Aquestive Therapeutics, Inc. (AQST) Q4 2020 Earnings Call Transcript

Aquestive Therapeutics, Inc. (AQST -6.54%)
Q4 2020 Earnings Call
Mar 10, 2021, 8:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by and welcome to the fourth quarter 2020 Aquestive Therapeutics Earnings Conference Call. [Operator instructions] Please be advised that today's conference may be recorded [Operator instructions] I would now like to hand the conference over to your speaker today, Ms. Stephanie Carrington. Ma'am, please go ahead.

Stephanie Carrington -- ICR

Thank you, operator. Good morning and welcome today's call. On today's call, I am joined by Keith Kendall, president and chief executive officer; and Ernie Toth, interim chief financial officer. We're going to provide an overview of recent business developments and performance in the fourth quarter and full-year 2020, followed by a Q&A session.

In total, we expect today's call to last approximately 60 minutes. As a reminder, the company's remarks today correspond with the earnings release that was issued after market close yesterday. In addition, a recording of today's call will be made available on Aquestive Therapeutics website within the Investors section shortly following the conclusion of today's call. To remind you, Aquestive team will be discussing some non-GAAP financial measures this morning as part of its review of the fourth quarter and full-year 2020 results.

A description of these measures, along with a reconciliation to GAAP can be found in the earnings release issued yesterday which is posted on the Investors section of Aquestive Therapeutics' website. During the call, the company will be making forward-looking statements. We remind you of the company's safe harbor language as outlined in yesterday's earnings release, as well as the risks and uncertainties affecting the company as described in the Risk Factors section included in the company's annual report on Form 10-K filed with the SEC on March 10, 2021. As of any pharmaceutical company with product candidates under development and products being commercialized, there are significant risks and uncertainties with respect to the company's business and the development, regulatory approval, and commercialization of its products, and other matters related to operations.

The impact of the ongoing COVID-19 pandemic is highly uncertain and cannot be predicted with certainty or clarity. Given these uncertainties, you should not place undue reliance on these forward-looking statements which speak only as of the date made. Actual results may differ materially from these statements. All forward-looking statements attributed to Aquestive Therapeutics or any person acting on -- on its behalf are especially qualified in their entirety by this cautionary statement and the cautionary statements contained in the earnings release issued yesterday.

The company assumes no obligation to update its forward-looking statements after the date of this conference call, whether as a result of new information, future events, or otherwise, except as required under applicable law. With that, I'll now turn the line over to Keith.

Keith Kendall -- President and Chief Executive Officer

Thank you, Stephanie. And thank you, everyone, on the call, for joining us this morning. I'd like to take the -- this opportunity to introduce you to Ernie Toth, the company's interim chief financial officer. And welcome him to his first Aquestive quarterly business update call.

Ernie joined Aquestive in December and has already become a valued member of our management team. In our remarks today, Ernie and I will be discussing a number of important developments in our business for the fourth quarter and over the first two months of 2021. As always, Ernie and I will be joined by additional members of the Aquestive leadership team during the Q&A session afterwards. As we look back at the extraordinary events occurring during this past year, we're proud that as a company, we were able to successfully execute on our key priorities starting with the safety of our colleagues, the people we do business with, and the patients and caregivers who interact with our products, while at the same time continuing to advance the important work of the company.

Let's look at our performance for 2020 and the progress we've made. As we've committed through this period, we've delivered a number of important milestones related to the key drivers of value for our company. First, we remained focused on building our CNS franchise. The company is in the process of finalizing the resubmission of our new drug application for Libervant after receiving guidance from the FDA on its expectations for information and supporting analysis relating to the PK modeling and simulations included in our prior submission to the agency in December 2020.

We're developing Libervant as an alternative to the device-driven invasive, inconvenient, and difficult-to-administer alternatives, including a rectal gel, currently available for patients with refractory epilepsy. As a result of the issues many patients have regarding the current products in the market, a large portion of the patient population does not receive adequate treatment, or for those treatment altogether. The company believes that Libervant if approved for U.S. market access, will enable a larger share of these patients to receive more appropriate treatment by providing consistent therapeutic dosing in a noninvasive and innovative treatment form.

As we've previously communicated, we resubmitted to the agency a revised weight-based dosing regimen along with modeling and simulation data in December 2020 to address the issues raised by the FDA in the Complete Response Letter received in September. As you may recall, the FDA limited its comments in the CRL to one out of nine studies that we included in our NDA. The study in question was the single-dose cross-over PK study in 28 patients that we referred to as study 180323. The FDA confirmed that the issues identified in the CRL may be addressed by utilize -- utilizing modeling and simulations based upon the information provided in our FDA meeting package submitted in October.

