AYTU BIOPHARMA, INC Q4 FY2024 earnings call

• Repositioned Aytu as a growing specialty pharmaceutical company focusing on commercializing novel prescription therapeutics, including indefinitely suspending clinical development programs in 2022 and winding down consumer health business completed in July 2024.
• Adjusted EBITDA improved 162% to $9.2 million in fiscal 2024 compared to $3.5 million in fiscal 2023.
• Wound down consumer health business, which had revenue of $33.6 million in the previous year but didn't generate positive operating cash flows, and entered into an agreement to divest it, receiving up to $0.5 million of revenue based royalty payments on future sales.
• Closed Grand Prairie, Texas manufacturing facility, completed production transfer to third-party manufacturer, and saw gradual improvement in gross margins with Rx gross margins at 75% in fiscal 2024 compared to 71% last year.
• ADHD portfolio net revenue increased 23% year-over-year in fiscal 2024 and 8% year-over-year in the second half of fiscal 2024; ADHD ship units were up 26% from July 1 through September 25, 2025.
• Pediatric portfolio impacted by payer changes in September 2023, but seeing signs of recovery in fiscal 2025 first quarter with unit shipments up 115% from July 1 through September 25; implemented commercial initiatives to regain growth.
• Impacted by cyberattack on Change Healthcare, which temporarily negatively impacted business but issue is now fixed; expecting ADHD script growth based on preliminary data.

For fiscal 2024, net revenue was $81 million. The Rx segment net revenue for the full year was $65.2 million. Within Rx, the ADHD portfolio, which accounted for 89% of Rx net revenue, saw a 23% increase to $57.8 million compared to the prior year period. The pediatric portfolio had full year net revenue of $7.3 million compared to $25.4 million last year, a decrease of $18.1 million. Consumer health business net revenue for 2024 fiscal year was $15.8 million. Companywide gross margins improved to 67% for full year 2024 compared to 62% in fiscal 2023, and Rx business gross margin was 75% in 2024 compared to 71% in the prior year.

• Expect Rx revenue and adjusted EBITDA in fiscal 2025 to be ahead of fiscal 2024 numbers.
• Pediatric products are beginning to show signs of recovery and are expected to return to growth in fiscal 2025.
• Based on preliminary data, expect ADHD script growth with unit sales volumes up 26% from July 1 through September 25, 2025.

• Cyberattack on Change Healthcare created havoc in the healthcare ecosystem, temporarily negatively impacting Aytu's business such as a 15% sequential decrease in a large grocery chain customer's prescription dispensing due to issues processing copay cards.
• Historical activity related to the consumer health business will be reflected as discontinued operations in financial statements starting from the first quarter of fiscal 2025.
• Continued impact from payer changes on the pediatric portfolio, although signs of recovery are seen, there is still risk of ongoing negative effects on revenue.

Q: Regarding ADHD franchise sales in 4Q and confidence in returning to previous levels, Aytu's Josh Disbrow answered that there was a snapback in Q4 due to a payer error, but looking at raw units and prescription demand, there's high confidence in fundamental demand as it's reset to significantly higher levels than pre-shortage.

Q: On contracting and reimbursement for ADHD, Josh Disbrow said Aytu is open to discussions but terms must make sense, and RxConnect provides leverage to assure patients of coverage at no more than $50 copay for commercially-insured patients.

Q: On DEA increase in API quarter for Vyvanse, Josh Disbrow said it would have minimal impact as Aytu competes in a relatively small share of the market and can grow its products regardless of such macro events.

Q: On pediatric business revenue translation and strategy, Josh Disbrow said pediatric business is core and can be meaningful revenue contributor, with initiatives like broader geographic spread for Karbinal ER and resolving supply chain issues for multivitamins to drive growth.

Q: On pediatric business recovery initiatives, Josh Disbrow detailed broader geographic coverage for Karbinal ER using current ADHD sales force, incentive compensation, and improved coverage in states, as well as resolving supply chain issues and improved coverage for multivitamins to drive recovery.