All right. Hello, everyone. Welcome to the Aytu BioPharma fireside chat. Again, my name is Robert Blum, Managing Partner at Lithium Partners. In addition to being joined by Josh Disbrow, Chief Executive Officer of Aytu BioPharma, we're also joined by Thomas Flatten, Senior Research Analyst with Lake Street Capital Markets, who will be moderating the fireside chat today. As a reminder, AYTU trades under the ticker symbol AYTU on the Nasdaq. Thank you both so much for your participation today. Thomas, I'll go ahead and turn it over to you to get started.
Excellent. Thank you, Robert. And Josh, thanks for joining us. Just for everybody's full disclosure, I'm going to admit that we're taping this ahead of time because when the fireside actually does air, Josh, you'll be in the middle of your national sales meeting to support the launch of the, or in the middle of the Exxua launch, and certainly an exciting event in the evolution of Aytu. So maybe we should just start with Exxua. Maybe you can share with us a little bit about how you came across the asset, how the deal came together to start.
Yeah. And thanks to you, Thomas, and the Lake Street folks, as well as Robert and the Lithium team for having us. It was really exciting how we came across Exxua. In fact, it was at the JPMorgan Healthcare Conference last year, so just about a year ago to the day, when we came across Exxua through some business development contacts, and immediately were attracted to the fact that it just was a perfect fit. Obviously, being an antidepressant fit perfectly into psychiatry, which, of course, we call on today. And ultimately, how it came to be was they were seeking a true partner, a partner with whom they could have a seat at the table, a partner with whom they could interact frequently, they being Fabre-Kramer Pharmaceuticals, the company that we license rights from.
And so really, from the very beginning, we established that this would be a partnership and a win-win from both an economics perspective, as well as from how we would approach it strategically, how we would think about resourcing it. And both of us being small companies, very action-oriented and very oriented around getting things done quickly, it was really a perfect match. And of course, we were excited to announce it.
It was obviously very well received by the market. And really, since that time, the middle of last year calendar all the way through today, it has been a full sprint and excited to really be at the launching pad right now. So it's just an absolutely perfect time for us, perfect fit and opportunity we view as unlike any other that we think could possibly be before us. So looking forward to launching it, and we're in that phase now.
That's great. And as you mentioned, Exxua is an antidepressant. And as most of the viewers and listeners will know, there's a lot of antidepressants on the market. So maybe if it's possible, just to briefly explain how Exxua differentiates itself from all the others that are out there?
Yeah, you're exactly right. And so one thing that's important to note about the antidepressant market is it is very large, first and foremost, in that there's over 345 million prescriptions written annually in the U.S. It's dominated by SSRIs, selective serotonin reuptake inhibitors, and SNRIs, selective serotonin norepinephrine reuptake inhibitors. That's essentially the standards of care and has been for the better part of a generation. And they're problematic in that they're pan-selective. They essentially bathe the brain in serotonin and/or serotonin and norepinephrine. And with that, you get untoward side effects, most notably sexual side effects, and you get weight gain, and you get some other things. Sometimes you get some anxiety with some of the atypicals. And so how does Exxua differentiate itself? It's truly unique in that it is not an SSRI or an SNRI. It does not bathe the brain in serotonin or norepinephrine.
It is very selective, very targeted in that it specifically targets and agonizes or upregulates the 5-HT1A serotonin receptors. So it's really that single receptor that is activated to enable the antidepressant activity by releasing serotonin into the brain. And so by not bathing the brain in serotonin, you're alleviating a lot of those side effects, such as treatment-emergent sexual dysfunction in the form of ejaculatory delay, low libido, blunting of overall sort of sexual interest, erectile dysfunction, and the list goes on.
And it avoids weight gain, which is potentially as or maybe even more problematic than treatment-emergent sexual side effects. And it's also not associated with any increase in anxiety, which some of the newer drugs are. And so it is different. It's quite distinct. It is truly unique. And it is the first and only 5-HT1A agonist indicated for major depressive disorder. That's really something special in a market that is, again, characterized by 340+ million prescriptions annually in the U.S. Yeah, it's quite different.
Excellent. One of the things you hinted at when you were describing how the deal came together was that it was a product that would be in the psychiatry space. And obviously, you have a great synergy in that you're able to take advantage of an existing commercial infrastructure that you have in the psych space. I was wondering if you could just give us a quick overview of what that commercial infrastructure looks like?
