Aytu BioPharma, Inc. (AYTU) Q3 2025 Earnings Report, Transcript and Summary

Greetings. And welcome to the Aytu BioPharma Fiscal 2025 Q3 Earnings Call. At this time, all participants are in a listen-only. [Operator Instructions] Please note, this conference is being recorded. I’ll now turn the conference over to your host, Robert Blum, Investor Relations at Aytu. Robert, your line, you may begin.

Thank you, very much and good afternoon, everyone. As the operator indicated, during today's call, we will be discussing Aytu BioPharma's fiscal 2025 third quarter operational and financial results for the period ended March 31, 2025 With us on today's call is Aytu's Chief Executive Officer, Josh Disbrow; and Ryan Selhorn, the company's Chief Financial Officer. At the conclusion of today's prepared remarks, we will open the call for a question-and-answer session. I'd like to remind everyone that today's call is being recorded. A replay of today's call will be available by using the teleconference numbers and conference ID provided in the press release issued earlier today or by utilizing a link on the company's website under Events & Presentations. Finally, I'd also like to call to your attention the customary Safe Harbor disclosure regarding forward-looking information including statements regarding the goals, strategies, beliefs, expectations and future potential operating results of Aytu BioPharma. Although management believes these statements are reasonable based on estimates, assumptions, and projections as of today, these statements are not guarantees of future performance. Time-sensitive information may no longer be accurate at the time of any telephonic or webcast replay. Actual results may differ materially as a result of risks, uncertainties and other factors, including but not limited to, the factors set forth in the company's filings with the SEC. Aytu undertakes no obligation to update or revise any of these forward-looking statements. With that said, let me turn the call over to Josh Disbrow, Chief Executive Officer of Aytu BioPharma. Josh, please proceed.

