AQST — Q2 2026 Financial Report Analysis

Overview

Aquestive Therapeutics' second quarter of 2026 had two sides. The business it already runs, making dissolvable drug films for partners, grew: revenue rose 38% to $13.8 million, mainly because Indivior ordered more Suboxone film, and the operating loss shrank from $11.4 million to $8.2 million. But the net loss widened to $22.9 million from $13.5 million because of an $11.7 million one-time charge for paying off its 13.5% notes early with a cheaper $55 million Oaktree term loan. What the company is worth still depends on one product that is not yet approved, Anaphylm, an epinephrine film placed under the tongue as an alternative to an EpiPen. The FDA rejected it in January 2026 over packaging and handling, and Aquestive planned to resubmit in Q3 2026.

At a glance

• Revenue $13.8M, up 38%. Higher Suboxone volumes (about +$4.6M) more than covered lower Ondif sales in Brazil (about -$2.2M). The growth came from the contract-manufacturing side, not from a new product.
• Net loss $22.9M, or $0.18 a share. About half of that ($11.7M) is the cost of retiring the 13.5% notes early. Without that charge the loss would have been about $11.2M, smaller than last year's $13.5M.
• Cash $98.5M at June 30, down from $121.2M in December. Operations used $24.2M in the first half. Much of that was a one-time payment under the Neurelis legal settlement, not the normal running cost of the business.

Q2 2026 key figures

Operating margin is operating profit or loss as a share of revenue: what is left after running the business, before interest and tax. "n/m" means not meaningful: percentage changes between two losses don't carry a useful message.

Where the revenue came from

Aquestive reports four revenue streams, and in Q2 almost all of the growth came from the first:

• Manufacture and supply ($11.9M, +24%). Aquestive makes film products that partners then sell. The 10-Q says the increase was "primarily due to higher Suboxone revenues of approximately $4,600 [thousand], partially offset by lower Ondif revenues of approximately $2,200." Suboxone is Indivior's opioid-dependence film. It is an aging brand that the company itself calls "a sunsetting product," with about 24% of the film market left after generics entered. Indivior made up 70% of first-half revenue and 84% of receivables at June 30. So the quarter's growth depends on order timing from one customer of a declining product, not on rising underlying demand.
• License and royalty ($1.3M, +58%). The increase was "primarily due to the recognition of royalty revenue from Zevra" ($0.5M in Q2). It is a small figure in Q2, but it matters for the first half. In March 2026 Zevra sold the ADHD drug Azstarys to Commave Therapeutics, and Aquestive received a share of the proceeds. That produced $5.0M of Zevra-related royalty revenue in the first half, most of it in Q1. This explains why first-half license and royalty revenue rose 313% to $6.7M. It is a one-off and should not be treated as a recurring rate.
• Co-development fees ($0.6M, +54%) depend on when milestones are reached, and the company says they "are expected to fluctuate among reporting periods."
• Proprietary product revenue ($0 vs -$0.8M). The comparison is distorted. In Q2 2025 Aquestive booked a negative figure, reserving for returns of Libervant (its own seizure-rescue film) after a court ruling ended its U.S. market access in April 2025. This year there is nothing to reverse, so the line "improved" by $0.8M without any product being sold.

Manufacturing costs fell 12% to $4.0M while manufacturing revenue rose 24%. The company attributes this to "changes in product mix," meaning the quarter's orders leaned toward higher-margin products, chiefly Suboxone over Ondif. The result was a manufacturing gross margin of 66.3%, up from 52.4%. That is a mix effect, not a lasting efficiency gain, and it would reverse if Suboxone volumes fall back.

Costs: savings partly reversed in Q2

• Selling, general and administrative (SG&A) rose 11% to $14.1M. The 10-Q lists about $2.1M more in legal fees, about $1.4M of severance (including share-based pay that vested early), about $0.9M more in personnel costs and about $0.3M more in share-based compensation. These were partly offset by about $2.6M less commercial spending (Anaphylm is not yet approved, and Libervant marketing stopped in 2025) and about $1.0M lower Libervant regulatory fees. For the half year SG&A fell 21%, mostly because 2025 included a one-time $4.3M Anaphylm FDA filing (PDUFA) fee.
• R&D fell 3% to $4.0M. Anaphylm project spending declined, while preclinical spending on AQST-108 (a topical epinephrine gel aimed at alopecia areata and possibly atopic dermatitis) rose to $0.27M from $0.10M.

