What changed in this filing

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Item 1. Business

2022-03-16 compared with 2021-03-16 · 584 added, 629 removed, 80 unchanged (94% of the section changed)

are a pharmaceutical company focused on developing, acquiring, and commercializing innovative pharmaceutical products that fulfill

an unmet patient need.

Since the formation of our company in 2017, we have used our expertise in business development, regulatory,

and product development to assemble a diversified portfolio of nine products and product candidates.

All nine of our product

candidates have now been submitted to the U.S.

Food & Drug Administration (“FDA”) and three of them

have been approved and commercially launched.

We plan to continue growing our business through the acquisition of additional late-stage,

high-value product candidates.

product portfolio is comprised of two categories:

Orphan Drugs and Royalty Products.

orphan drug product category is focused on commercializing products that treat the unmet needs of patients suffering from rare

Our first orphan product, Alkindi Sprinkle®, was launched in the fourth quarter of 2020.

As defined by the FDA,

orphan drugs typically address diseases that impact fewer than 200,000 patients in the United States.

Given these small patient

populations, products are typically promoted with small, targeted sales forces and distributed through high-touch specialty pharmacies

that provide comprehensive services to patients or caregivers.

are a pharmaceutical company focused on developing, acquiring, and commercializing innovative pharmaceutical products that fulfill an

unmet patient need.

Since the formation of our company in 2017, we have used our expertise in business development, regulatory, and product

development to assemble a diversified portfolio of eleven products and product candidates.

Six of our products have been approved

Food & Drug Administration (“FDA”) and commercially launched, and an additional four product candidates have

been submitted to the FDA.

We plan to continue growing our business through the acquisition of additional late-stage, high-value

product candidates.

product portfolio is comprised of three categories:

Orphan Drugs, Hospital Products, and Royalty Products.

orphan drug product category is focused on commercializing products that treat the unmet needs of patients suffering from rare diseases.

As defined by the FDA, orphan drugs typically address diseases that impact fewer than 200,000 patients in the United States.

small patient populations, products are typically promoted with small, targeted sales forces and distributed through high-touch specialty

pharmacies that provide comprehensive services to patients or caregivers.

We expect to continue to grow our orphan drug product category.

and eventually commercialize multiple products.

We are currently seeking to acquire late-stage orphan drug candidates and expect

to add additional product candidates to our pipeline in the near-future.

Sprinkle ®

We currently commercialize Alkindi Sprinkle in the United States.

The product was approved by the FDA in September

2020 as a replacement therapy for Adrenocortical Insufficiency (AI) in children under 17 years of age.

The product is the first

and only FDA-approved granule hydrocortisone formulation for the treatment of AI designed for use in children.

We launched Alkindi

Sprinkle in December 2020 with a sales force targeting pediatric endocrinologists.

We believe there are approximately 10,000 children

currently suffering from AI in the United States.

Some of our orphan drug products include:

Sprinkle ® (hydrocortisone granules) - This product was approved by the FDA in September 2020 as a replacement therapy for Adrenocortical

Insufficiency (“AI”) in children under 17 years of age.

The product is the first and only FDA-approved granule hydrocortisone

formulation for the treatment of AI designed for use in children.

We acquired U.S.

marketing rights to the product in March 2020 and

launched Alkindi Sprinkle in December 2020 with a sales force targeting pediatric endocrinologists.

In November 2021, we entered into

a co-promotion agreement with Tolmar Pharmaceuticals, Inc.

(“Tolmar”) to use their 60+ person salesforce to promote Alkindi

Tolmar’s sales force will promote Alkindi Sprinkle to pediatric endocrinology healthcare professionals and Tolmar will

receive a royalty on net sales growth above the product’s baseline sales level at the time of the transaction.

Eton retains ownership

of the product and will maintain responsibility for all non-sales force related commercial activities.

We believe there are approximately

10,000 children currently suffering from AI in the United States.

Alkindi Sprinkle is protected by four issued patents that extend to

January 2021, we announced the acquisition of Canadian rights to Alkindi Sprinkle and we expect to pursue regulatory approval

In January 2021, we announced the acquisition of Canadian rights to Alkindi Sprinkle and we expect to pursue regulatory approval

of the product in Canada in the near future.

Acid tablets - Our Carglumic Acid product is the first and only FDA-approved generic version of Carbaglu®.

Our product is approved

for the treatment of acute and chronic hyperammonemia due to N-acetylglutamate Synthase (NAGS) deficiency.

We acquired marketing rights

to the product in October 2021 and launched the product in December 2021.

We promote the product with our internal sales force.

was awarded Competitive Generic Therapy (CGT) designation by the FDA, which provides us with 180 days of generic exclusivity.

that the Carbaglu® market is more than $50 million annually and our goal is to capture 25% to 35% of the market.

Alcohol Injection.

Our dehydrated alcohol injection product has been submitted to the FDA for the treatment of methanol

The application has been granted Orphan Drug Designation and is expected to receive seven years of market

exclusivity upon its approval.

We submitted the NDA for the product to the FDA in July 2020, and the application has been

assigned a PDUFA date of May 27, 2021.

royalty products category is comprised of products that Eton does not commercialize or products that do not require promotional

In certain cases, the products may be owned and commercialized by a partner that will pay Eton milestones, royalties,

and/or profit shares from commercial sales.

In other cases, Eton may retain ownership of the product, but the product may not

require promotion or may be commercialized by a co-promotion partner.

royalty products category strategy allows us to monetize our vast experience and talent in business development, regulatory activities,

and product development to generate high returns on our financial investments without being restricted by commercial organization

Specifically, the royalty model allows us to pursue attractive product opportunities in a wide variety of dosage

forms, therapeutic areas, and sales channels without being restricted to only pursue product opportunities that are complementary

to a specific sales infrastructure.

By avoiding the financial and human resources required to commercialize products, we believe

we have created a highly scalable business model that can grow revenue significantly with minimal required growth in overhead

expenses and headcount.

believe our asset sales to Azurity Pharmaceuticals (“Azurity”) and Bausch Health Ireland Limited (“Bausch Health”

) have proven the validity of our business model and have established a successful track record.

We expect the diversified portfolio

of royalty interests that we have assembled to provide significant high-margin revenue to the company for years to come, and we

expect to continue growing our portfolio.

Future royalties may be acquired or created via a number of different strategies, including:

Initiation of development on Eton’s internal product ideas to be licensed out to commercial partners in the future,

licensing of existing development programs where Eton can provide development, regulatory and financial support to advance

the programs and increase the asset’s value before selling or licensing it to a commercial partner, or

acquisition of royalty interests in existing commercial products or development candidates.

current royalty products category includes seven products, two of which have been commercially launched and five

of which are under review with the FDA.

Application Status

Biorphen®

Pharmaceuticals

of Product Profit*

Preservative Free®

Oral Suspension

Pharmaceuticals

May 29, 2021)

Royalty on Net Sales**

Oral Solution

Pharmaceuticals

Royalty on Net Sales**

for Oral Suspension

Pharmaceuticals

Royalty on Net Sales**

Pharmaceuticals

of Product Profit

Ready-to-Use Injection

Pharmaceuticals

(PDUFA Jun 18, 2021)

of Product Profit*

to sales commission/selling costs

also to receive a total of up to $45 million in development and commercial milestones

Prescription Drug User Fee Act Date

Biorphen®.

Biorphen (phenylephrine) is the first and only FDA-approved formulation of ready-to-use phenylephrine injection.

in indicated for the treatment of clinically important hypotension resulting primarily from vasodilation in the setting of anesthesia.

Our dehydrated alcohol injection product candidate for the treatment of methanol poisoning was submitted to the

FDA and was granted Orphan Drug Exclusivity in late 2020.

In May 2021, we received a Complete Response Letter (“CRL”) from

We believe all of the items raised by the CRL are addressable, and we plan to submit our response to the FDA in the near future.

We believe the dehydrated alcohol injection market is more than $50 million annually.

Hydrocortisone Autoinjector.

Our Zeneo hydrocortisone autoinjector product candidate is a proprietary needle-free autoinjector under

development for the treatment of adrenal crisis.

We acquired the product candidate from Crossject in June 2021.

Currently patients suffering

from adrenal crisis typically use Solu-Cortef, a lyophilized hydrocortisone injection kit that must be reconstituted prior to delivery.

The current market for Solu-Cortef is more than $75 million annually based on IQVIA data.

We believe our needle-free autoinjector will

be preferred by patients.

We expect to submit a New Drug Application (“NDA”) for the product in 2023, which could

allow for FDA approval in 2024.

hospital products category consists of injectable products that are used in the hospital setting.

These include:

(phenylephrine HCl).

Biorphen is the first and only FDA-approved formulation of ready-to-use phenylephrine injection.

indicated for the treatment of clinically important hypotension resulting primarily from vasodilation in the setting of anesthesia.

acquired U.S.

marketing rights to the product in February 2019.

The product was approved in October 2019 and launched in December 2019.

We estimate the current addressable market for ready-to-use

phenylephrine to be more than ten million units of Biorphen annually.

Biorphen primarily competes with FDA-approved formulations

of concentrated phenylephrine injection, which must be diluted prior to administration to patients, and with unapproved formulations

of ready-to-use phenylephrine sold by 503B compounding pharmacies.

Eton owns the Biorphen new drug application (“NDA”),

but the product is currently promoted by Xellia Pharmaceuticals’

hospital sales force under a co-promotion agreement.

pays Xellia Pharmaceuticals a commission on sales of the product in certain channels.

We estimate the current addressable market for ready-to-use phenylephrine to be more than twenty million units of Biorphen annually.