Thank you, Robert, and welcome, everyone. I'm extremely pleased with the operating and financial performance achieved during the 2025 third fiscal quarter. A quick run of our numbers here to get us started. Total revenue grew 32%, led by growth in both our ADHD portfolio, which was up 25%, and pediatric portfolio, which was up 77%. The strong revenue growth, coupled with the implementation of our cost reduction initiatives, which helped to decrease operating expenses by $1.6 million, led to income from operations of $2.4 million. It's important to note that this is our second quarter with positive income from operation in the company's history, another huge milestone for everyone here at Aytu. I'll note also that this is our third quarter of positive net income from continuing operations and third quarter of positive net income as well, significant accomplishments across the board. Down the income statement, net income was $4 million, which compared to a $2.9 million loss in Q3 of a year ago, and translates into basic earnings per share of $0.65 this quarter compared to a $0.52 loss in the year ago third quarter. And finally, adjusted EBITDA came in at $3.9 million compared to $0.9 million in the year ago third quarter. By nearly every financial metric there is, we had a phenomenal third quarter. While it has taken a bit of time to fully get to this point, the pieces we've been putting in place for the past number of quarters, which have focused our efforts on our prescription pharmaceutical business, are beginning to fully manifest themselves in our financial performance. Remember, over the past two years, we have halted our clinical development efforts, wound down and sold our Consumer Health business, outsourced our manufacturing to a U.S.-based CMO, and refinanced our long-term note on more favorable terms. These have been heavy lifts, but the results announced today highlight what is possible as we move this business forward. The beauty of where we sit today is that these positive financial results are being accomplished on a focused portfolio of products. I believe our commercial platform has the ability to be further leveraged in the future through additional in-licensed or acquired products that can utilize the capabilities of our CNS-focused sales team and the broader Aytu RxConnect patient access platform. This is something we are keenly focused on now and in the future. But first, back to our two current product focuses, starting with ADHD. As I mentioned, ADHD net revenue was up 25%, coming in at $15.4 million during the quarter compared to the year ago quarter. Sequentially, ADHD net revenue also increased, up 11%. Certainly strong performance from the entire commercial organization that we're very pleased with. Overall, ADHD prescriptions were approximately 94,000 during the third quarter. Looking more broadly at the ADHD stimulant market, we continue to see conditions returning to a more normalized state following a series of significant market-wide stimulant shortages commencing in early 2023 that impacted the supply of Adderall XR and amphetamine based products, as well as methylphenidate -based stimulant medications. As I've discussed, fortunately, Aytu supply was never impacted and we therefore realized short-term and long-term tailwinds from the shortages others were facing. With the market stabilization in effect, the ADHD net revenue growth was largely driven by organic growth and improvements in gross to nets through assertive management of our brand's economics. This, of course, is enabled through our Aytu RxConnect platform, gaining strong channel and dispensing insights, and therefore the ability to manage our per-script economics is a calling card of Aytu RxConnect, so it was encouraging this quarter to see these GTN improvements. We saw a benefit from savings offers, government rebates, commercial rebates, and distributor fee improvements and also took a slight price increase in January of this year. It was a favorable quarter across multiple GTN parameters, to be sure. But back to what I believe is a key driver in all of this, Aytu RxConnect, our flagship, best-in-class patient access platform. RxConnect continues to be a significant differentiator for the company and one that enables us to stand apart from the competition and truly benefit patients. As a reminder, RxConnect is, among other things, a network of about 1,000 pharmacies with which we work around the country. Many of these are independent pharmacies in local geographies that do an excellent job servicing patients and prescribers. They're small businesses that work very hard to serve patients well and to go above and beyond to deliver best-in-class patient experiences. The other part of our network is made up of regional grocery chains that are very customer centric, that provide excellent customer service and work directly with us to ensure patient access to our products and the optimal use of our savings offers. I dove into this during our last quarter a bit, but as a reminder, the biggest differentiators of Aytu RxConnect are our ability to cut through the opaqueness of the pharmacy model to offer prescribers and patients affordability, predictability, and access, irrespective of a patient's insurance or their plan design, and even during the high deductible season when many patients experience higher out-of-pocket costs. Ultimately, with RxConnect, we are putting the power back into the hands of physicians and patients, something both stakeholders so desperately need today. Today, more than 85% of the company's scripts are driven through the Aytu RxConnect network. Again, this is something we think can be leveraged in the future as we look to bring in other products to the portfolio. Transitioning now to the pediatric side of the business. As I mentioned at the beginning, pediatric portfolio net revenue increased 77% to $3.1 million compared to the prior year period. Sequentially, the pediatric portfolio net revenue increased 27%. Growth in Ped’s reflects the positive effects from a recently implemented return to growth plan, as well as improvements in product gross to nets. As a reminder, looking back a few quarters ago, we were impacted by a variety of payer and channel challenges. Initially, we saw the impact when a large payer stopped covering a big portion of pediatric fluoride-based multivitamins that affected the entire multivitamin plus fluoride class. This was exacerbated further as we had some fairly concentrated dispensing pharmacies where this payer has a large market share. Our antihistamine was affected similarly by a payer change in an area where we had a pretty significant concentration of prescribers with that product largely covered by Medicaid. We have put in place a series of initiatives focused on diversifying the prescriber base and improving payer coverage for both franchises, multivitamins as well as with our antihistamine franchise. In particular, we have focused on expanding areas of promotion, diversifying our base of dispensing pharmacies, and bringing on several payers that we hadn't had covering our products before. We've also deployed sales representatives and shifted some promotional resources to our pediatric products. Previously, pediatric sales were conducted with a much smaller group of sales specialists that focused on promoting those products. For the last couple of quarters, though, we shifted our salesforce's product mix, providing for a better balanced and more impactful product penetration, and specifically with increased short-term emphasis on those pediatric products. We'll prudently allocate resources and evaluate the most appropriate product promotional mix to leverage our salesforce most effectively. We'll also, of course, monitor all macro and political factors that could have the potential to impact our brands, whether that be our ADHD brands, our fluoride supplements, or our antihistamine franchise. And of course, we'll then shift accordingly in terms of our priorities. Being nimble and responsive to what we believe are our best growth drivers is a critical success factor here for Aytu. So we'll always focus resources on the products we believe can drive the most growth, depending upon all commercial and macro factors we track. Clearly, the work we have done in the last 6 to 12 months is starting to be highlighted more fully in our financial results. As we have stated for some time now, we first and foremost are focused on the continued organic growth of our ADHD and pediatric portfolios. Today's results highlight our execution on that initiative. Second, we have focused on driving efficiencies across the organization. Again, that started with our decision to stop our development work, continued with our shutdown and sale of our Consumer Health business, expanded with the outsourcing of our manufacturing, and concluded in some ways with the optimization initiatives we announced recently to cut out an additional $2 million annually from our operating expenses. All of these moves are nearly fully recognized in the results you see today. With our infrastructure near full optimization, we remain focused on leveraging our platform through the pursuit of additional in-licensed or acquired products that can utilize the capabilities of our CNS-focused sales team and the broader Aytu RxConnect patient access platform. We are adept at identifying valuable assets and aligning with partners to seek a commercial partner with unique capabilities. So we see a tremendous advantage -- a tremendous opportunity rather to leverage our infrastructure, our capabilities, and our expertise and to diversify our portfolio by in-licensing and or acquiring assets. Of course, we'll be smart about it and look to pick these assets up as attractively as possible in win-win transactions for us and our prospective partners. As you can hear, I'm extremely pleased with the progress made and the results being more fully manifested in our financial results. In some ways, this was the type of breakout quarter that we always knew we were capable of when we implemented the series of strategic initiatives over the past couple of years. It's great to see it come to fruition. Let me now turn the call over to Ryan to review the financials in more detail, after which I'll provide a few closing comments, and we'll be happy to take your questions. Ryan?