In response to our December submission, the FDA provided written feedback in February which clarified its expectations relating to the information to be presented in the population PK model and the safety data that should be included in the NDA resubmission. We expect to perform the additional analyses and file the NDA by the end of the second-quarter 2021. Based on the FDA's feedback, we continue to believe that no further clinical studies will be necessary for the resubmission of the NDA for Libervant. Once resubmitted, we anticipate a six-month review process.

We continue to expect the PDUFA action date in 2021. There have been no indications to date from the FDA relating to market access and we do not expect to receive any FDA guidance regarding market access prior to the PDUFA action date for Libervant. Regarding FDA approval for U.S. market access, we believe that we've provided a strong set of facts supporting a decision by the FDA of clinical superiority to prior approved drugs for this indication based upon a finding that Libervant represents a major contribution to patient care.

Once we've resubmitted the NDA for Libervant, we will reengage with the FDA and update prior communications to demonstrate our position that Libervant, as a normally delivered product, meets one or more of the criteria to be considered a major contribution to patient care including convenience of treatment location, duration of treatment, patient comfort, reduced treatment burden, advances in ease and comfort of drug administration, and longer periods between doses. Subject to FDA approval, we are committed to launching Libervant as soon as possible after that approval. Let's now turn to our exciting epinephrine program. Utilizing Aquestive's PharmFilm technologies AQST 108 is a first-of-its-kind oral sublingual film formulation delivering systemic epinephrine that is in development for the treatment of anaphylaxis.

As previously reported, the FDA granted Fast Track Designation for AQST 108 in August of 2020. AQST is being reviewed under the 505(b)(2) approval pathway. Fast Track is an FDA process designed to facilitate the development and expedite the review of therapies to treat serious conditions and fill unmet medical needs. In granting a Fast Track Designation, the agency acknowledged that AQST 108 satisfies an unmet need in the patient population relating to those patients resistant to taking intramuscular or subcutaneous injections.

To date, we've completed two phase 1 PK trials for this product. The data from the two phase 1 PK studies demonstrate that AQST 108 can consistently deliver epinephrine sublingually and all subjects had measurable plasma concentrations of epinephrine. The top-line data for AQST 108 provides further evidence that we have developed a unique technological solution that can deliver epinephrine sublingually. We plan to share details about these trials and the clinical development strategies for the epinephrine program during the virtual Investor and Analyst Event That is scheduled for March 20 at 9 am Eastern time.

With presentations delivered by Aquestive senior management team and prominent key opinion leaders in the field of allergy disorders. Additionally, we have also submitted our dossier to Health Canada for a third phase 1 PK trial and plan on commencing the study as soon as we receive the necessary documentation. This is another significant step toward a final product formulation and dosing regimen. With respect to capital, in November, we completed the monetization of our royalty right for Kynmobi, a product launched in September 2020 by Sanofi and pharmaceuticals which is used for the treatment of both episodes in patients suffering from Parkinson's disease.

Most importantly, the net cash provided by the Kynmobi monetization, our cash on hand, our ATM activity to date, and expense management activities provide us with 12 months or more of capital with additional options for capital when needed. Ernie will be speaking more about this in more detail later. Next is Sympazan. Sympazan continued to perform and grow despite COVID-19-related restrictions on face-to-face interactions with healthcare providers.

While at times these restrictions were absolute as they were for much of the second and fourth quarters of 2020, Sympazan's script shipped to pharmacies grew nearly 100% in 2020 versus 2019. We believe that our continued growth in prescriptions and net revenue demonstrate that we've been able to continue to connect with prescribers even virtually and grow this product through extraordinary times, even virtually. Sympazan saw a continued growth in the prescriber base with over 30% penetration into the company's focused prescribers and over 79% of those prescribers writing multiple scripts. We continue to ramp up payor acceptance for Sympazan and currently have over 72% of commercial lives covered and 85% coverage of State Medicaid regions.

Paid pharmacy claims were 87% of all commercial and State Medicaid claims. We believe our position with prescribers and payers will be important to a successful launch of Libervant. Regarding Exservan, as we have committed previously, we entered a licensing and supply agreement with Mitsubishi Tanabe Pharma America in January 2021 for the U.S. rights to commercialize Exservan.

An oral-film formulation of riluzole for the treatment of ALS. Mitsubishi is a leading innovator in ALS with a deep commitment to the patient community. Mitsubishi will commercialize Exservan in the U.S. and we will serve as the sole and exclusive manufacturer and supplier for the product.

