Business Overview and History
Aquestive Therapeutics, Inc. (NASDAQ:AQST) is a pharmaceutical company dedicated to advancing innovative medicines that bring meaningful improvements to patients' lives through cutting-edge science and delivery technologies. With a diverse portfolio of products and a strong pipeline of promising drug candidates, Aquestive is positioning itself as a leader in the pharmaceutical industry.
Aquestive Therapeutics was founded in 2004 with a mission to develop and commercialize novel drug delivery solutions. The company's proprietary PharmFilm technology allows for the creation of user-friendly, soluble film formulations that can be administered through alternative routes, such as the buccal or sublingual methods. This innovative approach addresses the needs of patients who struggle with traditional oral dosage forms, particularly those suffering from central nervous system (CNS) disorders, severe allergies, and other medical conditions.
One of Aquestive's first major milestones was the commercial launch of Suboxone, a sublingual film formulation of buprenorphine and naloxone, in 2010. As the sole and exclusive supplier and manufacturer of Suboxone, Aquestive has produced over 2.7 billion doses of the product since its launch. Suboxone became the most prescribed branded product in its category and was the first sublingual film product for the treatment of opioid dependence.
In 2019, Aquestive achieved another significant milestone with the FDA approval of Exservan, an oral film formulation of riluzole for the treatment of ALS. The company has licensed the commercial rights for Exservan to partners in various regions, including Zambon in the European Union and MTPA in the United States. Exservan was developed to fulfill a need for ALS patients by providing a product that can be administered safely and easily without water.
Throughout its history, Aquestive has faced various challenges, including patent infringement lawsuits related to generic film-based products for buprenorphine-naloxone. The company has successfully navigated these legal hurdles while continuing to advance its product pipeline.
Product Portfolio and Pipeline
Over the years, Aquestive has successfully leveraged its PharmFilm technology to develop a diverse product portfolio. The company's flagship product, Libervant (diazepam) Buccal Film, received FDA approval in April 2024 for the acute treatment of intermittent, stereotypic episodes of frequent seizure activity in pediatric patients aged 2 to 5 years old. This represents a significant milestone for Aquestive, as Libervant is the first and only orally administered rescue medication approved for this patient population.
In addition to Libervant, Aquestive's pipeline includes several other promising drug candidates, such as Anaphylm (epinephrine) Sublingual Film and AQST-108 (epinephrine) Topical Gel. Anaphylm, the company's lead product candidate, is a needle-free, orally administered epinephrine formulation designed for the emergency treatment of allergic reactions, including anaphylaxis. Aquestive has made substantial progress in advancing Anaphylm through clinical development, with plans to hold a pre-NDA meeting with the FDA in the fourth quarter of 2024.
The company's pipeline also includes AQST-108, an epinephrine prodrug topical gel being developed for the treatment of alopecia areata. Aquestive has scheduled a pre-IND meeting with the FDA for the fourth quarter of 2024, laying the groundwork for the initiation of a Phase 2a study in 2025.
Aquestive's complex molecule portfolio includes two active programs. Anaphylm has received Fast Track designation from the FDA, and the company plans to file an NDA in the first quarter of 2025. AQST-108 is composed of the prodrug dipivefrin, which is enzymatically cleaved into epinephrine after administration. Aquestive believes AQST-108 has the potential to support the re-establishment of immune privilege in the hair follicle and plans to initiate a Phase 2a study in the second quarter of 2025.
The company's licensed commercial products portfolio includes Suboxone, Exservan, KYNMOBI, Zuplenz, and Azstarys. These products are marketed by Aquestive's licensees in the U.S. and around the world. Suboxone, an opioid agonist and antagonist product for the treatment of opioid dependence, is marketed by Indivior and represents the largest contributor to Aquestive's revenue, accounting for approximately 59% of total revenue in the first nine months of 2024.
Financial Performance
Aquestive's financial performance has been marked by both challenges and opportunities. In the third quarter of 2024, the company reported total revenues of $13.5 million, a 4% increase from the same period in the prior year. This increase was primarily driven by a rise in license and royalty revenue, partially offset by a decrease in manufacture and supply revenue.
The company's net loss for the third quarter of 2024 was $11.5 million, or $0.13 per share, compared to a net loss of $2 million, or $0.03 per share, in the third quarter of 2023. The increase in net loss was largely attributable to higher selling, general, and administrative expenses, as well as increased research and development costs associated with the advancement of the company's product pipeline.
For the full fiscal year 2023, Aquestive reported revenue of $50.58 million, a net loss of $7.87 million, operating cash flow of -$6.38 million, and free cash flow of -$7.38 million. The company's licensed commercial products generated $45.69 million in revenue for the first nine months of 2024, compared to $37.38 million in the same period of 2023.
