Aquestive Therapeutics: Navigating Credit Downgrades and the Path to Long-Term Growth

The recent downgrade of Aquestive Therapeutics’ credit rating to “B4” with a 5.404% probability of default underscores the company’s precarious financial position, yet it also highlights a critical inflection point in its journey. While the downgrade reflects heightened credit risk, it must be evaluated alongside the company’s strategic pivot toward Anaphylm, a groundbreaking epinephrine sublingual film for anaphylaxis. This analysis examines Aquestive’s long-term growth potential by dissecting its financial health, product pipeline, competitive dynamics, and industry trends.

Credit Volatility and Strategic Rebalancing

Aquestive’s credit rating has swung dramatically over the past three years, from a “D” in February 2022 to a current “B4” rating as of August 2025 [1]. The 2022 downgrade was driven by a confluence of factors: declining revenues, elevated default probabilities, and sector-wide biotech uncertainties. However, the company’s recovery to “C1” by December 2022 demonstrated resilience, fueled by progress in its drug pipeline and the acceptance of Anaphylm’s New Drug Application (NDA) by the FDA [1].

The latest downgrade to “B4” reflects ongoing financial pressures, including a 28% year-over-year revenue decline in Q1 2025 to $8.7 million, attributed to reduced sales of Suboxone and Azstarys [2]. Yet, Aquestive has strategically redirected resources to Anaphylm, slashing R&D expenses to $5.4 million in Q1 2025 from $5.9 million in Q1 2024 [2]. This rebalancing signals a shift from sustaining legacy products to prioritizing high-impact innovation—a move that could redefine its value proposition.

Anaphylm: A Game-Changer in Allergy Treatment

Anaphylm represents Aquestive’s most compelling opportunity. As the first needle-free, sublingual epinephrine treatment, it addresses critical unmet needs in the anaphylaxis market. The FDA’s decision to waive an advisory committee meeting for its NDA—a rare regulatory favor—positions Anaphylm for approval by January 31, 2026 [3]. Analysts project peak revenues exceeding $300 million, driven by its ease of use, portability, and appeal to needle-phobic patients [4].

The product’s differentiation is stark. Traditional epinephrine auto-injectors, such as EpiPen, face challenges like device complexity and patient reluctance. Anaphylm’s sublingual film format, by contrast, offers a discreet, user-friendly alternative. Aquestive’s pre-commercialization efforts, including 25 medical conferences and 16 published studies, have already generated strong physician interest [2]. Furthermore, the company’s in-house manufacturing capabilities and $160 million in recent financing underscore its readiness to scale [3].

Competitive Landscape and Market Dynamics

The epinephrine market is both crowded and evolving. Established players like Sanofi and Novartis dominate with auto-injectors, while newer entrants such as ARS Pharmaceuticals’ EURneffy (a nasal spray approved in the UK) are gaining traction [5]. However, Aquestive’s entry with Anaphylm could carve out a niche by targeting patients who avoid traditional devices.

Market size data reinforces the opportunity. The global epinephrine for anaphylaxis treatment market, valued at $1.56 billion in 2023, is projected to grow at a 9.0% CAGR to $3.32 billion by 2032 [6]. North America, with its 67.95% market share, remains the primary growth engine, driven by high allergy prevalence and advanced healthcare infrastructure [6]. Aquestive’s focus on U.S. commercialization, coupled with plans for international out-licensing, aligns with this trend.

Financial and Strategic Risks

Despite Anaphylm’s promise, Aquestive faces significant hurdles. Its 2025 revenue guidance of $44–$50 million, coupled with a Non-GAAP adjusted EBITDA loss of $47–$51 million, highlights the financial strain of pre-commercialization spending [2]. The company’s cash runway, while extended to 2026 via recent financing, remains vulnerable to delays in FDA approval or post-launch adoption.

Moreover, the epinephrine market is highly competitive. Even with Anaphylm’s unique delivery method, Aquestive must convince payers and providers of its cost-effectiveness. Pricing pressures and reimbursement challenges could temper growth. Additionally, the EpiPen patent expiry in September 2025 may accelerate generic competition, further fragmenting the market [7].

Long-Term Outlook: Balancing Risks and Rewards

Aquestive’s long-term growth hinges on three factors:
1. FDA Approval and Commercial Execution: A successful Anaphylm launch in Q1 2026 would validate the company’s strategic pivot. Post-approval, Aquestive must execute a robust commercial strategy, leveraging its existing distribution networks and partnerships with allergy advocacy groups.
2. Market Differentiation: Anaphylm’s success depends on its ability to capture a distinct segment of the market. Analysts project a 2:1 patient preference for Anaphylm over existing devices [2], but translating preference into market share requires aggressive education and marketing.
3. Financial Resilience: Aquestive must secure additional funding or strategic partnerships to sustain operations through 2027. The company’s exploration of ex-U.S. out-licensing opportunities is a prudent step, but execution risks remain.

Conclusion

Aquestive Therapeutics’ recent credit downgrade is a cautionary signal, but it should not overshadow the transformative potential of Anaphylm. The company’s ability to navigate regulatory, financial, and competitive challenges will determine its long-term viability. For investors, the key is to balance the immediate risks—declining revenues, high default probabilities—with the long-term upside of a product that could redefine anaphylaxis treatment. If Aquestive executes its strategy effectively, the downgrade may prove to be a temporary setback rather than a terminal obstacle.

Source:
[1] Aquestive Therapeutics (AQST), [https://martini.ai/pages/research/Aquestive%20Therapeutics-76e33245129d283742360fa231858002]
[2] AQST - Aquestive Therapeutics, Inc. [https://www.datainsightsmarket.com/companies/AQST]
[3] AQST Jumps 6.92% After FDA Signals Smoother Path for Anaphylm [https://marketchameleon.com/articles/b/2025/9/5/aqst-jumps-6-92-after-fda-signals-smoother-path-for-anaphylm-whats-next-for-aquestive-therapeutics]
[4] needle-less epinephrine stock poised for growth [https://www.investing.com/news/swot-analysis/aquestive-therapeutics-swot-analysis-needleless-epinephrine-stock-poised-for-growth-93CH-4218075]
[5] ARS Pharmaceuticals Announces Approval of EURneffy [https://www.nasdaq.com/articles/ars-pharmaceuticals-announces-approval-eurneffy-first-needle-free-adrenaline-treatment]
[6] Epinephrine for Anaphylaxis Treatment Market Size, Share ..., [https://www.fortunebusinessinsights.com/epinephrine-for-anaphylaxis-treatment-market-110489]
[7] EpiPen patent expiry opens new era for innovation [https://www.medicaldevice-network.com/news/epipen-patent-expiry-opens-new-era-for-innovation/]