Under that license, we received $3 million in milestone payments in January 2021 and expect an additional $2 million prior to launch, currently anticipated to occur mid-2021. In addition to the revenue generated from the exclusive supply agreement with Mitsubishi, we are entitled to receive double-digit royalty payments on the net sales of the product. Next, as we continue to execute our strategy in developing and potentially commercializing additional proprietary products, we continue to add executives and board members with experience and expertise that is additive to the company and critical as the company evolves. As earlier introduced, Ernie Toth was appointed interim chief financial officer in December and is a seasoned financial executive with over two decades of senior financial leadership at ArisGlobal, JHP Pharmaceuticals, and most recently with EHE Health.

Dr. Mark Lepore was appointed as the chief medical officer for allergies in January 2021. Mark is a board-certified allergist and pediatrician and has over 14 years of drug development experience with prior roles at Lupin Pharmaceuticals and Teva Pharmaceuticals; Dr. Julie Krop, chief medical officer of Freeline Therapeutics; and Dr.

Marco Taglietti, director, president, and chief executive officer of SCYNEXIS, were appointed as independent directors to the board in February of 2021. Julie and Marco bring significant experience in the pharmaceutical and biotechnology industry that are additive to our current board of directors. We're confident that they will provide valuable perspectives as -- as we continue to develop and commercialize proprietary products that fill significant unmet patient needs and enhance value for the company's shareholders. In addition, sadly, Doug Bratton retired from the board in February after more than 17 years of service as our original chairman of the board.

We thank Doug for his valuable contributions to the board and our company for these many years. So, to summarize, going forward in 2021, we're focused on advancing our proprietary products. We're preparing for the resubmission of our NDA for Libervant, expect to file at the end of the second quarter of 2021, and anticipate launching Libervant as soon as possible after an FDA approval for market access. Next, we've submitted our dossier to Health Canada for a third phase 1 PK trial as part of our epinephrine program and plan on commencing this study as soon as we receive the necessary documentation.

We'll continue to efficiently grow Sympazan shipments and revenue while establishing strategic relationships for us in the epilepsy market in advance of an anticipated Libervant launch. And finally, we'll continue to prudently manage expenses and consider capital opportunities to expand -- extend our cash horizon. We look forward, as always, to continuing to update you as we advance all of these initiatives throughout 2021. With that, I'd like to turn the floor over to Ernie who will provide specifics of our present -- financial performance and outlook.

Ernie Toth -- Interim Chief Financial Officer

Thank you, Keith, and good morning, everyone. By now, you will have seen our financial results in our 10-K and earnings release that were filed last evening. As we typically do, we will address most of the discussion related to the fourth-quarter and full-year 2020 results in the Q&A. And in my comment, I will highlight a few points from our results that are important to understand, our full-year 2021 financial guidance, which was published in the release.

Overarching our 2021 guidance are some key principles that Keith outlined in his remarks, including we are focused in 2021 on our two most important value drivers: Libervant's resubmission, approval, and launch; and the continued development of our epinephrine program. While we are targeting a great 2021 PDUFA date, we have included zero revenue from Libervant in our full-year 2021 guidance until we are certain of approval and launch timing. Our epinephrine program will continue toward development of a final product formulation and dosing regimen with a third phase 1 PK trial expected to commence following the review and the dossier by Health Canada. While we do not specifically guide on Sympazan revenue, as Keith mentioned previously, our trends on wholesaler shipments to retail pharmacies and growth in new and rep -- repeat prescribers are very solid quarter over quarter, and we anticipate continued growth in 2021.

While Suboxone is a legacy product for us, it remains a significant part of our near-term revenue outlook. This product continued to perform well in 2020 with the branded product retaining a U.S. market share of 40%. Our revenue guidance for 2021 considers that some level of erosion of market share will continue in the future.

While Suboxone provides a cash flow stream for the business, our future is to group the proprietary assets we are developing and commercializing, Libervant and QST -- AQST-108 epinephrine, and continuing to grow Sympazan. In November, we completed the monetization of our royalty rights for Kynmobi. The Kynmobi royalty monetization transaction provides up to $125 million based on the achievement of worldwide royalty targets and certain other commercial milestones. We have realized $50 million from this transaction to date and an additional $15 million may be potentially available between now and mid-2022.

As outlined in the earnings release issued yesterday, our 2020 results met or exceeded our previously provided financial expectations. Our full-year non-GAAP adjusted EBITDA loss for 2020 was $32.9 million, beating the top end of our guidance range. As of December 31, 2020, cash and cash equivalents were $31.8 million. During the fourth-quarter 2020, we accessed capital net proceeds of $6.1 million under our ATM facility.