Biorphen primarily competes with FDA-approved formulations of concentrated phenylephrine injection, which must be diluted prior to administration

to patients, and with unapproved formulations of ready-to-use phenylephrine sold by 503B compounding pharmacies.

Eton owns the Biorphen

NDA, but the product is currently promoted by Xellia Pharmaceuticals’ (“Xellia”) hospital sales force under a co-promotion

Eton pays Xellia a commission on sales of the product in certain channels.

Eton retains the right to exit the co-promotion

agreement under certain conditions.

We acquired U.S.

marketing rights to the product in February 2019.

Preservative Free®.

Alaway Preservative Free (ketotifen fumarate) is the first and only preservative-free ophthalmic product

We are actively working on converting this product from its current ampule container to a vial.

expect to launch the vial presentation in 2022, which is expected to drastically increase the adoption of the product.

(ephedrine HCl) .

Rezipres is an innovative ready-to-use formulation of a molecule that is indicated for the treatment of clinically

important hypotension occurring in the setting of anesthesia.

Our product will compete against Emerphed® and non-FDA approved ready-to-use

products from compounding facilities.

Rezipres® provides a ready-to-use strength that can be immediately administered to patients,

eliminating the need for calculations and additional dilution steps.

Our product is also preservative free and does not contain any sulfites.

This product was launched in March 2022.

We have partnered with XGen Pharmaceuticals DJB (“XGen”) for commercialization

of the product.

XGen’s sales force is responsible for promoting the product to hospitals.

We are actively working on converting

the product from its current ampule container to a vial.

We expect to launch the vial presentation in 2022.

Our cysteine injection product candidate is a generic form of EXELA Pharma Sciences’ Elcys® product for which

we have submitted an Abbreviated New Drug Application (“ANDA”) to the FDA.

We are actively engaged in the Paragraph IV litigation

associated with the innovator company’s patent.

Given our first-to-file status, we expect to be entitled to 180 days of generic

exclusivity if we are successful in challenging the patent.

The trial is expected to begin in March of 2022.

We believe the current market

for Cysteine injection is more than $50 million annually.

royalty products category is comprised of products that Eton does not commercialize.

In most cases, these are products that Eton initiated

development of, or licensed at an early stage, and advanced development to an FDA submission before selling the product rights to a third

These products are now owned and commercialized partners that pay Eton milestones and royalties on commercial sales.

products category strategy allows us to monetize our vast experience and talent in business development, regulatory activities, and product

development to generate high returns on our financial investments without being restricted by commercial organization limitations and

it does not require significant ongoing overhead support costs.

We currently have four royalty products:

Alway Preservative Free, which

is owned and marketed by Bausch Health, and our three neurology oral liquid products, EPRONTIA™, Zonisamide oral suspension

and Lamotrigine oral suspension, which are owned and marketed by Azurity Pharmaceuticals (“Azurity”).

Preservative Free (ketotifen fumarate) .

Alaway Preservative Free is the first and only preservative-free ophthalmic product

approved for the treatment of allergic conjunctivitis.

The preservative-free formulation is designed to deliver an improved comfort

profile to patients compared to currently available ketotifen ophthalmic products that contain preservatives.

The product is sold

via the over-the-counter channel.

Currently the market for ketotifen ophthalmic products is estimated to be more than $75

million annually based on data from IRI and IQVIA.

The preservative-free formulation is designed to deliver an improved comfort profile

to patients compared to currently available ketotifen ophthalmic products that contain preservatives.

The product is sold via the over-the-counter

Currently, the market for ketotifen ophthalmic products is estimated to be more than $75 million annually based on data from

IRI and IQVIA.

We sold the product rights to Bausch Health in February 2019.

Bausch Health

is responsible for commercialization of the product which was launched in February 2021.

We are entitled to receive a $1.5 million

milestone payment in conjunction with the launch of the product and will receive a double-digit percentage royalty on the product’s

Oral Liquids (Zonisamide, Topiramate, and Lamotrigine).

In 2018 and 2019, we assembled a portfolio of three neurology oral

liquid products through in-licensing and internal development.

All three products are molecules that are widely used in oral solid

forms to treat epilepsy, however, are not currently FDA-approved in liquid formulations.

We believe our formulations will be beneficial

to patients suffering from dysphagia, which is prevalent among pediatric and geriatric patients.

In addition, our liquid formulations

offer precision dosing, which can provide patients and caregivers with accurate doses that are lower than or in between the limited

strength doses available from oral solid products.

advanced all three products to NDA submission, and in February 2021 we announced that we sold the three products to Azurity.

Under terms of the agreement, Azurity will pay us milestone payments of up to $45 million and a single digit royalty on net sales

of the products.

Azurity has taken over ownership of the products and is responsible for all development, regulatory, and commercial

Bausch Health is responsible for commercialization of the

product which was launched in February 2021.

We received a $1.5 million milestone payment in conjunction with the launch of the product

and receive a twelve percent royalty on the product’s net sales.

Oral Liquids.

Starting in 2018, we assembled a portfolio of three neurology oral liquid products through in-licensing and

internal development.

All three products are molecules that are widely used in oral solid forms to treat epilepsy, but were not

FDA-approved in liquid formulations.

We believe the formulations will be beneficial to patients suffering from dysphagia, which

is prevalent among pediatric and geriatric patients.

In addition, the liquid formulations offer precision dosing, which can provide patients

and caregivers with accurate doses that are lower than or in between the limited strength doses available from oral solid products.

sold these three products to Azurity in February 2021.

Under terms of the agreement, Azurity has paid us $17 million

and will pay up to $25 million in additional milestone payments plus a single digit royalty on net sales of the products.

taken over ownership of the products and is responsible for all development, regulatory, and commercial activities.

The three neurology

oral liquid products are:

(topiramate oral solution).

the only FDA-approved liquid formulation of topiramate.

The product is approved for three indications, including:

monotherapy for treatment

of partial-onset or primary general tonic-clonic seizures in patients two years of age and older;

adjunctive therapy for treatment of

partial-onset seizures, including seizures associated with Lennox-Gastaut syndrome in patients two year of age and older;

and as a preventive

treatment of migraine in patients 12 years of age and older.

The product was approved in November 2021 and launched by Azurity in December

The current market for topiramate in oral form is more than $800 million annually according to IQVIA.

Oral Suspension.

The product is an innovative liquid formulation of zonisamide under FDA review for the treatment of partial

seizures in patients with epilepsy.

The product has been issued a patent, which is now owned by Azurity.

The product’s

NDA has been assigned a PDUFA date of May 29, 2021.

The current market for zonisamide in oral form is more than $65 million annually

according to IQVIA.

Oral Solution .

The product is an innovative liquid formulation of topiramate under FDA review for three indications, including:

monotherapy for treatment of partial-onset or primary general tonic-clonic seizures in patients two years of age and older;

therapy for treatment of partial-onset seizures, including seizures associated with Lennox-Gastaut syndrome in patients two year

of age and older;

and as a preventive treatment of migraine in patients 12 years of age and older.

Eton’s development partner

has submitted a patent on the product.

The product’s NDA has been assigned a PDUFA date of August 6, 2021.

The current market

for topiramate in oral form is more than $800 million annually according to IQVIA.

The product is an innovative liquid formulation of zonisamide under FDA review for the treatment of partial seizures

in patients with epilepsy.

The product application was originally assigned a PDUFA date of May 29, 2021 and the FDA issued a Complete

Response Letter because it was unable to inspect the manufacturing site due to COVID-related travel restrictions.

The FDA inspected the

facility in January 2022, and we believe the application could be approved in the near future.

The current market for zonisamide in oral

form is more than $65 million annually according to IQVIA.

for Oral Suspension .

The product is an innovative liquid formulation of lamotrigine under FDA review for the treatment of

partial on-set seizures, primary generalized tonic-clonic seizures, and seizures of Lennox-Gastaut syndrome in patients two year

of age and older.

The product is an innovative liquid formulation of lamotrigine under FDA review for the treatment of partial

on-set seizures, primary generalized tonic-clonic seizures, and seizures of Lennox-Gastaut syndrome in patients two year of age and older.

The product has been issued a patent, which is now owned by Azurity.

The product’s NDA

application received a Complete Response Letter in March 2020 and the FDA requested changes to the Dosage and Administration section

of the product’s Prescribing Information to simplify the dosing information for intended users.

The FDA has requested a

human factors validation study with the revised labeling to demonstrate that the intended users can prepare and administer the

oral suspension safely and effectively.

Our development partner is in the process of completing the study and expects the final

report to be completed and submitted to the FDA in 2021.

The current market for lamotrigine in oral form is more than $700 million

annually according to IQVIA.

Cysteine injection is a product candidate for which we have submitted an Abbreviated New Drug Application (“ANDA”)

We believe we are the first-to-file ANDA and should be entitled to 180 days of exclusivity if the patent is successfully

We expect the NDA to receive tentative approval, in 2021 however, ongoing Paragraph IV

litigation is expected to delay final FDA approval beyond that date.

We believe the current market for Cysteine injection is more

than $50 million annually.

Ready-to-Use Injection.

This product is an innovative ready-to-use formulation of a molecule that is currently approved in

a concentrated formulation that must be diluted prior to administration to patients.

Hospitals currently purchase non-FDA approved

ready-to-use products from compounding facilities, or manually dilute the products in-house.

Our product candidate has been developed

in a ready-to-use strength that can be immediately administered to patients, eliminating the need for calculations and additional

dilution steps.

We believe that, if approved, our product will offer significant benefits to hospitals over the current compounded

products, including longer shelf-life, reduction of compounding errors, greater sterility assurance, and more consistent supply.