Yeah, absolutely. So exactly right. We already have a sales force here in the U.S. Today, it stands at about 44 sales representatives. It sort of varies between 40 and 45 or so, already aligned to psychiatry. We've been selling in the psychiatric space for, well, really since we acquired Neos Therapeutics in 2021, in that we have ADHD medications. And so we've been selling in Adzenis and Cotempla, two of our core brands since that acquisition, and so are naturally aligned there. And along with the infrastructure, we've had various other resources, inclusive of telesales and virtual sales reps. And so we're fully aligned to these depression targets. We were already in psychiatry. And ultimately, this was hand in glove, really just a matter of training reps on the disease state, potentially some new relationships here and there, which we'll talk about.
But generally speaking, it was a just add water scenario. And on top of the sales force, already had the full infrastructure, inclusive of a really phenomenal first-in-class patient access program, which we can talk about, all the supporting accoutrements, inclusive of marketing and sales training and channel access and distribution, and the list goes on. And so again, this was perfect in that we have the infrastructure. We have brands that are, frankly, mature and sort of in their twilight years. We think they have good longevity, but not a lot of growth potential. And so this was just absolutely perfect to put this infrastructure against this novel, really unique asset in this huge market that, frankly, dwarfs the ADHD market when you look at market potential.
So even though you're in the psych space, shifting from ADHD being your focus to depression, did you have to make any changes to the commercial team, or I should maybe be more specifically say the field team to prepare for the Exxua launch?
Yeah, a little bit. I would say if you had to put a number on it, we were 60%-70% aligned to these targets. So we were in a good spot. And so really, if you look at what we've done, I mentioned sort of the full sprint that we've been in since essentially the middle of the year, really now fully aligned 100% to these high-prescribing major depressive disorder psychiatrists. And I will emphasize, it's psychiatry only. We're going to be laser-focused. We're going to be very efficient. And we are going after psychiatric practices, so that psychiatrists themselves and their nurse practitioner and physician assistant colleagues. So I can say as of really the middle of last month, when we announced commercial availability of Exxua, our sales force is 100% aligned to those high-prescribing physicians.
What's also important is that beyond just high-prescribing depression or antidepressant targets, we've ensured really an enrichment of the target base to make sure that efficiency is at its very highest and that we are focusing on brand-centric prescribers. It makes sense. This is a brand. This is a newer product. We want to go after physicians, again, specifically psychiatrists that are writing some of these newer brands and are more inclined to write a new brand. That's just common sense. We're also focused on folks that are already familiar with us. They're, of course, in our geographies more or less, some modifications, but generally speaking, within the existing footprint.
And they also have some alignment and familiarity with our patient access program, which we'll get to, RxConnect, that really ensures they've got familiarity with kind of how to write our products, how to work within sort of our system to ensure their patients experience minimal friction. And at the end of the day, we're not trying to blanket the earth. We are not trying to be everything to everyone. It's psychiatrically focused. It is within our footprint, plus some virtual to get us into a white space so we cover the U.S. And we're talking thousands of doctors, not tens of thousands of prescriber targets. We're not going to spread ourselves thin. We're going to be very focused and very efficient.
So we talked a little bit about the differentiation of Exxua versus the other antidepressants out in the market. And translating that into selling messages the reps can take into the field is largely governed by what the FDA will allow you to say. So with that filter in mind, what are they going to be trained on the week that the listeners are hearing this next week for us that's really going to get them out into the field with kind of a, back to your point, laser-focused pitch on why Exxua should be part of their prescribing arsenal?
Yes. There's really four. I call it really three, but three with a subset of messages that they have been and will sort of the final stage and refinement of training will happen, as you said, as this is airing. First and foremost is that Exxua is a very targeted and selective way of treating MDD via a new mechanism of action, specifically calling out the mechanism around targeting and upregulating or agonizing the 5-HT1A. That's distinct. That's important. Physicians are familiar with receptor pharmacology, specifically psychiatrists, hence the reason we want to start with psychiatry, and we know that resonates. It resonates in market research. It resonates in real life, and just knowing that I have something that specifically agonizes the 5-HT1A is important. So I'm listening, and by virtue of that, you have a product that's effective.
We have a product that's demonstrated efficacy when you look at the two pivotal studies. So you're talking about a product that first and foremost is an effective treatment when you measure MDD symptoms over an eight-week clinical trial. That effectiveness, frankly, begins as early as week three. It's actually a relatively rapid onset when you compare it to the competitive set that largely consists of SSRIs, where they take four to six weeks before noticeable effect begins. We will, in compliant and we think effective ways, communicate that by virtue of the mechanism of action, you are avoiding some of the most notable side effects.
