Evoke Pharma’s Financial Performance and Outlook

Evoke Pharma is a specialty pharmaceutical company focused on developing and commercializing drugs to treat gastrointestinal (GI) disorders. Their sole product is Gimoti, a nasal spray approved in 2020 for the relief of symptoms in adults with acute and recurrent diabetic gastroparesis.

Revenue and Profit Trends

Evoke Pharma launched Gimoti in the United States in October 2020 through a commercial partnership with Eversana. Net product sales for Gimoti have been steadily increasing, reaching $10.2 million in 2024 compared to $5.2 million in 2023 - a 97.8% increase.

Several factors have contributed to the growth in Gimoti sales:

• Improved prescription approval and fill rates after transitioning pharmacy services to ASPN Pharmacy in late 2023. This helped capture more out-of-network prescriptions.

• Expansion of the pharmacy network, which improved insurance coverage and reduced reliance on patient savings programs.

• Greater adoption by physicians, especially within larger gastroenterology practices, as more doctors prescribed Gimoti after seeing positive results from their colleagues.

• Higher refill rates, as 67% of eligible patients opted to refill their Gimoti prescriptions.

However, Evoke Pharma continues to operate at a loss, with selling, general and administrative expenses exceeding product revenues. Research and development costs have decreased since Gimoti’s approval, but the company anticipates incurring significant additional costs for a post-marketing clinical trial required by the FDA.

Strengths and Weaknesses

A key strength for Evoke Pharma is the clinical data supporting Gimoti. Studies have shown that patients taking Gimoti experience significantly fewer physician visits, emergency department visits, and hospitalizations compared to those taking oral metoclopramide. This translated to around $15,000 in cost savings per patient over a six-month period. Key opinion leaders have also presented data indicating a lower incidence of tardive dyskinesia, a serious side effect, with Gimoti compared to previous reports.

However, Evoke Pharma faces several challenges:

• Competition from well-established oral and intravenous forms of metoclopramide, the same active ingredient in Gimoti.
• The need to conduct an additional clinical trial to support a lower dose formulation of Gimoti, which could be costly.
• Uncertainty around the continued partnership with Eversana, as the commercial services agreement allows Eversana to terminate the arrangement under certain conditions.
• Potential delisting from the Nasdaq stock exchange if the company cannot maintain the required minimum stockholders’ equity, leading to the need for a reverse stock split.

Outlook and Future Considerations

Evoke Pharma’s current cash position of $13.6 million as of December 31, 2024 is intended to fund ongoing commercialization activities, the post-marketing clinical trial, and other general operations. However, the company has stated there is substantial doubt about its ability to continue as a going concern for more than a year, as it may require additional financing to sustain operations.

The success of Gimoti is crucial for Evoke Pharma, as the company’s business is entirely dependent on this product. If the company is unable to secure additional funding or identify alternative strategic options, it may be forced to curtail activities or even liquidate. Investors should closely monitor the company’s progress in growing Gimoti sales, managing costs, and securing its financial position.

Key factors that will influence Evoke Pharma’s future include:

• Continued growth in Gimoti prescriptions and refill rates
• Successful completion of the post-marketing clinical trial for a lower dose formulation
• Ability to maintain Nasdaq listing and access to capital markets
• Ongoing partnership with Eversana and potential impact of termination rights
• Management of selling, general and administrative expenses, including marketing and manufacturing costs

Overall, Evoke Pharma has made progress in commercializing Gimoti, but faces significant financial and operational challenges that will require careful navigation in the coming years to ensure the company’s long-term viability.