Eton Pharma (ETON) to Report Q4 Earnings: What's in the Cards?
Eton Pharmaceuticals ETON is expected to release its fourth-quarter 2023 results soon.
Eton is a commercial-stage company with four approved products, Alkindi Sprinkle, Carglumic Acid, Betaine Anhydrous and Nitisinone Capsules, in its portfolio at present. Alkindi Sprinkle and Carglumic Acid sales are primary contributors to the top line. Betaine Anhydrous, launched in May 2023, has also been witnessing solid uptake.
ETON’s earnings surpassed expectations in each of the trailing four quarters, delivering an average earnings surprise of 177.14%. In the last reported quarter, the company recorded a positive earnings surprise of 80%.
In the past year, shares of Eton Pharma have gained 20.5% against the industry’s 7% decline.
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Let us see how things have shaped up for the quarter to be reported.
Factors to Consider
Eton recognizes revenues under two heads in its income statement — Licensing revenues and Product sales and royalties.
The company’s fourth-quarter revenues are likely to have been driven by the sales of its marketed products. It is important to note that in the last quarter, Eton Pharma recorded its 11th straight quarter of sequential product revenue growth, which allowed the company to reach cash flow break-even ahead of schedule. The uptick was primarily driven by robust demand and record results of Alkindi Sprinkle and Carglumic Acid. The momentum is expected to have continued in the fourth quarter as well.
Product sales and royalty revenues are expected to have increased year over year in the to-be-reported quarter, primarily driven by growing demand for Alkindi Sprinkle and Carglumic Acid tablets.
In the last quarter’s earnings release, the company shared its intention to launch an Alkindi Sprinkle physician sampling program soon, which will further accelerate the product’s growth. An update regarding the same is expected in the upcoming earnings release. The strong growth trend in the sales of Carglumic Acid is a result of the recently expanded sales force of the company as well as the launch of Betaine Anhydrous, which shares the same prescriber base as Carglumic Acid.
Betaine Anhydrous is yet to gain traction in the market. The drug, however, has already seen strong adoption by patients in the short time that it has been commercially available. This trend is expected to have continued in the to-be-reported quarter.
The Zacks Consensus Estimate for total revenues generated by the company in the to-be-reported quarter is pegged at $7.7 million.
Eton Pharma’s research and development expenses are likely to have increased slightly in the fourth quarter, driven by development activities related to pipeline candidates, ET-400 and ET-600.
General and administrative expenses are expected to remain flat year over year in the to-be-reported quarter.
Eton Pharmaceuticals, Inc. Price, Consensus and EPS Surprise
Eton Pharmaceuticals, Inc. price-consensus-eps-surprise-chart | Eton Pharmaceuticals, Inc. Quote
Other Updates
During the third quarter of 2023, the company entered into an agreement to acquire a generic version of an ultra-rare disease product, Nitisinone Capsules, from Oakrum Pharma. The acquired product received the FDA’s approval in May 2023 for the treatment of hereditary tyrosinemia type 1 (HT-1) in combination with dietary restriction of tyrosine and phenylalanine.
Earlier this month, Eton Pharma launched Nitisinone Capsules in the United States for the HT-1 indication. Per the company, HT-1 is an ultra-rare condition that is estimated to impact fewer than 500 patients in the United States. Nitisinone Capsules sales are expected to boost the company’s top line in the upcoming quarters.
Additionally, the investors can also expect a regulatory update regarding ETON’s endocrinology candidate, ET-400.
In the last earnings release, the company announced a meeting with the FDA regarding the impending regulatory filing for the approval of ET-400. Based on the FDA’s feedback, Eton Pharma is gearing up to run an additional bioequivalence study and submit the NDA in the middle of 2024.
ET-400 is the company’s proprietary liquid formulation of hydrocortisone, which, subject to approval, is expected to complement Alkindi Sprinkle sales by providing patients with an additional treatment option.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Eton Pharma this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat. Unfortunately, that is not the case here, as you will see below. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Earnings ESP: Eton Pharma has an Earnings ESP of 0.00% as the Zacks Consensus Estimate and the Most Accurate Estimate are both pegged at a loss of 4 cents.
Zacks Rank: ETON currently carries a Zacks Rank #3.
Stocks to Consider
Sarepta Therapeutics SRPT has an Earnings ESP of +306.25% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Sarepta’s stock has gained 15.6% in the past year. It beat earnings estimates in each of the last four quarters. SRPT has an earnings surprise of 48.67%, on average.
Compugen CGEN has an Earnings ESP of +451.63% and a Zacks Rank #2 at present.
Compugen’s stock has skyrocketed 207.2% in the past year. It beat earnings estimates in three of the last four quarters and missed the mark on one occasion. CGEN has an earnings surprise of 18.23%, on average.
Arcutis Biotherapeutics ARQT has an Earnings ESP of +25.58% and a Zacks Rank #3 at present.
Arcutis’sstock has plunged 39.4% in the past year. It beat earnings estimates in three of the last four quarters and missed the mark on one occasion. ARQT has an earnings surprise of 9.23%, on average.
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