Aytu BioPharma achieves $66.4 million in revenue for fiscal 2025 and prepares for transformative EXUA launch, targeting major depressive disorder market.

OPERATOR - (00:00:22)

Greetings. Welcome to the Aytu BioPharma to report fiscal 2025 full year and fourth quarter and operational and financial results on September 23, 2025. Conference call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone would like to ask a question, please press Star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press Star two. If you would like to remove your question from the queue, please note this conference is being recorded. I will now turn the conference over to your host, Robert Bloom with Latham Partners. You may begin.

Robert Bloom - Moderator - (00:01:07)

Alright, thank you very much and good afternoon everyone. As the operator indicated during today's call, we will be discussing Aytu BioPharma's fiscal 2025 full year and fourth quarter operational and financial results. This for the period ended June 30, 2025. Joining us on today's call is A2's Chief Executive Officer Josh Disbrow and Ryan Selhorn, the company's Chief Financial Officer. At the conclusion of today's prepared remarks, we will open the call for a question and answer session. I'd like to remind everyone that today's call is being recorded. A replay of today's call will be available by using the telephone numbers and conference ID provided in the press release issued earlier today or by utilizing the link on the company's website under Events and Presentations. Finally, I'd also like to call to your attention the customary safe harbor disclosure regarding forward-looking information. The conference call today will contain certain forward-looking statements, including statements regarding the goals, strategies, beliefs, expectations and future potential operating results of A2 biopharma. Although management believes these statements are reasonable based on estimates, assumptions and projections, as of today, these statements are not guarantees of future performance. Time sensitive information may no longer be accurate at the time of any telephonic or webcast replay. Actual results may differ materially as a result of risks, uncertainties and other factors, including but not limited to the factors set forth in the company's filings with the SEC. A2 undertakes no obligation to update or revise any of these forward-looking statements. With that said, let me turn the call over to Josh Disbrow, Chief executive officer of A2 Biopharma. Josh, please proceed.

Josh Disbrow - Chief Executive Officer - (00:02:56)