Our guidance for 2021 reflects continued cash flow from our licensee and proprietary products revenue base. Careful focus of our investments into the most value-driven aspects of our future, Libervant and AQST-108, and continued focus on capital conservation so that cash is extended as far as possible. As outlined in the press release issued last night after market closed, we are providing a full-year 2021 financial guidance. For the full-year 2021, we expect total revenues of approximately $38 million to $42 million, non-GAAP adjusted gross margins of approximately 70% to 75% on total revenues, and non-GAAP adjusted EBITDA loss of approximately $42 million to $45 million.

In summary, our 2021 guidance for full-year non-GAAP adjusted EBITDA loss reflects a lower projected revenue base from Suboxone, partially offset by steady growth in Sympazan and focused investments related to the completion of Libervant work and the clinical trials related to AQST-108 epinephrine. At the same time, we are focused on being as efficient as possible across the organization with continued management of the variable cost structure at the plant to match the volumes of production, a focus on the efficiency of Sympazan as it continues to grow and pave the way for the anticipated launch of Libervant, and careful management of our support organizations to be aligned with the arc of the various focused initiatives of the company. The net cash provided by the Kynmobi monetization, our cash on hand, our ATM activity, and expense management activities provide us with 12 months or more of capital with additional options for capital when needed. Those options include, as we have discussed before, up to $30 million of additional capital available subject to FDA approval and U.S.

market access for Libervant under our existing senior debt facility, as well as potential assets sales and out licenses. With that, I will now turn the line back to the operator to open the line for questions.

Questions & Answers:

Operator

Thank you. [Operator instructions] Our first question comes from the line of Gary Nachman with BMO Capital Markets. Your line is open. Please go ahead.

Gary Nachman -- BMO Capital Markets -- Analyst

Thanks, guys, and good morning. Regarding Libervant, just describe in more detail what else the FDA wanted to see in terms of your analysis of the weight-based dosing with the PK modeling and why you're confident you'll be able to deliver that data without doing additional clinical studies? And then, you know, some of the additional work that you're doing there for Libervant, both PK and safety, could that potentially be helpful to showing a meaningful improvement to patient care on getting the orphan drug designation? How much could that potentially help your case even further? Then I have a couple of follow-ups after that Q.

Keith Kendall -- President and Chief Executive Officer

Sure. Thanks, Gary. Dan, do you want to take care of that?

Dan Barber -- Chief Operating Officer -- Analyst

Sure. Good morning, Gary. Good to hear your voice. So as -- as we shared in our previous press release on the feedback from the FDA, we are actually generating no new data for our resubmission on Libervant.

What we received back from the FDA -- and -- and if we go back, if you recall, we had a very positive Type A meeting in November where the FDA gave us guidance allowing us to use simulations and modeling to defend our revised dosing regimen. They did ask that we provide a dosing regimen to the FDA for their review prior to resubmitting, which we did. And as you know, unfortunately, it took about two months to hear back from the FDA, which we heard back a couple of weeks ago. And in that feedback, the FDA asked for formatting essentially to be changed on our safety component.

And on the PK piece, excuse me, on the PK piece, they simply asked for us to ensure that we are showing the predictive nature of our model when compared to the observed data in our crossover study. So both of those things, we're happy to do. [Audio gap] they, unfortunately, take time, which is why we have a little bit of time before our resubmission. But there is absolutely no new information that we will include in our NDA resubmission -- mission.

Gary Nachman -- BMO Capital Markets -- Analyst

OK. No, that's helpful. And then maybe just on the -- the additional work that you're doing now in -- in terms of your case on the meaningful improvement to patient care. If you think the additional analysis, the additional safety data, if that could potentially help your case further?

Dan Barber -- Chief Operating Officer -- Analyst

Sure. Well, to start with, we had a very strong case. We believe we have a very strong case in our view. We have multiple ways in which our product is different than any other product currently on the market.

We have, as we've shared with you before, put that position before the orphan drug group at the FDA and walked them through our views. We'll continue to do that as we go through the resubmission process. And yes, of course, as we develop new ways of defining our safety and population PK modeling as the FDA requested, we'll include components of those changes in our discussion with the FDA. But we remain very confident that there are differentiating factors with our product that are important to patients and we are hopeful that the FDA will see -- will see the value in those -- in those differences.

Gary Nachman -- BMO Capital Markets -- Analyst

OK. And how soon can you engage with FDA on that after you -- you resubmit at the end of the second quarter? Is that immediate or would it take a while, that it would have to be closer to the PDUFA date?

