Aytu BioPharma Reports Second Quarter of Fiscal Year 2023
Aytu BioPharma (NASDAQ:AYTU) reported strong financial results for Q2 2023, with net revenue reaching $26.3 million, a 14% increase year-over-year. The prescription (Rx) segment alone generated $18.0 million, a growth of 23% compared to the previous year, driven significantly by a 95% surge in pediatric product revenues.
Adjusted EBITDA was positive at $0.7 million, a significant improvement from the $(7.6) million loss reported last year. Despite challenges in the Consumer Health segment, which saw a 3% revenue decline, the company's strategic shift to higher-margin e-commerce sales is expected to bolster profitability.
- Q2 2023 net revenue increased 14% to $26.3 million.
- Rx segment revenue grew 23% to $18.0 million.
- Pediatric product revenue surged 95% to $6.3 million.
- Adjusted EBITDA turned positive at $0.7 million, improving from $(7.6) million.
- Gross margins improved from 53% to 66%.
- Strategic shift to focus on higher-margin e-commerce sales.
- Consumer Health segment revenue declined by 3% to $8.3 million.
- Net loss for Q2 2023 was $(6.7) million, although improved from $(11.5) million in the prior year.
- Impacts from calendar year-end weather-related shipping delays affected ADHD revenue.
Second Consecutive Quarter of Positive Adjusted EBITDA
Quarterly Net Revenue of
Company to Host Conference Call Today at 5:00pm ET
ENGLEWOOD, CO / ACCESSWIRE / February 21, 2023 / 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 quarter ended December 31, 2022.
Q2 2023 Commercial Highlights (3 months ending December 31, 2022)
- Total net revenue was
$26.3 million , an increase of14% over the$23.1 million in net revenue in the year ago quarter. - Net revenue from the Company's Rx segment was
$18.0 million during Q2 2023 compared to$14.6 million in the year ago quarter, growth of23% .- ADHD products (Adzenys XR-ODT® and Cotempla XR-ODT®) net revenue increased by
2% to$11.1 million from$10.9 million in the year ago quarter. - Pediatric products (Poly-Vi-Flor®, Tri-Vi-Flor®, and Karbinal® ER) net revenue increased
95% to$6.3 million , from$3.2 million in the year ago quarter.
- ADHD products (Adzenys XR-ODT® and Cotempla XR-ODT®) net revenue increased by
- Consumer Health revenue during Q2 2023 was
$8.3 million , a decrease of3% over the year ago quarter due largely to a shift away from the Consumer Health segment's direct mail channel to focus on the higher contribution margin OTC medicines e-commerce channel. The segment's core OTC medicines e-commerce portfolio revenue grew70% over the year ago quarter. - Gross margins increased to
66% in Q2 2023 compared to53% in the year ago quarter. - Total Adjusted EBITDA1 was a positive
$0.7 million in Q2 2023 compared to$(7.6) million in the year ago quarter. Expenditures attributable to the suspended Pipeline R&D were approximately$1.3 million in Q2 2023. - On October 13, 2022, the Company announced a shift of its strategy aimed at accelerating the growth of its commercial business and achieving corporate 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
$20.0 million in projected future study costs.
________________________
[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.
Management Discussion
"I am extremely pleased with the recent momentum the business has gained as we report our second consecutive quarter of positive Adjusted EBITDA and strong top-line performance in our Rx segment," commented Josh Disbrow, Chief Executive Officer of Aytu BioPharma. "We made strategic decisions in October 2022 to accelerate the growth of our commercial businesses and indefinitely suspend our clinical development programs, both of which have put us on a faster path to profitability. Within our Rx segment, Pediatric products net revenue increased
"Our Consumer Health segment continues to execute on our objectives to improve segment profitability, with a focus on more efficient, higher contribution margin online sales channels, resulting in a significant
"The significant progress we have made over the past two quarters, along with the initiatives we've put in place for further improvements and cost reductions during the remainder of fiscal 2023, have put us in a stronger financial position to drive long-term shareholder value," Disbrow concluded.
