Everyone, thanks for joining us on day two of Maxim's Virtual Healthcare Summit. On this Fireside Chat, we have Aytu BioPharma and their CEO, Josh Disbrow. Josh, thanks for joining us. It's always a pleasure to have you. Just for some context, Aytu BioPharma, they're a commercial stage company with, generating both revenue and a lot of positive EBITDA. They're actually in the ADHD business, and amidst the stimulant shortages over the last couple years, they've seen significant acceleration in their ADHD business. They're in a very transformative year. They've been in a very transformative phase over the last year or two, arguably. With that, Josh, could you kind of give the audience that are not familiar with Aytu, a little background about yourself and more info on the company? Yeah, thanks, Naz. Thanks to you and for Maxim for having Aytu at the Virtual Healthcare Conference. I'm glad to be with you. Josh Disbrow, as Naz mentioned, I'm one of the co-founders and Chief Executive Officer of Aytu BioPharma. Myself, I'm a, you know, entrepreneurial pharma executive with about 27 years in the business. Started off carrying the bag, and so have spanned the entire commercial spectrum throughout my career. And prior to Aytu, a company that my brother and I helmed, called Arbor Pharmaceuticals, was acquired by a large private equity group for over $1 billion. Our family was able to realize some nice gains from that, as were the original investors, and that business was built largely through strategic acquisitions and licensing. And so Aytu was built, slightly differently, but really with a similar mindset of acquiring and/or licensing products and scaling those products around and using commercial infrastructure. So Aytu today, you know, is a commercial stage pharma company generating substantial revenue as well as EBITDA, as Naz said. We're based in Denver, Colorado, which you can see out over my shoulder. We operate primarily in the U.S., although we'll get to later, the fact that we've actually begun to recently expand our footprint outside the U.S. through some licensing deals. The company commercializes multiple products. Our main product line is in attention deficit hyperactivity disorder, ADHD, so we sell products... All of our products are branded prescription products, by the way. Those products are Adzenys and Cotempla for ADHD and compete in a very, very large market. We have a line of pediatric products, and all in, the company did revenues in excess of $65 million last year and posted EBITDA in excess of $10 million dollars when you look at our core business, which really serves as the foundation as we move forward. We've got a line of multivitamins that are starting to grow back after they'd had some impact over the last year or so. We've got a first-line antihistamine that's proprietary as well. And we've really got a very interesting commercial setup in that we've got a traditional infrastructure with a sales force that's nationwide, that calls on physicians. But as importantly, we've got a very unique capability called RxConnect, which really does serve as some special sauce for us to really elevate our products, and we'll talk a little bit about that as well. Again, U.S. sales force calling on physicians around the country. We've got non-personal promotional elements as well, but really, RxConnect, which we'll talk about, is a real game changer for us, so happy with the company in that we've really transitioned, a very transformational year, as Naz mentioned, in multiple ways, most notably focusing on the Rx segment, driving EBITDA, ultimately driving cash flow, and really excited about how we're positioned at the moment. Thanks for that. Josh, so obviously, since dating back to, like, October 2022, we've had this, like, stimulant shortages ongoing with Adderall and Concerta. I think it ameliorated a little bit, but based on all your conversations with your physician partners and associates, what have you been hearing about where the shortages is right now, the dynamics at play, and how it's sort of impacting, like, physician prescribing habits and patients right now? Like, how's that situation evolved? Yeah, good question. And you know, first of all, you know, the ADHD market is huge. It's one of the largest therapeutic categories in the U.S. prescription drug market, in that there's you know, over 80 million prescriptions generated annually, over $12 billion in category sales when you look at wholesale or WAC sales. And so it's a large category, and so any disruption can really serve to disrupt in a major way, kind of across the entire healthcare and prescribing ecosystem. You know, what I will say is, certainly, the stimulant shortages have slowed down from where they had been. They are intermittent. You still do see, you know, spot fires pop up here and there in various geographies. But you know, generally speaking, that's been the case for years within the ADHD category. There's been intermittent shortages that pop up. A particular generic goes in shortage, and then it causes some problems for some period of time. So there is sort of a notion of an unsettled nature in the market, but I would say, generally speaking, we're back to sort of steady state, which is great for us, because as we'll talk about, our growth continues despite the fact that the ADHD stimulants shortages have largely sort of gotten better. You know, and it's really encouraging to see. You know, we've generated sales growth of over 23% for the ADHD brands year over year, despite the fact that the market has really kind of come back to relatively normal state. There were issues associated with some labor shortages at one of the large generic manufacturers in particular. That was compounded by the significant growth in the category coming out