Executive Summary / Key Takeaways

• Evoke Pharma is a specialty pharmaceutical company focused on commercializing Gimoti, the first and only nasally-administered metoclopramide for diabetic gastroparesis, addressing a significant unmet need for non-oral treatment options.
• Gimoti's differentiated nasal delivery technology offers rapid absorption, bypassing impaired gastric emptying, a key advantage over oral therapies, and is supported by intellectual property extending into 2038.
• Recent financial performance demonstrates strong growth momentum, with net product sales increasing 96% in 2024 to $10.2 million and 77% in Q1 2025 to $3.1 million, driven by expanding prescriber base, improved fulfillment via strategic pharmacy partnerships (like ASPN), and compelling real-world evidence.
• The company projects continued growth with FY 2025 net revenue guidance of approximately $16 million, representing a 60% increase over 2024, supported by ongoing commercial initiatives and efforts to improve patient access and prior authorization processes.
• Despite commercial progress and recent financing, substantial doubt exists regarding the company's ability to continue as a going concern due to recurring losses and the potential acceleration of the $7.2 million Eversana loan upon potential termination of the commercial agreement, necessitating future financing.

Evoke Pharma: A Targeted Approach to a Debilitating Disease

Evoke Pharma, Inc. (NASDAQ: EVOK) is a specialty pharmaceutical company singularly focused on addressing the significant challenges faced by adults suffering from acute and recurrent diabetic gastroparesis. This debilitating gastrointestinal disorder, characterized by delayed gastric emptying, leads to severe symptoms like nausea, vomiting, bloating, and abdominal pain. Beyond the physical distress, it can result in dehydration, malnutrition, erratic blood sugars, and frequent emergency room visits and hospitalizations. For decades, treatment options have been limited, with oral metoclopramide being the primary pharmacological intervention. However, the very nature of gastroparesis – impaired stomach emptying – makes the absorption of oral medications unpredictable and often ineffective.

Evoke's core strategy revolves around its sole approved product, Gimoti, a novel nasal spray formulation of metoclopramide. Approved by the FDA in June 2020, Gimoti represents the first and only non-oral, nasally-administered product indicated for the relief of symptoms in adults with acute and recurrent diabetic gastroparesis. The company's history since its 2007 inception has been dedicated to the development and now commercialization of this single asset, recognizing the profound unmet need for a reliable, non-oral delivery method for this patient population. Early operations were funded through equity and debt, a pattern that continues as the company scales its commercial efforts.

The technological differentiation of Gimoti lies in its nasal delivery system. This route allows for rapid and direct absorption of metoclopramide into the bloodstream, bypassing the stomach and its impaired emptying function. This is a critical advantage over oral formulations, where absorption can be delayed or incomplete due to the disease itself. Specific quantifiable metrics on onset speed compared to oral metoclopramide were not detailed, the company emphasizes that this delivery method addresses the fundamental problem of the disease, enabling predictable drug delivery. The company's intellectual property portfolio, including FDA Orange Book-listed patents and others extending into 2038, protects this nasal formulation and methods of use, including for moderate to severe gastroparesis, providing a competitive moat. Future R&D efforts include a post-marketing commitment to conduct a single-dose PK clinical trial to characterize dose proportionality for a lower dose strength, aiming to provide physicians with more flexible dosing options, though the costs and timeline for this are not yet clear.

In the competitive landscape, Gimoti is positioned against the long-standing standard of care, oral metoclopramide, as well as other treatments like Domperidone (though its compassionate use supply is ending in early 2025) and potentially addressing symptoms associated with the increasing use of GLP-1 agonists. While large pharmaceutical companies like AbbVie (ABBV), Takeda Pharmaceutical (TAK), Ironwood Pharmaceuticals (IRWD), and Bausch Health (BHC) have significant presences in the broader GI market with diversified portfolios and greater scale, Evoke's focus on the specific challenge of gastroparesis and its differentiated nasal technology provide a unique angle. Compared to these larger players with robust gross margins (e.g., ABBV ~85%, TAK ~70%, IRWD ~80%, BHC ~60-70%) and established global distribution, Evoke operates with higher relative operating costs due to its specialty focus and smaller scale. However, Evoke's recent revenue growth rates (96% in 2024) significantly outpace the typical growth rates of these larger, more mature companies (e.g., ABBV 4-6%, TAK 2-3%, IRWD 10%, BHC 5%). This suggests that while Evoke is a smaller player with lower absolute margins, its targeted approach and differentiated product are capturing market share and driving rapid percentage growth in its specific niche. The discontinuation of Domperidone supply is seen as a potential catalyst, driving patients toward approved alternatives like Gimoti.

Evoke's commercial strategy is executed through a partnership with Eversana, which handles market access, marketing, and distribution in the U.S. This collaborative model allows Evoke to focus on manufacturing and regulatory responsibilities while leveraging Eversana's commercial infrastructure. Evoke records the sales and reimburses Eversana based on an agreed budget and a percentage of net product profits, retaining over 80% of profits after costs.

Performance Momentum and Operational Execution

Evoke's strategic focus on increasing awareness, improving access, and generating compelling evidence for Gimoti has translated into significant financial and operational progress. Net product sales have shown impressive growth, increasing from $2.5 million in 2022 to $5.2 million in 2023 (a 108% increase) and further to $10.2 million in 2024 (a 96% increase). This momentum continued into the first quarter of 2025, with net product sales reaching $3.1 million, a 77% increase compared to $1.74 million in Q1 2024.

