Aytu BioPharma Reports Fiscal 2025 Second Quarter Operational and Financial Results

Net income of $0.8 million Adjusted EBITDA 1 of $1.3 million Pediatric Portfolio net revenue up 86% sequentially First quarterly sequential prescription increase for both ADHD and Pediatric portfolios since Q2 fiscal 2023 $20.4 million cash balance at December 31, 2024 Company to host conference call and webcast today, February 12, 2025, at 4:30 p.m. Eastern time DENVER, CO / ACCESS Newswire / February 12, 2025 / Aytu BioPharma, Inc. (the "Company" or "Aytu") (Nasdaq:AYTU), a pharmaceutical company focused on commercializing novel therapeutics, today announced operational and financial results for the fiscal 2025 second quarter. Q2 2025 Highlights Quarterly sequential increase in prescriptions across both portfolios, led by 29% sequential growth from the Pediatric Portfolio. Pediatric Portfolio (antihistamine franchise and pediatric multivitamin franchise) net revenue increased 86% sequentially to $2.4 million versus $1.3 million in Q1 fiscal 2025, reflecting positive effects from recently implemented return-to-growth plan for the pediatric product line. Pediatric Portfolio net revenue increased 12% compared to Q2 fiscal 2024. ADHD Portfolio (Adzenys XR-ODT® and Cotempla XR-ODT®) net revenue increased 16% sequentially to $13.8 million versus $11.9 million in Q1 fiscal 2025 after adjusting for a one-time vendor agreement positively impacting Q1 fiscal 2025 net revenue by $3.3 million. Net income in Q2 fiscal 2025 was $0.8 million, or $0.13 net income per share basic and $0.26 net loss per share diluted, compared to a net loss of $0.2 million, or $0.04 net loss per share basic and diluted in Q2 fiscal 2024. Adjusted EBITDA was $1.3 million in Q2 fiscal 2025 compared to $5.5 million in Q2 fiscal 2024. Cash and cash equivalents were $20.4 million at December 31, 2024, compared to $20.1 million at September 30, 2024. Management Discussion "We successfully returned both our ADHD and Pediatric portfolios to positive sequential prescription growth during the second quarter, the first such occurrence in which both portfolios exhibited sequential prescription growth since late-2022," noted Josh Disbrow, Chief Executive Officer of Aytu. "Our entire commercial team has done a great job navigating the various dynamics of the macro landscapes for our addressable markets. In the quarter, our sales team employed a focused and efficient promotional approach to grow the ADHD Portfolio, drove broader prescribing and distribution across the Pediatric Portfolio, capitalized on improved payor coverage, and leveraged the strengths of our best-in-class Aytu RxConnect access platform." "This positive commercial momentum parallels our corporate optimization initiatives, driving efficiencies within our operating structure. We expect that these programs will realize at least $2.0 million in cost savings annually beyond the expense reductions we have already achieved. Our goal remains firmly focused on generating positive cash flows and increasing stockholder value. With this now our seventh consecutive quarter of positive adjusted EBITDA and second consecutive quarter of net income, I believe we are well positioned to achieve these objectives." "Specific to our ADHD market, the macro trends continue to show a return to more normalized supply status following the ADHD stimulant shortages over the past 18 months, which helped to temporarily bolster Adzenys and Cotempla prescriptions, resulting in boosted fiscal 2024 numbers. With more than 99,000 prescriptions written during the second fiscal quarter for our ADHD brands, we remain above the pre-stimulant shortage levels, highlighting our pronounced volume gains. Within Pediatrics, we took decisive action securing improved reimbursement and wider distribution for both our antihistamine and multi-vitamin franchises. These efforts have resulted in a significant increase in covered lives and dispensed prescriptions. We have also substantially increased our promotional footprint with our sales force as we shift promotional priorities, resulting in early traction as demonstrated by increased prescribing and pharmacy dispensing. The initial result was a 29% sequential increase in