Our development partner, Sintetica, has submitted the product’s NDA and the application has been assigned a PDUFA date of

June 18, 2021.

The product’s NDA application received a Complete Response

Letter in March 2020 and the FDA requested changes to the Dosage and Administration section of the product’s Prescribing Information

to simplify the dosing information for intended users.

The FDA requested a human factors validation study with the revised labeling to

demonstrate that the intended users can prepare and administer the oral suspension safely and effectively.

Our development partner completed

the study and submitted the report to the FDA in November 2021.

The application has been assigned a PDUFA date of May 30, 2022.

market for lamotrigine in oral form is more than $600 million annually according to IQVIA.

Pharmaceuticals

Insufficiency

Preservative Free

Conjunctivitis

Alcohol Injection

SPRINKLE (Canada)

Insufficiency

Expected in 2022

Hydrocortisone

Expected in 2023

and Strengths

goal is to become a leading profitable pharmaceutical company that brings innovative treatments to patients.

We believe we are

unique in the pharmaceutical industry in our ability to identify, acquire, and advance products through the development and regulatory

We believe we are unique

in the pharmaceutical industry in our ability to identify, acquire, and advance products through the development and regulatory process.

Our biggest competitive strengths are:

development experience–

our ability to identify and execute transactions on under-appreciated development assets.

team has completed over 150 business development transactions throughout their careers and their industry connections and

track record provide the company with proprietary deal flow.

We avoid participating in broker led transactions of auction

expertise –

Our knowledge and experience gaining FDA approval, and particularly our knowledge within the 505(b)(2) regulatory

pathway, which provides drug sponsors with the opportunity to leverage existing data or literature to drastically expedite

drug development timelines and reduce investment.

development experience– our ability to identify and execute transactions on under-appreciated development assets.

has completed over 150 business development transactions throughout their careers and their industry connections and track record

provide the company with proprietary deal flow.

We avoid participating in broker led transactions of auction processes.

expertise – our knowledge and experience gaining FDA approval, and particularly our knowledge within the 505(b)(2) regulatory

pathway, which provides drug sponsors with the opportunity to leverage existing data or literature to drastically expedite drug development

timelines and reduce investment.

and Marketing

currently own or have economic interests in three commercial products.

We plan to commercialize our orphan products internally

with our own infrastructure.

For our royalty category products, we plan to utilize partners for any product commercialization

that requires promotional activities.

In our orphan product category, we currently commercialize Alkindi Sprinkle in the United

We believe we have established the internal infrastructure necessary to commercialize the product.

We have an internal

field sales force targeting pediatric endocrinologists and may utilize third-party companies for additional promotional activities.

The product is distributed to patients via a specialty pharmacy, which supports customer service and reimbursement activities.

our royalty product category, we rely on partners to commercialize Alaway Preservative Free and Biorphen.

We sold Alaway Preservative

Free (previously known as EM-100) to Bausch Health in February 2019, and Bausch Health is responsible for all commercialization

Eton receives a royalty on net sales of the product.

January 2020 we signed a co-promotion agreement with Xellia Pharmaceuticals for the promotion of Biorphen.

Under terms of the

agreement, Xellia’s US-based hospital sales force will promote Biorphen in certain customer channels in exchange for a commission

based on net sales realized at certain customer accounts.

Eton owns the Biorphen NDA and the product is sold under Eton’s

The agreement has a five-year term, but allows Eton to exit under various scenarios, including a change of control,

and after 2021 if Biorphen net sales from Xellia designated accounts do not exceed $29.4 million in 2021, or $42.0 million in

2022 and the following years.

currently own or have economic interests in six commercial products.

We typically commercialize our orphan products under our own label

with our internal infrastructure and sales force, however, we may at times supplement our efforts with a co-promotion arrangement as

we have with Tolmar Pharmaceuticals on Alkindi Sprinkle.

In our orphan product category, we currently commercialize Alkindi Sprinkle

and Carglumic Acid in the United States.

These products are distributed to patients via a specialty pharmacy, which supports customer

service and reimbursement activities.

our hospital category, we have entered into short-term co-promotion agreements for the ampule format of both Biorphen and Rezipres.

retain ownership of the products and have no commercial arrangements relating to the vial formats of both products.

For each future product

launch we will assess if it is more advantageous to promote internally with our own sales force or partner with a company with an existing

hospital sales force.

our royalty product category, the products are commercialized by our partners.

Bausch Health is responsible for all sale and marketing

activities related to Alaway Preservative Free, and Azurity is responsible for all sales and marketing activities related

to Eprontia, zonisamide oral suspension, and lamotrigine suspension.

In all cases we receive a royalty on net sales of the products

January 2020 we signed a co-promotion agreement with Xellia for the promotion of Biorphen.

Under terms of the agreement, Xellia’s

U.S.-based hospital sales force will promote Biorphen in certain customer channels in exchange for a commission based on net sales realized

at certain customer accounts.

Eton owns the Biorphen NDA and the product is sold under Eton’s brand name.

The agreement has a five-year

term, but allows Eton to exit under various scenarios, including a change of control, and after 2021 if Biorphen net sales from Xellia

designated accounts do not exceed $29.4 million in 2021, or $42.0 million in 2022 and the following years.

In July 2021 we signed a co-promotion

agreement with XGen whereby XGen’s salesforce will promote Rezipres for a three-year

term, in exchange for a profit share on the Rezipres product.

In November 2021 we signed a co-promotion agreement with Tolmar whereby

Tolmar will promote Alkindi Sprinkle® through its 60+ person salesforce in exchange for a royalty on net sales.

and Development

currently have six employees that support research and development and have a laboratory facility that supports product development

In addition, we utilize external sources for various product development activities including the resources of our

product development partners for certain product candidates and also through the use of contract laboratory services on a fee

for service model.

currently have seven employees that support our product research and development activities.

In addition, we utilize external sources

for various product development activities, including the resources of our product development partners for certain product candidates,

and also through the use of contract laboratory services on a fee for service model.

Manufacturing

and Suppliers

rely on third-party contract manufacturing organizations (“CMOs”) to manufacture our products.

All our manufacturing

partners are based in the United States or Europe.

rely on third-party contract manufacturing organizations (“CMOs”) to manufacture our products.

All our manufacturing partners

are based in the United States or Europe.

We seek to work with CMOs that have a long history of quality and FDA compliance.

All products are manufactured in compliance with current Good Manufacturing Processes (“cGMP”), and our internal quality

system requires us to enter quality agreements with and audit all of our manufacturers prior to commercializing product.

to rely on external manufacturers significantly reduces the amount of capital invested in our business and allows us the flexibility

to pursue a broad range of opportunities beyond the specific capabilities of a single facility.

are manufactured in compliance with current Good Manufacturing Processes (“cGMP”), and our internal quality system requires

us to enter quality agreements with and audit all of our manufacturers prior to commercializing the product.

Our choice to rely on external

manufacturers significantly reduces the amount of capital invested in our business and allows us the flexibility to pursue a broad range

of opportunities beyond the specific capabilities of a single facility.

policy is to seek to protect our proprietary position by, among other methods, filing U.S.

and foreign patent applications related

to our proprietary technology, inventions and improvements that are important to the development of our business.

on our trade secrets, know-how and continuing technological innovation to develop and maintain our proprietary position.

We vigorously

defend our intellectual property to preserve our rights and gain the benefit of our technological investments.

Our business is

not dependent, however, upon any single patent, trademark or contract.

Alkindi Sprinkle is

protected by four issued patents that extend to 2034.

and foreign patent applications related to

our proprietary technology, inventions and improvements that are important to the development of our business.

We also rely on our trade

secrets, know-how and continuing technological innovation to develop and maintain our proprietary position.

We vigorously defend our

intellectual property to preserve our rights and gain the benefit of our technological investments.

Our business is not dependent, however,

upon any single patent, trademark or contract.

Sprinkle is protected by four issued patents that extend to 2034.

We intend to seek patent protection on our internally developed products

as circumstances warrant and we have applied for trademark registration of the marks “Eton”

and “Eton Pharmaceuticals”

with the U.S.

Patent and Trademark Office.

Our development partners

for zonisamide and topiramate have filed patent applications on those products and our development partner for lamotrigine was

granted a patent by the United States Patent and Trademark Office for the product’s unique formulation.

as circumstances warrant.

development partners for zonisamide and topiramate have filed patent applications on those products and our development partner for lamotrigine

was granted a patent by the United States Patent and Trademark Office for the product’s unique formulation.

We expect the lamotrigine

3 unchanged sentences

Pharmaceutical

companies are subject to extensive regulation by foreign, federal, state and local agencies, such as the FDA, and various European

regulatory authorities.

The manufacture, distribution, marketing and sale of pharmaceutical products are subject to government

regulation in the United States and various foreign countries.

Additionally, in the United States, we must follow rules and regulations

established by the FDA requiring the presentation of data indicating that our products are safe and efficacious and are manufactured

in accordance with cGMP regulations.

If we do not comply with applicable requirements, we may be fined, the government may refuse

to approve our marketing applications or allow us to manufacture or market our products, and we may be criminally prosecuted.

We, our manufacturers and CROs may also be subject to regulations under other foreign, federal, state and local laws, including,

companies are subject to extensive regulation by foreign, federal, state and local agencies, such as the FDA, and various European regulatory

The manufacture, distribution, marketing and sale of pharmaceutical products are subject to government regulation in the

United States and various foreign countries.

Additionally, in the United States, we must follow rules and regulations established by

the FDA requiring the presentation of data indicating that our products are safe and efficacious and are manufactured in accordance with

cGMP regulations.

