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Subsequent Events

12 Months Ended

Dec. 31, 2018

Subsequent Events [Abstract]

Subsequent Events

Note 15 — Subsequent Events

The Company has performed an evaluation of events occurring subsequent to December 31, 2018 through the filing date of this Annual Report. Based on its evaluation, nothing other than the events described below need to be disclosed.

On January 23, 2019, the Company entered into a Licensing and Supply Agreement (the “Agreement”) with Liqmeds Worldwide Limited (“LMW”) for ET-104 oral liquid, a development stage product candidate (“ET-104”). Pursuant to the terms of the Agreement, Eton will be responsible for regulatory and marketing activities. LMW will be responsible for development and manufacturing of ET-104. Eton is obligated to pay to LMW licensing payments of up to $2.5 million based on achievement of the following milestones:

	●	$350,000 upon execution of the Agreement;

	●	$350,000 upon successful bioequivalence study results;

	●	$325,000 upon NDA acceptance for review by the FDA;

	●	$325,000 upon NDA approval;

	●	$650,000 upon issuance of patent listed in the FDA’s Orange Book; and

	●	$500,000 when product sales first exceed $10 million in a calendar year.

Eton will also pay to LMW 35% of product profit from commercial sales. The Agreement has a ten-year term, and Eton will retain sole ownership of the NDA after expiration of the Agreement.

On February 8, 2019, the Company entered into an Exclusive Licensing and Supply Agreement (the “ET-202 License Agreement”) with Sintetica SA (“Sintetica”) for marketing rights in the United States to ET-202, an injectable product candidate for use in the hospital setting that has been submitted to the FDA for review. Pursuant to the terms of the Agreement, Eton will be responsible for marketing activities and Sintetica will be responsible for development, manufacturing, and regulatory activities related to obtaining regulatory approval. Eton will pay to Sintetica a licensing payment of $2,000,000 upon execution of the agreement and $750,000 upon FDA approval of the product candidate. Upon approval, Sintetica will supply ET-202 to Eton at its direct costs. Eton will retain 5% of net sales as a marketing fee. Sintetica will be entitled to receive the first $500,000 of product profits. All additional profit will be split 50% to Eton and 50% to Sintetica. The agreement has a ten-year term from first commercial sale of product.

On February 8, 2019, the Company also entered into an Exclusive Licensing and Supply Agreement (the “ET-203 License Agreement”) with Sintetica for marketing rights in the United States to ET-203, an injectable product candidate for use in the hospital setting. Pursuant to the terms of the Agreement, Eton will be responsible for marketing activities and Sintetica will be responsible for development, manufacturing, and regulatory activities related to obtaining regulatory approval. Eton will pay to Sintetica a licensing payment of $1,000,000 upon execution of the agreement and $750,000 upon FDA approval of the product candidate. Upon approval, Sintetica will supply ET-202 to Eton at its direct costs. Eton will retain 5% of net sales as a marketing fee. Sintetica will be entitled to receive the first $500,000 of product profits. All additional profit will be split 50% to Eton and 50% to Sintetica. The agreement has a ten-year term from first commercial sale of product.

On February 18, 2019, the Company entered into an Amended and Restated Agreement with Eyemax amending the Sales Agreement (the “Amended Agreement”). Pursuant to the Amended Agreement, Eyemax sold Eton all of its right, title and interest in EM-100, including any such product that incorporates or utilizes Eyemax’s intellectual property rights. Under the Amended Agreement, Eton assumed certain liabilities of Eyemax under its Exclusive Development & Supply Agreement with Excelvision SAS dated as of July 11, 2013, as amended (the “Excelvision Agreement”), with respect to certain territories and arising during certain time periods. Pursuant to the Amended Agreement, the Company remain obligated to pay Eyemax two milestones: (i) one milestone payment for $250,000 upon regulatory approval in the territory by the FDA of the first single agent product and (ii) one milestone payment for $500,000 following the first commercial sale of the first single agent product in the territory. Following payment of the milestones, Eton is entitled to retain all of the non-royalty transaction revenues and royalties up to $2,000,000 (the “Recovery Amount”). After the Company has retained the full Recovery Amount, it is entitled to retain half of all royalty and non-royalty transaction revenue. The Amended Agreement also contains customary representations, warranties, covenants and indemnities by the parties. The Company’s CEO, Sean Brynjelsen, has a 33% ownership interest in Eyemax.

In conjunction with the Amended Agreement with Eyemax, on February 18, 2019, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Bausch Health Ireland Limited (“Bausch”). Pursuant to the Asset Purchase Agreement, Eton sold all of its right, title and interest in EM-100 in the United States, including any such product that incorporates or utilizes its intellectual property rights with respect to EM-100. Under the Asset Purchase Agreement, Bausch assumed all of Eton’s liabilities under the Excelvision Agreement, related to the United States and arising during certain time periods. Pursuant to the Asset Purchase Agreement, Bausch paid Eton an upfront payment of $500,000 and Bausch is required to pay the Company commercial milestone payments of up to $2,500,000. Additionally, Bausch is required to pay Eton a royalty in the low-double digit percentage range on net sales for a period of 10 years from the date of the first commercial sale of the first single agent EM-100 product in the United States. In the event that any product with the same sole active ingredient as EM-100 is launched in the United States by any person other than Bausch (or its affiliates) during the term of Bausch’s royalty commitment, then the royalty rate will be reduced to a lower specified percentage. In the event that EM-100’s market share in the territory falls below a certain percentage of the target market during the term of Bausch’s royalty commitment, then the royalty rate will be further reduced to a lower specified percentage. The Asset Purchase Agreement also contains customary representations, warranties, covenants and indemnities by the parties.