Pediatric Portfolio prescriptions." "We have successfully implemented a multi-year, strategic realignment to focus on our profitable prescription pharmaceutical business and leverage the unique capabilities of our now streamlined organization. These changes have resulted in the growth of our novel, commercialized prescription therapeutics, while also driving positive adjusted EBITDA and profitability. With positive operational trends in place, we remain focused on seeking opportunities to leverage our commercial infrastructure and Aytu RxConnect platform, while we pursue additional in-licensed or acquired products. We continue to expect revenue and adjusted EBITDA growth from current levels as we strive for positive cash flows. I am pleased with the significant progress made and look forward to continuing to execute on our strategy in the years to come." Organizational Changes and Operating Optimization Plan Aytu has successfully repositioned itself as a growing specialty pharmaceutical company focused on commercializing novel prescription therapeutics. During the past year, the Company wound down and sold its Consumer Health business. Prior to that, the Company indefinitely suspended all clinical development programs. The Company also spent over two years working on manufacturing, operational, and regulatory initiatives to outsource the contract manufacturing of its ADHD products, culminating with the closure of the Grand Prairie, Texas manufacturing facility at the end of calendar 2024. Recently, the Company implemented an additional series of organizational changes focused on optimizing operations and driving near-term positive cash flows. As noted above, these new optimization efforts are expected to further reduce operating expenses by at least $2.0 million annually. Consumer Health - Discontinued Operations In June 2023, the Company announced that it had instituted a strategic mandate focusing solely on its Rx business. This mandate, now completed, encompassed Aytu's companywide restructuring objectives. These efforts included the wind down, and subsequent divestiture in the first quarter of fiscal 2025, of the Consumer Health business, the successful outsourcing of ADHD products production and the associated closure of the Grand Prairie, Texas ADHD manufacturing facility, and the indefinite suspension of Aytu's clinical development programs. The Company expects the savings realized from these strategic shifts to significantly enhance its operating results and drive stockholder value. The accounting requirements for reporting the Consumer Health business divestiture as a discontinued operation were met when the wind down and divestiture was completed on July 31, 2024. Accordingly, the Company's unaudited consolidated financial statements for all periods presented reflect the Consumer Health business as a discontinued operation. In addition, the Company's fiscal 2024 quarterly results classify the Consumer Health business as a discontinued operation. Net Revenue by Portfolio Three Months Ended December 31, 2024 2023 (in thousands) ADHD Portfolio $ 13,816 $ 16,572 Pediatric Portfolio 2,400 2,145 Other* 5 31 Total net revenue $ 16,221 $ 18,748 *Other includes discontinued or deprioritized products. Q2 2025 Financial Results Net revenue for the second quarter of fiscal 2025 was $16.2 million, compared to $18.7 million for the prior year. The change was primarily due to a decrease of $2.8 million in the ADHD Portfolio, partially offset by an increase in the Pediatric Portfolio which was driven by the success of initiatives the Company has implemented to increase coverage, broaden distribution and shift and enhance promotional resources. The ADHD Portfolio (Adzenys XR-ODT® and Cotempla XR-ODT®) experienced a 17% decrease in net revenue to $13.8 million in the second quarter of fiscal 2025, compared to the prior year period. The Pediatric Portfolio (antihistamine franchise and multivitamin franchise) experienced a 12% increase in net revenue to $2.4 million in the second quarter of fiscal 2025, compared to the prior year period. Sequentially, ADHD Portfolio net revenue increased 16% after adjusting for a one-time vendor agreement positively impacting Q1 fiscal 2025 net revenue