Thank you, Josh. As we mentioned, the 2025 fiscal third quarter's results underscore the hard work, dedication, and perseverance of the entire Aytu team. Our financial progress highlights the huge number of operational and financial changes that we've worked on over the past few years. Please note that our March third quarter fiscal 2025 financial results are detailed in both our press release and Q3 fiscal 2025 Form 10-Q that we filed today with the SEC. Let's dive into the numbers in more detail. The third quarter net revenue was $18.5 million, up 32% from $14 million in the year ago third fiscal quarter. The ADHD portfolio net revenue rose 25% to $15.4 million versus $12.3 million in Q3 fiscal 2024, primarily reflecting improvements in our gross to net that we spent a lot of time optimizing and constantly refining. On the pediatric side, net revenue was $3.1 million versus $1.7 million in Q3 of last year. As Josh noted, we continue to see the progress in the execution of our pediatric return-to-growth program and are pleased with our results, which, again, showed a rebound both year-over-year and sequentially. Gross margin for the third quarter was 69% compared to 74% in the Q3 of last year. Last quarter, I had mentioned the noise in our numbers, especially in our cost of sales. We are and expect to continue to work through the higher cost inventory through the end of this fiscal year, which ends on June 30th. As a reminder, from a GAAP accounting standpoint, earlier this year, we loaded factory overhead costs into the ADHD inventory manufactured at our now shuttered Grand Prairie facility. We did this as we ramped down our own manufacturing and ramped up production at our contract manufacturer, which ensured a balanced manufacturing handoff. As our self-manufactured production output fell, the in-house produced goods absorbed to the same amount of overhead from our facility and personnel. Thus, the numerator, or the overhead expense, stayed constant while our denominator, or manufactured units, fell. As a result, it resulted in higher unit cost of goods. As we continue to sell through this inventory, we expect to see our ADHD gross margins expand, breaking down our cost of goods slightly during the third quarter of the overall $5.6 million, $352,000 represents the current year depreciation and amortization, $1.5 million represents overhead and indirect costs, with direct costs consisting of the remaining $3.8 million. With continued revenue growth, we expect to see gross profit margins improve toward the low to mid 70% range and see operating margins reflect our reduced headcount, leaner management structure and, of course, outsourced manufacturing. Operating expenses in Q3, excluding amortization of intangible assets and restructuring costs, were down $1.3 million to $9.5 million from $10.8 million last year. The decreased OpEx is a result of our focus on continued cost reduction and our improved operational efficiencies. One note about our last year's numbers, the Consumer Healthcare business is now accounted for as discontinued operations, thus last year's expense excludes that division's revenues and expenses. If you were to look at the actual OpEx from the year ago quarter, the savings are significantly greater. Net income from operations during this quarter was $2.4 million versus last year's loss from operations of $1.6 million or a $4 million swing in earnings. Bottom line net income during the third quarter of fiscal 2025 was $4 million or $0.65 net income per share basic and $0.21 net income per share diluted compared to a net loss of $2.9 million or $0.52 net loss per share basic and diluted in the prior year period. The fiscal 2025 third quarter results were impacted by $2.3 million of derivative warrant liabilities gained due primarily to the decrease in the company's stock price compared to a derivative warrant liabilities gain of $1 million in the third quarter of fiscal 2024. To reiterate from earlier, the positive operating income of $2.4 million is our second quarter with positive income from operations in the company's history. And again, this is our third quarter of positive net income from continuing operations and positive net income overall. For the quarter, adjusted EBITDA was $3.9 million in the third quarter fiscal 2025 compared to $0.9 million in the prior year period. A full reconciliation of adjusted EBITDA is included in the press release. This puts our trailing 12-month EBITDA at $9.2 million. Turning now to the balance sheet, the cash and cash equivalents were $18.2 million at March 31st, 2025 compared to $20.4 million at December 31st, 2024. I do want to note that the biggest change in the balance sheet was from the growth of our accounts receivable which shows at $35.8 million up from last June's $23.5 million. While our sales can be somewhat lumpy, our collections are very predictable. We collected about $19 million of those receivables in April and expect that the remainder will come in during May for our normal trade terms. On the liability side of the ledger, we're in full compliance with all our debt covenants. We did use some of our cash holdings to pay down a combined $2.5 million in long-term debt and other fixed payment arrangements during the third quarter of fiscal 2025. While we don't provide forward guidance, I will say that overall we are very pleased with the progress that Aytu has made in getting to this point in time. Our hope is that as we approach the end of our fiscal 2025 year, we are well-positioned to take advantage of the growth in our underlying business. With that, let me turn it back over to Josh.