If we do not comply with applicable requirements, we may be fined, the government may refuse to approve our marketing

applications or allow us to manufacture or market our products, and we may be criminally prosecuted.

We, our manufacturers and contract

research organizations (“CROs”) may also be subject to regulations under other foreign, federal, state and local laws, including,

but not limited to, the U.S.

Occupational Safety and Health Act, the Resource Conservation and Recovery Act, the Clean Air Act

and import, export and customs regulations as well as the laws and regulations of other countries.

government has increased

its enforcement activity regarding illegal marketing practices domestically and internationally.

As a result, pharmaceutical companies

must ensure their compliance with the Foreign Corrupt Practices Act and federal healthcare fraud and abuse laws, including the

False Claims Act.

regulatory requirements impact our operations and differ from one country to another, so that securing the applicable regulatory

approvals of one country does not imply the approval of another country.

The approval procedures involve high costs and are manpower

intensive, usually extend over many years and require highly skilled and professional resources.

Occupational Safety and Health Act, the Resource Conservation and Recovery Act, the Clean Air Act and import,

export and customs regulations as well as the laws and regulations of other countries.

government has increased its enforcement

activity regarding illegal marketing practices domestically and internationally.

As a result, pharmaceutical companies must ensure their

compliance with the Foreign Corrupt Practices Act and federal healthcare fraud and abuse laws, including the False Claims Act.

regulatory requirements impact our operations and differ from one country to another, so that securing the applicable regulatory approvals

of one country does not imply the approval of another country.

The approval procedures involve high costs and are manpower intensive,

usually extend over many years and require highly skilled and professional resources.

Market Approval Process

steps usually required to be taken before a new drug may be marketed in the United States generally include:

steps required to be taken before a new drug may be marketed in the United States generally include:

of pre-clinical laboratory and animal testing;

of required chemistry, manufacturing and controls testing;

submission to the FDA of an investigational new drug, or IND, the application for which must be evaluated and found acceptable

by the FDA before human clinical trials may commence;

of adequate and well-controlled human clinical trials to establish the safety, pharmacokinetics and efficacy of the proposed

drug for its intended use;

submission to the FDA of an investigational new drug, or IND, the application for which must be evaluated and found acceptable by

the FDA before human clinical trials may commence;

of adequate and well-controlled human clinical trials to establish the safety, pharmacokinetics and efficacy of the proposed drug

for its intended use;

and approval of an NDA;

with FDA of the language on the package insert.

studies are conducted under protocols detailing, among other things, the objectives of the study, what types of patients may enter

the study, schedules of tests and procedures, drugs, dosages, and length of study, as well as the parameters to be used in monitoring

safety, and the efficacy criteria to be evaluated.

A protocol for each clinical study and any subsequent protocol amendments must

be submitted to the FDA as part of the IND process.

studies are conducted under protocols detailing, among other things, the objectives of the study, what types of patients may enter the

study, schedules of tests and procedures, drugs, dosages, and length of study, as well as the parameters to be used in monitoring safety,

and the efficacy criteria to be evaluated.

A protocol for each clinical study and any subsequent protocol amendments must be submitted

to the FDA as part of the IND process.

trials are usually conducted in three phases.

Phase 1 clinical trials are normally conducted in small groups of healthy volunteers

to assess safety of various dosing regimens and pharmacokinetics.

After a safe dose has been established, in Phase 2 clinical

trials the drug is administered to small populations of sick patients to look for initial signs of efficacy in treating the targeted

disease or condition and to continue to assess safety.

Phase 3 clinical trials are usually multi-center, double-blind controlled

trials in larger numbers of subjects at various sites to assess as fully as possible both the safety and effectiveness of the

trials must be conducted in accordance with the FDA’s good clinical practices (“GCP”) requirements.

may order the temporary or permanent discontinuation of a clinical study at any time or impose other sanctions if it believes

that the clinical study is not being conducted in accordance with FDA requirements or that the participants are being exposed

to an unacceptable health risk.

An institutional review board (“IRB”) generally must approve the clinical trial design

and patient informed consent at study sites that the IRB oversees and also may halt a study, either temporarily or permanently,

for failure to comply with the IRB’s requirements, or may impose other conditions.

Additionally, some clinical studies are

overseen by an independent group of qualified experts organized by the clinical study sponsor, known as a data safety monitoring

board or committee.

This group recommends whether or not a trial may move forward at designated check points based on access to

certain data from the study.

The clinical study sponsor may also suspend or terminate a clinical trial based on evolving business

objectives and/or competitive climate.

a product candidate moves through the clinical testing phases, manufacturing processes are further defined, refined, controlled

and validated.

Phase 1 clinical trials are normally conducted in small groups of healthy volunteers to

assess safety of various dosing regimens and pharmacokinetics.

After a safe dose has been established, in Phase 2 clinical trials the

drug is administered to small populations of sick patients to look for initial signs of efficacy in treating the targeted disease or

condition and to continue to assess safety.

Phase 3 clinical trials are usually multi-center, double-blind controlled trials in larger

numbers of subjects at various sites to assess as fully as possible both the safety and effectiveness of the drug.

trials must be conducted in accordance with the FDA’s good clinical practices (“GCP”) requirements.

The FDA may order

the temporary or permanent discontinuation of a clinical study at any time or impose other sanctions if it believes that the clinical

study is not being conducted in accordance with FDA requirements or that the participants are being exposed to an unacceptable health

An institutional review board (“IRB”) generally must approve the clinical trial design and patient informed consent

at study sites that the IRB oversees and also may halt a study, either temporarily or permanently, for failure to comply with the IRB’s

requirements, or may impose other conditions.

Additionally, some clinical studies are overseen by an independent group of qualified experts

organized by the clinical study sponsor, known as a data safety monitoring board or committee.

This group recommends whether or not a

trial may move forward at designated check points based on access to certain data from the study.

The clinical study sponsor may also

suspend or terminate a clinical trial based on evolving business objectives and/or competitive climate.

a product candidate moves through the clinical testing phases, manufacturing processes are further defined, refined, controlled and validated.

The level of control and validation required by the FDA increases as clinical studies progress.

We and the third-party

manufacturers on which we rely for the manufacture of our product candidates and their respective components (including the API)

are subject to requirements that drugs be manufactured, packaged and labeled in conformity with cGMP.

To comply with cGMP requirements,

manufacturers must continue to spend time, money and effort to meet requirements relating to personnel, facilities, equipment,

production and process, labeling and packaging, quality control, recordkeeping and other requirements.

completion of all required testing in accordance with all applicable regulatory requirements, detailed information on the product

candidate is submitted to the FDA in the form of an NDA, requesting approval to market the product for one or more indications,

together with payment of a user fee, unless waived.

An NDA includes all relevant data available from pertinent nonclinical and

clinical studies, including negative or ambiguous results as well as positive findings, together with detailed information on

the chemistry, manufacture, controls and proposed labeling, among other things.

To support marketing approval, the data submitted

must be sufficient in quality and quantity to establish the safety and efficacy of the product candidate for its intended use

to the satisfaction of the FDA.

We and the third-party manufacturers

on which we rely for the manufacture of our product candidates and their respective components (including the active pharmaceutical ingredient

(“API”)) are subject to requirements that drugs be manufactured, packaged and labeled in conformity with cGMP.

with cGMP requirements, manufacturers must continue to spend time, money and effort to meet requirements relating to personnel, facilities,

equipment, production and process, labeling and packaging, quality control, recordkeeping and other requirements.

completion of all required testing in accordance with all applicable regulatory requirements, detailed information on the product candidate

is submitted to the FDA in the form of an NDA, requesting approval to market the product for one or more indications, together with payment

of a user fee, unless waived.

An NDA includes all relevant data available from pertinent nonclinical and clinical studies, including

negative or ambiguous results as well as positive findings, together with detailed information on the chemistry, manufacture, controls

and proposed labeling, among other things.

To support marketing approval, the data submitted must be sufficient in quality and quantity

to establish the safety and efficacy of the product candidate for its intended use to the satisfaction of the FDA.

an NDA submission is accepted for filing, the FDA begins an in-depth review of the NDA.

Under the Prescription Drug User Fee Act

(“PDUFA”) the FDA’s goal is to complete its initial review and respond to the applicant within ten months of

submission, unless the application relates to an unmet medical need, or is for a serious or life-threatening indication, in which

case the goal may be within six months of NDA submission.

However, the review process and the target response date under PDUFA

may be extended if the FDA requests or the NDA sponsor otherwise provides additional information or clarification regarding information

already provided in the NDA.

During its review of an NDA, the FDA may refer the application to an advisory committee for review,

evaluation and recommendation as to whether the application should be approved.

The FDA is not bound by the recommendation of

an advisory committee, but it typically follows such recommendations.

Data from clinical studies are not always conclusive and

the FDA and/or any advisory committee it appoints may interpret data differently than the applicant.

the FDA evaluates the NDA and inspects manufacturing facilities where the drug product and/or its API will be produced, it will

either approve commercial marketing of the drug product with prescribing information for specific indications or issue a complete

response letter indicating that the application is not ready for approval and stating the conditions that must be met in order

to secure approval of the NDA.

If the complete response letter requires additional data and the applicant subsequently submits

that data, the FDA nevertheless may ultimately decide that the NDA does not satisfy its criteria for approval.

The FDA could also

approve the NDA with a Risk Evaluation and Mitigation Strategies (“REMS”) plan to mitigate risks, which could include

medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient

registries and other risk minimization tools.

The FDA also may condition approval on, among other things, changes to proposed

labeling, development of adequate controls and specifications, or a commitment to conduct post-marketing testing.

