Aytu BioPharma at Planet MicroCap: Strategic Shift to CNS Focus

On Wednesday, 22 October 2025, Aytu BioPharma (NASDAQ:AYTU) presented at the Planet MicroCap Showcase: TORONTO 2025, unveiling its strategic shift to a pure-play central nervous system (CNS) company. The company highlighted its upcoming launch of Exua for major depressive disorder (MDD) and detailed operational changes aimed at improving financial performance. Despite past financial challenges, Aytu BioPharma assured stakeholders of a more disciplined and profitable future.

Key Takeaways

• Aytu BioPharma is transitioning to a CNS-focused company, planning to launch Exua for MDD in December.
• The company achieved a $35 million improvement in adjusted EBITDA by divesting non-core assets.
• Exua’s favorable side-effect profile is expected to drive its adoption as a third- or fourth-line therapy for MDD.
• The company’s financial position includes $31 million in cash and a market cap of approximately $50 million.
• Aytu BioPharma’s largest shareholders, Nantahala Capital and Stonepine, show long-term confidence in the company’s strategy.

Financial Results

• Revenue: $66 million annual revenue, with $58 million from ADHD products.
• Gross Margins: Approximately 69%, expected to remain consistent with Exua’s addition.
• Adjusted EBITDA: Improved by $35 million through strategic transformation.
• Cash Balance: $31 million as of June.
• Debt: Under $13 million in term loan; $9-12 million availability on a revolving line of credit.
• Market Cap: Approximately $50 million, trading below annual revenue.

Operational Updates

• Business Transformation: Shift to CNS focus, divesting non-core assets.
• Manufacturing: Outsourced to a US-based third-party contract manufacturer.
• Sales Force: 40 representatives targeting psychiatrists and general practitioners on the East Coast and Midwest.
• RxConnect Program: Ensures patients pay no more than $50 for ADHD prescriptions through contracts with over 1,000 pharmacies.

Future Outlook

• Exua Launch: Scheduled for December, focusing on the MDD market.
• Market Strategy: Position Exua as a third- or fourth-line therapy, leveraging its unique side-effect profile.
• Sales Force Utilization: Existing sales force to promote Exua.
• Market Expansion: Exploring outlicensing opportunities in Israel and Canada for ADHD medication.
• Business Development: Continuing to explore licensing opportunities in the CNS space.

Q&A Highlights

• Monotherapy: Exua intended as monotherapy but may be combined with other drugs by psychiatrists.
• Target Patients: Initially not likely to be prescribed to new patients due to insurance coverage favoring generics.
• Patent Life: Protected through 2030, with efforts to maximize potential and explore extensions.
• Analyst Expectations: Acknowledgment of past mismanagement of expectations leading to stock decline.
• Past Performance: Admission of past mistakes, with a focus on a more disciplined and profitable future.

For further details, please refer to the full transcript below.

Full transcript - Planet MicroCap Showcase: TORONTO 2025:

Unidentified speaker, CFO, Aytu BioPharma: Officer of Aytu BioPharma. We’re a, NASDAQ listed, Denver, Colorado based, specialty pharmaceutical company, focused in the CNS space. Oh, no. Uh-oh. What happened?

Sorry. I got it. We’re good. I got So, Aytu is, focused on improving patients’ lives everywhere with a distinct focus on complex CNS conditions. We’re a company committed to providing differentiated therapeutics for, serious neurological and psychiatric conditions.

We are now a pure play CNS company with products in ADHD and a new product in major depressive disorder or MDD. Before I jump into our exciting news about our new product here, we’ve gone through quite a bit of a transformation over the number over the last few years. Back in the 2022, we took a look at the business and realized we were doing way too much for for what we were, a small little company. We had a clinicaldevelopmentcom project going on with a rare disease asset. We had we’ve been manufacturing our own ADHD medication in Grand Prairie, Texas.

We had a consumer health care business that was over the counter, growing top line great, but never profitable and didn’t have a vision to get to profitability. So we took a look, we said, you know, we we gotta do what we’re good at, and that is being a specialty pharma commercial company. So in October ’22, we suspended our clinical development program, and we’ve since divested that. In June ’24, we paid off our term loan and refinanced it under better terms. Also in June ’24, we’ve completed the outsourcing of our manufacturing to a US based third party contract manufacturer.

Later in December ’24, we shut we shut down the facility altogether and gave back the keys. Then in July, ’24, we divested our consumer health care business and wound that down. And then in November ’24, we reorganized some of the some of the headcount in our operations for just optimization purposes. So a lot went on in the last couple of years, and that has basically produced an improvement in our adjusted EBITDA of about $35,000,000 And then this past June, we just licensed an agreement with to commercialize ExuA, never been launched major depressive disorder, MDD product that I’ll I’ll touch on. So before I go into the exua, just an idea of what our core products are.

