Q4 2025: Contradictions Emerge in ADHD Franchise Growth, Breakeven Revenue Projections, and EXXUA Launch Timing

The above is the analysis of the conflicting points in this earnings call

Date of Call: September 23, 2025

Financials Results

• Revenue: $66.4M, up 1.8% YOY (vs. $65.2M prior year)
• Gross Margin: 69%, compared to 75% in the prior year

Guidance:

• EXXUA U.S. launch targeted Q4 CY25 (AYTU FY26 Q2); product available by year-end.
• Minimal revenue in FY26 Q2; small ramp Q3; meaningful ramp from Q4 (June 2026) onward.
• Plan to invest ~$10M in FY26 launch; ~50% in Q2, rest Q3–Q4.
• EXXUA economics: 28% royalty plus COGS true-up; ~31% COGS (~69% gross contribution).
• Base ADHD/peds breakeven at ~$13.2M revenue per quarter under new cost structure.
• Gross margins should improve as high-cost ADHD inventory clears and PDUFA fee ends after Sept 2025.
• Expect interest expense to drop by ~$1.5M in FY26 after paying off Tris obligation.
• No major sales force expansion; 40+ reps lead launch via RxConnect.

Business Commentary:

* Financial Performance and Stability: - Aytu BioPharma reported net revenue of $66.4 million for fiscal 2025, a slight increase from the previous year. - The company reported positive adjusted EBITDA of $9.2 million for the third consecutive year, reflecting their pivot towards focusing on their prescription pharmaceutical business.

• ADHD Portfolio and Teva Impact:
• The ADHD portfolio contributed $57.6 million in revenue, with no significant impact from Teva's potential entry into the market.

• This stability is attributed to the concentrated distribution through the Aytu RxConnect platform and the psychiatry-centric sales force.

• EXXUA Launch and Market Opportunity:

• Aytu signed an exclusive agreement to commercialize EXXUA, a novel MDD treatment in the U.S., aiming for a late 2025 product launch.

• The company anticipates significant market potential due to EXXUA's unique mechanism of action and the need for treatments without side effects such as sexual dysfunction.

• Cost Reductions and Operational Efficiency:

• Operating expenses excluding amortization were reduced to $39.6 million in fiscal 2025, reflecting a $5.2 million decrease from the previous year.
• This reduction is due to strategic alignment, including the shutdown of the Grand Prairie manufacturing facility and the divestiture of the consumer health business.

Sentiment Analysis:

• Management highlighted nine consecutive positive adjusted-EBITDA quarters and third straight positive year ($9.2M FY25). EXXUA is described as “transformational,” with launch by year-end and strong clinician interest. FY25 net revenue grew slightly to $66.4M; cash was $31M after a successful financing. New cost structure lowers breakeven to ~$13.2M per quarter; gross margins expected to improve as high-cost ADHD inventory is cleared and PDUFA fee ends; interest expense to decline by ~$1.5M in FY26.

Q&A:

• Question from Thomas Flaten (Lake Street Capital Markets): If you load the channel in Q4 calendar 2025, when will the national sales meeting and full launch occur?
  Response: Load-in by late 2025, then a sales meeting and full launch with initial detailing in Q1 calendar 2026.

• Question from Thomas Flaten (Lake Street Capital Markets): Will you preclear EXXUA promotional materials with FDA given recent warning letters?
  Response: No; they’ll use the standard 2253 submission, citing confidence in compliant materials and preclearance delays.

• Question from Thomas Flaten (Lake Street Capital Markets): How will you approach payer contracting—have you done prelaunch discussions and what triggers case-by-case deals?
  Response: They’ll be highly selective to avoid best-price issues, prioritize strong government coverage, contract commercially only with clear pull-through, and route scripts via RxConnect.

• Question from Nazibur Rahman (Maxim Group): With focus shifting to EXXUA, where do ADHD and pediatric businesses level in annual sales and contribution?
  Response: No top-line guidance; promo shifts off base business, which should remain margin-positive; breakeven for the base is ~$13.2M revenue per quarter under the new cost structure.

• Question from Nazibur Rahman (Maxim Group): What medical affairs efforts are planned for EXXUA (conferences, education, publications)?
  Response: They’ve rehired Dr. Westfield, are engaging KOLs, planning targeted conference presence, physician education (branded/unbranded), potential IITs, and publications.

• Question from Edward Woo (Ascendiant Capital Markets): Clarify OpEx and the ~$10M EXXUA launch spend—how will it be distributed?
  Response: Pro forma expense run-rate reflects H2 FY25; ~50% of the ~$10M EXXUA launch spend will occur in FY26 Q2, with the remainder across Q3–Q4 for reps and marketing.