Thank you, Ryan. Let me just say that it's very gratifying when a plan comes together the way our multiyear strategic realignment to focus the plan has come together. Let's not forget that in fiscal ‘21, we had a net loss of $58.3 million and an adjusted EBITDA loss of $34.8 million. We were burning cash and taking significant impairments on our assets. Today, we have recorded three consecutive quarters of positive net income and eight straight quarters of positive adjusted EBITDA. We've utilized the opportunity to improve the balance sheet through the continued pay down of our long-term loan with Eclipse, our senior lending partner, and other fixed payment arrangements. As Ryan mentioned, we paid down $2.5 million this quarter alone. The sales team and our Aytu RX Connect platform are operating at high levels of efficiency, and as Ryan just highlighted, we still have upside potential within our gross margins as we fully finalize the outsource manufacturing transition. All of this would not have been possible without the hard work of the entire Aytu team. I look forward to building off this success in the future, and I thank the whole team here for their efforts to get us to this important point. Thank you everyone participating on today's call. We'll now be happy to answer any questions. Operator?

[Operator Instructions] The first question is coming from Naz Rahman from Maxim Group.

Hi, everyone. Thanks for taking my questions, and congrats on the progress made, especially over all these years. For this quarter, did you see any one-time effects in the ADHD or pediatric business, whether it's stocking or anything else that impacted the numbers?

No, thanks, Naz, for the question. The answer is no on that on both fronts. This was organic growth driven by obviously all the optimization efforts, but there's no one-timers in there at all, nothing related to stocking. So, very good to see that.