by $3.3 million. Sequentially, Pediatric Portfolio net revenue increased 86% compared to the first quarter of fiscal 2025. Gross profit was $10.8 million, or 66% of net revenue, in the second quarter of fiscal 2025, compared to $14.6 million, or 78% of net revenue, in the same quarter last year. The decrease in gross profit percentage is primarily related to increased cost of sales in the Company's ADHD inventory. The inventory's higher cost resulted from the allocation of certain overhead costs associated with the Company's Grand Prairie, Texas manufacturing facility, to a reduced amount of ADHD product being produced there. This situation occurred as the Company ramped up production at its contract manufacturer and concurrently decreased production at Grand Prairie, Texas. This higher cost inventory is expected to be liquidated in the coming quarters as the Company continues to sell these products through its sales channels, resulting in a normalization of gross profit percentage. Operating expenses, excluding amortization of intangible assets and restructurings costs, were $10.2 million in the second quarter of fiscal 2025 compared to $10.5 million in the prior year period. The decrease is primarily a result of continued cost reduction efforts and improved operational efficiencies. Loss from operations was $1.7 million for the second quarter of fiscal 2025 compared to income from operations of $3.1 million in the prior year period. Net income during the second quarter of fiscal 2025 was $0.8 million, or $0.13 net income per share basic and $0.26 net loss per share diluted, compared to a net loss of $0.2 million, or $0.04 net loss per share basic and diluted, in the prior year period. The fiscal 2025 second quarter results were impacted by $3.0 million of derivative warrant liabilities gain due primarily to the decrease in the Company's stock price, compared to a derivative warrant liabilities loss of $0.6 million in the second quarter of fiscal 2024. Adjusted EBITDA was $1.3 million in the second quarter of fiscal 2025, compared to $5.5 million in the prior year period. Cash and cash equivalents were $20.4 million at December 31, 2024, compared to $20.1 million at September 30, 2024. Conference Call Details Date and Time: Wednesday, February 12, 2025, at 4:30 p.m. Eastern time. Call-in Information: Interested parties can access the conference call by dialing (888) 506-0062 for United States callers or +1 (973) 528-0011 for international callers and using the participant access code 583044. Webcast Information: The webcast will be accessible live and archived at https://www.webcaster4.com/Webcast/Page/2142/51953, and accessible on the Investors section of the Company's website at https://investors.aytubio.com/ under Events & Presentations. Replay: A teleconference replay of the call will be available until February 26, 2025, at (877) 481-4010 for United States callers or +1 (919) 882-2331 for international callers and using replay access code 51953. About Aytu BioPharma, Inc. Aytu is a pharmaceutical company focused on commercializing novel therapeutics. The Company's prescription products include Adzenys XR-ODT® (amphetamine) extended-release orally disintegrating tablets (see Full Prescribing Information, including Boxed WARNING) and Cotempla XR-ODT® (methylphenidate) extended-release orally disintegrating tablets (see Full Prescribing Information, including Boxed WARNING) for the treatment of attention deficit hyperactivity disorder (ADHD), Karbinal® ER (carbinoxamine maleate), an extended-release antihistamine suspension indicated to treat numerous allergic conditions, and Poly-Vi-Flor® and Tri-Vi-Flor®, two complementary fluoride-based prescription vitamin product lines available in various formulations for infants and children with fluoride deficiency. To learn more, please visit aytubio.com. Forward-Looking Statements This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended ("Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"). All statements other than statements of historical facts contained in this press release, are forward-looking statements. Forward-looking statements are generally written in the future tense and/or are preceded by words such as "may," "will," "should," "forecast," "could," "expect," "suggest," "believe," "estimate," "continue," "anticipate," "intend," "plan," or similar words, or the negatives of such terms or other variations on such terms or comparable terminology. All statements other than statements of historical facts contained in this presentation, are forward-looking statements. These statements are predictions and are subject to risks and uncertainties that could cause the actual events or results to differ materially. These risks and uncertainties include, among others, risks associated with: the Company's overall financial and operational performance, potential adverse changes to the Company's financial position or our business, the results of operations, strategy and plans, changes in capital markets and the ability of the Company to finance operations in the manner expected, risks relating to gaining market acceptance of our products, our partners performing their required activities, our anticipated future cash position, regulatory and compliance challenges and future events under current and potential future collaborations. We also refer you to (i) the risks described in "Risk Factors" in Part I, Item 1A of our most recent Annual Report on Form 10‑K and in the other reports and documents we file with the United States Securities and Exchange Commission.​ Footnote 1 Aytu uses the term adjusted EBITDA, which is a term not defined under United States generally accepted accounting principles ("U.S. GAAP"). The Company uses this term because it is a widely accepted financial indicator utilized to analyze and compare companies on the basis of operating performance. The Company believes that presenting adjusted EBITDA by certain categories allows investors to evaluate the various performance of these categories. The Company's method of computation of adjusted EBITDA may or may not be comparable to other similarly titled measures used by other companies. We believe that net income (loss) is the performance measure calculated and presented in accordance with U.S. GAAP that is most directly comparable to adjusted EBITDA. See below for a reconciliation of net income (loss) to adjusted EBITDA. Contacts for Investors Ryan Selhorn, Chief Financial Officer Aytu BioPharma, Inc. rselhorn@aytubio.com Robert Blum or Roger Weiss Lytham Partners aytu@lythampartners.com Aytu BioPharma, Inc. Unaudited Consolidated Statements of Operations (in thousands, except share and per share data) Three Months Ended December 31, 2024 2023 Net revenue $ 16,221 $ 18,748 Cost of sales 5,435 4,145 Gross profit 10,786 14,603 Operating expenses: Selling and marketing 5,272 5,218 General and administrative 4,449 4,800 Research and development 522 521 Amortization of intangible assets 921 918 Restructuring costs 1,317 - Total operating expenses 12,481 11,457 (Loss) income from operations (1,695 ) 3,146 Other income, net 140 96 Interest expense (1,079 ) (1,266 ) Derivative warrant liabilities gain (loss) 3,016 (577 ) Income from continuing operations before income tax expense 382 1,399 Income tax benefit (expense) 283 (780 ) Net income from continuing operations 665 619 Net income (loss) from discontinued operations, net of tax 123 (839 ) Net income (loss) $ 788 $ (220 ) Basic weighted-average common shares outstanding 6,132,060 5,517,670 Diluted weighted-average common shares outstanding 8,485,112 5,517,670 Net income (loss) per share: Basic - continuing operations $ 0.11 $ 0.11 Diluted - continuing operations $ (0.28 ) $ 0.11 Basic - discontinued operations, net of tax $ 0.02 $ (0.15 ) Diluted - discontinued operations, net of tax $ 0.01 $ (0.15 ) Basic - net income (loss) $ 0.13 $ (0.04 ) Diluted - net loss $ (0.26 ) $ (0.04 ) Aytu BioPharma, Inc. Unaudited Consolidated Balance Sheets (in thousands, except share data) December 31, June 30, 2024 2024 ASSETS Current assets: Cash and cash equivalents $ 20,398 $ 20,006 Accounts receivable, net 25,403 23,526 Inventories 11,085 12,141 Prepaid expenses and other current assets 6,167 5,097 Current assets of discontinued operations - 1,121 Total current assets 63,053 61,891 Non-current assets: Property and equipment, net 516 693 Operating lease right-of-use assets 1,178 829 Intangible assets, net 