This growth is directly linked to operational execution. The company has seen a substantial increase in its cumulative prescriber base, which grew 46% year-over-year in 2024, reaching over 2,500. New prescribers are being added consistently each month, and importantly, the depth of prescribing per physician is also increasing, indicating growing confidence and repeat use. Prescription fills and patient enrollments have also shown robust increases (72% and 22% respectively in 2024).

A key operational driver has been the strategic evolution of the company's pharmacy distribution network. The transition to ASPN pharmacies in late 2023/early 2024 has been highlighted as particularly effective. This partnership has streamlined prescription fulfillment, accelerated the adjudication of insurance authorizations, and improved patient capture and conversion rates, reducing reliance on patient savings programs. The expansion of the pharmacy network has also mitigated geographic and payer restrictions, contributing to a reported 30% faster speed to therapy for patients.

Selling, general, and administrative expenses have increased in line with commercialization efforts, rising from $9.6 million in 2022 to $12.2 million in 2023 and $15.1 million in 2024. This includes higher marketing, advertising, and Eversana profit-sharing costs, directly correlated with increasing sales. Research and development expenses, while significantly lower than pre-approval levels, saw a slight increase in Q1 2025 due to miscellaneous product development costs and are expected to increase more substantially once the post-marketing PK trial begins.

Real-world evidence generation has been central to the commercial strategy. Studies presented at major gastroenterology conferences in 2023 and 2024 demonstrated that Gimoti use was associated with significantly fewer physician office visits, emergency department visits, and inpatient hospitalizations compared to oral metoclopramide, leading to substantial cost savings (approximately $15,000 per patient over six months in one study). This data is being actively used to inform physicians and payers of Gimoti's value proposition and is beginning to influence payer discussions and coverage decisions. The company is also leveraging this data to address emerging market dynamics, such as the potential use of Gimoti for gastroparesis symptoms in patients taking GLP-1 agonists.

Financially, the company has historically relied on equity and debt financing. As of March 31, 2025, cash and cash equivalents stood at $12.6 million. The company borrowed $5.0 million under the Eversana Credit Facility in 2020, with principal and accrued interest totaling $7.2 million as of March 31, 2025. A significant $14.3 million capital raise in 2024 through equity financings and warrant exercises provided necessary funding, helped regain compliance with Nasdaq listing requirements (following a reverse stock split in August 2024 to address the minimum bid price requirement), and extended the cash runway.

Outlook, Risks, and the Path Forward

Looking ahead, Evoke is projecting net revenue of approximately $16 million for the full year 2025, representing a 60% increase over 2024. This guidance is predicated on the continued momentum in prescription growth, further improvements in reimbursement pathways, and the ongoing effectiveness of commercial strategies, including expanding pharmacy partnerships and enhancing the prior authorization process through dedicated resources like Field Reimbursement Managers. Management remains confident in the market opportunity and their ability to execute, believing they have only "scratched the surface" of potential market penetration.

Despite the positive commercial trajectory, significant risks and challenges remain. The company has incurred recurring losses since inception and expects to continue doing so, leading management to conclude there is substantial doubt about its ability to continue as a going concern for one year from the Q1 2025 financial statement issuance date. The current cash position, even with projected sales growth, is only expected to fund operations into the second quarter of 2026, excluding the potential early repayment of the Eversana Credit Facility.

A critical risk is the potential termination of the Eversana commercial services and loan agreement. Both parties have the right to terminate if net profit is negative for two consecutive quarters (NPQTR). As net profits were negative for the two quarters preceding March 31, 2025, this right is currently exercisable by either party. If Eversana were to exercise this right, the $7.2 million loan would become due within 90 days, and Evoke would need to establish its own commercial infrastructure, which the company believes would be substantial and costly. This scenario would materially and adversely affect near-term liquidity and cash runway, exacerbating the going concern uncertainty.

Consequently, the company anticipates needing to raise additional funds through future debt, equity, or collaboration arrangements. There is no guarantee that such financing will be available on acceptable terms, or at all. Failure to secure adequate funding could force the company to curtail commercial activities, potentially leading to liquidation. Other risks include maintaining Nasdaq listing compliance (subject to a monitoring period through June 2025), potential supply chain disruptions from reliance on third-party manufacturers, and the inherent uncertainties of market acceptance and competition, including from established oral and IV metoclopramide products and the evolving landscape around GLP-1 associated GI symptoms.

Conclusion

Evoke Pharma presents a compelling investment narrative centered on its differentiated product, Gimoti, addressing a significant unmet need in diabetic gastroparesis. The company's nasal delivery technology offers a tangible advantage over traditional oral therapies, a key factor in its strategy to become the standard of care. Recent financial results demonstrate strong commercial execution, with robust revenue growth driven by expanding prescriber adoption and strategic operational improvements in prescription fulfillment and patient access. The company's guidance for 2025 signals confidence in continuing this growth trajectory, underpinned by ongoing commercial initiatives and the increasing impact of real-world evidence.

However, this opportunity is balanced by substantial financial risks, most notably the going concern uncertainty and the potential acceleration of debt tied to the Eversana agreement. While recent financing has provided a temporary buffer, securing additional capital will be crucial for the company's long-term viability and ability to fully capitalize on the market potential. Investors should weigh the promising commercial momentum and the unique value proposition of Gimoti against the significant funding requirements and operational risks inherent in a specialty pharmaceutical company dependent on a single product and strategic partnerships. The successful execution of the commercial strategy, coupled with the ability to secure necessary future financing, will be paramount to realizing the potential value in Evoke Pharma.