Aquestive Therapeutics (AQST) Q2 2026 earnings call transcript

I would like now to turn the conference over to Faith Pomeroy Ward, Investor Relations. Please go ahead. Thank you, Operator. Good morning and welcome to today's call. On today's call, I'm joined by Dan Barber, President and Chief Executive Officer, and Ernie Toth, Chief Financial Officer, who are going to provide an overview of the company's reported financial results for the second quarter into June 30, 2026, and a progress update on the company's key 2026 objectives, followed by a Q&A session. During the Q&A session, the team will be joined by Dr. Matt Greenhaut, Chief Medical Officer, Melina Chaffee, Senior Vice President, Regulatory Affairs, Sherry Korchinski, Chief Commercial Officer, and Dr. Matthew Davis, Chief Development Officer. As a reminder, the company's remarks today correspond with the earnings release that was issued after market close yesterday.

In addition, a recording of today's call and related supplemental materials will be made available on Aquestive's website within the Investors section shortly following the conclusion of this call. To remind you, the Aquestive team will be discussing some non-GAAP financial measures this morning as part of its review of second quarter 2026 results. A description of these measures, along with a reconciliation to GAAP, can be found in the earnings release issued yesterday, which is posted on the Investor's section of Aquestive's website.

During the call, the company will be making forward-looking statements. We remind you of the company's safe harbor language as outlined in yesterday's earnings release, as well as the risks and uncertainties affecting the company as described in the risk factors section and in other sections included in the company's annual report on Form 10-K filed with the U. S. Securities and Exchange Commission on March 4, 2026. As with any pharmaceutical company with product candidates under development and products being commercialized, there are significant risks and uncertainties with respect to the company's business and the development, regulatory approval, and commercialization of its products and other matters related to operations.

Given these uncertainties, you should not place undue reliance on these forward-looking statements, which speak only as of the date made. Actual results may differ materially from these statements. All forward-looking statements attributable to a questive or any person acting on its behalf are expressly qualified in their entirety by this cautionary statement and the cautionary statements contained in the earnings release issued yesterday. The company assumes no obligation to update its forward-looking statements after the date of this conference call, whether as a result of new information, future events, or otherwise, except as required under applicable law. Now, I would like to turn the call over to Dan.

Thanks, Faith, and good morning, everyone. I am excited to share today that not only have we completed the necessary studies for anafilm resubmission, but that we remain on track to resubmit before the end of this quarter. This is less than eight months from when we received a complete response letter from the FDA. Okay. Our resubmission will include the results from our most recent Human Factors Validation Study. As a reminder, this study provides information on how participants interacted with our improved packaging and instructions for use. In the complete response letter received earlier this year, the FDA indicated participants experienced difficulty opening our pouch and incorrectly administered the film too many times. I am pleased to say that after updating our packaging, labeling, and instructions for use, our most recent human factors validation study showed, statistically speaking, a major reduction in both categories.

Under the previous packaging, we had 26 individuals indicate difficulty opening our packaging, and we had six individuals tear the film. This time, we had only one participant show difficulty, and no one tore the film.

In the previous study, 20 participants placed the film incorrectly on top of their tongue or on the roof of their mouth. This time, we had only two participants misplace the dose during administration. This data is further supported by our latest pharmacokinetic, or PK, study. In this study, we saw no statistical difference between clinician-administered and self-administered drug product. Keep in mind, subjects who self-administered were given our revised packaging and instructions for use and had no coaching by clinical staff during the administration.

We also had an encouraging result when a film was purposely misplaced by clinicians on top of a subject's tongue. This data was requested by the FDA to further understand what might happen if the film is misadministered. We saw rapid and meaningful changes in blood pressure and heart rate. The changes from baseline were higher than manual IM during the critical first 15 minutes and in line with what we have seen from EpiPen in our other studies.

This means that in the evaluated misadministration scenario, pharmacodynamic responses compared favorably to manual IM administration. Even on PK, while we saw lower levels as expected compared to on-label sublingual administration, we still reached meaningful CMAX levels. This is a very encouraging outcome for the program.

