fiscal year 2024, the company reported total revenues of $57.6 million, a 14% increase compared to the prior year. This growth was primarily driven by increases in license and royalty revenue, as well as co-development and research fees, which offset declines in manufacture and supply revenue. However, excluding a one-time recognition of deferred revenue, total revenue actually decreased 9% year-over-year.
The company's net loss for the full year 2024 widened to $44.1 million, or $0.51 per share, compared to a net loss of $7.9 million, or $0.13 per share, in the prior year. The increase in net loss was mainly attributable to higher selling, general, and administrative expenses, as well as research and development expenses related to the advancement of the company's pipeline, including Anaphylm and AQST-108.
Looking ahead, Aquestive has provided guidance for the fiscal year 2025, projecting total revenues in the range of $47 million to $56 million and a non-GAAP adjusted EBITDA loss of approximately $46 million to $53 million. The revenue guidance includes contributions from the company's recently approved product, Libervant, for the treatment of seizure clusters in pediatric patients aged 2 to 5 years, as well as an anticipated decline in Suboxone revenues.
The non-GAAP adjusted EBITDA loss guidance reflects Aquestive's continued investment in the development of Anaphylm, including the submission of the NDA, the completion of the Anaphylm pediatric clinical trial, and preparations for a potential FDA advisory committee meeting. Additionally, the guidance incorporates the costs associated with the commencement of the AQST-108 Phase 2a clinical trial in the second quarter of 2025.
In the most recent quarter (Q4 2024), Aquestive reported revenue of $11.9 million, a 10% decrease from $13.2 million in Q4 2023. This decline was primarily due to decreases in license and royalty revenue and manufacture and supply revenue.
Liquidity and Capital Resources
As of December 31, 2024, Aquestive's cash and cash equivalents stood at $71.6 million, providing near-term liquidity to fund its operating needs and continue the development of its product pipeline. The company's debt-to-equity ratio was -0.63, which is negative due to negative equity. Aquestive's current ratio was 4.68, and its quick ratio was 4.36, indicating a strong ability to meet short-term obligations.
Aquestive has access to a $10 million asset-based lending (ABL) facility that it can utilize upon meeting certain conditions, providing additional financial flexibility. The company's operating cash flow for 2024 was -$35.8 million, while free cash flow was -$35.9 million, reflecting the significant investments in research and development and commercialization activities.
Geographic Markets and Revenue Breakdown
Aquestive generates revenue both in the United States and internationally. In 2024, the company reported U.S. revenue of $39.9 million and ex-U.S. revenue of $17.6 million. The ex-U.S. revenue primarily came from partnerships with Indivior, Haisco, and Hypera.
Regulatory and Commercial Milestones
Aquestive's key near-term focus is on advancing its lead proprietary asset, Anaphylm, through the regulatory approval process. The company has recently initiated the NDA filing process for Anaphylm with the FDA and expects the NDA to be accepted in the second quarter of 2025. If approved, Aquestive plans to launch Anaphylm in the first quarter of 2026, aligning with the peak allergy season.
The company has also made progress with the pediatric development of Anaphylm, with the initial clinical trial results in subjects aged 7 to 17 years being in line with expectations. Aquestive is currently actively recruiting subjects for the pediatric study and expects to complete the trial activities in the coming months.
In addition to the Anaphylm program, Aquestive is advancing AQST-108, its epinephrine topical gel product candidate, through clinical development. The company recently received positive feedback from the FDA during the pre-IND meeting and is on track to initiate the Phase 2a clinical trial in alopecia areata in the second quarter of 2025.
Aquestive's other key product, Libervant, received FDA approval in April 2024 for the acute treatment of seizure clusters in pediatric patients aged 2 to 5 years. However, the company has faced recent challenges related to a federal court ruling that vacated the FDA's approval of Libervant for this patient population. Aquestive is actively engaged in the appeals process and remains committed to ensuring patient access to Libervant.
Competitive Landscape and Risks
Aquestive operates in a highly competitive pharmaceutical industry, with both branded and generic products vying for market share. The company's proprietary product candidates, Anaphylm and AQST-108, face competition from existing and pipeline treatments, including auto-injectors, nasal sprays, and other novel formulations.
One of the key risks for Aquestive is the potential for delays or setbacks in the regulatory approval process for its product candidates. The company's ability to successfully navigate the FDA approval process and address any concerns raised by the regulatory authorities will be crucial for the success of its pipeline.
Additionally, Aquestive is exposed to the risk of generic competition for its licensed products, such as Suboxone, which has been a significant revenue contributor. The company's ability to maintain and grow its licensed product portfolio will be important for its financial performance.
Product Portfolio and Pipeline
Aquestive's product portfolio includes both proprietary and licensed products:
Proprietary Product Pipeline:
1. Anaphylm (epinephrine sublingual film): Anaphylm is Aquestive's lead proprietary product candidate for the emergency treatment of allergic reactions, including anaphylaxis. In 2024, the company reported positive topline data from several clinical studies, demonstrating that treatment with Anaphylm was well-tolerated with no serious adverse events reported.
2. AQST-108 (epinephrine topical gel): This product candidate is being developed for the treatment of alopecia areata. Aquestive completed the first human clinical trial for AQST-108 and plans to initiate a Phase 2a clinical trial in the second quarter of 2025.
3. Libervant (diazepam buccal film): Libervant is approved for the acute treatment of seizure clusters in patients with epilepsy aged 2 to 5 years. Aquestive is seeking to overcome orphan drug market exclusivity to gain U.S. market access for patients aged 6 years and older.
Licensed Commercial Products:
1. Suboxone (buprenorphine and naloxone) sublingual film: Manufactured exclusively for Indivior, Suboxone accounted for 62% of Aquestive's total revenue in 2024.
2. Emylif (riluzole) oral film: Licensed to Zambon for development and commercialization in the EU for the treatment of ALS.
3. Ondif (ondansetron) oral film: Licensed to Hypera for commercialization in Brazil for the treatment of nausea and vomiting.
4. Sympazan (clobazam) oral film: Licensed to Assertio Holdings, Inc. for worldwide rights in October 2022.
Industry Trends
The pharmaceutical industry, particularly in the areas of central nervous system (CNS) disorders and allergic reaction treatments where Aquestive operates, has experienced a compound annual growth rate (CAGR) of 5-7% in recent years. This growth trend provides a favorable backdrop for Aquestive's product development and commercialization efforts.
Conclusion
Aquestive Therapeutics is a pharmaceutical company with a unique focus on developing innovative drug delivery solutions. The company's proprietary PharmFilm technology has enabled the creation of a diverse pipeline of product candidates, with Anaphylm and AQST-108 being the key drivers of potential future growth.
Despite the challenges the company has faced, including the recent court ruling related to Libervant, Aquestive has demonstrated its ability to navigate the regulatory landscape and advance its product candidates through clinical development. The company's upcoming milestones, such as the NDA submission for Anaphylm and the initiation of the AQST-108 Phase 2a trial, will be crucial in determining its long-term success.
Investors should closely monitor Aquestive's progress in executing its strategic priorities and managing the risks inherent in the pharmaceutical industry. The company's ability to successfully commercialize its proprietary products, if approved, could unlock significant value for shareholders in the years to come. With a strong cash position and a diverse product portfolio, Aquestive is well-positioned to pursue its growth strategy and potentially transform the treatment landscape in its target therapeutic areas.