Such post-marketing

testing may include Phase 4 clinical trials and surveillance to further assess and monitor the product’s safety and efficacy

after approval.

Under the Prescription Drug User Fee Act (“PDUFA”)

the FDA’s goal is to complete its initial review and respond to the applicant within ten months of submission, unless the application

relates to an unmet medical need, or is for a serious or life-threatening indication, in which case the goal may be within six months

of NDA submission.

However, the review process and the target response date under PDUFA may be extended if the FDA requests or the NDA

sponsor otherwise provides additional information or clarification regarding information already provided in the NDA.

During its review

of an NDA, the FDA may refer the application to an advisory committee for review, evaluation and recommendation as to whether the application

should be approved.

The FDA is not bound by the recommendation of an advisory committee, but it typically follows such recommendations.

Data from clinical studies are not always conclusive and the FDA and/or any advisory committee it appoints may interpret data differently

than the applicant.

the FDA evaluates the NDA and inspects manufacturing facilities where the drug product and/or its API will be produced, it will either

approve commercial marketing of the drug product with prescribing information for specific indications or issue a CRL indicating that

the application is not ready for approval and stating the conditions that must be met in order to secure approval of the NDA.

CRL requires additional data and the applicant subsequently submits that data, the FDA nevertheless may ultimately decide that the NDA

does not satisfy its criteria for approval.

The FDA could also approve the NDA with a Risk Evaluation and Mitigation Strategies (“REMS”)

plan to mitigate risks, which could include medication guides, physician communication plans, or elements to assure safe use, such as

restricted distribution methods, patient registries and other risk minimization tools.

The FDA also may condition approval on, among

other things, changes to proposed labeling, development of adequate controls and specifications, or a commitment to conduct post-marketing

Such post-marketing testing may include Phase 4 clinical trials and surveillance to further assess and monitor the product’s

safety and efficacy after approval.

the FDA approves one of our product candidates, we will be required to comply with a number of post-approval regulatory requirements.

We would be required to report, among other things, certain adverse reactions and production problems to the FDA, provide updated

safety and efficacy information and comply with requirements concerning advertising and promotional labeling for any of our products.

Also, quality control and manufacturing procedures must continue to conform to cGMP after approval, and the FDA periodically inspects

manufacturing facilities to assess compliance with cGMP, which imposes extensive procedural, substantive and record keeping requirements.

If we seek to make certain changes to an approved product, such as certain manufacturing changes, we will need FDA review and

approval before the change can be implemented.

For example, if we change the manufacturer of a product or our API, the FDA may

require stability or other data from the new manufacturer, and such data will take time and are costly to generate, and the delay

associated with generating these data may cause interruptions in our ability to meet commercial demand, if any.

While physicians

may use products for indications that have not been approved by the FDA, we may not label or promote the product for an indication

that has not been approved.

Securing FDA approval for new indications is similar to the process for approval of the original indication

and requires, among other things, submitting data from adequate and well-controlled studies that demonstrate the product’s

safety and efficacy in the new indication.

Even if such studies are conducted, the FDA may not approve any change in a timely

fashion, or at all.

FDA may also require post-marketing testing, or Phase 4 testing, as well as risk minimization action plans and surveillance to

monitor the effects of an approved product or place conditions or an approval that could otherwise restrict the distribution or

use of the product.

We would be required to report, among other things, certain adverse reactions and production problems to the FDA, provide updated safety

and efficacy information and comply with requirements concerning advertising and promotional labeling for any of our products.

quality control and manufacturing procedures must continue to conform to cGMP after approval, and the FDA periodically inspects manufacturing

facilities to assess compliance with cGMP, which imposes extensive procedural, substantive and record keeping requirements.

to make certain changes to an approved product, such as certain manufacturing changes, we will need FDA review and approval before the

change can be implemented.

For example, if we change the manufacturer of a product or our API, the FDA may require stability or other

data from the new manufacturer, and such data will take time and are costly to generate, and the delay associated with generating these

data may cause interruptions in our ability to meet commercial demand, if any.

While physicians may use products for indications that

have not been approved by the FDA, we may not label or promote the product for an indication that has not been approved.

approval for new indications is similar to the process for approval of the original indication and requires, among other things, submitting

data from adequate and well-controlled studies that demonstrate the product’s safety and efficacy in the new indication.

such studies are conducted, the FDA may not approve any change in a timely fashion, or at all.

FDA may also require post-marketing testing, or Phase 4 testing, as well as risk minimization action plans and surveillance to monitor

the effects of an approved product or place conditions or an approval that could otherwise restrict the distribution or use of the product.

505(b)(2) New Drug Applications

intend to submit applications for certain product candidates via the 505(b)(2) regulatory pathway.

As an alternate path for FDA

approval of new indications or new formulations of previously approved products, a company may submit a Section 505(b)(2) NDA,

instead of a “stand-alone”

or “full”

Section 505(b)(2) of the Federal Food, Drug and Cosmetic Act

(“FDCA”) was enacted as part of the Drug Price Competition and Patent Term Restoration Act of 1984, otherwise known

as the Hatch-Waxman Amendments.

Section 505(b)(2) permits the submission of an NDA where at least some of the information required

for approval comes from studies not conducted by or for the applicant and for which the applicant has not obtained a right of

Some examples of products that may be allowed to follow a 505(b)(2) path to approval are drugs that have a new dosage

form, strength, route of administration, formulation or indication.

As an alternate path for FDA approval

of new indications or new formulations of previously approved products, a company may submit a Section 505(b)(2) NDA, instead of a “stand-alone”

or “full” NDA.

Section 505(b)(2) of the Federal Food, Drug and Cosmetic Act (“FDCA”) was enacted as part of the

Drug Price Competition and Patent Term Restoration Act of 1984, otherwise known as the Hatch-Waxman Amendments.

Section 505(b)(2) permits

the submission of an NDA where at least some of the information required for approval comes from studies not conducted by or for the

applicant and for which the applicant has not obtained a right of reference.

Some examples of products that may be allowed to follow

a 505(b)(2) path to approval are drugs that have a new dosage form, strength, route of administration, formulation or indication.

Hatch-Waxman Amendments permit the applicant to rely upon certain published nonclinical or clinical studies conducted for an approved

product or the FDA’s conclusions from prior review of such studies.

The FDA may require companies to perform additional

studies or measurements to support any changes from the approved product.

The FDA may then approve the new product for all or

some of the labeled indications for which the reference product has been approved, as well as for any new indication supported

by the Section 505(b)(2) application.

While references to nonclinical and clinical data not generated by the applicant or for

which the applicant does not have a right of reference are allowed, all development, process, stability, qualification and validation

data related to the manufacturing and quality of the new product must be included in an NDA submitted under Section 505(b)(2).

the extent that the Section 505(b)(2) applicant is relying on the FDA’s conclusions regarding studies conducted for an already

approved product, the applicant is required to certify to the FDA concerning any patents listed for the approved product in the

FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, or Orange Book.

Specifically, the applicant must

certify that:

(i) the required patent information has not been filed;

product or the FDA’s conclusions from prior review of such studies.

The FDA may require companies to perform additional studies

or measurements to support any changes from the approved product.

The FDA may then approve the new product for all or some of the labeled

indications for which the reference product has been approved, as well as for any new indication supported by the Section 505(b)(2) application.

While references to nonclinical and clinical data not generated by the applicant or for which the applicant does not have a right of

reference are allowed, all development, process, stability, qualification and validation data related to the manufacturing and quality

of the new product must be included in an NDA submitted under Section 505(b)(2).

the extent that the Section 505(b)(2) applicant is relying on the FDA’s conclusions regarding studies conducted for an already

approved product, the applicant is required to certify to the FDA concerning any patents listed for the approved product in the FDA’s

Approved Drug Products with Therapeutic Equivalence Evaluations, or Orange Book.

Specifically, the applicant must certify that:

required patent information has not been filed;

(ii) the listed patent has expired;

(iii) the listed patent

has not expired, but will expire on a particular date and approval is sought after patent expiration;

or (iv) the listed patent

is invalid or will not be infringed by the new product.

The Section 505(b)(2) application also will not be approved until any

non-patent exclusivity, such as exclusivity for obtaining approval of a new chemical entity, listed in the Orange Book for the

reference product has expired.

If the Orange Book certifications outlined above are not accomplished, the Section 505(b)(2) applicant

may invest a significant amount of time and expense in the development of its products only to be subject to significant delay

and patent litigation before its products may be commercialized.

(iii) the listed patent has not expired, but will

expire on a particular date and approval is sought after patent expiration;

or (iv) the listed patent is invalid or will not be infringed

by the new product.

The Section 505(b)(2) application also will not be approved until any non-patent exclusivity, such as exclusivity

for obtaining approval of a new chemical entity, listed in the Orange Book for the reference product has expired.

If the Orange Book

certifications outlined above are not accomplished, the Section 505(b)(2) applicant may invest a significant amount of time and expense

in the development of its products only to be subject to significant delay and patent litigation before its products may be commercialized.

505(j) Abbreviated New Drug Applications

505(j) pathway is used for product candidates that are therapeutically equivalent to an approved product.

The underlying premise

of the 505(j) pathway is that a product candidate classified as therapeutically equivalent can be substituted for the approved

product with the full expectation that the substituted product will produce the same clinical effect and safety profile as the

approved product when administered under the same conditions.

A product candidate utilizing the 505(j) pathway requires an abbreviated

new drug application, or ANDA, which relies on the FDA’s finding that the previously approved drug candidate is safe and

An ANDA generally must contain information to show that the product candidate is the same as the approved product with

respect to API, conditions of use, route of administration, dosage form, strength and labeling, with certain permissible differences,

and is the bioequivalent of the approved drug.

