Aytu BioPharma(US:AYTU)2021-02-12 10:43Financial Data and Key Metrics Changes - Aytu BioScience reported a record net revenue of over $15.1 million for Q2 2021, representing a 377% increase compared to the same quarter last year and a 12% sequential growth over Q1 2021 [4][8] - The adjusted EBITDA loss was approximately $1.8 million, an improvement of over $1 million compared to the adjusted EBITDA loss of $2.9 million in Q2 2020 [8][11] - Gross profit for Q2 was $9.1 million, with a gross profit margin of approximately 60%, down from 81% in the same quarter last year due to lower margins from COVID-19 test kit sales [9][10] Business Line Data and Key Metrics Changes - The consumer health division achieved an all-time revenue high of $7.9 million, while the Rx division generated $7.2 million, a 25% increase from the previous quarter [6][14] - The pediatric segment, particularly Poly-Vi-Flor, contributed to Rx revenue growth, alongside revenue from COVID-19 test kits [15][19] Market Data and Key Metrics Changes - The COVID-19 testing market remains robust, with Aytu having successfully sourced an antigen test that has seen strong market acceptance [27][28] - The company anticipates continued demand for antibody testing as the market evolves [28] Company Strategy and Development Direction - Aytu is focused on integrating the Innovus Consumer Health business and the Cerecor pediatric assets, while also pursuing additional growth drivers and acquisitions [5][18] - The planned merger with Neos Therapeutics is expected to close by Q2 2021, creating a specialty pharmaceutical company with pro forma annual revenue exceeding $100 million [5][18] - The merger is anticipated to yield annual cost synergies of approximately $15 million starting in FY '22 [19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's strategic transformation and the potential of the Healight technology in treating respiratory diseases [17][20] - The focus remains on top-line growth and achieving profitability, with a strong cash balance of over $62 million to support future initiatives [7][12] Other Important Information - Aytu completed a $28.75 million public offering, which will help pay down a substantial portion of Neos' debt upon merger closing [12] - The company ended the quarter with total assets of $167 million and equity of $113 million [12] Q&A Session Summary Question: Growth expectations for the pediatric side of the business - Management expects continued growth in the pediatric segment, leveraging experience from the Cerecor acquisition and the upcoming Neos transaction [22][24] Question: Contribution of COVID-19 business to overall revenues - The COVID-19 testing business has been meaningful, with management noting the importance of being opportunistic in this market while focusing on broader growth [25][27][28] Question: Future expectations for gross margins - Management indicated that gross margins are expected to stabilize between 70% to 80%, depending on the contributions from the Rx and consumer health segments [31][32]