of the pandemic, and that caused a pinch on API shortages. And so it all sort of culminated to serve as a just a pinch point for the entire market, which we did benefit from for the short term, but again, the market has sort of gotten back to normal. You don't hear of it more than just sort of intermittent, as opposed to hearing it hourly or almost by the second it seemed a year ago. You know, you hear of shortages kind of on a bi-weekly or monthly basis. But what's nice about sort of how we're positioned is, first of all, we've never had a shortage in the history of these brands. Secondarily, we've always been able to get our API quota, which is actually getting better in many, many circumstances. And these products, through their clinical benefits, as well as through the benefits of RxConnect, you know, really provide a lot of certainty for these patients and sort of put stability in a market that doesn't currently have any level of stability, particularly when there are shortages. So, so anyway. Thanks for that. I mean, Josh, there's a lot of ADHD products out there. Could you talk about what differentiates Adzenys products from the other products? And also, like, you touched on it a little bit, but how is that Adzenys never really been impacted by the shortages? Like, how have you been able to grow the business this much? Yeah, we're very adept from a supply chain perspective. You know, going way back to prior to the acquisition of Neos, the company that initially got these products approved and then started selling these products. There's been a really strong history of good coordination, very solid handle on securing API. It's a very intense process. It requires a great deal of attention to detail, and I would just say we've always handled it very, very well. Most recently, we've been in direct dialogue with the DEA, with members of the FDA, to make sure they understand the impact of, you know, even simple decisions like changing the cadence of the API allocation program. Simple things like that can really cause effects, and we've been at the table specifically with senior leaders of the DEA to ensure that they understand the impact of that. And I'm really proud to say several of our leaders within the organization have gotten directly in front of the DEA multiple times to ensure that they understand that, look, that when this happens at this level, here's the implications at industry level, particularly as it relates to smaller manufacturers. And what I'll say, look, is it's probably equal parts diligence and the ability to really effectively navigate the API request process and how to deal with all the changes that are in constant play. But it's also the fact that, look, I mean, at the end of the day, this is a huge market of which we have a relatively small portion, you know, call it less than 1% of the market. And so when a large manufacturer, particularly a large generic manufacturer, that, say, has 30-40% of the market, now, depending on what that market might be, the amphetamine market or the methylphenidate market or the Adderall XR-specific market, if they get shorted by, say, 10% on quota, that has a tremendous effect. 10% of a large number is obviously much bigger than 10% of a smaller number. We get to deal in, you know, sort of a smaller ecosystem, in that we've got a small percentage-ish portion of the market. If we get shorted by 10%, it's relatively easy for us to navigate, change our production schedules, re-request, and we've maintained a very, very steady supply. And, you know, what I'm happy to say, knock on wood, really, over the last few months, we've gotten ourselves to the highest level of safety stock in the company's history, and it's really through that combination of an adeptness of being able to navigate the macro sort of environment, and then the ability of dealing with a relatively small part of the market and just really being able to maximize our, you know, our portion of it. That having been said, if we were able to secure 2-5% of the market, we'd be in a similar spot in that we're still not asking for hundreds of thousands of kilograms from the DEA in terms of API. We'd be asking for 20-40 kilograms, which is obviously easier to deal with, and we've been the beneficiary of being a relatively small player, but one of the things that we hang our hat on is we are small, we are nimble, but we are scalable, and we have obviously shown the ability to scale our products in this very, very large market. That was very helpful. Josh, as you mentioned earlier, your ADHD franchise has grown, like, 23%, and the shortages, as you said, are somewhat normalizing. I guess long term, what are your strategies to continue growing the franchise, and what are the key factors in managing that growth? Like, what gives you confidence you can continue growing the franchise at this point? Yeah, great question, and for us, very simply, the calling card in this category has to be consistency and simplicity, and we offer that through both our products and through our service platform that we call Aytu Rx Connect. I'll talk about the products first. First and foremost, is this is a category where if you can enable physicians to prescribe a brand, they will. Because it is well known within all of the ADHD prescribing circles, that one generic is not equal to the other, and generics may not give you the same effects as a brand. And while that may sound counterintuitive because the FDA has approved these products as, quote, "bioequivalent," and is, and they are in fact, AB-rated, the experience at the patient level, and really, which is really where it matters, can be highly variable from one generic to the next. That's because the FDA requires bioequivalents, but they don't require 100% bioequivalence to the RLD, to