Aytu BioPharma Reports Record Quarterly Revenue and Positive Adjusted EBITDA in First Quarter of Fiscal Year 2023
Aytu BioPharma reported a record quarterly net revenue of $27.7 million for Q1 2023, a 26% increase from $21.9 million year-over-year. Revenue from the Rx segment rose 34% to $18.7 million, with ADHD products increasing by 24% and pediatric products by 73%. The company achieved a positive Adjusted EBITDA of $1.4 million compared to a loss of $4.2 million last year. Strategic leadership changes were made to enhance commercial operations. The indefinite suspension of R&D programs is projected to save over $20 million in future costs.
- Record Q1 2023 net revenue of $27.7 million, up 26% year-over-year.
- Rx segment revenue growth of 34%, totaling $18.7 million.
- Positive Adjusted EBITDA of $1.4 million, compared to a $4.2 million loss last year.
- Pediatric products revenue increased by 73% to $6.6 million.
- Projected savings of over $20 million due to suspended R&D programs.
- Net loss of $2.9 million in Q1 2023, although improved from a $27.9 million loss in Q1 2022.
Record Quarterly Net Revenue of
Positive Adjusted EBITDA for the Quarter of
Leadership Changes Implemented to Focus on Commercial Operations
Company to Host Conference Call Today at 4:30pm ET
ENGLEWOOD, CO / ACCESSWIRE / November 14, 2022 / Aytu BioPharma, Inc. (the Company or "Aytu") (Nasdaq:AYTU), a commercial stage pharmaceutical and consumer health company providing pediatric-focused prescription drugs and cost-effective consumer health solutions, today announced financial and operational results for the first quarter of fiscal year 2023 for the period ended September 30, 2022.
Q1 2023 Commercial Highlights (3 months ending September 30, 2022)
- Total net revenue was
$27.7 million , a new quarterly record, and an increase of26% over the$21.9 million in net revenue in the year ago quarter. - Net revenue from the Company's Rx segment was
$18.7 million during Q1 2023 compared to$13.9 million in the year ago quarter, growth of34% .- ADHD products (Adzenys XR-ODT® and Cotempla XR-ODT®) net revenue increased by
24% to$11.6 million from$9.3 million in the year ago quarter. - Pediatric products (Poly-Vi-Flor®, Tri-Vi-Flor®, and Karbinal® ER) net revenue increased
73% to$6.6 million from$3.8 million in the year ago quarter.
- ADHD products (Adzenys XR-ODT® and Cotempla XR-ODT®) net revenue increased by
- Consumer Health revenue during Q1 2023 was
$9.0 million , an increase of12% over the year ago quarter. - Gross margins increased to
65% in Q1 2023 compared to57% in the year ago quarter. - Total Adjusted EBITDA1 (inclusive of Pipeline R&D which has been indefinitely suspended as of October 13, 2022) was a positive
$1.4 million in Q1 2023 compared to$(4.2) million in the year ago quarter. Spend attributable to the now suspended Pipeline R&D was approximately$0.9 million in Q1 2023. - On October 13, 2022, the Company announced a shift of its strategy aimed at accelerating the growth of its commercial business and achieving profitability. As a result, the Company announced the indefinite suspension of its clinical development programs, including AR101/enzastaurin for the treatment of Vascular Ehlers-Danlos Syndrome (VEDS). The suspension is expected to save the Company over
$20 million in projected future study costs.
Management Discussion
"This was truly a transformational quarter for Aytu as we reported record quarterly net revenue and our first ever positive Adjusted EBITDA quarter," commented Josh Disbrow, Chief Executive Officer of Aytu BioPharma. "The net revenue growth of
Leadership Changes to Focus on Commercial Operations
In connection with the strategic decision to focus on its commercial business and indefinitely suspend its clinical development programs, the Company announced the following executive leadership changes aimed at aligning the skills of its key leadership team members to the near- and mid-term goals of driving revenue growth, further consolidating expenses, improving gross margins, and driving long-term profitability.