The 505(j) pathway typically requires no clinical testing other than a bioequivalence

While the 505(j) pathway is typically shorter and less expensive than the 505(b)(2) pathway, the 505(b)(2) pathway allows

greater flexibility as to the characteristics of the product candidate.

The underlying premise of the

505(j) pathway is that a product candidate classified as therapeutically equivalent can be substituted for the approved product with

the full expectation that the substituted product will produce the same clinical effect and safety profile as the approved product when

administered under the same conditions.

A product candidate utilizing the 505(j) pathway requires an abbreviated new drug application,

or ANDA, which relies on the FDA’s finding that the previously approved drug candidate is safe and effective.

An ANDA generally

must contain information to show that the product candidate is the same as the approved product with respect to API, conditions of use,

route of administration, dosage form, strength and labeling, with certain permissible differences, and is the bioequivalent of the approved

The 505(j) pathway typically requires no clinical testing other than a bioequivalence trial.

While the 505(j) pathway is typically

shorter and less expensive than the 505(b)(2) pathway, the 505(b)(2) pathway allows greater flexibility as to the characteristics of

the product candidate.

Healthcare Laws and Compliance Requirements

products distributed in the United States, we will also be subject to additional healthcare regulation and enforcement by the

federal government and the states in which we conduct our business.

Applicable federal and state healthcare laws and regulations

include the following:

Anti-Kickback Statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving,

or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual

for, or the purchase, order, lease, or recommendation of, any good or service, for which payment may be made under federal

healthcare programs such as Medicare and Medicaid;

products distributed in the United States, we will also be subject to additional healthcare regulation and enforcement by the federal

government and the states in which we conduct our business.

Applicable federal and state healthcare laws and regulations include the

Anti-Kickback Statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving, or

providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for,

or the purchase, order, lease, or recommendation of, any good or service, for which payment may be made under federal healthcare

programs such as Medicare and Medicaid;

federal civil and criminal false claims laws, including the U.S.

False Claims Act, can be enforced by individuals, on behalf

of the government, through civil whistleblower or qui tam actions, and the civil monetary penalties law, prohibits individuals

or entities from, among other things, knowingly presenting, or causing to be presented, to the federal government claims for

payment that are false or fraudulent or making a false statement to avoid, decrease, or conceal an obligation to pay money

to the federal government;

Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which prohibits, among other things, executing

a scheme to defraud any healthcare benefit program and knowingly and willfully falsifying, concealing or covering up a material

fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items,

as amended by the Health Information Technology for Economic and Clinical Health Act, and their implementing regulations,

imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission

of individually identifiable health information;

Physician Payments Sunshine Act which requires certain manufacturers of drugs, devices, biologics and medical supplies for

which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions)

to report annually to the Centers for Medicare & Medicaid Services (“CMS”) information related to payments

or other transfers of value made to physicians and teaching hospitals, as well as ownership and investment interests held

by physicians and their immediate family members;

state laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements

and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers,

state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines

and the relevant compliance guidance promulgated by the federal government;

state and local laws that require drug manufacturers

to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing

expenditures;

False Claims Act, can be enforced by individuals, on behalf of the

government, through civil whistleblower or qui tam actions, and the civil monetary penalties law, prohibits individuals or entities

from, among other things, knowingly presenting, or causing to be presented, to the federal government claims for payment that are

false or fraudulent or making a false statement to avoid, decrease, or conceal an obligation to pay money to the federal government;

Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which prohibits, among other things, executing

a scheme to defraud any healthcare benefit program and knowingly and willfully falsifying, concealing or covering up a material fact

or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items, or services;

as amended by the Health Information Technology for Economic and Clinical Health Act, and their implementing regulations, imposes

obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually

identifiable health information;

Physician Payments Sunshine Act which requires certain manufacturers of drugs, devices, biologics and medical supplies for which

payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report

annually to the Centers for Medicare & Medicaid Services (“CMS”) information related to payments or other transfers

of value made to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate

family members;

state laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims

involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, state laws

that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the

relevant compliance guidance promulgated by the federal government;

state and local laws that require drug manufacturers to report

information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures;

state laws that require the reporting of information related to drug pricing;

state and local laws requiring

the registration of pharmaceutical sales and medical representatives;

and state and foreign laws, such as the General Data

Protection Regulation (EU) 2016/679, governing the privacy and security of health information in some circumstances, many

of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

of the breadth of these laws and the narrowness of available statutory exceptions and regulatory safe harbors, it is possible

that some of our business activities could be subject to challenge under one or more of such laws.

If our operations are found

to be in violation of any of the federal or state laws described above or any other governmental regulations that apply to us,

we may be subject to penalties, including significant criminal, civil, and administrative penalties, damages, fines, disgorgement,

imprisonment, exclusion from participation in government healthcare programs, integrity oversight and reporting obligations to

resolve allegations of non-compliance with these laws, and the curtailment or restructuring of our operations.

state and local laws requiring the registration of

pharmaceutical sales and medical representatives;

and state and foreign laws, such as the General Data Protection Regulation (EU)

2016/679, governing the privacy and security of health information in some circumstances, many of which differ from each other in

significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

of the breadth of these laws and the narrowness of available statutory exceptions and regulatory safe harbors, it is possible that some

of our business activities could be subject to challenge under one or more of such laws.

If our operations are found to be in violation

of any of the federal or state laws described above or any other governmental regulations that apply to us, we may be subject to penalties,

including significant criminal, civil, and administrative penalties, damages, fines, disgorgement, imprisonment, exclusion from participation

in government healthcare programs, integrity oversight and reporting obligations to resolve allegations of non-compliance with these

laws, and the curtailment or restructuring of our operations.

Reimbursement

of our products in the United States may depend, in part, on the extent to which the costs of the products will be covered and

reimbursed by third-party payors, such as government health programs, commercial insurance and managed health care organizations.

These third-party payors are increasingly challenging the prices charged for medical products and services.

Additionally, the

containment of health care costs has become a priority of federal and state governments, and the prices of drugs have been a focus

in this effort.

The United States government, state legislatures and foreign governments have shown significant interest in implementing

cost-containment programs, including price controls, restrictions on reimbursement and requirements for substitution of generic

Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions

with existing controls and measures, could further limit our net revenue and results.

If these third-party payors do not consider

our products to be cost-effective compared to other available therapies, they may not cover our products after approval as a benefit

under their plans or, if they do, the level of payment may not be sufficient to allow us to sell our products on a profitable

Medicare Prescription Drug, Improvement, and Modernization Act of 2003, (the “MMA”), imposed new requirements for

the distribution and pricing of prescription drugs for Medicare beneficiaries and included a major expansion of the prescription

drug benefit under Medicare Part D.

Under Part D, Medicare beneficiaries may enroll in prescription drug plans offered by private

entities which will provide coverage of outpatient prescription drugs.

Part D plans include both stand-alone prescription drug

benefit plans and prescription drug coverage as a supplement to Medicare Advantage plans.

Unlike Medicare Parts A and B, Part

D coverage is not standardized.

Part D prescription drug plan sponsors are not required to pay for all covered Part D drugs, and

each drug plan can develop its own drug formulary that identifies which drugs it will cover and at what tier or level.

Part D prescription drug formularies must include drugs within each therapeutic category and class of covered Part D drugs, though

not necessarily all the drugs in each category or class.

Any formulary used by a Part D prescription drug plan must be developed

and reviewed by a pharmacy and therapeutic committee.

Government payment for some of the costs of prescription drugs may increase

demand for products for which we receive marketing approval.

However, any negotiated prices for our products covered by a Part

D prescription drug plan will likely be lower than the prices we might otherwise obtain.

Moreover, while the MMA applies only

to drug benefits for Medicare beneficiaries, private third-party payors often follow Medicare coverage policy and payment limitations

in setting their own payment rates.

Any reduction in payment that results from the MMA may result in a similar reduction in payments

from non-governmental payors.

in third-party reimbursement for our products or a decision by a third-party payor to not cover our products could reduce physician

usage of the products and have a material adverse effect on our sales, results of operations and financial condition.

the United States and some foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed

changes regarding the health care system that could prevent or delay marketing approval pharmaceutical products, restrict or regulate

post-approval activities and affect our ability to profitably sell our product candidates.

Legislative and regulatory proposals

have been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products.

example, in March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation

Act, (collectively, the “Health Care Reform Law”) was enacted, which substantially changes the way health care is

financed by both governmental and private insurers, and significantly impacts the U.S.

of our products in the United States may depend, in part, on the extent to which the costs of the products will be covered and reimbursed

by third-party payors, such as government health programs, commercial insurance and managed health care organizations.

These third-party

payors are increasingly challenging the prices charged for medical products and services.

Additionally, the containment of health care

costs has become a priority of federal and state governments, and the prices of drugs have been a focus in this effort.

The United States

government, state legislatures and foreign governments have shown significant interest in implementing cost-containment programs, including

price controls, restrictions on reimbursement and requirements for substitution of generic products.

Adoption of price controls and cost-containment

measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit our net

revenue and results.

If these third-party payors do not consider our products to be cost-effective compared to other available therapies,

they may not cover our products after approval as a benefit under their plans or, if they do, the level of payment may not be sufficient

to allow us to sell our products on a profitable basis.

Medicare Prescription Drug, Improvement, and Modernization Act of 2003, (the “MMA”), imposed new requirements for the distribution

and pricing of prescription drugs for Medicare beneficiaries and included a major expansion of the prescription drug benefit under Medicare

Under Part D, Medicare beneficiaries may enroll in prescription drug plans offered by private entities which will provide coverage

of outpatient prescription drugs.

