Aytu BioPharma, Inc.

Greetings. Welcome to the A2 BioPharma Fiscal 2026 Full Year and Q4 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two 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 Lithum Partners. You may begin.

All right, thank you and good afternoon, everyone. As the operator indicated during today's call, we will be discussing A2 BioPharma's fiscal 2026 fourth quarter and full year operational and financial results for the period ended June 30th, 2026. 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. 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 findings with the SEC. A2 undertakes no obligation to update or revise any of these forward-looking statements except as required by law. With that said, let me turn the call over to Josh Disbrow, Chief Executive Officer of A2 BioPharma. Josh, please proceed.

Thanks, Robert, and welcome, everyone. I'm very excited about the progress we're making and the opportunity ahead for A2. We finished fiscal 2026 with an encouraging fourth quarter. As Actua continued to build, our ADHD business performed better than anticipated, and A2 returned to positive adjusted EBITDA. Actua gives us something special to build around. It's the first and only selective serotonin 5-HT1A receptor agonist approved by the FDA for the treatment of major depressive disorder in adults. Its novel mechanism and differentiated tolerability profile address an important need in a category where many patients struggle to find a treatment that works well for them and that they can stay on. As a reminder, the opportunity is substantial. An estimated 21 million Americans are affected by MDD, and the U.S. prescription MDD market exceeds 22 billion. Even a modest foothold in a market of that size would be meaningful for A2. We strongly believe Exua has the potential to become an important treatment option and a major growth driver for our company. It's one thing to have had excitement before a launch occurs, but what makes this especially exciting is that we are now seeing that opportunity begin to take shape in clinical practice. Physicians are gaining experience, patients are continuing treatment, and our prescription base is expanding. These early results reinforce our conviction in Exua and give us a strong reason to keep building, with the same focus on execution and financial discipline. As we have discussed for some time, our approach to Exua is methodical. We are building the business with a clear focus on productivity, the return on our commercial investment, and preserving cash. As we have communicated, this was never going to be an oversized, quote, spend at all costs, boom or bust type of launch. This quarter gives us meaningful evidence that our approach is working. Today, let me spend most of my prepared remarks discussing the Exua execution, including what we're seeing in the field and the decisions we are making as the launch develops. I'll also spend a little more time on ADHD because the notable durability of that business certainly deserves attention. Ryan will then cover our financial results and our fiscal 2027 outlook. Exua generated $3.9 million of net revenue in the fourth quarter, up from $2.4 million in the third quarter, bringing its fiscal 26 contribution to $6.6 million. As a reminder, our formal launch only occurred at the beginning of January and broader field deployment in late February and early March. We remain early in building physician awareness and experience with Exua having only just completed our first full quarter of launch. During the June quarter, total prescriptions were 3,323 compared with 1,398 in the March quarter. The monthly progression was 973 prescriptions in April, 1,089 in May, and 1,261 in June. As we entered fiscal 27, July increased further to 1,377. August was up at 1,408 prescriptions. Importantly, ectua grew from July to August despite the overall MDD market declining. That is meaningful progress as more physicians begin using ectua and patients move from initial treatment into refills. One item I think is important to understand as we look at the trajectory in the early going is that we have consistently said we would manage this launch methodically, and that includes expecting a high-performing sales organization and holding that sales organization accountable for performance. Where representatives have not been performing at high levels or at the high levels we need, we have made adjustments in real time. As a result, we have seen ebbs and flows in the number of sales individuals on a month-by-month basis. Importantly, several of those changes occurred during June and July and our field force reached a low of 32 representatives in July. That was down from 43 reps at the end of March. This was intentional as we were demanding high performance across the sales organization. Standards have been set and will be upheld and will remain disciplined with our capital deployment throughout the launch. Those changes temporarily reduced our coverage while we worked to fill territories and optimize the profile of our sales specialist position. Since that low, we brought the sales force back to approximately 42 representatives, and we continue to fill open positions. We're also adjusting territory coverage based on what we're learning, adding resources where the opportunity supports them, and combining sales specialist coverage where that makes better economic sense. One of the key metrics we're watching is weekly and monthly prescriptions per sales rep. Using month ed field force headcount as a directional measure, in March, we had 761 prescriptions and 43 sales specials, or about 18 prescriptions per sales rep per month. In July, we had 1,377 prescriptions and 32 representatives, or approximately 43 prescriptions per rep for the month. That's more than a twofold increase in prescriptions per rep, with total monthly prescriptions also increasing 81% over that period. We're continuing to be proactive and fine tuning the team, but we view that as an encouraging measure of the productivity of our commercial effort. To add some additional color on rep performance, which is clearly going to be the key driver of our success with Exua, consider some other numbers. If you look at our current active sales specialists, the top 10 are averaging almost 15 prescriptions per week. The top five are averaging 18 and a half prescriptions per week. But importantly, as I share these numbers, I should note that we are not top heavy with respect to the percentage of territories driving the majority of the actual prescriptions. In fact, 24 territories, or approximately 60% of the current sales force, are driving 70% of the actual prescriptions, demonstrating very good breadth across many geography and across many sales specialists. So that gives us great confidence in knowing that we have a product that is being and can be