Forward-Looking Statements
This Annual Report on Form 10-K and certain other communications made by
us contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”), including statements about our growth and future operating results, discovery and development of products,
strategic alliances and intellectual property. For this purpose, any statement that is not a statement of historical fact should be considered a forward-looking statement. We often use the words “believe,” “anticipate,” “plan,” “expect,”
“intend,” “may” and similar expressions to help identify forward-looking statements. We cannot assure you that our estimates, assumptions and expectations will prove to have been correct. These forward-looking statements include, among others,
statements about: the success of our sales and manufacturing efforts in support of the commercialization of any of our products or product candidates; the size and growth of the potential markets for our products or candidates and our ability
to serve those markets; the Company’s plans to expand the use of any of our products or candidates to additional indications and opportunities, and the timing and success of any related clinical trials; the related timing and success of United
States Food and Drug Administration New Drug Applications; the outcome of any matters related to patent procurement, protection or prosecution, or matters related to infringement; the outcome of existing antitrust litigation; our plans to
evaluate, develop and pursue additional product candidates; clinical trials in support of existing or potential products; our commercialization and marketing capabilities; our ability to effectively outsource certain operational and staff
functions to third-parties; our expectations regarding the impact of existing and future legislation and regulatory provisions on product exclusivity; legislation or regulatory action affecting pharmaceutical product pricing,
reimbursement or access; claims and concerns that may arise regarding the safety or efficacy of our products and product candidates; changes in governmental laws and regulations; the impact of product recalls and withdrawals; uncertainties
related to general economic, political, business, industry, regulatory and market conditions and other unusual items. Important factors could cause our actual results to differ
materially from those indicated or implied by forward-looking statements, including those discussed below in Part I-Item 1A. Risk Factors. We undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, and readers should not
rely on the forward-looking statements as representing our views as of any date after the date of the filing of this Annual Report on Form 10-K.
These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results,
levels of activity, performance or achievements to differ materially from those expressed or implied by these statements. These factors include the matters discussed and referenced in Part I-Item 1A. Risk Factors.
Item 1. Business
References
Aquestive Therapeutics, Inc. a Delaware corporation, was formed effective on January 1, 2018 via the conversion of MonoSol Rx, LLC, a
Delaware limited liability company and predecessor or Aquestive Therapeutics, Inc., into a C corporation and a simultaneous name change to Aquestive Therapeutics, Inc. (referred to in this Annual Report on Form 10-K as the “January Conversion”).
Unless the context otherwise indicates, references to “Aquestive”, “AQST”, “we”, the “Company”, “us” and “our” in this Annual Report on Form 10-K refers to Aquestive Therapeutics, Inc. Our principal executive offices are located in Warren, New
Jersey.
Overview
We are a specialty pharmaceutical company focused on developing and commercializing differentiated products to address unmet medical
needs. We have a late-stage proprietary product pipeline focused on the treatment of diseases of the Central Nervous System, or CNS. We believe that the characteristics of these patient populations and shortcomings of available treatment options
create opportunities for the development and commercialization of meaningfully differentiated medicines. In December 2018, we commercially launched the first of our CNS products, SympazanTM (clobazam) Oral Film, for use as an adjunctive therapy for seizures associated with Lennox-Gastaut Syndrome, or LGS in patients two years and older. Our most advanced proprietary product candidates, which we plan
on commercializing ourselves, include (i) Libervant, a buccal soluble film formulation of diazepam for the treatment of recurrent epileptic seizures, for which we expect to complete certain additionally-requested clinical studies and submit a New
Drug Application, or NDA, in the second half of 2019, and for which orphan drug and fast track designations have been granted; and (ii) Exservan, formerly known as AQST-117, an oral soluble film formulation of riluzole for the treatment of
Amyotrophic Lateral Sclerosis, or ALS, for which orphan drug designation has been granted and for which the Company has started the NDA filing process. We have also developed a proprietary pipeline of complex molecule products addressing large
market opportunities beyond CNS indications, which include (i) AQST-108, a sublingual film formulation of epinephrine for the treatment of anaphylaxis, for which we expect to begin our next Phase 1 proof of concept study with our enhanced
prototype in the first half of 2019, with completion planned within this year, and (ii) AQST-305, a sublingual film formulation of octreotide for the treatment of acromegaly and neuroendocrine tumors, for which we began a human proof of concept
study in Canada during the third quarter of 2018, and, based on anticipated enhancements that may be indicated by that study, we are planning additional human proof of concept trials in the second half of 2019.
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In addition to these product candidates, we have a portfolio of commercialized and development-stage partnered products. These products
include Suboxone®, a sublingual film formulation of buprenorphine and naloxone, which is the market leader for the treatment of opioid dependence. We manufacture all our partnered and proprietary products at our FDA and Drug Enforcement Agency,
or DEA, inspected facilities and anticipate that our current manufacturing capacity is sufficient for commercial quantities of our products and product candidates currently in development. We have produced approximately 2 billion doses of
Suboxone since its launch in 2010. Our products are developed using our proprietary PharmFilm® technology and know-how. Our patent portfolio currently comprises at least 200 issued patents worldwide, of which at least 40 are U.S. patents, and
more than 90 pending patent applications worldwide.
Our Product Portfolio and Pipeline
The following table outlines our pipeline of products and product candidates:
Proprietary CNS Product Portfolio
We have initially focused our proprietary product pipeline on certain difficult to treat CNS diseases. Our PharmFilm® technology allows
us to develop medicines that offer non-invasive delivery, customized suitability for patients with dysphagia, or trouble swallowing, can be administered without water and ensure consistent therapeutic dosing. We believe that these characteristics
will allow us to achieve the desired patient outcomes, while potentially reducing the total cost of patient care.
The three most advanced assets within our proprietary CNS portfolio are as follows:
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Sympazan – an oral soluble film formulation of clobazam, a benzodiazepine used as
an adjunctive therapy for seizures associated with LGS. We developed Sympazan as an alternative to Onfi brand and clobazam generic, which were previously only available in either tablet form or liquid suspensions. LGS patients often
have difficulty swallowing pills and large volume suspensions leading to uncertain and inconsistent dosing. These challenges increase the burden of care, particularly for patients that have difficulty swallowing or who may be
combative or resistant during treatment administration. We believe that Sympazan addresses these treatment obstacles because it is mucoadhesive, dissolves rapidly in existing saliva and is swallowed along with a patient’s natural
saliva production, and therefore cannot be easily spit out. In clinical trials, Sympazan has demonstrated bioequivalence to Onfi. Following approval by the FDA, we launched Sympazan in December 2018.