AYTU BIOPHARMA, INC Q3 FY2025 earnings call

• Total revenue grew 32%, with ADHD up 25% and pediatric up 77%.
• Operating expenses decreased by $1.6 million, leading to income from operations of $2.4 million, the second quarter of positive income from operations in the company's history.
• Net income was $4 million, compared to a $2.9 million loss in the prior year's third quarter. Adjusted EBITDA was $3.9 million, up from $0.9 million in the prior year.
• Aytu RxConnect platform drives over 85% of the company's scripts, a key differentiator.
• For the pediatric business, a return-to-growth plan was implemented, including diversifying prescribers, improving payer coverage, and shifting salesforce focus.
• Strategic realignments include halting clinical development, selling Consumer Health business, outsourcing manufacturing, and refinancing debt.

Total revenue for the quarter was $18.5 million, up 32% from the prior year. The ADHD portfolio had net revenue of $15.4 million, up 25% year-over-year, accounting for 83.2% of total revenue. The pediatric portfolio had net revenue of $3.1 million, up 77% year-over-year, accounting for 16.8% of total revenue.

• No specific forward guidance provided, but management is pleased with progress and hopes to leverage growth in the underlying business.
• Anticipates gross margins to improve toward the mid-70% range as inventory from the transition to outsourced manufacturing is sold through.

• Tariffs: Minimal impact as products are mostly manufactured in the US, with only small componentry sourced internationally.
• Political factors: Potential impact from legislation on fluoridation, but minimal materiality expected as any effects would take time and be relatively minor.

Q: Did you see any one-time effects in the ADHD or pediatric business?

A: No, organic growth with no one-timers.

Q: Growth expectations for ADHD and pediatric?

A: Expect growth for ADHD, pediatric to grow beyond current levels but not to $25M annualized.

Q: Business development gating factors?

A: Finding the right asset that fits therapeutic focus, salesforce footprint, and RxConnect capability.

Q: Tariffs impact?

A: Minimal, products mostly US-manufactured.

Q: Pediatrics return to growth plan?

A: Deployed salesforce, expanded footprint, improved payer coverage for pediatric products.

Q: New product targets?

A: CNS-focused, commercial-ready assets aligning with salesforce and RxConnect.

Q: OpEx breakeven?

A: Revenue needs ~$15M quarterly to breakeven, ~$13.1M for operating cash breakeven.