the reference-listed drug. You've got to be between 80% and 125% bioequivalent, and you've got to hit that at various time points throughout the day to get your ANDA approved if you're a generic product. Well, that causes inherent variability and in the patient experience, in terms of how they feel. And so a patient may, for whatever reason, get switched from one generic to another because the contract with the pharmacy chain changed or because the payer situation changed, and that may affect that patient negatively, such that all of a sudden they're experiencing their ADHD symptoms again, their grades in school are getting worse, they experience difficulties with their job. And so that's one factor that really enables us to go in as a branded company and say: You should prescribe Adzenys in the event that you're looking for an amphetamine or Cotempla, in the event that you're looking for a methylphenidate, because you're gonna get that consistent, smooth experience throughout the day, and the same thing every day, because of the inherent lack of variability with the brand. But it's not enough in this day and age with our complex ecosystem, particularly in branded pharmaceuticals, to just offer something that's clinically better, quote-unquote. "You have to be better all the way around," and that's where RxConnect comes in. And through RxConnect, what we offer patients and physicians, which are as important in the ecosystem, we offer them predictability, simplicity, and a hassle-free experience. Right now, if you were to prescribe a branded medication in the U.S., and frankly, many times, even a generic medication, the physician may not know what you as the patient are going to get, because it's all comes down to what the payers are willing to pay for and what the large pharmacy chains are willing to stock based on their contracts. RxConnect offers us as Aytu the ability to go in and offer Adzenys and Cotempla, and all of our branded medications for that matter, and say, "If you prescribe these brands and send them to a partner pharmacy with whom we work with directly, your patients will, first of all, get the brand that they were prescribed, and they'll get it at a copay that's predictable and the same every single month, month after month. Could be as low as zero, but in no event for Adzenys or Cotempla, will it be any more than $50 for a monthly copay." That is a phenomenal value proposition to offer to physicians when right now, their current state is callbacks for prior authorization, step edits, lack of coverage, lack of availability of a product, or a patient in an even worse case scenario, or a patient's parent calls and expresses concern or frustration around the high copay. We cut through all of that and tell the doctor that you can get back to prescribing medication the way you see fit and not have to worry about the red tape that is presented by this very complex and overbearing PBM-dictated ecosystem. RxConnect really affords them that safety net and that comfort of knowing when I write Adzenys or Cotempla or Karbinal or Poly-Vi-Flor for that matter, they're going to get those medications, they're going to get them timely at a partner pharmacy that they know and trust. In many cases, these partners may even do home delivery or offer courier services, and they'll do it at a price that the patients can afford predictably. Even in the event that the patient has a high deductible plan at the beginning part of the year when the deductible resets, even as they're paying their way through to meet that deductible, we are still guaranteeing these patients, in the case of our ADHD meds, they're paying no more than $50 out of pocket. Equal parts convenience, predictability, and consistency on the brand effect and the clinical attributes, as well as on the economic and the overall experiential attributes when a physician or patient either prescribes or takes our medications. That was very helpful, so obviously you're once again financially seeing a lot of growth. I believe in September 2025, Actavis Teva has approval to launch a potential generic for Adzenys. How much of a risk or concern is that for you right now? You know, in theory, it is a risk, Naz, and it's a risk that I don't wanna totally dismiss, but I think there's some real important perspective to put in front of the listeners that I think would give people some comfort, that we don't necessarily have huge concerns around the potential infiltration of a generic. First of all, I should point out that, you know, we do have a single Paragraph IV filer, as you mentioned, it was Actavis. It's now those ANDAs are held with Teva just based on some M&A. You know, first of all, so only having a single filer, there's actually very little precedent for that, even in this category of ADHD stimulants, but it gives us very good comfort. And typically, when you have a single filer, if they come at all, they tend to behave very rationally. They tend to take a relatively small portion of the overall market. And so we don't necessarily think on its face that any entry of the single ANDA would have that much of an impact. But, you know, that having been said, you hit on it earlier, and it's just one of the factors that we think about as we consider the potential impact of a Paragraph IV filer and subsequent entrant. First of all, you know, even though the stimulant shortages are abating to a large degree, as we've said, you know, a large manufacturer, in this case, like Teva, you know, they're gonna have to evaluate the value and the importance of diverting their API quota, in this case, their amphetamine quota, in favor of a product that, in the scheme of things, is quite small. Look, I mean, we're proud of the growth we've had. These are very large products from Aytu's perspective, for