As we approach our planned resubmission for Anaphilm, it is a good time to review the compelling opportunity that exists for Anaphilm here in the U. S. While the epinephrine rescue market is largely generic, the need for improved clinical and caring offerings in this category is significant, and we believe these needs could support conversion to a branded product over time if approved. As a large PBM publicly wrote earlier in the year about Anifilm, this advancement stands out because emergency treatment is a category where ease of use and readiness really matter.

That need starts with patients, caregivers, and healthcare providers. Our interactions with the allergy community indicate there is a widespread desire among patients and caregivers for an epinephrine that is oral, works quickly, is easy to use, easy to carry, and durable. Many years of research and data tell us patients still do not carry or use their epinephrine. The data also shows that medical devices, such as autoinjectors, are often not where you need it, when you need it, when anaphylaxis occurs.

We believe the conversion from autoinjectors starts with the allergists, and we can accomplish this efficiently. Our focus at launch will be on the allergy community, which will allow us to keep our cash burn down as we prepare for a potential launch, if approved. We believe if allergists convert their prescriptions to the first and only non-invasive, orally delivered epinephrine product for the treatment of type 1 allergic reactions, including anaphylaxis, if approved by the FDA, the rest of the market could follow over time. Clearly, the desire for better products in this space is strong among patients, caregivers, and healthcare providers.

This brings us to payer coverage. The first point I want to be clear on today is that we believe clinical differentiation matters to payers. Let me repeat that. Clinical differentiation matters. This goes beyond just offering a no-needle solution. In our case, the benefits from an oral medication are significant. Not only do we believe we are easier to carry than autoinjectors, our product has shown in our studies meaningful clinical differentiation from the autoinjector on time to maximum concentration, or Tmax, and on change from baseline blood pressure following administration.

Our data demonstrates this, and we believe payers may find this meaningful. This, along with the ease of carry and use aspects of Anifilm, are important. We have a great clinical story to share, and we have already heard from multiple counterparts at various payer groups about the difficulties their individual family members face with autoinjectors. Payer coverage is also a function of product pricing. This is the single most important decision any brand will make at launch. We are actively building our pricing strategy, and for now, we'll keep this confidential. What I will say is that based on the ongoing volume in this market, we continue to believe the market opportunity for epinephrine-branded products exceeds $1 billion a year and could potentially reach $2 billion a year over time.

This is driven not just by payer dynamics, but also by prescription volumes. The epinephrine rescue market has been growing for years, even without significant promotional activities. Over the last few years, the market has grown annually by around 6%, and this holds true for 2026 year-to-date. Given the large gap between prescriptions and prevalence, the continued expansion of allergy diagnoses, and new product offerings, We believe this growth rate could continue for the foreseeable future.

So, from my perspective, the compelling opportunity in this category remains intact. We have an expanding and growing market dominated by outdated technology. We believe our product provides meaningful clinical differentiation that could support payer adoption, All while being efficient in our allergist-focused launch strategy, if approved.

Now, let's talk about medical affairs and our commercial launch preparations. Our Chief Medical Officer, Dr. Matt Greenhaut, and his team continue to interact with allergists on a daily basis and continue to attend all key allergy conferences. In fact, I believe awareness of anafilm within the allergy community is now quite high. Matt recently told me that during a major allergy conference, it was difficult to find physicians who were unfamiliar with anafilm. That is a testament to the team's consistent engagement with allergists over the last several years. Interaction after interaction, the team continues to share the excitement for Anifilm to be potentially approved.

Our commercial team has launch preparations fully underway. As previously shared, the team has made excellent progress preparing for launch. Dale's leadership has put plans in motion to bring on our regional sales directors and training. Marketing is driving all promotional materials and programs to be launch-ready in a manner consistent with applicable pre-approval requirements, and we are building out our commercial analytics capabilities.

Simply put, we have the right experienced leadership in place and remain on track to hit the ground running as soon as possible if approved by the FDA. Now, let's turn to AQSB108. I must admit, I was surprised after our May earnings call by how much interest we received in our atopic dermatitis program. One of the most common reactions was, I've never thought about epinephrine for atopic dermatitis, along with questions on how we believe the science works. We have included extra slides in our supplemental materials to further elucidate the science.

