Aytu BioPharma, Inc. (NASDAQ:AYTU) Q1 2024 Earnings Call Transcript

This is obviously a critical need. These are — and it is members of Congress, as well as now some of the government agencies that are obviously getting very frustrated with the fact that they don’t have access to these needed treatments. And so it’s cut into a point where it is of sort of national interest and has gotten to Capitol Hill. I’ve been fortunate enough to have conversations with some staff members, some various members of Congress, getting our perspective on various aspects as it relates to the shortages and things that we could potentially do. And look, I’m happy to say that we’re doing our part in producing every bit of Adzenys and Cotempla that we can and we are able to meet the demand. We’ve been very adept at going back and getting incremental quota.

It’s a very extensive process. There’s a high level of data scrutiny that the DEA applies. We’ve been able to obviously satisfy their request to demonstrate that the products are going into the retail or into our distribution network in terms of filling actual demand. And we’ll continue to do that, demonstrate that demand is increasing. Obviously the need for additional API quota increases along with that. Again, we’ve been successful in being able to consistently increase our supply and get more quota for the DEA. But again, it doesn’t seem to be lighting up anytime soon, which we expect to be to our benefit as we’re able to step in and fill some of these gaps.

Naz Rahman: Thanks for the thoughtful and comprehensive response on that one. And just one last question on the ADHD business. Have you seen a material impact in the generic [indiscernible] entrance or do you think it could materially impact Aytu going forward?

Josh Disbrow: That’s a good question, Nas, and not really. I mean, obviously it is a stimulant and it was the leading brand until such time as it went off patent. And we are certainly seeing a material impact from those generics, but it’s of course cannibalizing that [indiscernible] business. And might it present an opportunity for us? It could in similar ways as the Adderall generics. They sort of create confusion within the channel, patients get switched from one generic to another, there may be sort of PBM impacts in terms of which one is contracted versus which one is not. So there could be some noise sort of around that. Anything that sort of comes from that would be upside, not necessarily anything that we specifically model in terms of us being able to take advantage or take some of that share.

What it does sort of further emphasize though is just the overall issue that exists in the ADHD category, which is there’s inherent variability across multiple perspectives. There may be clinical response variability if you’re talking about one generic versus another, specifically as it relates to mixed salts or Adderall generics. But there’s also variability in the context of, what they’re going to pay at the pharmacy counter. And so irrespective of sort of what goes generic and when, the inherent variability in terms of just patient experience, in terms of what they’re going to get, how much of it they can get, whether they can actually get it filled this month or they have to wait, several days or even weeks to track it down somewhere across town.

And when they get it, how much they’re going to pay for it. And ultimately, when they’re taking it, how they’re going to feel. Because if you are taking one generic versus another, patients and physicians sort of universally acknowledge that the responses might be different. And so it is just another example of why you need something like RxConnect, why you want to have a brand prescribed because of the inherent predictability that all of that affords these patients. So we’re keeping an eye on the [indiscernible] situation and ultimately we’re going to win out by virtue of the fact that all of these products have their own sort of challenges, whether they be clinical, economic, or both.

Naz Rahman: Got it. Thank you. Thanks for answering my questions and congrats on the progress.

Josh Disbrow: Thanks, Nas.

Operator: [Operator Instructions]

Robert Blum: Operator, while you’re polling I’m going to just jump in and I’ll ask Josh a question or two. Say Josh, obviously you showed some very strong ADHD script growth this quarter again. How much of the 28% script growth do you think is category growth versus market share gains?

Josh Disbrow: It’s a good chunk of sort of share growth, particularly — and it depends on the month because the market grows at different rates throughout the year and actually declines during the summer, as folks likely know. But there’s a good chunk of our prescription growth that is coming from gobbling up patients that otherwise would have been on Adderall XR or other stimulants, and you see some of that with Cotempla as well. And so, but even if we just kept up with category growth, that’s sizable. These prescription categories continue to demonstrate strong year-over-year growth. It’s not the growth that we saw, say, coming out of the pandemic, but this category has consistently grown as obviously the diagnoses of ADHD continue to go up.