You can see on the top left there, Adzenys and Cotempla are our two core products. Adzenys is an amphetamine, so we compete with Adderall on the ADHD side, and Cotempla is a methylphenidate, so we compete with kind of the Ritalins of the world. Total business is about $66,000,000 Those two products do about 58,000,000 of it. The remaining is is carbonyl, which is an antihistamine. It’s an extended release version of an antihistamine.

And then Polyviflor and Triviflor are fluoride tablets and drops for children where they’re deficient in fluoride to improve their teeth. We did we did license another ADHD product called Medidates CD just recently. So that is just now getting launched and is small from a revenue standpoint, but should continue to grow. But the real story is in kind of the Exua that I’ll touch on. So when we do license products, we do focus on IP protected products and brands.

So that that was what excited us about Exua. It was approved in September 2023, and we plan to launch it in December. And so it’s never been launched before, and it is protected through 2030, which doesn’t seem like a long time. But in in our kind of size, that’s an eternity for us, five years. Plus, we’re looking to figure out ways to extend that that patent just by tweaking some of the the pieces of the of the product.

Product. So we do have plans to hopefully extend that IP. We’re our all of our other brands have have IP protection as well. Again, I as I mentioned, we’re $66,000,000 of of revenue. We’re at June 30 year end, so it’s a little confusing.

But we just filed our 10 ks, and about $58,000,000 of that is ADHD. What you will notice here is that our 2024 year, we did have pretty substantial growth. If you’re familiar, in The US, we had a big Adderall or ADHD shortage, specifically Adderall. And so we were able to kind of scoop up a number of prescriptions in 2024 more than more than we were anticipating from a growth standpoint. But the the products continue to to continue to grow and and steady, but that this is kind of our now core, you know, core base business before Exua.

One of the things that sets us apart from other specialty commercial companies is our internally developed RxConnect patient access program. So if you’re familiar with US health care, first of all, it’s a mess. And secondly, it it there are a lot of players, and the patient is the one that always suffers in terms of getting prescriptions. Typically, happens is if an insurance company doesn’t want to cover a brand, they’ll the the patient could end up with a $304,100 or $500 bill at the pharmacy level. And then they go back to the doctor and say, I can’t afford this on a monthly basis.

Or a lot of insurance companies require prior authorization, so they have to go back to the doctor and get forms filled out for the insurance company just to get their prescription. So it’s a lot of a headache a lot of headache for a patient and the doctor. The doctor doesn’t want to see the patient multiple times in a month when they’ve already gotten sent out the prescription. So what we’ve done is we’ve contracted with over a thousand pharmacies nationwide where we go to them and say, if it’s not covered by insurance or the insurance is not covering it in full, the patient shall pay no more than $50 for the ADHD. And so what this does is ensures that the patient will get their their prescription and they’re happy excuse me.

It it ensures they don’t go back to the doctor and and have to try to change their prescription. And additionally, if there if there is a requirement for a prior authorization, we have a program that will help to facilitate that process in a more efficient way than the patient having to manage it with their doctor. So 85 percent of our prescriptions actually go through this program with these 1,000 pharmacies. So what that really means is that 15% is only going is going to the big box stores, your CVSs or your Walgreens. So we we feel that our our prescriptions are well protected because they’re they’re in kind of the either the local pharmacies or some of the larger grocery pharmacies.

And we see a more consistent prescription refill rate than we would at the big box stores. From a operational structure, we have our our own sales reps. We have about 40 sales reps across the country, primarily focused on the East Coast and Midwest with a few scattered on the on the West Coast. The key here is that these these sales reps focus on psychiatrists and general practitioners. Psychiatrists are key when it comes to ADHD and also to MDD, our new our new drug.

And so when we were first looking into Exua, we looked for the overlap of where our psychiatrists are currently calling on or where our sales reps are current currently calling on, and there’s about 60% overlap of MDD subscriber prescribers with our sales reps today. So pretty confident that they can throw this extra this additional product into their bag and hit the ground running. So moving on to the actual opportunity of Exua. So if you’re familiar with the MDD space, it is massive in The United States. It’s about 340,000,000 prescriptions a year.

So that’s basically a prescription for every person who lives in The United States, about a $22,000,000,000 market, significantly bigger than ADHD. To give you kinda comparable, ADHD is about a $7,000,000,000 market with about 90,000,000 prescriptions. So this this new product, Exua, with the drug name Gyperone, it it went through two well controlled studies. And the key with depression is all the drugs work fairly well, and this one does as well. The efficacy is just as well as every as everything else.