Simply put, a localized topical epinephrine application may have the potential to provide a meaningful treatment approach in atopic dermatitis and could potentially support a dosing profile that does not require DALI administration. This could allow us to position HUSC 108 between low-cost, less-effective generics, and significantly higher-priced biologics. We will have more to say on this program after we have completed the resubmission of Anifilm.

Now, let's turn to our partnering and base business activities. We continue to engage in active partnering processes for Liberbin in the U. S. and Anifilm outside of the U. S. , and we expect to have more to say as those processes progress. Our base business, as well, remains cash-flowing on a consistent basis. After interacting with Indiviar, we also believe that there is no near-term impact to our base business based on the proposed Indiviar-Sopernis merger.

We continue to manage our cash carefully As a reminder we continue to expect million in launch funds from RQW following FDA approval as well as million from Oaktree This along with the potential cash that could be generated from our outlicensing activities if completed on acceptable terms means we believe we are positioned to support an effective launch of Anifone assuming FDA approval satisfaction of applicable funding conditions and execution of our planned commercial strategy In conclusion, the epinephrine market remains a healthy and growing market that is well-positioned for potential conversion from autoinjectors.

We are on track to resubmit our NDA in Q3. Our cash position is expected to support a potential launch, and we will have more to say on AQST 108 later in the year.

With that, I will turn the call over to Ernie.

Thank you, Dan, and good morning, everyone. By now, you will have seen our second quarter of 2026 financial results in the earnings release issued last evening and detailed in our Form 10-Q filing. As we typically do, we will address most of the detailed discussion regarding the quarter during Q&A, and I will focus my remarks on the financial performance, operating spend, and liquidity. During the second quarter, our primary financial focus remains supporting the Anifilm resubmission process while maintaining a strong balance sheet and financial flexibility. During the quarter, we also completed our refinancing with Oaktree, establishing a new $150 million debt facility that lowers our cost of capital, extends our interest-only period, and enhances our financial flexibility as we prepare for a potential anti-film launch if approved by the FDA.

As Dan discussed, we successfully completed the Human Factors Validation Study and PK Study for Anifilm and results support resubmission of the NDA in the third quarter of 2026. We are also continuing to manage the business with a disciplined approach to capital allocation. Our commercial team is advancing launch preparations in a manner consistent with applicable preapproval requirements, while our medical affairs team continues to engage with the allergy community. At the same time, we remain focused on carefully managing cash as we move towards resubmission and prepare for a potential launch if approved.

Now, let me walk through the second quarter results. Total revenues increased to $13.8 million in the second quarter of 2026 from $10 million in the second quarter of 2025. The 38% increase was primarily driven by increases in manufacture and supply revenue and increases in license and royalty revenue. Manufacturer and supply revenue increased to $11.9 million in the second quarter of 2026 from $9.6 million in the second quarter of 2025, primarily due to increases in Suboxone revenues, partially offset by lower on-deef revenues. License and royalty revenue increased to $1.3 million in the second quarter of 2026 from $0.8 million in the second quarter of 2025, primarily due to royalty revenue from Zebra. Total revenues increased to $28.3 million for the six months ended June 30, 2026, from $18.7 million for the six months ended June 30, 2025.

A 51% increase was primarily driven by increases in license and royalty revenues and increases in manufacturer and supply revenue. Manufacturer and supply revenue increased to $20.7 million for the six months ended June 30, 2026, from $16.8 million for the six months ended June 30, 2025, primarily due to increases in suboxone revenues partially offset by lower on-yeef revenues. License and royalty revenue increased to $6.7 million for the six months ended June 30, 2026, from $1.6 million for the six months ended June 30, 2025, primarily due to royalty revenue from Zebra. Research and development expenses decreased to $4 million in the second quarter of 2026 from $4.1 million in the second quarter of 2025. The decrease in research and development expenses was primarily due to lower development and manufacturing costs associated with the Anafilm program, partially offset by increases in preclinical costs.