Dan Barber -- Chief Operating Officer -- Analyst

We're -- we're -- we can reach -- we can engage the orphan drug group whenever we want. Our view is that around the resubmission time is the time to reengage simply because of human nature. We want to make sure as they're reviewing our application, they're also thinking about the components of value that we bring to patients. So we -- we will look to engage them in the summertime would -- would be the best guidance I can give you.

Gary Nachman -- BMO Capital Markets -- Analyst

OK. That's great. And then just a couple more keys. When will you consider expanding the commercial infrastructure? Will it only be once Libervant is approved? Will you wait until you get the orphan drug designation? And if you're getting some more traction with Sympazan, would you consider doing that sooner potentially? And then -- and then I have just one on epinephrine just quickly.

I know you'll talk more at the R&D Day, but when you talk about the breadth of that pipeline, is that different formulations or -- or something else that you're referring to? can you just give us a sneak peek on that? Thanks.

Keith Kendall -- President and Chief Executive Officer

Sure. I'll -- I'll go back to epinephrine after we deal with Libervant. I -- look, we've -- we've worked really hard to establish a position in the prescribers' offices with Sympazan. As modest as that product is, it does serve an important purpose in advance of -- of Libervant.

I think as we get close to the date based on our interactions with the agency if we're feeling confident or if Sympazan is continuing to grow at the pace it is, we'll start to slowly expand the sales force. But I don't think you'll see a meaningful increase in the footprint at least until we get an approval. We still don't know, as we've discussed before, how quickly after an approval on the product should we get one the decision on market access will -- will come. So we -- we've got a couple of variables there to manage.

But, you know, as liber -- as, I'm sorry, Sympazan continues to grow, we certainly will look to add a couple of people into the sales force. And as we get the approval on Libervant, then we'll -- we'll materially change the size of the sales force in advance of that launch. Did that get to your question on that, Gary?

Gary Nachman -- BMO Capital Markets -- Analyst

Yup, it did, it did. Thank you.

Keith Kendall -- President and Chief Executive Officer

OK. Great. Dan, do you want to give them a little color on epinephrine?

Dan Barber -- Chief Operating Officer -- Analyst

Sure. And -- and o -- obviously, Gary, we are -- we're excited for the R&D Day on March 25. So I don't want to -- to give too much of the details because I'd like you to join and be excited for that call as well. But suffice it to say that we have learned a lot from both studies in AQST-108 that have -- we have done.

We'll be outlining in detail the results from those studies on the 25th, and we'll also walk you through what's different about the formulation that is going into the clinic immediately in the future and why we are excited about where that will take us going forward.

Gary Nachman -- BMO Capital Markets -- Analyst

OK, that's fair. We'll tune in on the 25th. Thank you.

Operator

Thank you. And our next question comes from the line of Randall Stanicky with RBC Capital Markets. Your line is open. Please go ahead.

Randall Stanicky -- RBC Capital Markets -- Analyst

Great, thanks. Just a couple for me. Keith, how has your view of the Libervant opportunity evolved over the last couple of years as you're watching the market and specifically in Neurelis' Valtoco. I'm not sure how accurate Activia is and it's still early, but, you know, only seeing a few thousand scripts per month.

Has -- has it changed in terms of what you think Libervant could do from a peak perspective assuming it gets to market? So that's the first question, and I'm going to ask the second upfront because it's related. Do you guys have good visibility into other potential diazepam filers? And specifically, you know, how are you thinking about the competitive dynamics here over the next, you know, one, two to three years, understanding that getting around the ODE is going to be a hurdle for other filers as well?

Keith Kendall -- President and Chief Executive Officer

Sure. Well, Randall, it's good to talk to you again. Thank you for the question. I -- I -- I think -- let me -- let me think about the right way to lay this out.

I -- I -- I think our -- our thinking on Libervant has evolved this way. Our initial belief that led us to invest in this product was that if we can deliver it effectively, orally, given the options that this patient population had and given the number of patients in this population that actually forego treatment because they don't want to interact with those options has -- has only actually grown as we've gone through this. As we've watched the -- the two nasals enter the market and be restricted to one end of the age group in the market for the most part, we continue to believe perhaps even more strongly than we did in the past that we have a solution for this patient population to be very attractive. The middle part of your question, we'll always be -- we think conservative when we talk about what we think the peak sales for this product will be.

So I'll tell you I still think it's a $250 million or $300 million product just as we've said before. But the nasals have not really penetrated the market in any meaningful way. They've brought a minor number of patients into this space and I -- and they've eaten at the rectal gel as you would expect, but they still haven't cracked the overall population of patients that are searching for a solution, and -- and we feel very strongly that we have a solution for them given the preference especially in the United States for oral medications versus deliveries of other types. In terms of the pipeline, you know, I -- I think that, technologically, we have solved the problem in terms of delivering this molecule effectively in some alternative -- in some oral way.