- Appointment of Co-Founder Jarrett Disbrow to newly created role of Chief Business Officer & President, Consumer Health
- Promotion of Topher Brooke to re-created role of Chief Operating Officer ("COO")
- Promotion of Ryan Selhorn to newly created role of Executive Vice President, Finance and Business Optimization
Greg Pyszczymuka will remain in his role as Chief Commercial Officer, overseeing all aspects of the Rx commercial business, which has grown
In discussing the leadership team and these changes, Disbrow added, "I'm excited to announce these leadership changes through which Jarrett, Topher, and Ryan will take on expanded roles directly aligned to our renewed strategic focus. Our executive team's collective experience in driving growth of pharma and consumer health companies will serve us very well as we drive toward our near-term goal of achieving profitability."
"Additionally, with a key focus on growing the Rx business, we'll continue to rely heavily on Greg Pyszczymuka's leadership as our Chief Commercial Officer. We've experienced strong growth, a significant upgrade in talent, and a streamlining of our commercial operations under Greg's direction and look forward to Greg and his team continuing our growth trajectory across the Rx portfolio," Disbrow added.
"Jarrett Disbrow, who co-founded Aytu and has been leading the company with me since inception, is poised to take his deep experience across both Rx and consumer brands to build our consumer health segment into a dynamic, high-growth, consumer-centric enterprise. Jarrett has an exciting vision for this growing business segment and has begun implementing plans for continued expansion, new product launches, and a refacing of the consumer health business."
"Topher Brooke's executive leadership at both large global and smaller specialty and biotech business units, coupled with his entrepreneurial orientation as the Co-Founder of pediatric-centric biotech Rumpus Therapeutics, makes him especially well-suited to step into the newly re-established role of Chief Operating Officer. As COO, Topher will lead the Grand Prairie manufacturing transition as we move to significantly increase prescription margins by outsourcing the production of Adzenys XR-ODT and Cotempla XR-ODT to a global contract manufacturer. He will also lead regulatory and quality affairs, scientific and medical affairs, strategy, and corporate and business development going forward."
"Finally, Ryan Selhorn, currently Senior Vice President, Finance and Operations for the Consumer Health segment, will increase his responsibilities in the newly created corporate leadership role of Executive Vice President, Finance and Business Optimization. Ryan's prior experience as a public company Chief Financial Officer, in both pharma and consumer health, coupled with his expertise in organizational improvement, dovetails perfectly into our revised strategic plans. He will lead the ongoing consolidation and streamlining of internal processes while spearheading numerous financial projects expected to drive efficiencies and significant cost savings throughout the organization."
"I am thankful for these leaders and their enthusiasm as we move into this next phase of the Company's growth and renewed focus," Disbrow concluded.
Segment Reporting
| Quarter Ended | ||||||||
| September 30, | ||||||||
| 2022 | 2021 | |||||||
| (In thousands) | ||||||||
Consolidated revenue: | ||||||||
Rx Segment | $ | 18,652 | $ | 13,883 | ||||
Consumer Health Segment | 9,003 | 8,014 | ||||||
Consolidated revenue | $ | 27,655 | $ | 21,897 | ||||
Rx Segment | ||||||||
ADHD | $ | 11,585 | $ | 9,327 | ||||
Pediatric | 6,558 | 3,798 | ||||||
Other* | 509 | 758 | ||||||
| $ | 18,652 | $ | 13,883 | |||||
*Other includes COVID-related test kits and discontinued or deprioritized products.
Q1 2023 Financial Results
Net revenue for the first quarter of fiscal 2023 was
Net revenue from the Rx segment in the first quarter of fiscal 2023 was
Net revenue from the Consumer Health segment was
Gross profit increased to
Operating expenses, excluding impairment expense and amortization of intangible assets, were
Net loss during the year ago first quarter was impacted by an impairment of
Net loss for the first quarter of fiscal 2023 was
Adjusted EBITDA (see Table A-1) was
Balance Sheet and Operational Improvements
Cash and cash equivalents on September 30, 2022 were
The manufacturing transfer to a global contract manufacturer of the ADHD products remains on track to be completed in calendar 2023, and this transition is expected to further improve gross margins of Adzenys XR-ODT and Cotempla XR-ODT by
Subsequent to the end of the quarter, the Company announced an agreement with the Avenue Venture Opportunities Fund, L.P. ("Avenue Venture Debt Fund" or "Avenue") to extend the interest-only period of the Company's existing senior secured loan facility held with Avenue. This amendment to the original secured loan agreement, which was executed in January 2022, extends the interest-only period to January of 2024. The maturity date of the Avenue secured loan is January 2025 and remains subject to additional interest-only period extensions upon the achievement of certain milestones by the Company. The extension of the interest-only period will conserve cash and save the Company over
Conference Call Details
Aytu will host a conference call today, Monday, November 14th, 2022, at 4:30 PM Eastern Time to discuss financial results for the first fiscal quarter of 2023 for the quarter ended September 30, 2022.