The key differentiator are the the side effects. So one of aspects of of many of the drugs out sexual dysfunction and weight change are the biggest complaints of patients in with MDD taking prescriptions. And this this drug has neither one. It is not in in the product information. It’s it’s it’s not anywhere to be found.

No sexual dysfunction or weight change, which is a key differentiator. And the reason for this is kind of the the novel mechanism of action that it attacks the five HT1A receptor, which is one receptor in your brain. Whereas a lot of the drugs that are out there, especially SSRIs and SNRIs like Prozac or Lexapro that you may be familiar with, they tend to affect affect a number of receptors, and and that causes the side effects. But this drug only affects the the five HT1A, which is the receptor that affects mood and emotion. So this is this is the key excitement for for this product.

We think we’ve talked to a lot of psychiatrists, they’re excited about trying something that doesn’t have the side effects. We talked about the patent coverage. And and additionally, a pricing standpoint in The US, the depression space is about three to four times the price of the ADHD space. So definitely high higher dollar values from that standpoint. As I mentioned, a large market.

One other key differentiator with MDD is there’s a lot of switching that goes on. So patients will start on a level one, which is like your Prozac or your Lexapro, and they’ll have the side effects, and then they’ll switch. So patients are constantly switching with MDD up to forty percent. And here you can see seventy percent of patients complain about sexual dysfunction, about sixty five percent complain about the weight gain. So this is a a primary point and discussion with their psychiatrist on a regular basis.

We’ve talked a little bit about again, this is the five h t one a receptor that we that we touch on. It it affects mood, emotion, pleasure. The five h t two a that I mentioned, that’s the that’s the aspect of sexual dysfunction. So it is it’s steering clear of that receptor, which is why there is no side effect there. From a clinical trial standpoint, we did two two eight week randomized double blind placebo controlled studies.

By week three, there was it was statistically significantly different from the placebo. So definitely operates well, and we’re excited for the opportunity to introduce this to the market. Here, just more facts about our clinical study. Only about seven percent of the patients discontinued treatment compared to three percent on placebo. Now all these drugs have some sort of side effect.

The the ones that ours do have is dizziness, which is kinda typically described as transient. It’s kind of like when you stand up from the chair too fast and you feel a little bit a little off. Usually, it lasts about thirty seconds to to a minute after taking the medication. And then nausea is is something our we do recommend that our product be taken with food, which is pretty standard for most depression products in the market. The nausea is the aspect that we are looking into to try to tweak the the drug maybe in the future to extend the patent life.

From a competition standpoint, the these are these are essentially our competitors. SSRIs and SNRIs represent about 60 of the market. As I said, they they’re level one. So they’re the first thing that psychiatrists will prescribe to to patients. Then they’ll move into the Wellbutrin’s bupropion.

And then really where where where our competitors will lie is with Trintellix or Ovelity. And I’ll show you some stats on on their revenue growth shortly. But as you can see, we’re we’re the only ones without the sexual dysfunction. And the SSRIs and SNRIs both have weight change problems. So we are weight neutral.

The numbers in like I said, in in depression are massive. So it doesn’t take hard it’s it’s not hard to kind of do the numbers and figure out how big this this can be. But our plan is really we’re we’re not gonna be a first line therapy. We’re not gonna be probably even a second line therapy. We’re we’re really gonna play more in the third or fourth line therapies.

But even if we took just a handful of of each of these lines of therapy, these numbers are significantly better than what our ADHD does today. To give you perspective, we do about 400,000 prescriptions of ADHD. It’s about 58,000,000. Even if we just did a 100,000 prescriptions of MDD, that would be $50,000,000 product right out of the gate. So pretty confident that we can grow this quite substantially.

And our competitors have proven that. So as you can see, Ovelity is probably the the best comparable to this product. They launched in the ’22 and have have just skyrocketed. They’ve just just because of the switching and it’s something new, physi psychiatrists are constantly looking for the next new product, and they’re willing to try anything. And and that proves out here with Validay and CAPLYTA.

Even SPRAVATO is an esketamine. It’s actually a nasal spray that you have to take in a physician’s office that that has seen tremendous growth. So new products tend to do really well in this space. From a market research standpoint, we’re covered by Lake Street from a financial analyst standpoint, but they performed a 20 person survey with psychiatrists, and all 20 said they would immediately prescribe, Exua. Additionally, we’ve engaged a third party to do an independent study of, another 20 psychiatrists, and 19 of the 20 said they absolutely would, prescribe.