Thank you Robert and welcome everyone. This is an extremely exciting time for Aytu given the strong financial performance during the recent fiscal year and perhaps more importantly the upcoming launch of EXUO, which we believe significantly transforms Aytu for years to come. At a high level fiscal year 2025 which as a reminder we have a June 30 year end, saw stability within our existing ADHD and pediatric portfolios as well as our focus on driving efficiencies across our operations. To report our ninth consecutive quarter and third consecutive year of positive adjusted EBITDA. For the year, net revenue was $66.4 million which was a slight increase from the previous year on the adjusted EBITDA line. We came in at $9.2 million. Again, this is now three consecutive years of positive adjusted EBITDA as we really pivoted this company the past few years to focus on a prescription pharmaceutical business while we halted our development efforts, wound down and sold our consumer health business and outsourced our ADHD manufacturing to a US based cmo. It should not be overstated how different we look today from just a few years ago. I give tremendous credit to the entire team for their efforts to unlock value in Aytu and thank them for all they're doing to put us in this strong position. With all the heavy lifting completed over the last few years, we positioned ourselves to build upon the uniqueness of our Salesforce's psychiatry focus and alignment with the proprietary A2RX Connect patient access platform to begin the next stage of Focus product acquisitions which can align with our psychiatry focus. To that end, in June of this year we announced what we believe is a truly transformational opportunity for A2 by signing an exclusive agreement with to commercialize EXUA in the United States. With EXUO, we are bringing to market a novel first in class treatment for Major Depressive Disorder or MDD in over $2 billion US market. The key word here is novel. EXUA is not an SSRI nor is it an snri. It does not inhibit neurotransmitter reuptake. It is in a new class of MDD treatment as a 5ht1a receptor agonist. It is a partial agonist of the 5ht1a receptor and it's long acting by upregulating the 5ht1 receptor. EXUA uniquely targets a receptor chiefly implicated in mood, notably depression and anxiety. Because ECSUA targets this specific receptor so selectively, it does not carry the same risk of sEXUOl dysfunction and doesn't cause weight changes when compared to placebo, which the SSRIs and SNRIs routinely do as it relates specifically to sEXUOl function, not only does it not cause sEXUOl related side effects such as low libido, ejaculatory delay and erectile dysfunction, recently published work EXUOlly shows ECSTUA improves sEXUOl function and desire in depressed patients, and while that isn't an approved claim, we will specifically make with clinicians, that data is peer reviewed and published and in the public domain. So while SSRIs and NRIs are generally effective for some patients in treating MDD, the problems associated from a side effect perspective, particularly as it relates to sEXUOl dysfunction and weight gain, commonly lead to patient dissatisfaction with treatment. As you can imagine, these side effects are many times simply untenable for patients already struggling with their mental health, and thus many patients stop these treatments altogether or seek alternatives. Thus, we believe a significant market need exists for targeted and specific therapies minimizing off target effects and adverse events such as sEXUOl side effects and weight gain while effectively treating the symptoms of MD. This is key to the market positioning for EXUO. As I mentioned, this is an over $22 billion market in the US with over 340 million prescriptions written annually in the US for antidepressants. SSRIs and SNRIs represent approximately 220 million TRXs, or over 60% of all antidepressants prescribed. While the category is largely genericized, there are numerous branded products that have entered the market relatively recently, including newer antidepressants like Trintellix, Albelity and Sprav. These products have received strong physician uptake despite having some of the same side effects older products present, particularly Trintellix and Ovality. Both products list adverse events, specifically including sEXUOl dysfunction among others. So we view Exua as having a potentially favorable profile compared to those two, given its unique MOA and high receptor selectivity and lack of sEXUOl dysfunction. Further, as it relates to Albelity, that's dosed twice daily, so Exua's once daily dosing may offer a benefit in terms of patient convenience and compliance. Trintellix, a product that generated over 2 million prescriptions in calendar 24, has an exceedingly high rate of sEXUOl side effects 29 to 34% at the highest approved doses in men and women respectively. SEXUOl dysfunction is EXUOlly listed as a warning for Trintellix, so this is a very real problem with this product. So frankly, even if Exua was only the recipient of Trintellix failures or dissatisfied patients, that would make Exua a significant success for us. All this said, we obviously won't just target just one or two of those products failures as there are many millions more prescriptions to pull from across the spectrum of approved MDD treatments, particularly the SSRIs and SNRIs that dominate the MDD market despite their shortcomings. Needless to say, our expectations for EXUA are high as we believe we can help patients that are dissatisfied or are dealing with side effects with current treatment options, and there are many based on our market research and conversations with the psychiatry community. So let's turn to our key EXUA launch activities that are underway. Since completing the transaction in June, we've been working rapidly to bring the product to market. As a reminder, EXUA is already FDA approved. We are currently finalizing product manufacturing, packaging, validation, labeling, serialization and delivery to our third party logistics provider. This is the biggest gating factor at the moment with the current expectation that we will have product available by the end of the calendar year. On the medical affairs front, we have brought on Dr. Gerwin Westfield as our Senior Vice President of Scientific Affairs. Dr. Westfield is a distinguished leader in the medical and pharmaceutical fields whose work has contributed to a Nobel Prize. Dr. Westfield previously worked with us at A2 from 2015 to 2021 as our Director of Medical Affairs. Led by Dr. Westfield, we were focused on broadening EXUO's clinical profile via peer reviewed publications and key opinion leader engagement as you need to do with any successful product launch. With this, we expect to employ an active education, publication and presentation approach highlighting ecksua's sEXUOl function and anxiety data in conjunction of course with the product's depression efficacy data and safety data over the thousands of patients studied. On the sales front, we have refined our sales territory alignment and physician targeting. It's important to note that our existing psychiatry centric 40 plus person sales force will make EXUWA their primary promotional responsibility going forward. Our sales team already overlaps with a significant majority of targeted writers in our current geography and thus this really is a plug and play opportunity enabling us to efficiently launch with only a slightly modified footprint and will be specifically aligned to high branded antidepressant prescribing psychiatrists and psychiatrist aligned nurse practitioners and PAs. So we don't intend to significantly expand the sales team initially, but realignment of territories is now essentially complete to ensure maximum reach while also aligning with where market access is expected to be strongest and of course prescribing potential is expected to be the highest. I'll remind you that for government payers, Major Depressive Disorder has nearly universal coverage as this condition is a federally mandated protected class where MDD prescriptions must be covered and importantly, the government Pay segment represents approximately 30 plus percent of the MDD covered lives depending on the geography. So with 30 or even 40% of the antidepressant category depending on geography covered. By virtue of this protected status, we are of course aligning sales territories appropriately to ensure optimal patient access with respect to both government and commercial payers. As it relates to the branding and promotional aspect, we continue to work internally and with our agency to optimize product positioning and messaging, prepare promotional materials and refine our overall platform around EXUO. From a commercial perspective, we plan to implement a comprehensive promotional program whereby we establish a clear positioning for EXUA based on its attributes, the competitive landscape and ultimately where we believe we can win with this product. You'll see more on this in the months ahead as we formally make EXUA commercially available and launch EXUA through our sales force. From a payer and distribution perspective, we do plan to integrate ECSTUA into our A2RX Connect access platform. We expect to drive distribution through and dispensing from our RX Connect network pharmacies as we do now with our ADHD portfolio. This will enable us to gain strong insights on reimbursement and coverage rates to help guide selective and smart payer contract we will consider as you know, with our current products we're able to successfully navigate the payer landscape even in a category like adhd, for which brand reimbursement is spotty at best. And we've always been very judicious and selective in payer contracting. We will take contracting and rebating on a case by case basis as we do now, but our single biggest objective around reimbursement with EXUA will be to minimize coverage barriers and to help get patients successfully on therapy. The payer landscape in MDD is materially better than an ADHD based on the class's protected status and other factors. So we're anticipating materially higher net pricing and better overall coverage and reimbursement rates. More to follow on pricing and reimbursement as this piece unfolds and as we get closer to and into the ECUA launch. Finalization of manufacturing is the gaining factor to launch, but today we feel comfortable that we are on track to have EXUA available at the end of the calendar year. While efforts in the near future are on the EXUA launch, a question that frequently comes up is around opportunities to efficiently extend EXUA's lifecycle, whether that's through considering the pursuit of additional intellectual property or exploring alternate formulations or one of Jeff Broen's active metabolites. As a reminder, Exua's IP will extend to late 2030 or early 31 through a combination of patent term extension being worked on through along with the new chemical entity designation granted by the fda. So as we think about it, this is a nice Runway already from a patent or exclusivity perspective. Of course there can be no guarantee we'll be able to execute on extensions to this late 30 early 31 timeline, but we're having early discussions with prospective partners on ways that we believe those could be accomplished to make an already attractive opportunity for a two potentially even more so if we do in fact extend the ip. Our entire team is beyond thrilled to get things rolling on all things EXUO. As I said at the beginning, for us the ECU opportunity is quite simply transformational and we look forward to executing on this opportunity in the quarters and years to come. Before I turn it over to Ryan to review the financials in more detail, just a few comments on our ADHD portfolio. As most of you know, there's been a long since negotiated paragraph 4 settlement agreement with Teva whereby NEOs allowed them to enter the market with a generic to Adzenys on September 1, 2025. As we sit here today through.