DEER PARK, Ill. - Eton Pharmaceuticals , Inc. (NASDAQ:ETON), a company specializing in rare disease treatments, has announced the acquisition of the drug Increlex from Ipsen S.A. The transaction, which is set to conclude by the end of 2024, aims to enhance Eton's pediatric endocrinology portfolio and support its mission to provide life-changing medicines for patients with ultra-rare conditions.
Increlex (mecasermin injection) is a biologic approved in 40 territories, including the U.S. and EU, for treating severe primary insulin-like growth factor 1 deficiency (SPIGFD) in children and adolescents aged 2 to 18. This condition is characterized by a lack of sufficient insulin-like growth factor 1 (IGF-1) in the body. It is estimated that around 200 patients in the U.S. and 900-1,000 in Europe are affected by SPIGFD. Increlex is currently the only FDA and EMA-approved treatment for this condition.
Eton's CEO, Sean Brynjelsen, emphasized the company's commitment to addressing underdiagnosed and undertreated conditions by integrating Increlex into their portfolio. The company plans to commercialize the product in the U.S. immediately after closing, ensuring an uninterrupted supply for patients. Ipsen will continue to distribute the product in other territories during a six-month transition period to guarantee continuous patient care, after which Eton will take over the commercialization efforts.
The acquisition is financially backed by Eton's available cash and an expansion of its credit facility with SWK Holdings. Ipsen's global sales of Increlex amounted to €17.3 million in 2023.
Increlex comes with important safety information, including contraindications for patients with hypersensitivity to mecasermin or its ingredients, those with closed epiphyses, and patients with active or suspected neoplasia. The medication also carries warnings and precautions regarding hypoglycemia, intracranial hypertension, lymphoid tissue hypertrophy, and other potential complications.
This acquisition is based on a press release statement and is part of Eton's ongoing strategy to develop and market treatments for rare diseases. The company's current portfolio includes five commercial rare disease products, with three additional candidates in late-stage development.
In other recent news, Eaton (NYSE:ETN) Pharmaceuticals reported a significant increase in product sales in the second quarter of 2024, with a 40% year-over-year rise to $9.1 million. The surge in sales was primarily driven by ALKINDI SPRINKLE and Carglumic Acid. Despite a net loss of $2.9 million for the quarter, Eaton remains optimistic about its growth trajectory, targeting the PKU medical foods market and anticipating the launch of new pipeline candidates.
Eaton's acquisition of PKU GOLIKE is a strategic move to capture a share of the estimated $100 million PKU medical foods market in the US. Furthermore, the company's pipeline candidate, ET-400, is expected to launch in 2025, pending FDA approval. Despite the increase in R&D and general expenses, Eaton reported having $17.7 million in cash on hand.
These recent developments indicate Eaton's focus on growing its existing products and advancing pipeline candidates. The company's business development efforts are geared towards commercial products that could add over $10 million in revenue. However, increased expenses have weighed on the company's financials, although they are expected to normalize in the second half of the year.
InvestingPro Insights
Eton Pharmaceuticals' acquisition of Increlex aligns with its strategy to expand its rare disease portfolio, and recent financial data from InvestingPro provides additional context to this move. The company's market capitalization stands at $153.47 million, reflecting its position in the specialty pharmaceutical sector.
An InvestingPro Tip indicates that Eton holds more cash than debt on its balance sheet, which likely facilitated this strategic acquisition without overextending financially. This solid cash position could be crucial for integrating Increlex into its operations and supporting future growth initiatives.
Despite the positive news, investors should note that Eton's profitability remains a concern. Another InvestingPro Tip suggests that analysts do not anticipate the company will be profitable this year. This aligns with the reported operating income of -$6.28 million for the last twelve months as of Q2 2024, highlighting the importance of the Increlex acquisition in potentially improving the company's financial outlook.
The market appears optimistic about Eton's prospects, with the stock trading near its 52-week high and showing strong returns over various time frames. For instance, InvestingPro data reveals a 29.13% price return over the past month and an impressive 80.55% over the last three months.
Investors seeking a more comprehensive analysis can access additional insights through InvestingPro, which offers 11 more tips for Eton Pharmaceuticals.
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