US licencing agreement with Eton Pharmaceuticals for Alkindi® Sprinkle

Diurnal partners with specialist in hospital and paediatric-focused products

Total up-front payment and future milestones of up to $52.5 million

Double-digit royalties on sales

Diurnal Group plc (AIM: DNL), the specialty pharmaceutical company targeting patient needs in chronic endocrine (hormonal) diseases, announces that it has entered into an exclusive licence agreement for its product, Alkindi® Sprinkle (hydrocortisone granules in capsules for opening), in the United States with the specialty pharmaceutical company, Eton Pharmaceuticals, Inc. (NASDAQ: ETON “Eton”).

Under the terms of the licence agreement, Diurnal will receive a non-refundable upfront payment of $5.0 million, of which $3.5 million is in cash and $1.5 million is through the issue to Diurnal of 379,474 new Eton shares, and will receive an additional $2.5 million cash milestone payment upon first commercial sale in the US following regulatory approval and grant of Orphan Drug Status (currently anticipated in Q4 2020). Diurnal will receive a tiered royalty on sales ranging from low double-digits to high teens and is also due tiered sales-based milestone payments of up to $45 million in aggregate subject to annual sales thresholds.

Eton is a NASDAQ-listed specialty pharmaceutical company focused on developing, acquiring and commercialising innovative products. Eton is primarily focused on hospital and paediatric products, including those in endocrinology. Eton’s first commercial product, Biorphen®, (phenylephrine hydrochloride) is the only FDA approved ready-to-use formulation of phenylephrine injection and was launched in December 2019. Eton has an additional eight products under development, including three that are under review with the FDA.

Diurnal announced in February 2020 that its New Drug Application (NDA) for Alkindi® Sprinkle had been accepted for review by the US Food and Drug Administration (FDA). Diurnal is seeking approval of Alkindi® Sprinkle as a replacement therapy for adrenal insufficiency in infants, children and adolescents (from birth to <17 years old) in the US. The PDUFA date set by the FDA, which would be the earliest date at which approval could occur, is 29 September 2020.

Diurnal will be responsible for obtaining registration for Alkindi® Sprinkle in the US and Eton will be responsible for all commercialisation activities, including pricing and reimbursement. Eton will initially utilise product from Diurnal’s European supply chain, with an option to establish its own supply chain in the US in the future. 

Martin Whitaker, CEO of Diurnal, commented:

“We have been impressed by Eton’s enthusiasm and vision for the product throughout the partnering process. If approved, Alkindi® Sprinkle will provide a major breakthrough in the US as the only licensed treatment specifically designed for use in children with adrenal insufficiency, where there is a significant unmet patient need. With its focus on developing, registering and commercialising hospital and paediatric focused products, including endocrine products, we believe Eton is extremely well positioned to maximise the value of Alkindi® Sprinkle. In particular, we believe that Eton’s experience in replacing unapproved compounded products with approved pharmaceutical products will be invaluable in establishing Alkindi® Sprinkle in the US.

“Having successfully met our near term licensing objective of securing a partner to prepare for a successful launch of Alkindi® Sprinkle, along with underpinning the Group’s financing needs through the recent £11.2 million placing, Diurnal will continue to assess the optimum path and timing for the development and commercialisation of Chronocort® in the US as we progress our second late-stage product through the European regulatory review process.“ 

Sean Brynjelsen, CEO of Eton, commented:

“Alkindi® Sprinkle represents a transformational acquisition for Eton and a major step forward on our journey to become a leader in pediatric rare disease products. This product represents the largest market opportunity our company has pursued and adds a major product launch in the second half of this year, We are excited to be partnering with Diurnal to bring Alkindi® Sprinkle to pediatric patients, and we plan to immediately begin launch activities to ensure its commercial success.”

Paediatric AI is a condition characterised by deficiency in cortisol, an essential hormone in regulating growth, metabolism and the response to stress. Paediatric AI has been identified as an orphan disease in the US where there are estimated to over 4,000 sufferers under the age of 17. Untreated, the disease is associated with significant morbidity and increased mortality. Alkindi® Sprinkle has the potential to be the first pharmaceutically defined dose and consistent formulation of hydrocortisone (the synthetic version of cortisol) specifically designed for paediatric patients.

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014 (MAR).

For further information, please visit www.diurnal.co.uk  or contact:

Diurnal Group plc +44 (0)20 3727 1000

Martin Whitaker, Chief Executive Officer 

Richard Bungay, Chief Financial Officer 

Panmure Gordon (UK) Limited (Nominated Adviser and Joint Broker) +44 (0) 20 7886 2500

Corporate Finance: Freddy Crossley, Emma Earl

Corporate Broking: James Stearns

Cantor Fitzgerald Europe (Joint Broker) +44 (0) 20 7894 7000

Corporate Finance: Phil Davies, Will Goode, Michael Boot

Healthcare Equity Sales: Andrew Keith

FTI Consulting +44 (0)20 3727 1000

Simon Conway 

Victoria Foster Mitchell

Notes to Editors

About Alkindi® Sprinkle (hydrocortisone granules in capsules for opening)

Alkindi® Sprinkle is the first preparation of hydrocortisone specifically designed for use in children suffering from paediatric adrenal insufficiency (AI). Alkindi® is a patented, oral, immediate-release paediatric formulation of hydrocortisone granules in capsules for opening that allows for accurate age-appropriate dosing in children. This therapeutic approach has the potential to help young patients less than seventeen years of age suffering from diseases due to cortisol deficiency including paediatric AI and congenital adrenal hyperplasia (CAH) in the US. AI requires life-long treatment and Diurnal's novel approach to product development has the potential to significantly improve these young patients' lives. The European Commission has granted a paediatric use marketing authorisation (PUMA) for Alkindi® as replacement therapy of AI in infants, children and adolescents (from birth to <18 years old) in Europe.

 About Paediatric Adrenal Insufficiency

Paediatric AI, including the genetic condition CAH is a condition characterised by deficiency in cortisol, an essential hormone in regulating metabolism and the response to stress. The primary symptoms of AI are chronic fatigue and patients are at risk of adrenal crisis and death if they do not have adequate cortisol replacement. AI is either primary or secondary, with primary AI resulting from diseases intrinsic to the adrenal gland and secondary AI resulting from pituitary diseases where there is a failure of stimulation of the adrenal by the pituitary of the signalling hormone ACTH (adrenocorticotropic hormone).

About Diurnal Group plc

Founded in 2004, Diurnal is a UK-headquartered, European specialty pharma company developing pharmaceutical products for the global market for the life-long treatment of chronic endocrine conditions, including congenital adrenal hyperplasia and adrenal insufficiency. Its expertise and innovative research activities focus on circadian-based endocrinology to yield novel product candidates in the rare and chronic endocrine disease arena.

For further information about Diurnal, please visit www.diurnal.co.uk

Date of Preparation: March 2020            Code: Inf-US-GB-0006