Some of the alternatives back in the pipeline, including injection. We, again, feel very strongly that the market data we've developed in talking to patients, advocacy groups, and prescribers that an oral solution will always be preferred over an injection or other invasive delivery. Now, is there room for alternatives? Sure. But we're confident in a fairly significant patient population that we'll be able to carve a place out for ourselves with our product that we'll be very happy with.

Randall Stanicky -- RBC Capital Markets -- Analyst

Great. I appreciate that. One more question if I could. What is your appetite to -- in license another product here to further leverage what you'd previously talked about which is going to be obviously a potentially bigger commercial sales footprint post the assumed Libervant approval? And are you seeing opportunities in the market? And then, I guess, you know, that kind of adjunct to that would be, you know, does that appetite increase or decrease if you see or I should say, does it increase if you see another potential delay around Libervant?

Keith Kendall -- President and Chief Executive Officer

That's a great question. Thank you. I think our -- our view is we've got a great product in Libervant. We want to get it out into the market.

Our strategic imperative, once it's out in the market, obviously, will be how do we build on the CNS franchise represented by Sympazan and Libervant that we're selling ourselves as well as the products we've outlined since like Exservan. And we absolutely, without a doubt, will look to a number of places for the products that lever that. And one of them obviously would be in licensing. We can't develop every product that we want to bring to the market and the time frame for developing a product internally is long.

So, if we want to expand, I think, in licensing, is going to be a very part a very big part of that. Obviously, if you have a strategy built around creating a beachhead in CNS and the central product is delayed further we'll rethink the urgency we have about complementing Sympazan and growing the footprint in the short term. Right now we're absolutely focused on getting Libervant to the market and then starting to assess or develop a case around additions on the other side of an approval and a launch.

Randall Stanicky -- RBC Capital Markets -- Analyst

Great. Thank you.

Keith Kendall -- President and Chief Executive Officer

Thanks, Randall.

Operator

Thank you. Our next question comes from the line of Shveta Dighe with Wedbush Securities. Your line is open. Please go ahead.

Shveta Dighe -- Wedbush Securities -- Analyst

Hi. This is Shveta for Liana. Thank you for taking my question. For the Mitsubishi license agreement, can you remind us of the market opportunity for riluzole Exservan? And does your 2021 revenue guidance include the right to payments from Mitsubishi?

Keith Kendall -- President and Chief Executive Officer

Sure. There -- there -- there is -- there is an amount of money for royalties for Exservan in 2021. Obviously, with it launching in the middle of a year, it's not a very large number although we're happy with the deal. It is a -- it is probably a modest product by everybody's calculation.

What -- what the top end for it is will depend on how much it penetrates against some of the other products there. But -- but this is not a $500 million product. It's -- it's a much smaller product than that. Probably sub $100 million, my guess would be at best.

Shveta Dighe -- Wedbush Securities -- Analyst

Got it. Thank you.

Operator

Thank you. And our next question comes from the line of Jason Butler with JMP Securities. Your line is open. Please go ahead.

Jason Butler -- JMP Securities -- Analyst

Hi, thanks for taking the question. Again, not wanting to take the attention away from your upcoming Analyst Day. Could you maybe just give us an outline of the current patent estate for 108 on Analyst Day? Could you maybe just give us an outline of -- of the current patent estate for 108 and how you're thinking about the durability of -- of market exclusivity?

Dan Barber -- Chief Operating Officer -- Analyst

Sure. Good morning, Jason. So, we will -- I think the right way to frame it is we believe that we have an extensive and deep patent position on our epinephrine delivery system that we're bringing forward. And -- and I would frame it as patents that go out late into patent applications that will eventually become patents that will go out until late 2030 and early 2040.

And at the R&D, they will talk about -- as we've shared with you before, we are using some unique technology along with our -- our film platform to deliver epinephrine transmit causally. And those two pieces together, the film and the -- and the other technology component, provide a very blocking, in our view, a very blocking position. And we will talk specifically about patents on the 25th as well.

Jason Butler -- JMP Securities -- Analyst

OK, great. And then, I -- I guess just a follow-up question on the -- the longer-term strategy, Keith, as well as considering licensing additional assets. How do you think about, you know, long-term leveraging of pharm film technology bringing additional products or candidates into the clinic and -- and maintaining those yourself in and out-licensing opportunities?