Got it. And on that point, it seems like the ADHD franchise is finally back to the level seen at late fiscal ‘23, early fiscal ‘24. Are these levels you expect to continue growing forward, or do you expect to see growth here? I guess based on what you've seen thus far in the current quarter, what are you sort of expecting and seeing?

Yes, we do certainly expect growth going forward. And yes, I appreciate you acknowledging that we're sort of back to historically high levels, following just some optimization efforts that have happened along the way. And as we continue to focus, obviously, on the ADHD products, along with the pediatric products, I think we've really developed a good balance and prioritization across the portfolio to enable growth of both portfolios. So, yes, very excited with our trajectory. The sales team's really begun to get optimized and operate with good efficiency. And so, yes, excited to think that we can maintain and even grow these levels. So, yes, very good momentum.

Got it. And on similar energy, on the pediatrics business, you're now returning to growth, or like sales levels not seen, I guess somewhere between like late fiscal ‘23, early fiscal ‘24. Where do you sort of see the franchise going or getting back to? Do you think it's going to go back to becoming like a $25 million annual business or do you think it's less than that? What do you think the potential for the pediatric business is now?

Yes, probably not quite to that level, Naz. We would realistically expect growth to some degree from these levels, but probably not to that $25 plus million annualized run rate. But I'd always sort of said we'd be pleased if we could get sort of halfway back to where it was. So something north of where it is today, but perhaps not at, again, that $25 million level. So don't want to guide specifically, but if you take a look at this quarter and potentially applied some growth to that, I think that's a realistic number. We're seeing really good momentum on the antihistamine franchise in particular. There's probably more substantial growth in that particular franchise than perhaps with the multivitamins for various reasons and ultimately think we can grow that product. But yes, I think something approximating and maybe exceeding halfway where they were would be a good number and that would make these a meaningful contributor for the company while we think we can continue to grow the ADHD franchise as well.

Got it. Thanks. And I guess on the business development front, what have been, I guess, the gating factors in potentially closing a deal? Is it more like you're having some issues finding the correct asset? Is it the asking price? And also, what have you seen in terms of valuations? Have valuations like come down in the last several months amidst like market volatility? Have they been relatively stable? Have they increased? Like what have you been seeing and what have been the gating factors to potentially closing some sort of transaction?

Yes, I'd say the main gating factor for us is the right fit. We're really looking for the right asset to complement the capabilities, the therapeutic focus, the salesforce footprint, and of course, the RxConnect capability that we're obviously very proud of. And so, we would be optimally looking for something aligned to what the salesforce does on a regular basis, which is largely calling on psychiatrists and to some degree, pediatricians. And so, that's been the biggest factor is finding just that right asset. And I'll remind you that we're open to assets at various stages, most preferably something that's commercial ready, commercial stage, potentially something that's on the market, but the sweet spot would be something that is on the market and or ready to be marketed vis-a-vis through, it's already been through the FDA approval process. So, that's been the main thing is just finding the right thing. And I'll say, look, we're excited about some of the things that we're evaluating, some of the things we have on our plate at the moment. And I think we can get something done here in the relative near to midterm. We've said it's a high priority for the company to bring in an asset that's complementary, but we don't want to bring in just any asset for the sake of it. We are willing to look at brands that need to be launched. We're also willing to look at brands that are -- that need to be relaunched in some cases. And of course, we're open to mature assets that we believe can be accretive. The answer on valuation, I would say the valuation is going to have to be right for us. Obviously, we want to use our cash judiciously, particularly in this environment where cash remains very precious to us. And we have priorities not just around launching a product, but also around managing the debt and paying that down. Valuations are a bit high. Obviously, in this environment, companies are holding on to their assets more. And so, the valuations are higher. But I'm increasingly confident that we're going to be able to bring in an asset that really well aligns with, again, the therapeutic focus, our footprint, and with our capabilities. And so, more to follow, but excited about the things we have kind of circulating at the moment.