The conference call will be available via telephone by dialing toll free 877-545-0523 for U.S. callers or for international callers 973-528-0016 and using entry code 883834. A webcast of the call may be accessed at https://www.webcaster4.com/Webcast/Page/2142/46981.
A webcast replay will be available on the Investors News/Events section of the Company's website through. A telephone replay of the call will be available approximately one hour following the call, through November 28, 2022, and can be accessed by dialing 877-481-4010 for U.S. callers or 919-882-2331 for international callers and entering replay access code 46981.
About Aytu BioPharma, Inc.
Aytu BioPharma is a pharmaceutical company commercializing a portfolio of commercial prescription therapeutics and consumer health products. 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), as well as 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. Aytu's consumer health segment markets a range of over-the-counter medicines, personal care products, and dietary supplements addressing a range of common conditions including diabetes, allergy, hair regrowth, and gastrointestinal conditions. To learn more, please visit aytubio.com.
Forward-Looking Statement
This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, or the 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 just 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 plans relating to the Company's ability to efficiently wind down clinical development and reduce spend associated with AR101 and Healight™, the Company's ability to complete the manufacturing transfer of Adzenys XR-ODT® and Cotempla XR-ODT®, the company's overall financial and operational performance, potential adverse changes to our 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, risks related to the ongoing COVID-19 pandemic and its impact on our operations, our ability to effectively integrate operations and manage integration costs following our acquisitions, our partners performing their required activities, our anticipated future cash position, regulatory and compliance challenges and future events under current and potential future collaboration. We also refer you to (i) the risks described in ''Risk Factors'' in Part I, Item 1A of Aytu's most recent Annual Report on Form 10-K and in the other reports and documents it files with the Securities and Exchange Commission.
Contacts for Investors:
Mark Oki, Chief Financial Officer
Aytu BioPharma, Inc.
moki@aytubio.com
Robert Blum or Roger Weiss
Lytham Partners
AYTU@lythampartners.com
AYTU BIOPHARMA, INC.
Condensed Consolidated Statements of Operations
(In thousands, except share and per-share)
(Three Month Period Unaudited)
| Three Months Ended | ||||||||
| September 30, | ||||||||
| 2022 | 2021 | |||||||
Product revenue, net | $ | 27,655 | $ | 21,897 | ||||
Cost of sales | 9,623 | 9,441 | ||||||
Gross profit | 18,032 | 12,456 | ||||||
Operating expenses | ||||||||
Research and development | 1,064 | 1,652 | ||||||
Selling and marketing | 10,102 | 9,297 | ||||||
General and administrative | 7,322 | 8,216 | ||||||
Impairment expense | - | 19,453 | ||||||
Amortization of intangible assets | 1,197 | 1,537 | ||||||
Total operating expenses | 19,685 | 40,155 | ||||||
Loss from operations | (1,653 | ) | (27,699 | ) | ||||
Other expense | ||||||||
Other expense, net | (1,100 | ) | (40 | ) | ||||
Loss from contingent consideration | (128 | ) | (219 | ) | ||||
Total other expense | (1,228 | ) | (259 | ) | ||||
Loss before income tax | (2,881 | ) | (27,958 | ) | ||||
Income tax expense (benefit) | - | (107 | ) | |||||
Net loss | $ | (2,881 | ) | $ | (27,851 | ) | ||
Weighted average number of common shares outstanding | 50,358,134 | 25,597,319 | ||||||
Basic and diluted net loss per common share | $ | (0.06 | ) | $ | (1.09 | ) | ||
AYTU BIOPHARMA, INC.