Keith Kendall -- President and Chief Executive Officer

Well, I -- I think pharm film still plays an important part in our business, obviously. I think, there's a lot that can still be accomplished with that technology, and when we take you through the -- the newest step up in complexity that we can solve with the technology on the epinephrine day. I think, you'll -- you'll get some sense but I don't think that's the only way that we're going to get products to the market. I think we are happy when we talk about building out our CNS franchise and if we're lucky enough to get epinephrine done an allergy franchise, I don't think it has to be exclusively film.

I don't think we can wait for the cycles to develop products exclusively in film. But I do think it has -- it still has applicability. It's still capable of solving significant delivery problems, we think. And we'll continue to not only look for opportunities to apply it ourselves but to continue to work with others like Mitsubishi and Indivior in the past to solve problems with the products that they have.

I do think that -- that's still -- the film still has some value to extract over the coming years.

Jason Butler -- JMP Securities -- Analyst

OK, great. Thanks for taking my questions.

Keith Kendall -- President and Chief Executive Officer

Thanks, Jason.

Operator

Thank you. And our next question comes from the line of Thomas Flaten with Lake Street Capital Markets. Your line is open. Please go ahead.

Thomas Flaten -- Lake Street Capital Markets -- Analyst

Good morning. Thanks for taking the questions. Just correct me if I did my math wrong here, but I know you pointed to volumes for Sympazan being up about 6% sequentially but it looks like sales were down by about the same. Could you comment on that -- on that dynamic assuming my math is right there?

Keith Kendall -- President and Chief Executive Officer

Sure. Good to talk to you this morning, Thomas. Ernie, do you want to handle that?

Ernie Toth -- Interim Chief Financial Officer

Sure. So, Thomas, let me just -- just trying to understand your question that the Sympazan it is down sequentially quarter over quarter most of that related to the impact of COVID-19 and not being able to get into the doctor's offices but it is up compared to prior year by 132%.

Keith Kendall -- President and Chief Executive Officer

Right. But, Thomas, your question is how did shipments to the pharmacies go up but yet the revenue quarter of the morning go down, right? I -- I think that's -- I think that's just the timing of shipments that affect revenue recognition.

Thomas Flaten -- Lake Street Capital Markets -- Analyst

And then, Ernie, in the past we've gotten guidance on cash burn. I wonder if you could share with us what your expectation for cash burn for the year is?

Ernie Toth -- Interim Chief Financial Officer

Well, you know, Thomas, we're no longer providing a cash burn guide for the press release last time. We -- we really believe that the EBITDA is the most relevant metric, given the complexity of our business being a commercial business and manufacturing business in R&D business. And so, we haven't given directional guidance on our cash run rate, with the cash on hand, the ATM activity, and the expense management. You know, that along with the capital options that we have, it provides us with 12 months or more of capital.

So, as far as managing to a specific number, we've just decided that the company must provide specific cash burn guidance going forward.

Thomas Flaten -- Lake Street Capital Markets -- Analyst

Got it. And then, just one final one. I'm not sure if we've discussed this previously, Keith, but if you can, could you share what the trigger is for the $15 million Kynmobi payment that's due in the next 18 months or so? Or could be 18 months or so?

Keith Kendall -- President and Chief Executive Officer

Yeah. It's actually a couple of payments and it's all triggered on net sales achievement by Sunovion.

Thomas Flaten -- Lake Street Capital Markets -- Analyst

Got it. Appreciate you taking the question. Thank you.

Keith Kendall -- President and Chief Executive Officer

Thanks, Thomas.

Operator

Thank you. [Operator instructions] Our next question comes from the line of Ram Selvaraju with H.C. Wainwright. Your line is open.

Please go ahead.

Unknown speaker

Hi, Keith.

Keith Kendall -- President and Chief Executive Officer

Hey.

Unknown speaker

And I'm -- this is Maz on -- on behalf of Ram. Just regarding Libervant, if it's approved by the end of 2021 how swiftly do you think you could be able to introduce the product, and what the principal guidance would be to make it commercially available?

Keith Kendall -- President and Chief Executive Officer

Yeah. I think -- I think the fact that we have an act -- an active commercial sales force interacting with the prescribers that'll be central to Libervant right now. We'll be able to introduce the product to the market very quickly after an approval. We will ramp up the sales force starting at that point and -- and make it significantly bigger to reflect the opportunity and the number of prescriber points for Libervant.

But because we've invested in this commercial footprint up to this point, I think, we'll be ready to introduce the product to the market very quickly.

Unknown speaker

OK, great. And just to double-check that I got this right. The revenue for 2021 of Libervant sales, there's no meaningful contribution from those, is that correct?