Research and development expenses decreased to $8.2 million for the six months ended June 30, 2026, from $9.5 million for the six months ended June 30, 2025. The decrease in research and development expenses was primarily due to a decrease in the clinical trial costs and product research expenses associated with the ANA-Film program and decreases in share-based compensation partially offset by increase in personnel costs. Selling general and administrative expenses increased to $14.1 million in the second quarter of 2026 from $12.7 million in the second quarter of 2025. The increase primarily represents higher legal fees of approximately $2.1 million, higher severance costs of approximately $1.4 million, which includes acceleration of share-based compensation, higher personnel costs of approximately $0.9 million, and higher share-based compensation expenses of approximately $0.3 million, as well as other expenses.

Partially offset by lower commercial spending of approximately $2.6 million and lower regulatory and licensing fees of approximately $1.2 million.

Selling general and administrative expenses decreased to $25 million for the six months ended June 30, 2026 from $31.8 million for the six months ended June 30, 2025. The decrease primarily represents lower commercial spending of approximately $4.5 million, the one-time Anafilm-Pidufa fee of $4.3 million in the prior year period, lower legal fees of approximately $1.3 million, lower regulatory and licensing fees of approximately $1.9 million, Partially offset by higher severance costs of approximately $2 million, which includes acceleration of share-based compensation, higher personnel costs of approximately $1.4 million, and higher share-based compensation expenses of approximately $1.8 million, as well as other expenses. In the second quarter of 2026, the company recognized a one-time loss on extinguishment of debt of $11.7 million, which represents the difference between the carrying value of the 13.5% notes as of May 12, 2026, and the total payoff amount of the 13.5% notes.

Aquestive's net loss for the second quarter of 2026 was $22.9 million, or $0.18 for both basic and diluted loss per share, compared to the net loss in the second quarter of 2025 of $13.5 million, or $0.14 for both basic and diluted loss per share. Excluding the impact of the one-time recognition of the loss and extinguishment on the company's 13.5% notes, the net loss in the second quarter of 2026 was $11.2 million. Aquestive's net loss for the six months ended June 30, 2026 was $30.9 million, or $0.25 for both basic and diluted loss per share, compared to the net loss for the six months ended June 30, 2025 of $36.5 million, or $0.37 for both basic and diluted loss per share.

Excluding the impact of the one-time recognition of the loss and extinguishment on the company's 13.5% notes, the net loss for the six months ended June 30, 2026, was $19.2 million. Non-GAAP adjusted EBITDA loss was $5.2 million in the second quarter of 2026 compared to a non-GAAP adjusted EBITDA loss of $9.3 million in the second quarter of 2025. Non-GAAP adjusted EBITDA loss was $7 million for the six months ended June 30, 2026, compared to a non-GAAP adjusted EBITDA loss of $27 million for the six months ended June 30, 2025.

Turning to the balance sheet, we ended the second quarter of 2026 with $98.5 million in cash and cash equivalents. Combined with the flexibility provided by our Oak Tree facility and the expected availability of $75 million in launch funding from RTW and $20 million from Oak Tree following FDA approval of Antifilm, we believe we are well positioned to support our planned commercial strategy and launch preparation. As Dan noted, we also continue to engage in active partnering processes for LiberBet in the U. S. and Anifilm outside of the U. S. , and we expect to have more to say as those processes progress.

Our base business also remains cash flowing on a consistent basis. We are maintaining our full year 2026 financial guidance. For 2026, the company expects to have total revenue of $46 million to $50 million and non-GAAP adjusted EBITDA loss of $35 million to $30 million.

In summary, the second quarter reflects continued financial discipline and execution across the business. We delivered year-over-year revenue growth, improved non-GAAP-adjusted EBITDA performance, ended the quarter with a strong cash position, and remained focused on funding the key priorities that Dan outlined today. Those priorities including completing the antifilm resubmission in Q3, preparing for a potential launch if approved by the FDA, advancing AQSP-108, and continuing to evaluate partnering opportunities.

With that, I will now turn the line back to the operator to open the line for questions.