So we’re getting a lot of really good feedback. Even our CEO, Josh Disbrow, went to Houston two months ago, met with about 15 psychiatrists and had really great reception. And most of the conversations led more towards the side effects than anything about the efficacy of the product. Like I mentioned, our coverage, our sales force is well aligned in psychiatry already. So this is gonna be a plug and play.

We don’t have to add more sales reps. We’re actually gonna keep our sales reps at the the 40 count to start with, and then we’ll grow from there. One thing from a coverage standpoint that is a little unique, the US government requires that depression prescriptions are covered by Medicaid and Medicare. It’s a little different than ADHD where where coverage is not is not covered coverage is not given there. So we expect that Medicare and Medicaid will be about 30% to 40% of our coverage, which tend to have pretty pretty good margins from a gross to net standpoint.

So pretty excited about the the change in that from that standpoint. From a promotion and go to market strategy, we’re this is not a go on TV, go to every sporting events, put up banners everywhere kind of plan. This is a very efficient direct to psychiatrist kind of marketing strategy, along with we hired a VP of scientific affairs to work on some publications with some key opinion leaders as well as set up some some speeches and talks. But that’s essentially the limit of kind of where the where the spend’s gonna go. We’re we’re really focused on getting in in front of psychiatrists and getting having them make the decision on how to prescribe because they we feel like that’s that’s where they’re best suited.

I’ve kinda touched on this ADHD side of things. But as you can see, you know, it’s a pretty stable business. You know, it it competes, with, like I said, with Adderall and Ritalin. We’re probably only about 0.6% of the market. So we’re not a massive company, but we think that these can fairly maintain while we grow the ExuA side of the business.

This, we do have some outlicensing. This hasn’t really gotten started yet, but in Israel and here in Canada, we’ve outlicensed our ADHD prescriptions or medication. They’re still going through the approval process with the FDA. So we do expect eventually to to see some revenue from that, but not for a little while now. From a financial standpoint, I already mentioned $66,000,000 You the improvement in the adjusted EBITDA over the course of the last five years.

Gross margins are about 69%. Even with Exua, they should probably be about 68%, 69%, so they’ll maintain. On the right here, you can see kind of the impact of all of our adjustments and transformations over the course of the year on our op from our OpEx standpoint. We’ve definitely slimmed down the business, focused on cash and and really driving what’s where where the value is. From a balance sheet standpoint, we sit on about $31,000,000 as of June.

We do have debt. We have about just under $13,000,000 in a term loan, and we have a revolving line of credit that gives us availability anywhere between 9,000,000 and $12,000,000 of availability. We’ve definitely cleaned up, I’d say, in the last year to eighteen months, have cleaned up the balance sheet quite a bit. We had some really high interest liabilities that are now completely off the books. So poised for this next phase in our transformation.

So overall, we think we’re well positioned from a specialty pharma side of things. Excited about this new drug launch. We have a great management team that has been with the company for a number of a number of years. Many of them have come from the company that we acquired for the ADHD medication, but a lot of experience in launching products. Josh Disbrow and his brother, twin brother, Jared Disbrow, have been with the company since it started.

They were with a they they had started another specialty just a specialty pharmaceutical company years ago, called Arbor Pharmaceuticals and, grew that to about 250,000,000 and sold that for about a billion dollars. So very successful team in place. I’m gonna skip to just from a cap table standpoint so you understand. We have about 9.9 millions of common shares outstanding. However, I will point you to we have prefunded warrants of about 9,200,000.0.

So I I tend to say, you know, call it 19,000,000 of, true outstanding common shares and 23,300,000.0 fully diluted. So we’re basically about a $50,000,000 market cap right now, so trading below our our revenue for a year. So we’ve definitely seen improvement in our stock price, but, you know, I think the the market is still waiting to see what Exuwa can do. But from a holding standpoint, our largest shareholder is a fund called Nantahala Capital. They also sit on our board.

They own about 24% fully diluted. Then we have another company called Stonepine out of Oregon. They own about 16% fully diluted. We have about five funds that will hold about 60% to 65% of our fully diluted shares, and they’re all long. So they they’re all they’re all in for the long haul on this MDD space.

So with that, I think I’ve covered everything. So if anyone has any questions, happy to take them. Yeah.

Unidentified speaker: Is would it tend to be monotherapy? Yes.

Unidentified speaker, CFO, Aytu BioPharma: Yes. It it the question is, is is it monotherapy? It it is intended to be monotherapy. What I will say, my and I’m not the science guy in the room, but my understanding is with psychiatrists, they constantly tinker with other drugs. So sometimes they’ll take a drug that’s meant to be monotherapy and kinda tack on some others.