Part D plans include both stand-alone prescription drug benefit plans and prescription drug coverage

as a supplement to Medicare Advantage plans.

Unlike Medicare Parts A and B, Part D coverage is not standardized.

Part D prescription

drug plan sponsors are not required to pay for all covered Part D drugs, and each drug plan can develop its own drug formulary that identifies

which drugs it will cover and at what tier or level.

However, Part D prescription drug formularies must include drugs within each therapeutic

category and class of covered Part D drugs, though not necessarily all the drugs in each category or class.

Any formulary used by a Part

D prescription drug plan must be developed and reviewed by a pharmacy and therapeutic committee.

Government payment for some of the costs

of prescription drugs may increase demand for products for which we receive marketing approval.

However, any negotiated prices for our

products covered by a Part D prescription drug plan will likely be lower than the prices we might otherwise obtain.

Moreover, while the

MMA applies only to drug benefits for Medicare beneficiaries, private third-party payors often follow Medicare coverage policy and payment

limitations in setting their own payment rates.

Any reduction in payment that results from the MMA may result in a similar reduction

in payments from non-governmental payors.

in third-party reimbursement for our products or a decision by a third-party payor to not cover our products could reduce physician usage

of the products and have a material adverse effect on our sales, results of operations and financial condition.

the United States and some foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes

regarding the health care system that could prevent or delay marketing approval pharmaceutical products, restrict or regulate post-approval

activities and affect our ability to profitably sell our product candidates.

Legislative and regulatory proposals have been made to expand

post-approval requirements and restrict sales and promotional activities for pharmaceutical products.

example, in March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act,

(collectively, the “Health Care Reform Law”) was enacted, which substantially changes the way health care is financed by

both governmental and private insurers, and significantly impacts the U.S.

pharmaceutical industry.

The Health Care

Reform Law, among other things, imposed reporting requirements on manufacturers related to drug samples and financial relationships

with physicians and teaching hospitals, increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate

Program and extended the rebate program to individuals enrolled in Medicaid managed care organizations, established annual fees

on manufacturers of certain branded prescription drugs, and established a Medicare Part D coverage gap discount program.

The Health Care Reform Law, among

other things, imposed reporting requirements on manufacturers related to drug samples and financial relationships with physicians and

teaching hospitals, increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extended

the rebate program to individuals enrolled in Medicaid managed care organizations, established annual fees on manufacturers of certain

branded prescription drugs, and established a Medicare Part D coverage gap discount program.

of the provisions of the Health Care Reform Law have yet to be implemented, and there have been judicial and Congressional challenges

to certain aspects of the Health Care Reform Law, as well as recent efforts by the former Trump administration to repeal or replace

certain aspects of the Health Care Reform Law.

Since January 2017, former President Trump had signed two executive orders and

other directives designed to delay, circumvent or loosen certain requirements mandated by the Health Care Reform Law.

Concurrently,

Congress has considered legislation that would repeal or repeal and replace all or part of the Health Care Reform Law.

While Congress

has not passed comprehensive repeal legislation, two bills affecting the implementation of certain taxes under the Health Care

Reform Law have been signed into law.

The Tax Cuts and Jobs Act of 2017 (the “Tax Act”) included a provision which

repealed, effective January 1, 2019, the tax-based shared responsibility payment imposed by the Health Care Reform Law on certain

individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual

mandate.”

On January 22, 2018, former President Trump signed a continuing resolution on appropriations for fiscal year 2018

that delayed the implementation of certain Health Care Reform Law-mandated fees, including the so-called “Cadillac”

tax on certain high cost employer-sponsored insurance plans, the annual fee imposed on certain health insurance providers based

on market share, and the medical device excise tax on non-exempt medical devices.

The Bipartisan Budget Act of 2018, among other

things, amended the Health Care Reform, effective January 1, 2019, to increase from 50 percent to 70 percent the point-of-sale

discount that is owed by pharmaceutical manufacturers who participate in Medicare Part D and to close the coverage gap in most

Medicare drug plans, commonly referred to as the “donut hole”.

On December 14, 2018, a Texas U.S.

District Court Judge

ruled that the Health Care Reform is unconstitutional in its entirety because the “individual mandate”

by Congress as part of the Tax Act.

While the Texas U.S.

District Court Judge, as well as the Trump administration and CMS, have

stated that the ruling will have no immediate effect pending appeal of the decision, it is unclear how this decision, subsequent

appeals, and other efforts to repeal and replace the Health Care Reform will impact the Health Care Reform Law.

to certain aspects of the Health Care Reform Law.

In addition, Congress has considered legislation that would repeal or repeal and replace

all or part of the Health Care Reform Law.

While Congress has not passed comprehensive repeal legislation, two bills affecting the implementation

of certain taxes under the Health Care Reform Law have been signed into law.

The Tax Cuts and Jobs Act of 2017 (the “Tax Act”)

included a provision which repealed, effective January 1, 2019, the tax-based shared responsibility payment imposed by the Health Care

Reform Law on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred

to as the “individual mandate.” The Bipartisan Budget Act of 2018, among other things, amended the Health Care Reform, effective

January 1, 2019, to increase from 50 percent to 70 percent the point-of-sale discount that is owed by pharmaceutical manufacturers who

participate in Medicare Part D and to close the coverage gap in most Medicare drug plans, commonly referred to as the “donut hole”.

In 2018, a Texas U.S.

District Court Judge ruled that the Health Care Reform Law is unconstitutional in its entirety because the “individual

mandate” was repealed by Congress as part of the Tax Act.

While the ruling has no immediate effect pending appeal of the decision,

it is unclear how this decision, subsequent appeals, and other efforts to repeal and replace the Health Care Reform will impact the Health

Care Reform Law.

addition, other legislative changes have been proposed and adopted in the United States since the Health Care Reform Law was enacted.

These changes include, among others, aggregate reductions of Medicare payments to providers of up to 2% per fiscal year and an

increase in the statute of limitations period for the government to recover overpayments to providers from three to five years.

there has been heightened governmental scrutiny in the United States of pharmaceutical pricing practices in light of the rising

cost of prescription drugs and biologics.

Such scrutiny has resulted in several recent congressional inquiries and proposed and

enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the

relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for

For example, the Trump administration released a “Blueprint”

to lower drug prices and reduce out of pocket

costs of drugs that contains additional proposals to increase drug manufacturer competition, increase the negotiating power of

certain federal healthcare programs, incentivize manufacturers to lower the list price of their products, and reduce the out-of-pocket

costs of drug products paid by consumers.

On January 31, 2019, the Health and Human Services (“HHS”) Office of Inspector

General proposed modifications to the U.S.

Anti-Kickback Statute discount safe harbor for the purpose of reducing the cost of

drug products to consumers which, among other things, if finalized, will affect discounts paid by manufacturers to Medicare Part

D plans, Medicaid managed care organizations and pharmacy benefit managers working with these organizations.

While some of these

and other proposed measures may require additional authorization to become effective, Congress and government administration officials

have each indicated that they will continue to seek new legislative and/or administrative measures to control drug costs.

in December 2016, the 21st Century Cures Act was signed into law.

The 21st Century Cures Act, among other things, is intended

to modernize the regulation of drugs and biologics and spur innovation, but it has not yet been fully implemented and its ultimate

implementation is unclear.

Additionally, the Trump administration has taken several executive actions, including the issuance

of a number of executive orders, that could impose significant burdens on, or otherwise materially delay, the FDA’s ability

to engage in routine regulatory and oversight activities such as implementing statutes through rulemaking, issuance of guidance

and review and approval of marketing applications.

currently have 16 full-time employees, six of whom are engaged in research and development activities, six are engaged in sales/marketing

These changes include, among others, aggregate reductions of Medicare payments to providers of up to 2% per fiscal year and an increase

in the statute of limitations period for the government to recover overpayments to providers from three to five years.

there has been heightened governmental scrutiny in the United States of pharmaceutical pricing practices in light of the rising cost

of prescription drugs and biologics.

Such scrutiny has resulted in several recent congressional inquiries and proposed and enacted federal

and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing

and manufacturer patient programs, and reform government program reimbursement methodologies for products.

For example, in President

Biden’s 2022 State of the Union Speech, President Biden again called for Congress to take action to combat high prices of prescription

In 2019, the Health and Human Services (“HHS”) Office of Inspector General proposed modifications to the U.S.

Anti-Kickback

Statute discount safe harbor for the purpose of reducing the cost of drug products to consumers which, among other things, if finalized,

will affect discounts paid by manufacturers to Medicare Part D plans, Medicaid managed care organizations and pharmacy benefit managers

working with these organizations.

While some of these and other proposed measures may require additional authorization to become effective,

Congress and government administration officials have each indicated that they will continue to seek new legislative and/or administrative

measures to control drug costs.

currently have 17 full-time employees, seven of whom are engaged in research and development activities, six are engaged in sales/marketing

operations and four of whom are engaged in general corporate and strategy roles.

We periodically utilize outside consultants on

an as-needed basis, including medical consultants and product telesales services.

We periodically utilize outside consultants on an as-needed

basis, including medical consultants and product telesales services.

and Other Information

were incorporated under the laws of the state of Delaware in April 2017.

Our principal executive offices are located at 21925

Field Parkway, Suite 235, Deer Park, Illinois, 60010, and our telephone number is (847) 787-7361.