Sure. Good morning, Rowana. So, I'll give you my thought on the PK human factors overview, and then I will ask Matt to give a little bit more color. We know from the original review that the FDA's clinical team was bought into and signed off on the approval of our product. So we know from a clinical perspective that there's conviction on the FDA side from at least the interactions we've had in the back and forth and what we've seen in documentation. So we know that the CRL was limited to the things that not only we shared with with you, but also to that idea that the packaging was difficult to open and our instructions weren't clear for administration.

So when we look at the data that we just generated, we believe we have very convincingly and thoroughly answered the open questions the FDA put out. As you heard in the prepared remarks, on the human factor side, we think the results are very clean. And on the PK side, when administered, self-administered, we saw no difference from the clinician administered. And even when we look at this off-label arm that the FDA asked us to produce, we see some really interesting pharmacodynamic data. And before I answer the timeframe question you had, I'll just ask Matt to give his thoughts on the pharmacodynamic data.

Good morning In looking at the results the one theme that I keep coming back to is just how reassuring it was to look up the results that we got I think as Dan said when you look at the repeat of the self and the healthcare provider we got exactly what we were expecting and it didn range with what we seen before so it nice to see the reinforcement and replication of that data And then you look at the off the top of tongue you know and those were really really great data to see that there is with that sort of in a way that we don intend the product to be used that you're still getting a very clinically meaningful increase in your heart rate and blood pressure.

I think, you know, in my opinion, as a clinician, when I'm prescribing a drug to a family, to a parent, you know, They want reassurance that this is going to work, and I think we're able to look at these data in a way that we see a response, which in a way that you wouldn't want the drug to be taken, you're still going to get a response. I think that's among the more reassuring things that you can counsel a family when they're making a decision on what product they would prefer to be prescribed. So I'm very, very pleased with the results.

And going to your second question on the timeframe, our guidance to everyone remains the same. The classification system at the FDA would tend to say this is a six-month review, so our guidance is this will be a six-month review. However, comma, we are already engaged with the FDA on the fact that our application is coming their way. We do think this is a very thin package compared to the 10-month review they've already done and the conclusions that they've reached, and we will be pressing them in a supportive way, not in an aggressive way, that this is an opportunity to move faster. So whether they take that opportunity or not is up to them, and the standard time would be six months.

Yeah, well, I'll give it to Matt in a second again to give you his thoughts on how a physician might think about this data, but let me be clear with the data that we've generated. We have a great clinical story, and you heard me say that in a prepared comment. So not only in the payer world where we think there's an ability to position the product in an important way from a clinical perspective, but also with Matt's team, the MSLs, and of course with Sherry and all her efforts and her marketing team and sales team, we will absolutely be showing all of the great data we have, including the data we just generated. But I'll let Gip Mackey do the thoughts.

Yeah, I mean, I think Dan said it well. On the medical affairs side, we're very excited to get out to the next conference to be able to start sharing these details with the allergy community and in our visits to physician offices. You know, how we would look at these data, this is just building more of a, just rounding out the story of an already sort of very, very nice tale. We've got great data. We have a product that in our studies shows a very strong magnitude of effect, and that magnitude of effect occurs very early, within a couple of minutes.

You know, comparatively in our studies, we've consistently seen that the magnitude of that effect exceeds that that we're comparing it to. You know, you sort of synthesize what we just released, you know, we were able to show that even with the top of tongue, again, I mean, We really would prefer you not take it this way, but if you do, even the setting of low resulting PK, the resulting PD is overlapping with the same magnitude of change that we saw when we used EpiPen in our pivotal study. That, to me, just sort of at this point is, I don't want to say icing on the cake, but it's a really, really nice feature to be able to have to counsel your patients.

And again, if you're looking at the totality of our data, we have a consistent picture of rapid onset of the drug reaching high levels. And these are very clinically meaningful levels. So, you know, combine this now with human factors data that shows that clearly we've improved on, you know, sort of previous performance. And yeah, reassure. That's the one word. And it's nice to have these data, to see it over and over again in a number of different studies with the PK and PD data. Consistency, it's just very, it's a nice thing to have to be able to counsel your patients.

Thank you. Sure. Good morning, Kristen. So let me go in reverse order. On the CMAX question, as we all know, the FDA is reticent to ever give you bright lines of what you need or don't need. But we know from our correspondence over several years that there's two threshold marks that they have pointed to both in written communication with us and in meetings.