Condensed Consolidated Balance Sheets
(In thousands, except share and per-share)
| (unaudited) | ||||||||
| September 30, | June 30, | |||||||
| 2022 | 2021 | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 23,811 | $ | 19,360 | ||||
Accounts receivable, net | 27,924 | 21,712 | ||||||
Inventory, net | 12,871 | 10,849 | ||||||
Prepaid expenses | 9,024 | 7,375 | ||||||
Other current assets | 785 | 633 | ||||||
Total current assets | 74,415 | 59,929 | ||||||
Property and equipment, net | 2,672 | 3,025 | ||||||
Operating lease right-of-use asset | 2,976 | 3,271 | ||||||
Intangible assets, net | 69,108 | 70,632 | ||||||
Other non-current assets | 829 | 766 | ||||||
Total non-current assets | 75,585 | 77,694 | ||||||
Total assets | $ | 150,000 | $ | 137,623 | ||||
Liabilities | ||||||||
Current liabilities | ||||||||
Accounts payable and other | $ | 14,667 | $ | 10,987 | ||||
Accrued liabilities | 41,431 | 44,187 | ||||||
Short-term line of credit | 8,087 | 3,813 | ||||||
Current portion of debt | 925 | 96 | ||||||
Other current liabilities | 8,094 | 5,359 | ||||||
Total current liabilities | 73,204 | 64,442 | ||||||
Debt, net of current portion | 13,560 | 14,279 | ||||||
Other non-current liabilities | 9,330 | 12,810 | ||||||
Total liabilities | 96,094 | 91,531 | ||||||
Commitments and contingencies | ||||||||
Stockholders' equity | ||||||||
Preferred Stock, par value $.0001; 50,000,000 shares authorized; no shares issued or outstanding as of June 30, 2022 and June 30, 2021 | - | |||||||
Common Stock, par value $.0001; 200,000,000 shares authorized; shares issued and outstanding 62,429,445 and 38,578,825, respectively, as of September 30, 2022 and June 30, 2022 | 6 | 4 | ||||||
Additional paid-in capital | 345,253 | 334,560 | ||||||
Accumulated deficit | (291,353 | ) | (288,472 | ) | ||||
Total stockholders' equity | 53,906 | 46,092 | ||||||
Total liabilities and stockholders' equity | $ | 150,000 | $ | 137,623 | ||||
Table A-1 - Segment Adjusted EBITDA (Quarterly)
| Three Months Ended | Three Months Ended | |||||||||||||||||||||||
(in thousands) | Rx | Consumer Health | Pipeline R&D | September 30, 2022 | Rx | Consumer Health | Pipeline R&D | September 30, 2021 | ||||||||||||||||
Reconciliation of net loss to Adjusted EBITDA: | ||||||||||||||||||||||||
Net loss | $ | (1,179 | ) | $ | (827 | ) | $ | (875 | ) | $ | (2,881 | ) | $ | (25,022 | ) | $ | (1,394 | ) | $ | (1,435 | ) | $ | (27,851 | ) |
Addback: | ||||||||||||||||||||||||
Depreciation and amortization | 1,574 | 281 | - | 1,855 | 2,094 | 413 | - | 2,507 | ||||||||||||||||
Impairment expense | - | - | - | - | 19,453 | - | - | 19,453 | ||||||||||||||||
Stock based compensation | 1,153 | 15 | 9 | 1,177 | 1,193 | 14 | 312 | 1,519 | ||||||||||||||||
Other expense, net | 1,062 | 38 | - | 1,100 | 7 | 33 | - | 40 | ||||||||||||||||
Loss from contingent considerations | 128 | - | - | 128 | 219 | - | - | 219 | ||||||||||||||||
Income tax benefit | - | - | - | - | (107 | ) | - | - | (107 | ) | ||||||||||||||
Adjusted EBITDA | $ | 2,738 | $ | (493 | ) | $ | (866 | ) | $ | 1,379 | $ | (2,163 | ) | $ | (934 | ) | $ | (1,123 | ) | $ | (4,220 | ) | ||
[1] Aytu uses the term EBITDA, which is a term not defined under United States Generally Accepted Accounting Principles. 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 EBITDA by segments allows investors to evaluate the various performance of these segments. 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 loss is the performance measure calculated and presented in accordance with U.S. GAAP that is most directly comparable to EBITDA.
SOURCE: Aytu BioPharma, Inc.
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FAQ
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How much is Aytu projected to save by suspending R&D programs?