Segment Reporting
| Three Months Ended | ||||||||
| December 31, | ||||||||
| 2022 | 2021 | |||||||
| (In thousands) | ||||||||
Consolidated revenue: | ||||||||
Rx Segment | $ | 18,029 | $ | 14,643 | ||||
Consumer Health Segment | 8,250 | 8,482 | ||||||
Consolidated revenue | $ | 26,279 | $ | 23,125 | ||||
Rx Segment | ||||||||
ADHD | $ | 11,120 | $ | 10,850 | ||||
Pediatric | 6,328 | 3,248 | ||||||
Other* | 581 | 545 | ||||||
| $ | 18,029 | $ | 14,643 | |||||
*Other includes discontinued or deprioritized products.
Q2 2023 Financial Results
Net revenue for the second quarter of fiscal 2023 was
Net revenue from the Rx segment in the second 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 second quarter of fiscal 2023 was impacted by an impairment of
Net loss for the second quarter of fiscal 2023 was
Adjusted EBITDA (see Table A-1) was
Balance Sheet and Operational Improvements
Cash and cash equivalents on December 31, 2022 were
As part of the Company's indefinite suspension of its clinical development programs, the Company expects to save over
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.
During 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 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
The company implemented a 1-for-20 reverse stock split, effective January 6, 2023. This action enabled the Company to regain full compliance with Nasdaq's listing requirements effective January 23, 2023.
Warrant Transactions
The Company evaluated the accounting for previously granted warrants included in its debt and equity transactions. The Company restated Form 10-Q for the quarter ending September 30, 2022 in order to modify the accounting for certain warrants to liabilities from equity treatment. The changes in the restated Form 10-Q resulted in a reclassification of the value of these warrants from additional paid in capital to liabilities. Going forward, the Company will value these warrants on a quarterly basis, which could result in additional income or expense and a corresponding decrease or increase in derivative warrant liabilities. These adjustments have no impact on cash, working capital, cash flows from operations or Adjusted EBITDA.
Conference Call Details
Aytu will host a conference call today, Tuesday, February 21st, 2023, at 5:00 PM Eastern Time to discuss financial results for the second fiscal quarter of 2023 for the quarter ended December 31, 2022.
The conference call will be available via telephone by dialing toll free 888-506-0062 for U.S. callers or for international callers 973-528-0011 and using entry code 371594. A webcast of the call may be accessed at https://www.webcaster4.com/Webcast/Page/2142/47499.
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 February 28, 2023, 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 47499.
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 | ||||||||
| December 31, | ||||||||
| 2022 | 2021 | |||||||
Product revenue, net | $ | 26,279 | $ | 23,125 | ||||
Cost of sales | 8,986 | 10,826 | ||||||
Gross profit | 17,293 | 12,299 | ||||||
Operating expenses | ||||||||
Research and development | 1,710 | 4,475 | ||||||
Selling and marketing | 10,560 | 9,660 | ||||||
General and administrative | 8,018 | 7,953 | ||||||
Impairment expense | 2,600 | - | ||||||
Amortization of intangible assets | 1,198 | 1,505 | ||||||
Total operating expenses | 24,086 | 23,593 | ||||||
Loss from operations | (6,793 | ) | (11,294 | ) | ||||
Other expense | ||||||||
Other expense, net | (1,303 | ) | (257 | ) | ||||
Loss on derivative warrant liabilities | 1,403 | - | ||||||
Total other expense | 100 | (257 | ) | |||||
Loss before income tax | (6,693 | ) | (11,551 | ) | ||||
Income tax benefit | - | (3 | ) | |||||
Net loss | $ | (6,693 | ) | $ | (11,548 | ) | ||
Weighted average number of common shares outstanding | 3,110,304 | 1,320,623 | ||||||
Basic and diluted net loss per common share | $ | (2.15 | ) | $ | (8.74 | ) | ||
AYTU BIOPHARMA, INC.
