Financial Data and Key Metrics Changes - Net revenue for Q1 2026 was $13.9 million, down from $16.6 million in the prior year, but excluding a one-time rebate benefit from last year, net revenue increased by 5% [17][21] - ADHD portfolio net revenue was $13.2 million compared to $15.3 million in the prior year, but on an equivalent basis, it increased by about 10% [17][21] - Gross margin decreased to 66% from 72% year-over-year, but improved to 65% when excluding the rebate [18][21] - Operating expenses were $10.2 million, down from $11.2 million in the prior year, reflecting cost reduction efforts [19][21] Business Line Data and Key Metrics Changes - The ADHD portfolio showed resilience with a 10% increase in net revenue on an equivalent basis, despite a decrease in total prescriptions [17][21] - The pediatric portfolio revenue dropped to $0.7 million from $1.3 million due to manufacturing delays and a de-emphasis in marketing [18][21] Market Data and Key Metrics Changes - The company is preparing for the launch of Exxua, which is expected to significantly impact the market for major depressive disorder treatments [5][10] - The ADHD market remains highly genericized, but the company believes its unique distribution model will mitigate the impact of generic competition [12][13] Company Strategy and Development Direction - The company is focused on the successful launch of Exxua, with significant preparations underway including KOL engagement and Salesforce training [5][10] - Aytu is maintaining a Salesforce of approximately 40 people, with territory alignments adjusted for optimal market access [8][9] - The company is also working on lifecycle management approaches to extend exclusivity beyond 2030 [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ADHD portfolio's resilience despite the threat of generic competition, citing the unique distribution model [12][13] - The company anticipates a strong launch for Exxua, with positive feedback from prescribers and a focus on targeting younger patients dissatisfied with current treatments [27][44] Other Important Information - The FDA's recent communication regarding fluoride-containing drugs is being monitored, but the impact on Aytu's financials is expected to be minimal [15][16] - Cash and cash equivalents were $32.6 million at the end of the quarter, up from $31 million [22] Q&A Session Summary Question: How significant were the territory realignments and what are the plans for incentive compensation post-Exxua launch? - Approximately one-third of the territories were affected, with a focus on enhancing coverage in key areas. A rich incentive compensation plan is being finalized to reward engagement with new prescribers [30][31] Question: What has been done regarding payer engagement pre-launch? - The company is taking a cautious approach to contracting with commercial payers to maintain best pricing on government contracts, with light engagement ongoing [33][35] Question: How much of the target prescriber market has been reached and what feedback has been received? - Feedback from engaged prescribers has been overwhelmingly positive, with a focus on targeting psychiatrists already familiar with Aytu's products [40][41] Question: What is the flexibility of the supply chain to ramp up production if demand exceeds expectations? - The company has sufficient supply to meet initial forecasts and can scale production as needed, with a low cost of goods sold projected [49][51]

Financial Data and Key Metrics Changes - Total revenue grew 32% to $18,500,000 compared to $14,000,000 in the same quarter last year [22] - Net income was $4,000,000, a significant improvement from a net loss of $2,900,000 in the prior year [6][27] - Basic earnings per share increased to $0.65 from a loss of $0.52 in the same quarter last year [6][27] - Adjusted EBITDA rose to $3,900,000 from $900,000 in the prior year [6][27] Business Line Data and Key Metrics Changes - ADHD portfolio net revenue increased by 25% to $15,400,000 compared to $12,300,000 in Q3 of the previous year [22] - Pediatric portfolio net revenue surged 77% to $3,100,000 from $1,700,000 in the same quarter last year [22][14] Market Data and Key Metrics Changes - ADHD prescriptions were approximately 94,000 during the third quarter, reflecting a return to normalized market conditions following previous shortages [10] - The pediatric business saw a rebound due to a return to growth plan and improved payer coverage [14][15] Company Strategy and Development Direction - The company has focused on its prescription pharmaceutical business, halting clinical development and selling its consumer health business [7] - Future growth is expected to be driven by leveraging the A2 RxConnect platform and pursuing additional in-licensed or acquired products [8][19] - The company aims to maintain a balanced focus on both ADHD and pediatric portfolios for growth [18] Management's Comments on Operating Environment and Future Outlook - Management expressed satisfaction with the operational and financial performance, highlighting the achievement of positive income from operations for the second consecutive quarter [5][6] - The company is optimistic about future growth, particularly in the ADHD and pediatric segments, and is focused on operational efficiencies [18][19] Other Important Information - Gross margin for the third quarter was 69%, down from 74% in the same quarter last year, with expectations for improvement as inventory issues are resolved [22][25] - The company paid down $2,500,000 in long-term debt during the quarter, maintaining compliance with all debt covenants [29] Q&A Session Summary Question: Were there any one-time effects in the ADHD or pediatric business this quarter? - Management confirmed that the growth was organic and driven by optimization efforts, with no one-time effects impacting the numbers [35] Question: What are the expectations for the ADHD franchise moving forward? - Management expects continued growth in the ADHD franchise, supported by optimization efforts and a balanced focus on both ADHD and pediatric products [36][37] Question: What is the potential for the pediatric business? - Management indicated realistic growth expectations but does not foresee returning to a $25,000,000 annual business, aiming for something north of current levels [39][40] Question: What are the main factors affecting business development and asset acquisition? - The main gating factor is finding the right asset that complements the company's capabilities and therapeutic focus, with a preference for commercial-ready products [41][42] Question: What impact do tariffs have on the company? - Management stated that tariffs have a minimal impact as all ADHD products are manufactured in the U.S., with only small components sourced internationally [46][47] Question: Can you elaborate on the return to growth plan for the pediatric business? - The plan involved deploying the sales force against more pediatric targets and expanding coverage through creative contracting with payers [54][56] Question: What is the breakeven revenue number based on current operating expenses? - The breakeven revenue is approximately $15,000,000 on a quarterly basis, with a cash-based breakeven closer to $13,100,000 [61][62]