And the first one is this idea of getting over 50 picograms per milliliter, which we clearly do. And the second, on the top of town, and the second is this idea of clearing 100 picograms per milliliter, which we also do. So we think from a PK perspective, if you, and I'll hand it over to Matt in a second, and obviously as a practicing physician, I think you'll hear him say PK is not really where practicing physicians focus, but from an FDA perspective where PK can be more important, I think we have, at least from the bars they have talked about in the past, we have what we need. From, again, an off-label or off-use, I should say, because the label is obviously in progress, an off-use administration.

I will, Matt, I think this is your lucky day. It's coming back your way. I will let Matt talk about the clinical differentiation he sees, but I think it's worth pointing out again. And I think one of the learnings we have in watching this market develop is positioning a product as simply no needle is not the path to success. The path to success is highlighting the important clinical differentiation that you have. And then, of course, all of the important features like use and carry come along with that. But I'll let Matt talk about the specific clinical differentiation items he thinks are meaningful.

Good morning. Yeah, I mean, I think differentiation is the word, and, you know, if you look at our data, and I'll highlight going back to our published pivotal trial, the 301 study, the differentiation is very evident when you look at the magnitude of effect that our drug reaches versus what the comparator drugs reach in that study. The magnitude of change is, I mean, you can see it very clearly. It is greater. But more importantly, it's happening faster, much faster. And that makes a huge difference. You know, in my clinical experience, and I'll disclose, I'm also a patient. I have venom allergy. You know, I get stung. I try not to get stung, but I get stung.

I don't want something that's going to take a long time to kick in. I want that effect very rapidly. And I want a maximal effect. I don't sort of want a gradual increase in sort of, you know, marginal peaks of how much my blood pressure and heart rate are going to respond. And that's what we see with our data, a rapid response in high levels. And, you know, when you're giving epinephrine to a patient, you've got a very small window in which you're watching to see, is this going to work? What do I have to do next? You know, it's sometimes, you know, five to ten minutes. So, you know, you look at where, you know, the times for these onsets hit, it's within that window.

We feel, you know, not only is the change clinically meaningful, but it's happening in a time frame that fits when we have to make a decision. Are we going to say that the patient's going to be okay in that when we're watching them, or are we going to have to escalate care? So, you know, to us, we believe that that, you know, our properties are absolutely differentiating in that respect. And again, you know, my career giving alpha doses of epinephrine, I mean, time is precious, and you really don't want to mess around with that.

Good morning. And thank you for giving a little bit of airtime to 108. Obviously, we're incredibly excited about Anaphilm and where we are and what we're doing, but we do believe Adreneverse has broader use, and 108 is the first place we're putting that to work. Starting with the rationale on atopic derm, that's pretty straightforward. In other words, it's a well-worn path in the dermatology space that atopic derm is a good entry point and a good first initial indication for expanding into broader indications. So while we think alopecia areata is still an important indication and one that's out there for us, we want to get that first proof point through the gates. Now, we've obviously been a little hampered by just the ability to focus on 108 while also bringing Anifilm forward, and clearly our resources are focused on Anifilm.

But to the extent that we've been able to move 108 forward, and we plan on doing that as we go forward, we do think that the science is there in a compelling way. I'll turn it over to Matthew Davis to just give you his thoughts quickly and remind everyone why we feel good from a scientific perspective.

We're incredibly excited. So in our human trials of 108, we saw TSLP suppression. We saw CCL3 and CCL4 suppression. So when you think of atopic derm, the number one symptom that you want to alleviate is itch. An itch is not just a histamatic mast cell phenomenon. When it comes to atopic derm, it's actually an IL-31 phenomenon, TSLP phenomenon, and mast cell. When we looked at our preclinical program, we saw an NF-kappa B modulation, and that's a direct correlation with IL-31. So if you throw together the three main causes of itch for atopic dermatitis, we believe that topical 108 is going to hit those areas that cause itch, and we believe that it could have a meaningful benefit.

So I'm very excited. So more to come as time goes on, but I appreciate the questions on 108.

