Earnings call: Aytu BioPharma reports record revenues and plans to focus on Rx segment

Aytu BioPharma announced its fiscal 2023 Q4 and full-year financial results, achieving record annual revenues of $107.4 million and a gross margin of 62%. The company also reported positive adjusted EBITDA for both the quarter and the full fiscal year. Aytu BioPharma plans to wind down its Consumer Health segment and focus exclusively on its Rx segment, which includes ADHD products and pediatric multivitamins. The company expects further growth and improved profitability in fiscal 2024.

Key takeaways from the call include:

• The company’s Rx segment, including ADHD products and pediatric multivitamins, is the core business going forward.
• Aytu BioPharma has benefited from ongoing stimulant shortages in the ADHD market, resulting in increased prescriptions and market share.
• The company plans to wind down its Consumer Health segment and expects operations to end by the end of fiscal 2024.
• Aytu BioPharma is implementing initiatives to improve profitability through outsourced manufacturing and expects margin improvements for ADHD brands in 2024.
• The company is launching a multivitamin line extension with the novel folic acid ingredient, Arcofolin.
• Aytu BioPharma submitted the Cotempla Prior Approval Supplement (PAS) to the FDA, with expected approval by late 2023 or early 2024.

For the full year, the company’s net revenue increased 11% to $107.4 million, with net revenue from the Rx segment increasing by 21%. The ADHD portfolio experienced a 9% increase in revenue, while the pediatric portfolio net revenue increased by 58%. The company closed a $4 million public offering and has $23 million in cash and cash equivalents.

According to InvestingPro data, Aytu BioPharma has a market capitalization of 14.57M USD and a negative P/E Ratio of -0.51. The company has seen a significant return over the last week with a 72.26% increase in its stock price. Despite its recent success, the company has struggled over the past decade, with its price falling significantly over the last five years.

During the earnings call, Aytu BioPharma executives expressed confidence in the company’s financial performance and growth prospects. They stated that gross-to-net figures for the two ADHD products have stabilized and improved. The company is also in the process of completing the audit for their 10-K filing and expects to file it in the week of October 1st.

The company plans to focus on its Rx products and is optimistic about fiscal 2024. Yet, they anticipate a growing concern opinion in their upcoming 10-K due to the need to refinance the Avenue debt. Aytu BioPharma (NASDAQ:AYTU) believes they have sufficient cash and borrowing capacity to fund operations.

InvestingPro Tips suggest that Aytu BioPharma’s stock is currently in overbought territory and that revenue growth has been slowing down recently. Analysts do not anticipate the company will be profitable this year, and it has not been profitable over the last twelve months. Despite these challenges, the company’s stock is trading at a low revenue valuation multiple, suggesting potential for growth. For more insights like these, consider checking out InvestingPro’s premium features.

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