Condensed Consolidated Balance Sheets
(In thousands, except share and per-share)
| (unaudited) | ||||||||
| December 31, | June 30, | |||||||
| 2022 | 2022 | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 19,501 | $ | 19,360 | ||||
Accounts receivable, net | 25,547 | 21,712 | ||||||
Inventory, net | 12,950 | 10,849 | ||||||
Prepaid expenses | 11,989 | 7,375 | ||||||
Other current assets | 624 | 633 | ||||||
Total current assets | 70,611 | 59,929 | ||||||
Property and equipment, net | 2,344 | 3,025 | ||||||
Operating lease right-of-use asset | 2,675 | 3,271 | ||||||
Intangible assets, net | 64,985 | 70,632 | ||||||
Other non-current assets | 821 | 766 | ||||||
Total non-current assets | 70,825 | 77,694 | ||||||
Total assets | $ | 141,436 | $ | 137,623 | ||||
Liabilities | ||||||||
Current liabilities | ||||||||
Accounts payable and other | $ | 10,580 | $ | 10,987 | ||||
Accrued liabilities | 41,218 | 44,187 | ||||||
Short-term line of credit | 7,429 | 3,813 | ||||||
Current portion of debt | 90 | 96 | ||||||
Other current liabilities | 7,833 | 5,359 | ||||||
Total current liabilities | 67,150 | 64,442 | ||||||
Debt, net of current portion | 14,533 | 14,279 | ||||||
Derivative warrant liabilities | 4,155 | 1,796 | ||||||
Other non-current liabilities | 9,781 | 12,798 | ||||||
Total liabilities | 95,619 | 93,315 | ||||||
Commitments and contingencies | ||||||||
Stockholders' equity | ||||||||
Preferred Stock, par value $.0001; 50,000,000 shares authorized; no shares issued or outstanding as of December 31, 2022 and June 30, 2022 | - | - | ||||||
Common Stock, par value $.0001; 200,000,000 shares authorized; shares issued and outstanding 3,383,145 and 1,500,523, respectively, as of December 31, 2022 and June 30, 2022 | - | - | ||||||
Additional paid-in capital | 340,289 | 331,386 | ||||||
Accumulated deficit | (294,472 | ) | (287,078 | ) | ||||
Total stockholders' equity | 45,817 | 44,308 | ||||||
Total liabilities and stockholders' equity | $ | 141,436 | $ | 137,623 | ||||
Table A-1 - Segment Adjusted EBITDA (Quarterly)
(in thousands) | Rx | Consumer Health | Pipeline R&D | Three Months Ended December 31, 2022 | Rx | Consumer Health | Pipeline R&D | Three Months Ended December 31, 2021 | ||||||||||||||||||||||||
Reconciliation of net loss to Adjusted EBITDA: | ||||||||||||||||||||||||||||||||
Net loss | $ | (3,996 | ) | $ | (1,413 | ) | $ | (1,284 | ) | $ | (6,693 | ) | $ | (5,387 | ) | $ | (1,957 | ) | $ | (4,204 | ) | $ | (11,548 | ) | ||||||||
Addback: | ||||||||||||||||||||||||||||||||
Depreciation and amortization | 1,572 | 281 | - | 1,853 | 2,079 | 382 | - | 2,461 | ||||||||||||||||||||||||
Impairment expense | 2,600 | - | - | 2,600 | - | - | - | - | ||||||||||||||||||||||||
Stock based compensation | 2,974 | 80 | 13 | 3,067 | 1,148 | 13 | 68 | 1,229 | ||||||||||||||||||||||||
Other expense, net | 1,321 | (18 | ) | - | 1,303 | 230 | 27 | - | 257 | |||||||||||||||||||||||
Gain on derivative warrant liabilities | (1,403 | ) | - | - | (1,403 | ) | - | - | - | - | ||||||||||||||||||||||
Income tax benefit | - | - | - | - | (3 | ) | - | - | (3 | ) | ||||||||||||||||||||||
Adjusted EBITDA | $ | 3,068 | $ | (1,070 | ) | $ | (1,271 | ) | $ | 727 | $ | (1,933 | ) | $ | (1,535 | ) | $ | (4,136 | ) | $ | (7,604 | ) | ||||||||||
SOURCE: Aytu BioPharma, Inc.
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FAQ
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