So one, kind of going back to the human factor study, so maybe on the root cause of the failure, so it seems like there was one open failure and two misplacements. So maybe any color you can add on what the root cause analysis concluded for each and what residual risk justification goes into the submission. And then a second one is kind of following up on 108.

So this actually seemed to be quite an opportunity in atopic derm. One of the things that we were thinking through, though, was maybe more about dosing and long-term use, And maybe any color you could add about, like, rebound erythema or cacosylaxis with chronic dosing with epinephrine products of this disease?

Sure. Yeah. And thank you for two really insightful questions. First, I appreciate the opportunity to clarify on the human factors data. So I want to be really clear. Everyone opened the pouch in our human factors study. We had no failures to open the pouch. The one difficulty that we had still successfully opened the pouch. So the way that human factor studies work, without diving in too deep, is it's a ranking of identified risks. So one is you opened it easily. One is you didn't open it. Or another is you had some difficulty but opened it. So the one who opened it with some difficulty still opened the pouch In terms of the misplacements the two misplacements weren necessarily on top of the tongue or roof of the mouth They just weren completely in the sublingual cavity So if you pair that with the PK data and the conversation that we had with Matt earlier you would expect if there had been PK around those individuals and I completely giving an opinion we don have that data you would expect there would be somewhere between the self data and the I'm going to turn the call over to management for the data that is under the tongue and the data that was worst-case scenario generated by clinicians as the FDA requested.

So, I think we're in a really good place on that data, and I don't think there's any additional justification necessary for those two things. On 108 dosing over time, and I will pass it back to Matthew, I'll just highlight and remind you that this is a local delivery system that we're talking about, not a system. But I hopefully didn't steal all Matthew's thunder.

I'm sure he can say it way better than I could. This is an incredible opportunity. So what we found, our preclinical team has done amazing, amazing work. So when you topically apply 108, the tip of ethans has a super pharmacologic concentration on the skin. The carboxyesterase in your interstitial fluid slowly will break that down to epinephrine. So your question about tachyphylaxis is a great one and a vital one. Because we appear to have this Tepo-like effect, we do believe that this is foreshadowing that maybe we can dose this product not even once a day. So more to come on that. But we believe, first of all, we can talk about immune immunology, with cellular-based immunology.

PK does not always correlate to P-did. We are going to study the effect, the steeple effect, and we believe that we can have an extended release dosing of this product. More to come.

And secondly, I want to ask about something that your competitor, ARS, has flagged previously, that epinephrine patients tend to refill rather than return to the prescriber. So given this issue, how do you think about realistically the switchable pool by year one, say, and what's the mechanism that gets a patient to switch from existing auto-injector script? Thank you.

Sure. No, two good questions. The first, we did talk a little bit about the timing for the filing, but I will ask Melina to talk a little bit more about the classifications and what that means.

Certainly. So, there are two classifications that the agency will use to categorize an NDA resubmission. It's a very dated system from about 30 years ago, and there's really just those two classifications, one being a class one of two months review, the second one being that of a six month review. And there's a very limited scope in terms of what would qualify for a two month review, and it's not really well defined. Certainly it would be at the discretion of the agency as to whether or not they categorize this class one or class two.

But as Dan had indicated, we certainly will be offering a very succinct package with a very focused scope on the CRL items. And so I do think that, at least from my regulatory experience, given the data that we will be providing, it really should be a very streamlined review for the agency.

Again, it's certainly at their discretion, but I do think that they should be able to review what we consider to be a very succinct package quite quickly, if they choose. And I appreciate the commercial question, because Sherry has been sitting here patiently with all the great stuff her team has been doing, so I'll pass it over to her on your question. Yeah, thank you so much for the question. As you know, this market continues to be so big, and it continues to grow. I mean, year over year, we're seeing 6% or so growth, and even more encouraging is the allergist market continues to grow. When we think about how efficient our launch will be with being allergist-focused, we have been very focused, if you will, on understanding that process.