Looking ahead, Aquestive has provided guidance for 2024, projecting total revenues of approximately $57 million to $60 million and a non-GAAP adjusted EBITDA loss of approximately $20 million to $23 million. This guidance takes into account the continued expansion of the commercial launch of Libervant for patients ages 2-5, the advancement of Anaphylm through supportive studies and pre-commercial activities, and the progression of the AQST-108 program, including a planned Phase 2a study in 2025.
Liquidity
As of September 30, 2024, Aquestive had approximately $77.9 million in cash and cash equivalents, providing a runway into 2026. The company has successfully leveraged various financing strategies, including an at-the-market (ATM) facility and an underwritten public offering, to support its ongoing operations and product development efforts.
Aquestive's debt-to-equity ratio stood at -0.69 as of September 30, 2024. The company maintains a strong liquidity position with a current ratio of 6.37 and a quick ratio of 5.91. Additionally, Aquestive has access to an ATM facility of up to $100 million, of which $88.14 million remains available as of September 30, 2024. The company also has a $40 million Lincoln Park Capital purchase agreement in place, further bolstering its financial flexibility.
Operational Highlights and Milestones
Aquestive's recent operational highlights and milestones demonstrate the company's commitment to advancing its pipeline and expanding its commercial reach.
In the third quarter of 2024, the company reported positive topline results from its Oral Allergy Syndrome Challenge (OASIS) study for Anaphylm. The study showed that Anaphylm maintained its pharmacokinetic and pharmacodynamic profile, even in the presence of an allergen-induced oral physiological change. Importantly, the study also revealed that subjects experienced rapid symptom resolution, with a median time to complete symptom resolution of just 12 minutes after Anaphylm administration, compared to 74 minutes at baseline.
Furthermore, Aquestive announced that it has submitted its Anaphylm clinical briefing book to the FDA in preparation for a pre-NDA meeting scheduled for the fourth quarter of 2024. This milestone represents a significant step forward in the company's efforts to bring Anaphylm to market, as it aims to file the new drug application (NDA) for the product in the first quarter of 2025.
On the commercial front, Aquestive has expanded the national retail distribution and insurance coverage for Libervant, its approved product for the treatment of seizure clusters in pediatric patients aged 2 to 5 years old. The company has also built a dedicated sales team to support the continued growth of Libervant in this patient population.
Regarding the company's AQST-108 program, Aquestive has submitted its briefing book to the FDA in preparation for a pre-IND meeting scheduled for the fourth quarter of 2024. The company plans to initiate a Phase 2a study for AQST-108 in the treatment of alopecia areata in the second quarter of 2025.
Risks and Challenges
As with any pharmaceutical company, Aquestive faces a variety of risks and challenges that could impact its long-term success. These include the inherent uncertainties of the drug development and approval process, potential competition from rival products, and the company's ability to navigate the complex regulatory landscape.
Specifically, Aquestive's ability to obtain regulatory approvals for its product candidates, such as Anaphylm and AQST-108, is critical to its growth. Delays or setbacks in the clinical trial process or unfavorable regulatory decisions could significantly impact the company's timeline and financial performance.
Additionally, Aquestive's reliance on a limited number of customers, particularly for its licensed products, exposes the company to potential revenue volatility. The continued success of Suboxone, a sublingual film formulation of buprenorphine and naloxone that generates a significant portion of Aquestive's revenue, is also subject to the competitive dynamics of the opioid dependence treatment market.
The company's ability to effectively commercialize its approved products, such as Libervant, and manage the associated costs is another key area of focus. Aquestive's success in expanding insurance coverage and building a capable sales team will be crucial to driving patient access and achieving its financial goals.
Outlook and Conclusion
Aquestive Therapeutics is poised for continued growth as it advances its innovative drug delivery pipeline and expands the commercialization of its approved products. The company's strong cash position, coupled with its strategic financing initiatives, provides a solid foundation to support its ongoing operations and future development efforts.
The upcoming milestones for Anaphylm and AQST-108 are particularly exciting, as these product candidates have the potential to address significant unmet medical needs in the areas of severe allergic reactions and alopecia areata, respectively. If successful, these developments could further solidify Aquestive's position as a leader in the pharmaceutical industry.
Despite the challenges and risks inherent to the industry, Aquestive's commitment to innovation, patient-centric approach, and experienced management team position the company well for long-term success. As the company continues to execute on its strategic priorities, investors will be closely watching for continued progress and the potential unlocking of shareholder value.
The company's guidance for 2024, projecting total revenues of $57-60 million and a non-GAAP adjusted EBITDA loss of $20-23 million, reflects Aquestive's focus on advancing its pipeline while managing expenses. This outlook takes into account the ongoing commercialization efforts for Libervant, the advancement of Anaphylm through late-stage development, and the progression of the AQST-108 program.
As Aquestive Therapeutics continues to navigate the complex landscape of pharmaceutical development and commercialization, its diverse product portfolio, innovative technology platform, and strategic focus on addressing unmet medical needs position the company for potential long-term growth and success in the evolving healthcare market.