Aytu BioPharma, Inc.

Greetings. Welcome to the A2 Biopharma to report fiscal 2025 full year and fourth quarter and operational and financial results on September 23, 2025 conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. Please note, this conference is being recorded. I will now turn the conference over to your host, Robert Bloom, with Latham Partners. You may begin.

All right. Thank you very much, and good afternoon, everyone. As the operator indicated during today's call, we will be discussing A2 Biopharma's fiscal 2025 full-year program, and fourth quarter operational and financial results is for the period ended June 30th, 2025. Joining us on today's call is A2'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 telephone numbers and conference ID provided. in the press release issued earlier today or by utilizing the link on the company's website under Events and Presentations. Finally, I'd also like to call to your attention the customary safe harbor disclosure regarding forward-looking information. The conference call today will contain certain forward-looking statements, including statements regarding the goals, strategies, beliefs, expectations, and future potential operating results of A2 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. Action 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. A2 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 A2 Biopharma. Josh, please proceed.

Thank you, Robert, and welcome, everyone. This is an extremely exciting time for A2, given the strong financial performance during the recent fiscal year, and perhaps more importantly, the upcoming launch of Exua, which we believe significantly transforms A2 for years to come. At a high level, fiscal year 2025, which as a reminder, we have a June 30 year end, saw stability within our existing ADHD and pediatric portfolios, as well as our focus on driving efficiencies across our operations to report our ninth consecutive quarter and third consecutive year of positive adjusted EBITDA. For the year, net revenue was $66.4 million, which was a slight increase from the previous year. On the adjusted EBITDA line, we came in at $9.2 million. Again, this is now three consecutive years of positive adjusted EBITDA as we really pivoted this company the past few years to focus on a prescription pharmaceutical business while we halted our development efforts, wound down and sold our consumer health business, and outsourced our ADHD manufacturing to a U.S.-based CMO. It should not be overstated how different we look today from just a few years ago. I give tremendous credit to the entire team for their efforts to unlock value in A2 and thank them for all they're doing to put us in this strong position. With all the heavy lifting completed over the last few years, we positioned ourselves to build upon the uniqueness of our Salesforce's psychiatry focus and alignment with the proprietary A2 RS Connect patient access platform to begin the next stage of focus, product acquisitions which can align with our psychiatry focus. To that end, in June of this year, we announced what we believe is a truly transformational opportunity for A2 by signing an exclusive agreement to commercialize Exua in the United States. With Exua, we are bringing to market a novel first-in-class treatment for major depressive disorder, or MDD, in over $2 billion U.S. market. The key word here is novel. Exua is not an SSRI, nor is it an SNRI. It does not inhibit neurotransmitter reuptake. It is in a new class of MDD treatment as a 5-HT1A receptor agonist. It is a partial agonist of the 5-HT1A receptor, and it's long-acting. By upregulating the 5-HT1 receptor, Exua uniquely targets a receptor chiefly implicated in mood, notably depression and anxiety. Because Exua targets this specific receptor so selectively, it does not carry the same risk of sexual dysfunction and doesn't cause weight changes when compared to placebo. which the SSRIs and SNRIs routinely do. As it relates specifically to sexual function, not only does it not cause sexual-related side effects such as low libido, ejaculatory delay, and erectile dysfunction, recently published work actually shows actual improved sexual function and desire in depressed patients. And while that isn't an approved claim, we will specifically make with clinicians that data is peer-reviewed and published and in the public domain. So while SSRIs and NRIs are generally effective for some patients in treating MDD, the problems associated from a side effect perspective, particularly as it relates to sexual dysfunction and weight gain, commonly lead to patient dissatisfaction with treatment. As you can imagine, these side effects are many times simply untenable for patients already struggling with their mental health, and thus many patients stop these treatments altogether or seek alternatives. Thus, we believe a significant market need exists for targeted and specific therapies minimizing off-target effects and adverse events such as sexual side effects and weight gain while effectively treating the symptoms of MDD. This is key to the market positioning for Exua. As I mentioned, this is an over $22 billion market in the U.S. with over 340 million prescriptions written annually in the U.S. for antidepressants. SSRIs and SNRIs represent approximately 220 million TRXs or over 60% of all antidepressants prescribed. While the category is largely genericized, there are numerous branded products that have entered the market relatively recently, including newer antidepressants like Trintelix, Albelity, and Spravato. These products have received strong physician uptake despite having some of the same side effects older products present, particularly Trintelix and Albelity. Both products list adverse events, specifically including sexual dysfunction, among others, so we view Exua as having a potentially favorable profile compared to those two, given its unique MOA and high receptor selectivity and lack of sexual dysfunction. Further, as it relates to alveolity, that's dosed twice daily, so Exua's once-daily dosing may offer a benefit in terms of patient convenience and compliance. Trintelix, a product that generated over 2 million prescriptions in calendar 