AYTU BIOPHARMA, INC Q2 FY2025 earnings call

• The commercial team successfully returned both ADHD and pediatric portfolios to positive sequential prescription growth. - Leveraged the Aytu RxConnect platform to navigate the macro landscape, increase physician demand, improve payer coverage, and broaden distribution. - Implemented corporate optimization initiatives driving efficiencies, with at least $2 million in annual cost savings expected. - The RxConnect platform is a key differentiator, protecting pharmacies, reassuring prescribers, capping patient costs, and enabling patients to get prescribed products at affordable and predictable prices. - Focus remains on the profitable prescription business and pursuing additional in-licensed or acquired products.

For the ADHD portfolio, in the second quarter, scripts were slightly over 99,000. ADHD net revenue was $13.8 million in Q2, compared to $15.3 million in Q1 Fiscal 2025 and $16.6 million in Q2 of the previous year. On a sequential apples-to-apples basis excluding a one-time item, ADHD net revenue increased 16%. For the Pediatric portfolio, net revenue was $2.4 million in Q2, compared to $2.1 million in Q2 of the previous year, with a sequential increase of approximately 86%.

• Continue to focus on the profitable prescription business and leverage the unique capabilities of the Aytu RxConnect platform. - Pursue additional in-licensed or acquired products to diversify the portfolio. - Expect net revenue and adjusted EBITDA growth from current levels and work towards achieving positive cash flows.

• Market supply normalization has made year-over-year comparisons difficult for ADHD. - Payer changes and varying Medicaid coverage dynamics pose challenges for the Pediatric portfolio. - The transition from in-house manufacturing to contract manufacturing has caused noise in gross margin in the current quarters as inventory from the former Grand Prairie Facility is sold through.

Q: When will the ADHD franchise return to generating $16-17 million quarterly?

A: Anticipate growth and believe it is feasible to get back to that range as the market normalizes and with share gain.

Q: Were there any one-time effects in the Pediatric business in the second quarter?

A: No one-time effects, it's organic growth with the antihistamine franchise being the largest driver.

Q: Talk about dynamics in Medicaid coverage for Pediatrics in different states?

A: Picked up broad-based coverage, relatively consistent rebates across states, less reliant on a single state, and seeing improvement in coverage for the antihistamine franchise.

Q: Where is the additional $2 million in cost savings coming from?

A: Coming from G&A, starting to be realized in the current quarter with headcount reductions and slimming down contracted services.

Q: Status on business development for potential tuck-in or larger acquisitions?

A: In active discussions, looking at CNS/Psychiatry and Pediatrics, preferring opportunities with small/no upfronts and looking to model these opportunities.