Eagle Pharmaceuticals Provides Business Update and Guidance for 2023

Eagle Pharmaceuticals, Inc. (Nasdaq: EGRX) (“Eagle” or the “Company”) today provided a business update and guidance for 2023.

Highlights:

• During the 12 months ended September 30, 2022, Eagle recorded net income of $21.3 million or $1.63 per diluted share and adjusted EBITDA of $125.6 million and non-GAAP earnings per diluted share of $7.54, a significant increase from 2021.¹
• Eagle exited 2022 with an approximate 6%² share of the commercial segment of the pemetrexed market for its PEMFEXY^® product, equating to approximately $8 million per quarter in revenue³, and anticipates doubling its share by the end of Q1 2023. The Company bought down future royalties on PEMFEXY profits in exchange for a one-time payment of $15 million.⁴
• Expects U.S. bendamustine franchise decline to be manageable, maintaining approximately 75% of the gross profit in 2023. Q4 2022 expiration of development partner royalty on the bendamustine franchise profits (BENDEKA^®, BELRAPZO^® & TREAKISYM^®), representing approximately 10% of such profits.

Preliminary 2023 Guidance

• Adjusted EBITDA of $74.0-$80.0 million⁵
• Adjusted non-GAAP earnings per share of $4.20-$4.53⁶
• Adjusted non-GAAP R&D expense of $41.0-$45.0 million⁷

Improved Margins and Contribution for Key Products

• The Company continues to evolve with a more diversified revenue stream
• U.S. bendamustine revenue as a percentage of total revenue projected to decline, while maintaining approximately 75% of gross profit in 2023
• Expected increase in PEMFEXY sales from 2022 to 2023
  • Eagle exited 2022 with an approximate 6% share of the commercial segment of the pemetrexed market, equating to approximately $8 million per quarter in revenue
  • Anticipates doubling share by end of Q1 2023
  • Company values this segment at approximately $550 million annually at expected pricing^8,9
• Elimination/expiration of royalties paid
  • Q4 2022 expiration of development partner royalty on bendamustine franchise profits (BENDEKA, BELRAPZO & TREAKISYM) representing approximately 10% of profits historically
  • Bought down future royalties on PEMFEXY profits in exchange for one-time payment of $15 million¹⁰
    • Includes elimination of 25% royalty on next $85 million in profit
    • Reduction in rates on subsequent profits

“Our path to achieving our projected earnings per share range of $4.20 to $4.53 for 2023 is based on several key drivers. First, we anticipate higher PEMFEXY sales in 2023 than we had last year, and we also reduced future royalties related to PEMFEXY profits from 25% to a range of 0% to 12.5% based on aggregate profits achieved in exchange for a one-time payment of $15 million. In addition, we expect the 2023 decline in bendamustine to be manageable, and the 10% royalty on bendamustine products no longer applies. We also remain enthusiastic about the commercial potential of our two newest hospital-based products, Barhemsys^® and Byfavo^®. These efforts, together with our intention to further expand the Company, including M&A, lead us to believe that Eagle is poised for another year of strong earnings growth and profitability in 2023,” stated Scott Tarriff, President and Chief Executive Officer of Eagle Pharmaceuticals.

Commercial and Pipeline Update

• Product portfolio
  • Acute Care Hospital: RYANODEX^®, vasopressin, Barhemsys^®, Byfavo^®
  • Oncology: BENDEKA, BELRAPZO, PEMFEXY¹¹, TREAKISYM Japan¹²
  • 75-person commercial team covers all products excluding BENDEKA and TREAKISYM
• Company projects growth in earnings while still supporting R&D
• Cash flow from legacy products expected to continue to fund R&D and partnerships for branded pipeline, including:
  • Landiolol¹³: NDA under review by FDA
  • CAL02¹⁴: Global Phase 2 study underway with 276 expected patients in 120 centers expected in 22 countries
  • Enalare’s ENA-001¹⁵: Fast-track status for post-operative respiratory depression—Enalare expects to start fentanyl toxicology study in early 2023 and expects Phase 2 enrollment as early as Q3 2023
    • BARDA¹⁶ (award to Enalare worth up to $50 million to advance intramuscular formulation) and NIH funding for community drug overdose—expect Phase 1 enrollment mid-2023
    • Rare Pediatric Disease and Orphan Drug designations for apnea of prematurity—Enalare completed animal proof of concept; designing next set of animal studies and clinical pathway

About Eagle Pharmaceuticals, Inc.