That was very helpful. Thanks. And one last question, if I may. In context of the broader political environment, would tariffs have any impact on Aytu? And if so, how? Or is there any other piece of legislation that you think might have any material near or medium-term impact on Aytu?

Yes, good question. I'd say in the context of tariffs, as it relates to our products, relatively de minimis impact. Understanding that our ADHD meds, all of our products are manufactured in the U.S. Just to restate that, we've mentioned that, I think, in the past. The ADHD products, by definition, are made in the U.S. The DEA does not allow you to import amphetamine or methylphenidate. And so, by definition, there's minimal impact. We have sort of small componentry that would be sourced outside the U.S. that would have some level -- have been impacted to some degree from tariffs, but it's not a material amount. Same applies for our other products, Karbinal and the multivitamin franchise. While there are components that we pull in from outside the U.S., for example, one of key ingredients in our multivitamins does come from Europe, but it's a relatively small purchase price in the scheme of things. And again, those products are all finished here. So, would not expect tariffs to have any material impact. As it relates to other potential macro factors out there, there's been talk, particularly recently, around fluoridation. Some states have recently banned putting fluoride in the municipal water supply. Utah is one state that has recently enacted that, and that'll take effect here very, very quickly. Other municipalities are seemingly daily making the move to potentially remove fluoride from the water. So, we're monitoring that. What impact does that have on the upside remains to be seen. Equal parts, there's talk of the FDA evaluating fluoride and fluoride supplements as to their benefits and the utility, and there is the potential that they, at some point down the road, conduct a study. They've indicated as much that they plan to study fluoride supplements here and come out with at least a recommendation. What impact that has, I mean, that has a long ways to go in terms of whether that even becomes close to reality. There's certainly, we've had the thought already, understanding that that's relatively new news. It may be challenged in court. The American Dental Association continues to be very strong proponents of fluoridation and fluoride supplementation, and so it remains to be seen whether any action would be taken. But we'll monitor that, understanding that the pediatric multivitamins are not gigantic pieces of our business today. So, and if there were any action, we think it would take quite some time if it ever actually comes to fruition. So, those are a couple of things as we think about the business. But overall, certainly minimal, if any, impact from a materiality standpoint from a tariff perspective. So, we feel good about that.

[Operator Instructions]

Josh and Ryan, this is Robert here. While we wait to see if there are any additional questions from the teleconference line, we have a couple of questions here. Maybe, Josh, the first one for you here. You referred to the return to growth plan for the pediatrics business, but can you revisit the substance of that plan and specifically what it entailed? Related to that, to what degree did you pivot the commercial team to get the products back to growth?

Yes, thanks, Robert. I would say, look, we, first and foremost, we did deploy the salesforce against more pediatric targets than we had in the past, specifically looking at antihistamine allergy targets. So, that was one thing, and so, not to suggest that we took them away from ADHD, but we certainly did add Karbinal to their promotional priority, and so that was one thing that we did. We also did expand the footprint significantly more reps in more places than we had been before. We had a relatively small team that was active mostly in the areas where there was quite favorable coverage so we've deployed more folks in the field around that, again, having dual responsibility for both the ADHD products as well as Karbinal in particular to create sort of hybrid responsibilities, and so that has certainly served to drive some growth. And then numerous pieces on the payer front to pick up additional coverage, particularly on the public payer side as it relates to the antihistamine franchise. So, several states that had previously not been covering the product through some creative contracting and various strategies we've employed across the franchise, we've been able to pick up multiple state Medicaid plans. Previously, Karbinal had been covered in really a very small handful of states, and the coverage, I will say, heading into the spring allergy season has picked up materially multiples more in terms of the number of states that have the product now covered on the formulary, in many cases without any kind of prior authorization or any kind of restriction. So, as a capstone to all that, I would say just put more emphasis in general on the pediatric franchise while not letting our foot off the gas on ADHD, and that has certainly served to really help us. So, we feel like Karbinal in particular has some really good momentum and good upside from these current levels, and that having been said, as I mentioned in my prepared comments, we'll continue to evaluate promotional priorities in the mix in the field. You never stay stagnant and static. You definitely want to make sure you're adhering to market trends. Obviously, growth drivers are going to be what we put the most emphasis behind, and so in the foreseeable future, obviously, we're fully back to promoting the ADHD brands along with Karbinal, and so excited to see that as it unfolds, but good momentum across the portfolio on the basis of some of this return to growth plan that we put in place.