broadly adopted and broadly sold. To see what actual weekly scripts could be in the relative near term, as some of our newer sales specialists we've on board have come up the curve, consider what a weekly run rate looks like by simply having 45 territories at the weekly script rate of the top 5 or 10 territories. By simply generating 15 prescriptions per rep per week, that gets us to 675 TRXs per week. and at the current selling price, that's already a $26 million annual run rate if you were to simply dollarize TRXs for ease of math. Taking that weekly rep average to 20 TRXs per week, which again, five territories are already averaging that plus or minus, and then you're looking at 900 TRXs weekly or about a $35 million run rate annually. And then at 30 TRXs per rep per week, again, a weekly number achieved by multiple reps already That takes the annual run rate to over $50 million, again, by simply dollarizing prescriptions. So with a refined sales team that will be getting us to 40 plus and more likely closer to 45 territories, you can see why we're excited about a significant lift of script levels in the relative near term. And speaking of near term, and this is happening really before any of the newly hired reps are even up the curve, we're seeing Exua take that next leg up. For the week ending September 4th, just before Labor Day, we generated 394 prescriptions, a significant jump from July and August levels. Again, when the newly onboarded folks get their feet under them, we're excited to see what the script trends look like. Growing refill activity is also part of the picture, alongside the work our representatives are doing to develop prescribing relationships. We look at this measure together with total prescriptions, new and repeat prescribers, and the economics of the business as we decide where to put the next dollar of investment. This is what we mean by a methodical launch. We are using the data to make staffing and spending decisions, learning from the territories that are performing well, and addressing the ones that need improvement. We believe that's how we build a commercial organization that can support Exua over time while maintaining the financial discipline we've worked hard to establish. Perhaps most importantly, the feedback from physicians who are gaining experience with Exua remains highly encouraging. In our latest launch-to-date update, nearly 1,200 unique prescribers had written Exua, and nearly 2,500 unique patients had received it. We're seeing repeat prescribing from physicians who are developing a broader base of experience with the product, along with encouraging feedback on patient response and on patient tolerability. At the same time, many physicians in that prescriber base have only used Exua with one or two patients. Of course, we know it takes time for a physician to identify appropriate patients and then assess their experience and then ultimately become comfortable using a new medicine more broadly. That process develops over time. Our opportunity is to deepen utilization among those early adopters while continuing to introduce Exuo to additional prescribers. We remain very encouraged by the response from physicians who are moving beyond their first few patients and continuing to prescribe. And it's precisely those prescribers who have written Exuo for a handful or more patients that are most impressed with the results. We continue to hear that across the country, and of course, that gives us great confidence in the product. Access also continues to support the launch. Reimbursement approval rates remain encouraging, and we are seeing a growing contribution from Medicaid and Medicare alongside the commercial business. RxConnect remains an important part of helping patients initiate and continue treatment and helping prescribers and their practices navigate access. Ryan will touch on this a bit, but growth to nets are significantly higher than our initial expectations. As we move into fiscal 27, we will continue investing in Exua sales and marketing and in the medical and scientific education that supports physician understanding of the product. We will continue assessing the results and directing resources toward the activities that are producing the strongest return. Our fourth quarter results are an encouraging indication of what this model can deliver. We grew Exua revenue, benefited from the continued contribution of our legacy products, and generated positive EBITDA at the company level while keeping cash relatively stable. Profitability and cash preservation remain central to how we're managing the launch. Of course, there will continue to be variability in quarterly results as we invest and as the business moves through its normal seasonal patterns. Again, Ryan will walk through that in more detail. Our objective, however, remains to build a durable, profitable actual business on the platform we already have with commercial spending tied to strong ROIs. Turning to ADHD. ADHD. The portfolio performed better than anticipated in the fourth quarter. Net revenue was $10.4 million compared to $9.1 million in the March quarter and $13.1 million in the fourth quarter prior year. For Adzenis, our brand and authorized generic together continue to retain approximately 80% of the prescriptions in the market for Adzenis and its generic equivalents. We believe this speaks to the durability of the franchise and the value of the RxConnect model, even with substantially less commercial support behind the brand. We also have our Cotempla authorized generic in the market, and it's gaining prescriptions week over week. As of today, Teva has not yet launched its generic version of Cotempla following the July 1 date permitted under our settlement agreement with Teva, presenting potential upside to our base case assumptions around Cotempla's revenue run rate. As always, ADHD has normal seasonality, with the earlier part of the first half of our first school year typically softer due to kids being out of school. The fourth quarter performance, however, reinforces our confidence in the value this portfolio brings to A2. It remains an important source of profit and cash to support our investment in Exua. Rounding out the legacy business, our pediatric portfolio generated $1.8 million of net revenue in the fourth quarter compared to $0.9 million in the March quarter and $2 million in the prior year quarter. These are mature products that we continue to service efficiently, and while smaller, pediatrics does remain a useful and durable contributor to the legacy business and the financial foundation supporting Exua. Overall, we are highly encouraged by the progress in Exua and the durability of our legacy business. Our focus remains on execution, profitability, and preserving cash. With that, let me turn the call over to Ryan for financial results in fiscal 2027 outlook. Ryan?