But the the the idea is for it to be mono.

Unidentified speaker: And is the idea that it’s going to be for patients who didn’t tolerate SSRIs well, or that it’s gonna or they’re gonna trial it in patients that are treatment naive?

Unidentified speaker, CFO, Aytu BioPharma: It probably won’t be new patients just because insurance won’t cover it. Insurance so so the SSRIs and SNRIs tend or is a genericized market. So insurance will tend to cover those well before a brand. So you’ll have to you’ll have to step through SSRI and SNRI before you come to kind of the next level. That’s kind of that step therapy third line.

Unidentified speaker: Last question. Were the phase threes conducted in treatment naive or or in SSRI intolerant patients?

Unidentified speaker, CFO, Aytu BioPharma: That is actually a question I don’t know the answer to. Let me grab your information afterwards, and I apologize. I I don’t know that end.

Unidentified speaker: So it’s it’s not gonna be first line, second line, probably fourth line. You’ve got three years of sort of patent left. I’m still trying to look at the rationale for acquiring a drug when you’ve just such a short before you have to start planning for generic erosion.

Unidentified speaker, CFO, Aytu BioPharma: Yeah. It’s so five years is a long time for us, but it it will you don’t have to wait three years to get to for this. So this should this will be prescribed right away. So our goal is to basically drive this as fast as we can for the next three years, potentially look for ways to extend the patent life. If we can generate enough cash flow right now, our base business is cash flow neutral for the most part.

If we can generate enough cash flow, we’re constantly looking for the next drug. So so we we we’re just a business development shop. So we’re already talking with other other companies about licensing others other drugs in the CNS space. We just want the cash flow to be able to do that. So if we can generate $30.40 mill $50,000,000 of cash flow, we’re we’re now in a whole different subsegment of what we can actually license.

To give you perspective, this this drug, we licensed for $3,000,000 upfront, another $3,000,000 one year from launch. And then there are royalties, but it’s all success based. So pretty low kinda upfront relative to kinda other drugs out there. Okay. Excellent.

Well, thank you very much for your attention. Oh, sorry.

Unidentified speaker: Just looking at the chart. What happened in late September when the stock declined so much and then came right back?

Unidentified speaker, CFO, Aytu BioPharma: So I I’ll say we didn’t manage our we we have three new anal or two new analysts and and one that’s been with us. Two two two of the analysts started in June, they came out with numbers that were a bit aggressive for our June numbers. We we realized we did a poor job managing that, and so we didn’t hit the numbers that they had they had set. So you can Lake Street, Ascendiant Bank, and Maxim are the three that that cover us. You’ll see that since their their new reports have adjusted numbers, but I think that was the main reaction to kind of not hitting those numbers.

And but the reality is is our is our core business is is fairly steady. It’s really the future of Exua. So that’s kinda, I think, where people started coming back into the stock. Yep.

Unidentified speaker: So so you are CFO. Right? You are CFO. Right?

Unidentified speaker, CFO, Aytu BioPharma: As

Unidentified speaker: You are company CFO. Right?

Unidentified speaker, CFO, Aytu BioPharma: Oh, I’m the CFO. Yes. Sorry.

Unidentified speaker: So your CEO has been with a company for ten years. Right? So in the past ten years, your company lost a lot of money. Right?

Unidentified speaker, CFO, Aytu BioPharma: Yes.

Unidentified speaker: How can you let us believe next step will success Mhmm. Will be different from past ten years?

Unidentified speaker, CFO, Aytu BioPharma: Yep. And my my CEO, he’ll be here tomorrow. He will he will acknowledge the mistakes that he’s made over the last ten years. He started the business in 2015. Definitely a a humble guy considering that he’s he was successful in the past.

So he he he has had success in this industry. I think as he was as they were growing and and I’ve only been CFO for the last less than a year now. But, I think there was a lack of discipline on kind of trying to do too much and trying to chase revenue. You know, when when he first started the business, he was on the OTC stock exchange, and those those companies tend to chase revenue before profits, which which you sometimes you have to do, but that’s how we got into all these different businesses. And it just got it got way too diverse and way too spread out and just no path for profitability.

We’ve now streamlined. And so now, like I said, we’re we’re adjusted EBITDA 9,200,000, but, you know, cash flow basically breakeven, and, you know, this is now the future. So I think we’re a lot more disciplined than when we were in the future. And, you know, this is a bigger market than we’ve ever, you know, been in in the past. Good question, though.

Excellent. Thank you very much. Appreciate it.

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