Keith Kendall -- President and Chief Executive Officer

There's -- there's no -- there's no -- there's -- there's nothing in '21 for Libervant revenue, that's correct.

Unknown speaker

Excellent. OK. And just shifting quickly to AQST-108. We were interested in the three PK case studies and if they constitute the entirety of the PK package for the drug, if not what other work would need to be done and how quickly could the third PK trial readout top-line data?

Keith Kendall -- President and Chief Executive Officer

Well, we -- we've filed with Health Canada to start that trial. We're prepared to start it as soon as they give us the g-ahead. We have -- all along as we've been telling you targeted doing -- kicking that study off before the end of the quarter. Probably reading out sometime after the end of the next quarter, I would think, We -- we're -- we're in the process of tweaking the formulation in order to create certain predictable PK results.

Once we do that, on -- on a pilot scale, we'll interact with the agency and talk about what the rest of the development in the regulatory path would be or the rest of the clinical and regulatory path would be. It would only be at that time that I'd be able to answer you conclusively about what else was required. But, you know, there is going to be a larger study required of some sort. We're just not sure what that is until we interact with the agency again.

Unknown speaker

OK. Excellent. I respect that. Just a couple more and then I'll get back to the queue.

We were interested in these expense management methods that you alluded to in a press release. Would you be able to clarify what the nature of these and the magnitude of these are?

Keith Kendall -- President and Chief Executive Officer

I'm sorry. I'm not sure I got the question. Can you just say it again?

Unknown speaker

I was wondering if you could clarify the nature and the magnitude of the expense management efforts that you alluded in the press release and if that's slated to continue into 2021?

Keith Kendall -- President and Chief Executive Officer

Yeah. I mean, we're not going to comment on specific cost items that -- that we've managed. They'll tell you at a macro level, obviously, the choice to invest in building up the commercial organization, whether it's marketing medical affairs or sales in advance of a Libervant approval is a -- is an opportunity. Focusing on Libervant and epinephrine is an opportunity for us to manage costs related to other things in our business.

But I -- I don't think we're going to comment on specific cost actions. Just that directionally as we've said, we have a clear path to -- to 12 months or more of the capital runway.

Unknown speaker

OK. That's helpful nonetheless. And finally, you gave us some color on the Kynmobi rollout. How do you -- how do you think this is going other product sales outperforming expectations in the U.S.

and how do you think this could impact Aquestive financial performance?

Keith Kendall -- President and Chief Executive Officer

I -- I think it's early days for that. I don't think -- I don't think we've got a good enough view of the product's traction in the market. And I'm not sure how much their rollouts been affected by COVID just as we've had to manage it with Sympazan. I think, obviously, there's $75 million worth of milestone payments that are still available to us under that deal and we'd like to collect all of those.

And I think that -- I think it's a little just too early to comment on whether we're happy or unhappy about how would that launch is going.

Unknown speaker

OK. Makes sense. Thanks so much for taking my questions, Keith, and congrats on the quarter.

Keith Kendall -- President and Chief Executive Officer

Thank you very much.

Operator

Thank you. And this concludes today's question-and-answer session. And I would like to turn the conference back over to Mr. Keith Kendall for any further remarks.

Keith Kendall -- President and Chief Executive Officer

Well, everyone, thank you again for joining us this morning. As -- as always we enjoy the interaction and the questions. We hope that we've provided you the information that you were looking for. We look forward to focusing on the things that are central and critical to our business.

Obviously, we want to get Libervant refiled and convince the agency that it is a major contribution to patient care. We feel good about the product, we feel good about the arguments we have, and we've now got to advance them and let the agency do their work. We're very excited about what we've demonstrated we can do on epinephrine. Obviously, a difficult molecule to manage in the oral cavity and we're excited about walking you through that in March. And as we go through the year, we'll continue to focus and up -- update you on all of those.

And we look forward to the next conversation. So, thank you all. Have a great day and we'll talk soon.

Operator

[Operator instructions]

Duration: 54 minutes

Call participants:

Stephanie Carrington -- ICR

Keith Kendall -- President and Chief Executive Officer

Ernie Toth -- Interim Chief Financial Officer

Gary Nachman -- BMO Capital Markets -- Analyst

Dan Barber -- Chief Operating Officer -- Analyst

Randall Stanicky -- RBC Capital Markets -- Analyst

Shveta Dighe -- Wedbush Securities -- Analyst

Jason Butler -- JMP Securities -- Analyst

Thomas Flaten -- Lake Street Capital Markets -- Analyst

Unknown speaker

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