Our corporate website address

is www.etonpharma.com, to which we regularly post copies of our press releases as well as links to reports we have filed with

the SEC, which are available free of charge as soon as reasonably practicable after being electronically filed with or furnished

Interested persons can subscribe on our website to email alerts that are sent automatically when we issues press releases,

file reports with the SEC or post certain other information to our website.

Information contained on or accessible through our

website is not a part of this Annual Report on Form 10-K or our other filings with the SEC.

Our principal executive offices are located at 21925 W.

Parkway, Suite 235, Deer Park, Illinois, 60010, and our telephone number is (847) 787-7361.

Our corporate website address is www.etonpharma.com,

to which we regularly post copies of our press releases as well as links to reports we have filed with the SEC, which are available free

of charge as soon as reasonably practicable after being electronically filed with or furnished to the SEC.

Interested persons can subscribe

on our website to email alerts that are sent automatically when we issues press releases, file reports with the SEC or post certain other

information to our website.

Information contained on or accessible through our website is not a part of this Annual Report on Form 10-K

or our other filings with the SEC.

federal trademark applications and unregistered trademarks, including our company name.

All other trademarks or trade

names referred to in this Annual Report are the property of their respective owners.

Solely for convenience, the trademarks and

trade names in this Annual Report are referred to without the symbols ®

and ™, but such references should not be construed

as any indication that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto.

should carefully consider the risks set forth in the section of this prospectus entitled “Risk Factors”

All other trademarks or trade names

referred to in this Annual Report are the property of their respective owners.

Solely for convenience, the trademarks and trade names

in this Annual Report are referred to without the symbols ® and ™, but such references should not be construed as any indication

that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto.

Factor Summary

should carefully consider the risks set forth in the section of this Annual Report of Form 10-K entitled “Risk Factors” beginning

on page 16 of this Annual Report, including, but not limited to, the following:

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of our product candidates.

may acquire businesses or products, or form strategic alliances, in the future, and we may not realize the benefits of such

acquisitions.

rely significantly on information technology and any failure, inadequacy, interruption or security lapse of that technology,

including any cybersecurity incidents, could harm our ability to operate our business effectively.

of counterfeits of any of our product candidates, as well as unauthorized sales of any of our product candidates, may have

adverse effects on our revenues, business and results of operations and damage our brand and reputation.

have entered into several arrangements with related parties for the development and marketing of certain product candidates

and these arrangements present potential conflicts of interest.

depend entirely on the success of Biorphen and our product candidates.

If we are unable to generate revenues from our product

candidates, our ability to create stockholder value will be limited.

face competition from other biotechnology and pharmaceutical companies and our operating results will suffer if we fail to

compete effectively.

competitors may obtain FDA or other regulatory approval for comparable products more rapidly than we may obtain approval for

ours, and the risk of our competitors doing so may lead us to develop drug candidates without disclosing certain information

with regard to such candidates.

we are not able to obtain any required regulatory approvals for our product candidates, we will not be able to commercialize

our product candidate and our ability to generate revenue will be limited.

the FDA does not conclude that our product candidates satisfy the requirements for the 505(b)(2) regulatory approval pathway,

or if the requirements for approval of any of our product candidates under Section 505(b)(2) are not as we expect, the approval

pathway for our product candidates will likely take significantly longer, cost significantly more and encounter significantly

greater complications and risks than anticipated, and in any case may not be successful.

NDA submitted under Section 505(b)(2) subjects us to the risk that we may be subject to a patent infringement lawsuit that

would delay or prevent the review or approval of our product candidate.

if we receive regulatory approval for any of our product candidates, we may not be able to successfully commercialize the

product, and the revenue that we generate from its sales, if any, may be limited.

may acquire businesses or products, or form strategic alliances, in the future, and we may not realize the benefits of such acquisitions.

rely significantly on information technology and any failure, inadequacy, interruption or security lapse of that technology, including

any cybersecurity incidents, could harm our ability to operate our business effectively.

of counterfeits of any of our product candidates, as well as unauthorized sales of any of our product candidates, may have adverse

effects on our revenues, business and results of operations and damage our brand and reputation.

have entered into several arrangements with related parties for the development and marketing of certain product candidates and these

arrangements present potential conflicts of interest.

face competition from other biotechnology and pharmaceutical companies and our operating results will suffer if we fail to compete

competitors may obtain FDA or other regulatory approval for comparable products more rapidly than we may obtain approval for ours,

and the risk of our competitors doing so may lead us to develop drug candidates without disclosing certain information with regard

to such candidates.

we are not able to obtain any required regulatory approvals for our product candidates, we will not be able to commercialize our

product candidate and our ability to generate revenue will be limited.

the FDA does not conclude that our product candidates satisfy the requirements for the 505(b)(2) regulatory approval pathway, or

if the requirements for approval of any of our product candidates under Section 505(b)(2) are not as we expect, the approval pathway

for our product candidates will likely take significantly longer, cost significantly more and encounter significantly greater complications

and risks than anticipated, and in any case may not be successful.

NDA submitted under Section 505(b)(2) subjects us to the risk that we may be subject to a patent infringement lawsuit that would

delay or prevent the review or approval of our product candidate.

if we receive regulatory approval for any of our product candidates, we may not be able to successfully commercialize the product,

and the revenue that we generate from its sales, if any, may be limited.

are subject to ongoing obligations and continued regulatory review, which may result in significant additional expense.

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our product candidates could be subject to labeling and other restrictions and withdrawal from the market, and we may be subject

to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our product

additional labeling or warning requirements or limitations on the availability of our products may inhibit sales of affected

to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our product candidates.

additional labeling or warning requirements or limitations on the availability of our products may inhibit sales of affected products.

and future legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product

candidates and affect the prices we may obtain.

future growth may depend, in part, on our ability to penetrate international markets, where we would be subject to additional

regulatory burdens and other risks and uncertainties.

we market Biorphen or any of our product candidates in a manner that violates health care fraud and abuse laws, or if we violate

future growth may depend, in part, on our ability to penetrate international markets, where we would be subject to additional regulatory

burdens and other risks and uncertainties.

we market any of our products or product candidates in a manner that violates health care fraud and abuse laws, or if we violate

government price reporting laws, we may be subject to civil or criminal penalties.

may not be able to establish agreements with third parties with whom we wish to collaborate and, if we are able to establish

them, we may not be able to establish them on commercially reasonable terms, which could result in alterations or delays of

our development and commercialization plans.

may not be able to establish agreements with third parties with whom we wish to collaborate and, if we are able to establish them,

we may not be able to establish them on commercially reasonable terms, which could result in alterations or delays of our development

and commercialization plans.

expect to rely on third parties to conduct clinical trials for our product candidates.

2 unchanged sentences

any of our product candidates and our business would be substantially harmed.

enter into various contracts in the normal course of our business, some or all of which may require us to indemnify the other

party to the contract.

In the event we have to perform under these indemnification provisions, it could have an adverse effect

on our business, financial condition and results of operations.

enter into various contracts in the normal course of our business, some or all of which may require us to indemnify the other party

to the contract.

In the event we have to perform under these indemnification provisions, it could have an adverse effect on our business,

financial condition and results of operations.

Chief Executive Officer holds ownership interest in some of the third parties we have entered into agreements with.

and fee arrangements of these agreements, we believe, approximate the terms and fee arrangements of an agreement that would

have been obtained in an arm’s length and unaffiliated transaction.

Nonetheless, this may expose us to claims of interested

transactions and other fiduciary suits.

termination or suspension of, or delays in the commencement or completion of, any necessary studies of any of our product

candidates for any indications could result in increased costs to us, delay or limit our ability to generate revenue and adversely

affect our commercial prospects.

drug development involves a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials

may not be predictive of future trial results.

coverage and reimbursement and health care cost containment initiatives and treatment guidelines may constrain our future

The terms and

fee arrangements of these agreements, we believe, approximate the terms and fee arrangements of an agreement that would have been

obtained in an arm’s length and unaffiliated transaction.

Nonetheless, this may expose us to claims of interested transactions

and other fiduciary suits.

termination or suspension of, or delays in the commencement or completion of, any necessary studies of any of our product candidates

for any indications could result in increased costs to us, delay or limit our ability to generate revenue and adversely affect our

commercial prospects.

drug development involves a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials may

not be predictive of future trial results.

coverage and reimbursement and health care cost containment initiatives and treatment guidelines may constrain our future revenues.

are subject to extensive laws and regulations related to data privacy, and our failure to comply with these laws and regulations

1 unchanged sentence

will depend on rights to certain pharmaceutical compounds that have been acquired by us.

We do not have complete control over

these pharmaceutical compounds and any loss of our rights to them could prevent us from selling our products.

We do not have complete control over these

pharmaceutical compounds and any loss of our rights to them could prevent us from selling our products.

is difficult and costly to protect our intellectual property rights, and we cannot ensure the protection of these rights.

may not be able to protect our intellectual property rights throughout the world.

in either U.S.

or foreign patent law or interpretation of such laws could diminish the value of patents in general, thereby

impairing our ability to protect our products.

product candidates may infringe the intellectual property rights of others, which could increase our costs and delay or prevent

our development and commercialization efforts.

may claim an ownership interest in our intellectual property, which could expose us to litigation and have an adverse effect

on our prospects.

or foreign patent law or interpretation of such laws could diminish the value of patents in general, thereby impairing

our ability to protect our products.

product candidates may infringe the intellectual property rights of others, which could increase our costs and delay or prevent our

development and commercialization efforts.

may claim an ownership interest in our intellectual property, which could expose us to litigation and have an adverse effect on our

may be subject to claims that we have wrongfully hired an employee from a competitor or that we or our employees have wrongfully

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business