The refinancing

On May 12, 2026 Aquestive borrowed $55M (Tranche A) from Oaktree. It used most of that to repay the $45M of 13.5% notes, plus a $2.0M exit fee and a $3.8M prepayment penalty. The old notes would have begun amortizing in June 2026, meaning principal repayments of roughly $10M a year (the $9.99M "current debt" on the December balance sheet). The new loan:

• costs three-month SOFR (a benchmark short-term interest rate) plus 6.25%, with a 2.75% floor on SOFR. That means at least 9.0% a year instead of 13.5%;
• requires no principal repayment until it matures in May 2031;
• has $20M more (Tranche B) available if Anaphylm is approved before June 30, 2027, and another $25M (Tranche C) tied to a sales milestone;
• is secured by a first lien on substantially all of Aquestive's assets, including its intellectual property, and came with warrants for about 230,000 shares at $4.18.

The $11.7M charge is the gap between the old notes' book value and what it cost to pay them off. It is a one-time accounting loss, though about $5.8M of it (the exit fee and penalty) was real cash. In return, the next five years' principal payments are gone and the rate is lower.

What the headline numbers hide

• Most of the net loss came from outside the business. Below the operating loss, the quarter carried the $11.7M extinguishment charge, $2.8M of interest expense and $1.0M of non-cash interest on royalty obligations. Interest income was also lower: $0.9M against $2.1M a year ago, when a one-time employee retention tax credit (ERTC) was received. Excluding the debt charge, our own calculation gives a net loss of about $11.2M, or about $0.09 a share, against $0.14. That is an improvement, though some of it comes from the one-off Suboxone/Ondif mix. The company does not report an adjusted EPS figure.
• Cash burn for the first half was distorted in both directions. Operations used $24.2M against a $30.9M net loss. The two largest working-capital moves were one-offs, both tied to the Neurelis settlement and customer payment timing. Accounts payable fell $21.4M, "mostly attributed to payments made under the confidential legal settlement," and receivables fell $8.4M as customers paid and settlement-related receipts came in. Non-cash items added back about $22M (the debt charge, $5.2M of share-based pay and $4.1M of debt-discount amortization). On a normal quarter, without the settlement payment, cash use is likely well below this run rate. That is our inference, not company guidance.
• Inventory rose while receivables fell. Inventory rose 19% since December to $7.4M, and receivables fell 47% to $9.3M. Higher inventory is not alarming for a contract manufacturer building to purchase orders, but it is worth watching against Suboxone order volumes in Q3.
• More shares outstanding pushed the per-share loss up. The weighted share count rose 26% year on year, to 125.0M from 99.3M, mainly because of the August 2025 offering of 21.25M shares at $4.00. Even with the operating improvement, any per-share comparison starts out worse because of this dilution.
• The balance sheet still shows a stockholders' deficit of $56.6M, wider than $33.7M at year-end. Total liabilities of $188.7M include $61.2M tied to the 2020 sale of KYNMOBI royalties and $27.8M of royalty obligations to the old noteholders. Most of these are accounting liabilities rather than near-term cash calls, but they mean shareholders rank behind a large stack of claims.

Takeaway: Ignoring the one-time refinancing charge, Aquestive's existing film-manufacturing business had a better quarter, with a smaller operating loss on a favourable Suboxone-heavy mix. But that business depends on one customer selling an aging product. The quarter's real achievement was the balance sheet: replacing 13.5% amortizing notes with a 2031 bullet loan at about 9% gives the company time and about $98M of cash to get Anaphylm resubmitted and, it hopes, approved.

Outlook: what to watch

Management gives no revenue or earnings guidance in the 10-Q. The company-stated milestones are:

• Anaphylm resubmission in Q3 2026. The January 30, 2026 rejection (a Complete Response Letter) did not question the clinical data or manufacturing. It cited human-factors problems: patients had trouble opening the pouch, tore the film, placed it wrongly, or chewed or removed it. A new study with redesigned packaging, reported August 10, cut the median pouch-opening time from 17 seconds to 3. Pouch-opening difficulty fell from 26 of 166 participants to 1 of 105, and wrong placement from 20 of 166 to 2 of 105. Aquestive plans to ask for an accelerated review, but says "no expedited review can be guaranteed." Approval also unlocks the $20M Tranche B and the RTW revenue-share funding of up to $75M, which requires approval by a specified date.
• Libervant. Its competitor Valtoco's orphan-drug exclusivity (a period during which the FDA cannot approve similar rival products) expires in January 2027. Aquestive filed in Q2 2026 for approval in ARS patients aged 6–11. A U.S. relaunch is possible after the exclusivity expires, though the company stresses there is "no assurance."
• International filings: Canada in 2026 and the EU in 2027, using existing data. AQST-108: further preclinical and clinical studies from H2 2026 through H1 2027.

Our read: until Anaphylm is approved, results will move with Suboxone order timing. Don't expect the license line to repeat the first half's $6.7M now that the Azstarys payment is booked. The quarterly operating loss should stay in the high single-digit millions, and if launch spending restarts after approval it will widen again. The key point in the balance sheet is that, with no principal due until 2031, the main limit on runway is how much Aquestive spends on a potential Anaphylm launch, not its debt payments. Further equity raises, which the company itself flags as likely, would mean more dilution.