24, has an exceedingly high rate of sexual side effects, 29 to 34% at the highest approved doses in men and women, respectively. Sexual dysfunction is actually listed as a warning for Trintelix. So this is a very real problem with this product. So frankly, even if Exua was only the recipient of Trintelix failures or dissatisfied patients, that would make Exua a significant success for us. All this said, we obviously won't just target just one or two of those products' failures, as there are many millions more prescriptions to pull from across the spectrum of approved MBD treatments, particularly the SSRIs and SNRIs that dominate the MBD market, despite their shortcomings. Needless to say, our expectations for Exua are high, as we believe we can help patients that are dissatisfied or are dealing with side effects with current treatment options. And there are many, based on our market research and conversations with the psychiatry community. So let's turn to our key Exua launch activities that are underway. Since completing the transaction in June, we've been working rapidly to bring the product to market. As a reminder, Exua is already FDA approved. We are currently finalizing product manufacturing, packaging, validation, labeling, serialization, and delivery to our third-party logistics provider. This is the biggest gating factor at the moment with the current expectation that we will have product available by the end of the calendar year. On the medical affairs front, we have brought on Dr. Gerwin Westfield as our Senior Vice President of Scientific Affairs. Dr. Westfield is a distinguished leader in the medical and pharmaceutical fields whose work has contributed to a Nobel Prize. Dr. Westfield previously worked with us at A2 from 2015 to 2021 as our Director of Medical Affairs. Led by Dr. Westfield, we were focused on broadening Exua's clinical profile via peer-reviewed publications and key opinion leader engagement, as you need to do with any successful product launch. With this, we expect to employ an active education, publication, and presentation approach, highlighting actual sexual function and anxiety data in conjunction, of course, with the product's depression efficacy data and safety data over the thousands of patients studied. On the sales front, we have refined our sales territory alignment and physician targeting. It's important to note that our existing psychiatry-centric 40-plus person sales force will make actual their primary promotional responsibility going forward. Our sales team already overlaps with a significant majority of targeted writers in our current geography. And thus, this really is a plug and play opportunity, enabling us to efficiently launch with only a slightly modified footprint. And we'll be specifically aligned to high branded antidepressant prescribing psychiatrists and psychiatrists aligned nurse practitioners and PAs. So we don't intend to significantly expand the sales team initially. But realignment of territories is now essentially complete to ensure maximum reach while also aligning with where market access is expected to be strongest and, of course, prescribing potential is expected to be the highest. I'll remind you that for government payers, major depressive disorder has nearly universal coverage as this condition is a federally mandated protected class where MDD prescriptions must be covered. And importantly, the government pay segment represents approximately 30 plus percent of the MDD covered lives depending on the geography. So with 30 or even 40 percent of the antidepressant category depending on geography covered by virtue of this protected status, We are, of course, aligning sales territories appropriately to ensure optimal patient access with respect to both government and commercial payers. As it relates to the branding and promotional aspect, we continue to work internally and with our agency to optimize product positioning and messaging, prepare promotional materials, and refine our overall platform around Exua from a commercial perspective. We plan to implement a comprehensive promotional program whereby we establish a clear positioning for Exua based on its attributes, the competitive landscape, and ultimately where we believe we can win with this product. You'll see more on this in the months ahead as we formally make Exua commercially available and launch Exua through our sales force. From a payer and distribution perspective, we do plan to integrate Exua into our A2RX Connect access platform. We expect to drive distribution through and dispensing from our RxConnect network pharmacies, as we do now with our ADHD portfolio. This will enable us to gain strong insights on reimbursement and coverage rates to help guide selective and smart payer contract we will consider. As you know, with our current products, we're able to successfully navigate the payer landscape, even in a category like ADHD, for which brand reimbursement is spotty at best. And we've always been very judicious and selective in payer contracting. We will take contracting and rebating on a case-by-case basis as we do now, but our single biggest objective around reimbursement with Exua will be to minimize coverage barriers and to help get patients successfully on therapy. The payer landscape in MDD is materially better than in ADHD based on the class's protected status and other factors, so we're anticipating materially higher net pricing and better overall coverage and reimbursement rates. More to follow on pricing and reimbursement as this piece unfolds and as we get closer to and into the Exua launch. Finalization of manufacturing is the gating factor to launch, but today we feel comfortable that we are on track to have Exua available at the end of the calendar year. While efforts in the near future are on the Exua launch, a question that frequently comes up is around opportunities to efficiently extend Exua's life cycle, whether that's through considering the pursuit of additional intellectual property or exploring alternate formulations or one of Jeff Grone's active metabolites. As a reminder, Exua's IP will extend to late 2030 or early 31 through a combination of patent term extension being worked on through