Okay, great. Next question here, and you touched on this a bit with Naz. Maybe if there's anything you can add here as it relates to new product opportunities, how are you thinking about potential product targets? Anything to add there?

Yes, all I would say, just to reiterate, again, the sweet spot for us, the bullseye, so to speak, would be something in the CNS space, so something that's in psychiatry, neurology, but with a potential secondary emphasis in the pediatric types of products, and some good conversations happening with things that are sort of aligned to that. We clearly are going after brands. We are definitely interested in things that are commercial stage, commercial ready, i.e., already approved through the FDA and can be launched in a relatively short order, or products that are already in the market that we can potentially bring back or reinvent, so to speak, and again, we definitely want things that ideally, if we can get them that fit well within the call point, we've got a sales team that's out there actively engaging with psychiatrists, and to a lesser extent, pediatricians, and select family practitioners. We're obviously in psychiatry by virtue of the fact that we're in ADHD, and so something that aligns to that, again, a branded asset on market or ready to be launched would be really in the sweet spot of what we're looking for. We also want things that align well with our payer strategy and fit within the RxConnect platform, things, again, that we understand the nuance around the payer challenges, how to work within the current confines of the PBM ecosystem, and obviously how to work with our pharmacy partners to ensure that there's good value created for everyone in the value chain, the patient, the physician, and obviously the dispensing pharmacist as well. So you mix all those things together, and it does create sort of a pretty specific bullseye, but I think if we can find the right asset, it will be one that we can surely say is a really perfect fit and one that we really can mobilize around. So excited with some of the conversations that we're having.

All right. Great. And then last question maybe for Ryan here, with the OpEx having come down materially over the last four plus quarters or so, how do you think about the go forward quarterly OpEx line, and what's a good breakeven number based on the current spend there?

Yes. Thanks, Robert, and thanks for the question. And yes, you're correct. Over the last four years, we've continued to experience reduction in the operating expenses as we've improved kind of the efficiency of the operations. We sold the Consumer Health division, outsourced the manufacturing of ADHD products. We finally hit the point this quarter which demonstrates debt expenses that we currently expect to continue into the future periods to come. As you'll note in the Q3 results, we do not incur any restructuring expenses and don't anticipate such expenses in the future. Our cash based operating expenses for the quarter, which excludes amortization, depreciation and stock-based compensation, totaled $9.3 million with our overall operating expenses of about $10.4 million. So when analyzing a breakeven number from an overall operation standpoint, and factoring in a similar growth profit of what we accomplished this quarter of 69.4%, revenue would need to achieve approximately $15 million on a quarterly basis to breakeven. But if we eliminated the noncash expenses and calculating kind of a breakeven from an operating cash perspective, total revenue would be closer to about $13.1 million to hit that breakeven point.

All right. Fantastic. Josh, Ryan, not showing any additional questions here. So Josh, I guess I'll turn it over to you for closing remarks.

Great. Thanks, Robert. And thanks to everyone on today's call for your time. We appreciate everyone's interest in Aytu BioPharma. We really are very pleased with the progress that we've made over the last couple of years. It has been a long time coming. We appreciate everyone's patience as we enact many of these significant changes to transform the company to get ourselves into the position that we are today. So with that, I'll say, again, thanks for your time. Thanks for your interest. Thanks for your ongoing support of Aytu. And we look forward to sharing our full fiscal ‘25 yearend results in the fall, in September, when we file our 10-K and subsequently release earnings for the fourth fiscal quarter, which is off to a very, very good start. So with that, I'll wish you a good afternoon and a good evening. And again, thanks for your time. Have a good evening.

Thank you. This does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.