In This Article:
Release Date: February 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Aytu BioPharma Inc (NASDAQ:AYTU) reported its seventh consecutive quarter of positive adjusted EBITDA and second consecutive quarter of net income.
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The company successfully returned both its ADHD and pediatric portfolios to positive sequential prescription growth.
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Aytu BioPharma Inc (NASDAQ:AYTU) achieved $2 million in future annual cost savings through corporate optimization initiatives.
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The company has a strong cash position with a balance of $20.4 million at the end of December 2024.
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Aytu BioPharma Inc (NASDAQ:AYTU) is leveraging its A2RX Connect platform to improve patient access and differentiate its products in the market.
Negative Points
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ADHD net revenue decreased 17% year-over-year due to normalization of the ADHD stimulant supply chain.
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Gross margin for the second quarter was 66%, down from 78% in the same quarter last year, due to higher costs from transitioning manufacturing.
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The company is still working through higher-cost ADHD inventory, which is impacting gross margins.
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Operating expenses remain a concern, although there have been reductions, further optimization is needed.
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The company faces challenges in returning ADHD franchise revenue to previous levels of $16-17 million per quarter.
Q & A Highlights
Q: With the stimulant shortages easing, do you think the ADHD franchise could return to generating $16-17 million per quarter? A: (Josh Disbrow, CEO) We anticipate growth and believe reaching $16-17 million per quarter is feasible. As the market normalizes, maintaining market growth and gaining share should help us achieve this target.
Q: Were there any one-time effects in the second quarter for the pediatric business, and which product had the largest impact? A: (Josh Disbrow, CEO) There were no one-time effects; the growth was organic. The antihistamine franchise, particularly Karbinal, was the largest driver of growth, reaching its highest prescription levels since Q2 2024.
Q: Can you elaborate on the dynamics of Medicaid coverage in different states and any challenges faced? A: (Josh Disbrow, CEO) We've expanded coverage broadly, including state payers. Each state decides on coverage independently, but we've achieved broad-based coverage without supplemental rebates, maintaining healthy margins. We've diversified coverage across more states, reducing reliance on any single state.
Q: Could you clarify the additional $2 million in cost savings mentioned? A: (Josh Disbrow, CEO) The $2 million in savings is expected on top of what's been realized, starting this quarter. It's primarily from G&A reductions, equating to about $500,000 per quarter.