along with the new chemical entity designation granted by the FDA. So as we think about it, this is a nice runway already from a patent or exclusivity perspective. Of course, there can be no guarantee we'll be able to execute on extensions to this late 30, early 31 timeline, but we're having early discussions with prospective partners on ways that we believe those could be accomplished to make an already attractive opportunity for A2, potentially even more so if we do, in fact, extend the IP. Our entire team is beyond thrilled to get things rolling on all things Exuo. As I said at the beginning, for us, the actual opportunity is quite simply transformational, and we look forward to executing on this opportunity in the quarters and years to come. Before I turn it over to Ryan to review the financials in more detail, just a few comments on our ADHD portfolio. As most of you know, there's been a long since negotiated paragraph four settlement agreement with Teva, whereby Nios allowed them to enter the market with a generic to Adzenis on September 1st, 2025. As we sit here today, three weeks into September, they have activated their ANDA in the Orange Book and thus have signaled their intent to at some point enter the market, but they have yet to officially launch. Importantly, we have also launched an authorized generic of Adzenis. In fact, we launched it on September 2nd, and this product's early trajectory in the early weeks is very encouraging, to say the least. This AG will serve as an important offensive tool, and we believe helping us maintain a material share of the Adzenis market irrespective of Teva's potential entry by having a truly equivalent product available that is now being sold as a generic. Through the first few weeks of the month of September, we have not seen any impact on script trends to our overall ADHD portfolio by virtue of the fact, as I just mentioned, Teva has not yet entered. So, of course, we're pleased with that. This may, of course, change in the future if and when Teva does enter the market. But I believe it bears reminding that we have optimism that the impact on our business will be far less than under normal circumstances when prescription brands are sold through broad retail distribution, including the large national retail pharmacy chains. There are a few reasons behind this that I always like to point out. First, approximately 85% of our ADHD scripts go through our RxConnect platform. This is important as we have very tight controls and highly specific insights into the vast majority of prescriptions running through the platform. We see the planned coverage and reimbursement rates realized by the pharmacies and ultimately the dispensing pharmacies margin on the scripts they dispense. And again, by virtue of how we manage this highly integrated system of analytics, business rules, and algorithms, we ensure margin any time a pharmacy is dispensing our brand and now our AG. Through our systems, we're able to price match or better in the face of in the face of pharmacies having an alternative option to dispense. This is critical as we look at blunting potential erosion from an ANDA. Second, the ADHD category is already a highly genericized market with minimal switching. Opportunities have existed for many years to prescribe and fill alternatives, yet we've held a consistent, albeit small, share of the market with both Adzenus and Cotempla. Importantly, Prescribers do prefer brands in the ADHD category, given the reliability and the consistency from a PK perspective. So with our brands having this unique copay backstop, we offer a commercially insured patients of paying no more than $50 out of pocket. We've been able to carve out a solid niche and a sea of cheap generics. Third, The gross-to-nets on our ADHD portfolio are already below what industry observers might expect when generics typically enter the market. This is to say that the substitution impact and transition to a generic market is not as high as you might see in other similar circumstances. While we don't publish our gross-to-nets, we do generally communicate that our net selling prices for both Azenis and Cotempla are materially lower than what industry observers associate with typical Rx brands. So the potential for price erosion beyond our current net selling price per unit is also materially lower. That said, we don't yet know what and how Teva will approach pricing or contracting. There are several other interrelated factors at play as well to give us comfort that the Adzenis franchise has good market share protections in place, but the three I just covered are really the key ones. More to follow if and when Teva enters, but for now, it remains business as usual for A2. One other small detail, every year we pay an annual what's called a PDUFA fee to the FDA of about $2 million for Adzenis. This is a standard fee all branded manufacturers pay, and the fee goes up for each SKU the product has. Importantly, by law, when an AB-rated generic is activated in the Orange Book, that fee goes away. So this savings, which by the way is within our COGS line, will offset some initial impact we might see. Additionally, starting in late fiscal 26, and then really as we start to get into fiscal 27 and beyond, we expect further COGS reductions through improvements in packaging configurations. So once we've fully moved both ADHD brands to a more compact and efficient packaging setup, we expect to realize additional savings, which we'll talk to you as we get closer to that implementation. That said, we expect those COGS improvements to be material if we maintain current volumes. Look, we know time will tell as it relates to the impact we might see within our ADHD portfolio from generics, and I don't want to come out and say we expect no impact. But again, given the uniqueness of RxConnect and the various other factors we've discussed, we don't believe this will be as much of an impact as what might be seen in other situations where products are distributed in the more traditional way. With that, let me turn the call over to Ryan to go into detail on the financials, and I'll make a few closing comments, and then we'll look to address any questions you might have. Ryan?