a company that sits at a $14 million or so market cap. But in the grand scheme of things, you know, in a $12 billion category, this is a small product for them to take a look at and really put real effort into it. You know, they sell hundreds of millions of dollars of ADHD stimulants, versus, you know, these products combined, you know, are sort of north of $50 million in annual sales, so you think about the fact that Teva manufactures Adderall IR, they manufacture Adderall XR, and a host of other stimulant medications, Adzenys may frankly prove to be too small just on its face, but we have to consider on top of that is, we do not distribute these products in the regular way. These products don't simply sit at the wholesalers. We don't sell to just the big three. We have a direct network of many, many hundreds, you know, a 1,000-plus pharmacy customers that order from us at any given time. and ultimately, there are so many benefits afforded to not just us and the patients, but to the pharmacies themselves. They're substantial, such that these pharmacies are encouraged to continue to directly order from us. There's obviously inherent benefits to the patients and physicians in prescribing a brand that they know and trust, and as I said earlier, don't have to worry about sort of the issues associated with getting transitioned over to a generic. But if you think about how RxConnect works, and while it is proprietary, we don't talk about a lot of the specifics, we have really, within the program, insulated our prescriptions from multiple ways. Obviously, just the way they're physically shipped, many times these pharmacies are ordering directly themselves. Almost 90% of our prescriptions are filled by an RxConnect partner pharmacy, so there's a high level of control and insight and management around this sort of visible, high touch, high control environment, such that it's gonna be very difficult for even a large competitor to infiltrate that. There's various things at play around economics, around how pharmacies often lose money in the case of brands and certainly generics. All those things essentially come into play when you think about how... You can probably hear me with the high level of confidence that while they may come, first of all, to debate whether they do, if they do, we expect it to be a relatively muted impact and potentially a very muted impact by virtue of just how we organize our business, how we insulate the prescriptions through RxConnect, and ultimately, how we enable pharmacies to be sure that their economics are appropriately maximize within the construct of the RxConnect ecosystem. You know, you couple the macro environmental effects with, you know, intermittent shortages, wax and wane. These companies have priorities they have to think about, they have production schedules they have to think about, how does this little product fit within that? And then, by the way, if it even comes to market, then they have to deal with the micro sort of elements around RxConnect that we think go a long way to potentially thwarting any significant infiltration against our brands. So, not suggesting they won't come, couldn't come, but I think if they do, I think it's a I don't think it changes anything from a overall value proposition as we think about the ability to, again, thwart some of that. And of course, keep in mind, we've got Cotempla, we've got our pediatric products, which we fully expect to grow back to some reasonable level. And of course, we have other products in mind for the future as the company grows. Thanks for that. And you touched on another point on the pediatric business. So obviously, the pediatric business had experienced significant declines in this most recent fiscal year. Could you talk a little bit about what initiatives you have or are engaging in to normalize that revenue? And on top of that, how do you strategically think about that pediatric business at this point going forward because of the revenue decline? Yeah, yeah, great question, and I, I think an important one. So, you know, I think a couple of things. First of all, we've got a high level of confidence that we will bring the pediatric business back to some degree. Does it get back all the way to where it was, say, in 2023? Perhaps not, but that's even, in my mind, not out of the realm of possibility. So first of all, you know, what are we doing around the pediatric business? When I talk about the peds business, I'm talking about our multivitamin franchise, as well as our antihistamine, Karbinal ER. We've deployed numerous initiatives across the portfolio to improve payer coverage, and what I'm happy to say is that's already beginning to bear some meaningful fruit. We're already seeing prescriptions get covered in areas that they hadn't been previously, and multiple things went into that, but we really did put a big effort around how do we get improved coverage? Because a big effect that brought those product revenue, the numbers down, was that, you know, we lost coverage in a couple of areas, which was important. We've now expanded promotion geographically into some of these areas where we've picked up some coverage, and we're already seeing really nice momentum. And if you really just look at kind of where pediatric shipments were, say, at the end of our fiscal year ending June, to where they are now, you know, we're up over 130% in units shipped out, and that's all organic. That's not stocking. That is those are units that are being dispensed, pulled through at the pharmacy level, so we know they're already working. On top of expanding the promotional footprint and really optimizing the payer setup, we brought on several new distributors. Without going into too much detail, you know, it's not enough to simply put your products