And so the one thing that's really important foundationally is a patient does need to see their allergist every year to get a prescription. And so, you know, can't really comment on the competitor as to what or why they said that, but look, we will have a very balanced and integrated approach across multiple channels to drive those conversations with the patient and their allergens. We've got a really compelling switch story, as you've heard all morning long, and my team is preparing to drive that messaging and that clinical differentiation that we believe is absolutely the icing on the cake.

Thanks, Rom. So I'll go in reverse order on this one as well and hit the long-term impact question, and then give you some thoughts on the ex-US market. I will also ask Molina to weigh in again on the regulatory piece. So first, probably most importantly on the long-term impact, with the Indivior-Sopernis merger, we of course have been in contact with Indivior, with our, I don't know, I guess it's a 20-year relationship now. And not only do we know that Suboxone Sublingual Film continues to have strong usage, as you've seen from their results, but also that it's an important part of the story and will continue to be an important part of the story. So while that is a legacy part of our business, it does bring in, it is a profitable part of our business, and we expect that to continue as is.

In terms of cassette, they clearly are doing a good job with Symphazen. They're actually local to us here. We know the team there. We think they're a good home for Symphazen. We look forward to seeing what they do with the product. In terms of ex-US, I'll start with how we prioritize or where the opportunity is in the markets. And quite frankly, just like here in the US, epinephrine is a mature market from an understanding standpoint. So we know the opportunity in Europe is mathematically larger than the opportunity in Canada, which is larger than the opportunity in the UK. So in terms of markets, that would be the order of importance. But in terms of how we file, I'll let Melina tell you what we're thinking.

Thank you, Dan.

So we are targeting Canada, Europe, and the UK. We will be beginning that process this year in the fourth quarter. There was a question in terms of how the regulators view the product. I will just remind folks that we did have the opportunity to engage with all three regional health authorities. And not only were they confirmatory that the existing data package would suffice for filing, but I will just say that they also expressed interest. And I think that there is this concept of an unmet need that, at least from a regulator perspective, the groups understand. Thank you.

Well, before Sherry gives you her thoughts, I do want to give her a lot of credit. It's never easy to have a moving target, so I have definitely asked her to be ready for three or four different dates, which she has done a great job at, but I'll let her give you the thoughts. Yeah, thanks so much for the question.

Well, for lack of a better phrase, the beauty of having the CRL is that it has provided us time. And I was very fortunate to be able to keep the majority of my team on board. And so we have taken, as I've stated, shared before, you know, we've taken these months to really, really hone in and refine our plan from agencies and vendors we're using, and then also, you know, Dan says there's a, A few scenario plans, I will tell you, we've got quite a few scenario plans. And so, it will be a great problem to have if we get the two-month approval. So, we'll be ready for it. Will it impact hiring? Sure. I mean, we're not going to carry salespeople for months on end, as we stated.

Once we have the package filed, we should have fairly shortly thereafter further understanding of timing, as Melina has shared with us, and then that will allow us to determine when we are able to make those contingency offers for salespeople.

So I do just want to continue to remind everyone that our base case, and Thomas, we're excited too, so I appreciate the question, but our base case is a six-month review.

Yeah, I think the great thing about this moment for Aquestive is we have the ability to grow in several different places. With Matt Greenhaut and his experience and background and Sherry's depth in the allergy space as well, as we launch Anifilm and find our ground in our market share, we will absolutely be active in that space and want to be a leader in that space. And with the technology we have, that believes nicely into dermatology, which is right next to allergy. In fact, there's a variety of practices that we know in this country that are both allergy and dermatology. One side's allergy, one side's dermatology. So with Matthew Davis and some of the development experience we have, we do think we can play in that dermatology world as well.

So if I answer your question more from a what would I like to see the company do, over the next coming years, I would like to see us play in both areas and become a much larger company with multiple products.

I will now turn the call back over to Dan for closing remarks. Thank you, Michelle. As you heard today from our prepared remarks in the Q&A, this is a really exciting time for Questive. We do feel as though, and the expression goes, that we're hitting on all cylinders. We are on track to file Anafilm in the coming weeks. The epinephrine market, as Sherry said, remains healthy and growing, and we've positioned the company to launch Anafilm quickly if approved by the FDA.

So with that, thank you for joining us, and have a great day.