49,958 52,453 Other non-current assets 1,522 2,185 Non-current assets of discontinued operations - 44 Total non-current assets 53,174 56,204 Total assets $ 116,227 $ 118,095 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 11,699 $ 10,314 Accrued liabilities 39,372 38,143 Revolving credit facility 4,012 2,395 Current portion of debt 1,857 1,857 Other current liabilities 7,108 8,962 Current liabilities of discontinued operations - 557 Total current liabilities 64,048 62,228 Non-current liabilities: Debt, net of current portion 9,983 10,877 Derivative warrant liabilities 6,386 12,745 Other non-current liabilities 5,045 4,529 Total non-current liabilities 21,414 28,151 Stockholders' equity: Preferred stock, par value $.0001; 50,000,000 shares authorized; no shares issued or outstanding - - Common stock, par value $.0001; 200,000,000 shares authorized; 6,169,681 and 5,972,638 shares issued and outstanding, respectively 1 1 Additional paid-in capital 348,475 347,688 Accumulated deficit (317,711 ) (319,973 ) Total stockholders' equity 30,765 27,716 Total liabilities and stockholders' equity $ 116,227 $ 118,095 Aytu BioPharma, Inc. Unaudited Reconciliation of Net Income (Loss) to Adjusted EBITDA (in thousands) Three Months Ended December 31, 2024 2023 Net income (loss) - GAAP $ 788 $ (220 ) Interest expense 1,079 1,266 Income tax (benefit) expense (283 ) 780 Depreciation and amortization 1,292 1,510 Stock-based compensation expense 151 707 Other income, net (140 ) (96 ) Derivative warrant liabilities (gain) loss (3,016 ) 577 Restructuring costs 1,317 - Pipeline research and development costs 208 96 Net (income) loss from discontinued operations, net of tax (123 ) 839 Adjusted EBITDA - non-GAAP $ 1,273 $ 5,459 Aytu BioPharma, Inc. Unaudited Fiscal 2024 Quarterly and Full Year Consolidated Statements of Operations Adjusted for Discontinued Operations (in thousands) Three Months Ended Twelve Months Ended June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2024 (as adjusted) Net revenue $ 14,593 $ 14,025 $ 18,748 $ 17,817 $ 65,183 Cost of sales 3,541 3,664 4,145 4,779 16,129 Gross profit 11,052 10,361 14,603 13,038 49,054 Operating expenses: Selling and marketing 5,422 5,352 5,218 6,091 22,083 General and administrative 4,028 4,831 4,800 6,295 19,954 Research and development 1,042 611 521 595 2,769 Amortization of intangible assets 921 920 918 924 3,683 Restructuring costs 1,912 244 - - 2,156 Total operating expenses 13,325 11,958 11,457 13,905 50,645 (Loss) income from operations (2,273 ) (1,597 ) 3,146 (867 ) (1,591 ) Other income, net 120 70 96 584 870 Interest expense (1,253 ) (1,257 ) (1,266 ) (1,283 ) (5,059 ) Derivative warrant liabilities gain (loss) 1,463 1,017 (577 ) (5,907 ) (4,004 ) Loss on debt extinguishment (594 ) - - - (594 ) (Loss) income from continuing operations before income tax expense (2,537 ) (1,767 ) 1,399 (7,473 ) (10,378 ) Income tax expense (695 ) (245 ) (780 ) - (1,720 ) Net (loss) income from continuing operations (3,232 ) (2,012 ) 619 (7,473 ) (12,098 ) Net loss from discontinued operations, net of tax (1,385 ) (875 ) (839 ) (647 ) (3,746 ) Net loss $ (4,617 ) $ (2,887 ) $ (220 ) $ (8,120 ) $ (15,844 ) Aytu BioPharma, Inc. Unaudited Fiscal 2024 Reconciliation of Net Loss Adjusted for Discontinued Operations to Adjusted EBITDA (in thousands) Three Months Ended Twelve Months Ended June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2024 (as adjusted) Net loss - GAAP $ (4,617 ) $ (2,887 ) $ (220 ) $ (8,120 ) $ (15,844 ) Interest expense 1,253 1,257 1,266 1,283 5,059 Income tax expense 695 245 780 - 1,720 Depreciation and amortization 1,398 1,449 1,510 1,553 5,910 Stock-based compensation expense 243 699 707 725 2,374 Other income, net (120 ) (70 ) (96 ) (584 ) (870 ) Derivative warrant liabilities (gain) loss (1,463 ) (1,017 ) 577 5,907 4,004 One-time transactions 150 - - 851 1,001 Restructuring costs 1,912 244 - - 2,156 Loss on extinguishment of debt 594 - - - 594 Pipeline research and development costs 599 136 96 152 983 Net loss from discontinued operations, net of tax 1,385 875 839 647 3,746 Adjusted EBITDA - non-GAAP $ 2,029 $ 931 $ 5,459 $ 2,414 $ 10,833 SOURCE: Aytu BioPharma, Inc. 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