Eagle is a fully integrated pharmaceutical company with research and development, clinical, manufacturing and commercial expertise. Eagle is committed to developing innovative medicines that result in meaningful improvements in patients’ lives. Eagle’s commercialized products include vasopressin, PEMFEXY^®, RYANODEX^®, BENDEKA^®, BELRAPZO^®, TREAKISYM^® (Japan), and BYFAVO^® and BARHEMSYS^® through its wholly owned subsidiary Acacia Pharma Inc. Eagle’s oncology and CNS/metabolic critical care pipeline includes product candidates with the potential to address underserved therapeutic areas across multiple disease states.

Non-GAAP Financial Performance Measures

In addition to financial information prepared in accordance with U.S. GAAP, this press release also contains adjusted EBITDA and adjusted non-GAAP earnings per share attributable to Eagle and projected adjusted non-GAAP R&D expense, adjusted EBITDA and adjusted non-GAAP earnings per share. The Company believes these measures provide investors and management with supplemental information relating to operating performance and trends that facilitate comparisons between periods and with respect to projected information.

Adjusted EBITDA excludes items such as interest expense, interest income, income tax provision, depreciation expense, amortization expense, stock-based compensation expense, fair value adjustments on equity investment, expense of acquired in-process research and development, convertible promissory note related credit losses, fair value adjustments related to derivative instrument, restructuring charges, expense related to collaboration with TYME, and severance.

Adjusted non-GAAP earnings per share information excludes items such as amortization expense, stock-based compensation expense, depreciation expense, expense of acquired in-process research & development, severance, acquisition related costs, legal settlement, non-cash interest expense, fair value adjustments on equity investment, convertible promissory note related adjustments, fair value adjustments related to derivative instruments, foreign currency exchange loss, restructuring charges, inventory step-up and the tax effect of these adjustments.

Adjusted non-GAAP R&D expense excludes items such as stock-based compensation expense, depreciation expense, restructuring charges, severance and expense of acquire in-process research & development.

The Company believes the use of non-GAAP financial measures helps indicate underlying trends in the Company’s business and are important in comparing current results with prior period results and understanding projected operating performance. Non-GAAP financial measures provide the Company and its investors with an indication of the Company’s baseline performance before items that are considered by the Company not to be reflective of the Company’s ongoing results.

Investors should note that reconciliations of the forward-looking or projected non-GAAP financial measures included in this presentation to their most comparable GAAP financial measures cannot be provided because the Company cannot do so without unreasonable efforts due to the unavailability of information needed to calculate the reconciling items and the variability, complexity, and limited visibility of comparable GAAP measures, and the reconciling items that would be excluded from the non-GAAP financial measures in the future. Likewise, the Company is unable to provide projected GAAP financial measures. GAAP projections and reconciliations of the components of projected adjusted non-GAAP R&D expense, adjusted EBITDA and adjusted non-GAAP earnings per share to their most comparable GAAP financial measures are not provided because the quantification of projected GAAP R&D expense, GAAP net income and GAAP earnings per share and the reconciling items between projected GAAP to projected adjusted non-GAAP R&D expense, adjusted EBITDA and adjusted non-GAAP earnings per share cannot be reasonably calculated or predicted at this time without unreasonable efforts. For example, with respect to each of GAAP R&D expense, GAAP net income and GAAP earnings per share, the Company is not able to calculate the favorable or unfavorable expenses related to the fair value adjustments on equity investments and derivative instruments primarily due to nature of these transactions. Such unavailable information could be significant such that actual GAAP R&D expense, GAAP net income and GAAP earnings per share would vary significantly from projected adjusted non-GAAP R&D expense, adjusted EBITDA and adjusted non-GAAP earnings per share.

These non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with U.S. GAAP. The Company strongly encourages investors to review its consolidated financial statements and publicly filed reports in their entirety and cautions investors that the non-GAAP financial measures used by the Company may differ from similar measures used by other companies, even when similar terms are used to identify such measures.