into the wholesalers and sort of hope for pull-through. We have identified sort of some really unique, really experienced, and really nuanced capabilities within the distribution channel from some smaller partners that we're really beginning to cultivate, and we're excited about that. I mean, we've got good momentum. We're seeing a lot of the initiatives really pay off. And you know, look, I'll acknowledge to everybody listening, it's taken longer than we would've hoped for these products to kind of bottom out, but we really believe that we've seen the bottom. If you look at sort of, again, where scripts and units were coming out of June into July and now up into the mid-October timeframe, we're really, really happy with, you know, with where we are. Again, unit shipments up over 130% from then to basically the end of September. And it corresponds perfectly with the things we put in place, with the reps that we've got deployed in these particular areas that have good coverage. And so we're confident. You know, in terms of strategic, look, these products have value to us, and, you know, we do not wanna be a one or two-legged stool. We do not wanna be a one-product company. We wanna have a diverse base of products in our portfolio, and while these products last year contributed relatively small pieces proportionally, if we can get these products back to even halfway or even a third of the way from where they were, that's a meaningful revenue contributor for us. And so, you know, we wanna keep these products going. We wanna keep these products in the bag. We wanna keep these products in the portfolio because we view them as a nice way to diversify our portfolio. You know, it's never enough to have one or two products. There's always risk, whether it's payers, whether it's other commercial risks, whether it is potential generic risks, and by the way, all of our products compete in generic markets where there are generic alternatives, so you always have the risk of payers potentially not covering brands, so you need to have more. There's a limit to how many more products you wanna bring in, but at this time, we are 100% laser focused on growing these products back. If at that point, someone perceives that there's some value in the pediatric product line, it would command a very high price, by the way, because we would have demonstrated that, hey, we brought these products back, we've built value, we've really helped to augment the ADHD revenues nicely. And so we view them as an important part of the portfolio that we wanna hold on to today. You never say never. We're always gonna look to do the right thing for shareholders, and if that means monetizing certain assets at certain points, we'll consider that, but we're not gonna monetize them at a low point, and we're certainly gonna do everything we can to grow these products back. Got it. All right, Josh, it looks like we have about, like, a minute and a half left. So obviously, a lot of your initiatives over the last couple of years have come to fruition and paid off in terms of growing the ADHD business, restructuring the business, reducing expenses, et cetera. Now, longer term, strategically, where do you sort of see the business going post ADHD, or what are your plans post ADHD, or growing the revenue beyond that business? Yeah. So first of all, let me just point out, we have done a significant amount of work, and my hats off to the team for significantly reducing OpEx over the last couple of years. If you look at where our OpEx line was, say, in 2022, over $80 million in OpEx, that number's down to $52 million. You know, call that a 30-plus% reduction in OpEx, and that's in the face of growing the ADHD franchise. You know, so we continue to expect to be able to, you know, keep the OpEx line kind of actually at that lower, at that number or even lower. But as we think about growing, we really think about kind of three to four key pillars of growth. Grow the ADHD products as we have been, continue steady growth trajectory there, bring the pediatric products back to some reasonable level such that we've really augmented ADHD and diversified our base of revenue. Third, and we alluded to this, we've just signed our second deal outside the US to outlicense our ADHD meds. We signed a deal in Israel last year. We just announced earlier this month a deal with Lupin, Canada, to bring our ADHD meds to Canada. That'll serve as a nice beachhead to build revenues in the form of royalties outside the US. And then we're always looking for new assets, things to augment the portfolio, branded prescription products, commercial stage products that we can bring in that either fit with the RxConnect platform in terms of how we work that through various economic aspects and through pharmacy dispensing, and things that would align with the therapeutic footprint. We're calling psychiatrists, pediatricians, a smattering of other specialists with whom we could bring additional value to. So we are on the hunt. We are confident, and we're in some good discussions with some companies to potentially bring some additional things on board. But as we stand today, pretty healthy company that even if we don't add that much in the next year or so, we like how we're positioned, but we're definitely not satisfied with what we have. We need to bring in more assets and expand outside the U.S. All right. Let's stay right on time, Josh. I feel like we could talk for another hour or something. Thanks for your time. To the audience members, if you wanna have a follow-up with either Josh, feel free to reach out to your Maxim representative, and we'll see if we can set up a one-on-one. Once again, Josh, thanks for your time. It's always a pleasure to talk to you. Thanks, Naz. Great to talk to you. Appreciate your time.