By virtue of the fact that we have the absence of a couple of things in our package insert we think is helpful, and while not a specific message, the fact that we can go to a physician and say, "You'll note, psychiatrist, Dr. such and such, that you won't see sexual side effects or treatment-emergent sexual dysfunction listed on our package insert by virtue of the fact that it was not reported to any substantial degree. And you'll note that weight gain, while in our package insert and listed as an adverse event, is negligible and, frankly, clinically and statistically insignificant." And those are things that we can say and feel comfortable with. And then finally, we'll close out the pitch, if you will, with what I think is among the most important elements, which is the patient access piece.
If you put the clinical attributes and the novel MOA together with the fact that patients are able to get this new medication really quite simply by virtue of how we'll run it through our RxConnect platform, that really we think will solidify the interest and the enthusiasm, and we're already seeing that based on, obviously, some of the feedback and early prescriptions we're getting in the field today.
So we'll talk about RxConnect in a second. But when we kind of round out Exxua here, where in the line of therapy or lines of therapy do you think Exxua will initially be used? And some of that's going to be payer-driven, I'm sure. And then how far upstream do you think you can move it over time?
Yeah, great question. By definition, any new therapy, you would not expect it to be placed in first line. You would fully expect, based on clinical practice, just really guidelines and, of course, the payer piece, which you rightly alluded to, that's really going to enable that the SSRIs, so that's the Prozacs and the Zolofts and the Lexapros, that they will remain first line. They've been generic as long as most of us can remember. And that's really what payers will require. And so realistically, over time, we think it can get to a second and third line therapy. If it travels a normal course, which we would expect it will, this will be a fourth, fifth, or maybe even sixth line therapy. It may be for those patients that initially have failed even MAOIs, which very few psychiatrists write with any level of regularity.
Over time, we'll work its way down the armamentarium when they understand how to prescribe it, how to dose it, how to titrate it, and how patients are responding to it. Ultimately, getting to an earlier stage is realistic. It's realistic on the basis of we think the profile of Exxua has a safety profile that really is not dissimilar from some of the safest products on the market, Lexapro and Zoloft among those. While it does have side effects, its side effect profile is quite unique. I think as people get comfortable with the fact that patients are responding well and the side effects are mild and discontinuation rates we would expect to be relatively minimal, as has been demonstrated in the clinical trials, it may get earlier in line.
And not to jump, again, too far ahead, but also by virtue of the fact that we think the access piece we are going to be so unique in the market. And we already know this in conversations that even I'm having myself directly with psychiatrists. If you can offer an easy solution with respect to copays and mitigation of PAs and steps, it will get used earlier.
But we want to be realistic. We certainly don't want to set any expectation that this is going to be early use today or even this year. But I think it has a real opportunity based on the combination of, again, clinical attributes and sort of the payer piece that we think we can solve for; it will get moved up in line and potentially could be as early as second consistently, maybe. But frankly, if this does third, fourth, fifth, seventh, or even twelfth line, this product we think can do quite well.
You've teased this quite a few times now, RxConnect. I think it'd be super helpful to give an overview of what it is and how it works and then how it's benefited you historically. And then on a forward basis, how you think it'll benefit Exxua establishing itself as a brand in this MDD space.
Aytu RxConnect is really unique. And I can't overemphasize that. It's a program that we have designed from the ground up. And when I say we, it's really our commercial team and the commercial team leadership team that looks at several years ago, in fact, even prior to our acquisition of Neos, they really looked at what the biggest challenges are facing most branded companies, which is access. And to put ourselves, and at the time, themselves in a position where you can cut through some of the noise and be able to go to a physician and have them free to prescribe the product they want to prescribe without the fear of the dreaded callbacks from the pharmacy, the prior authorizations, and all the hurdles and clamps that the PBMs have put in place around branded medications in the year 2026 and, frankly, probably from the year 2020 onward.
And so it was designed with the goal in mind of being able to have a prescriber prescribe a medication for a patient and have that patient seamlessly, frictionlessly pick up their prescription and get it at a copay that they can predict at the same price point month after month after month, irrespective of the time of year, whether it's this time of year when the deductibles have reset and copays are higher or they're paying full cost until they've met their deductible or throughout the year. And ultimately, the basis for it is, again, something that we can present as hassle-free, predictable, consistent, and it's never going to be sort of a trap door. There's never going to be any trickery. And what we've done is we've gone to a network of pharmacies around the country. There's 1,000 of them or so.
Then we've also got a select number of retail grocery chains, one in the Midwest, one in Texas, and one in the Southeast. We've said, "You can participate with us. We'll recommend your pharmacy or pharmacies to the physicians on whom we're calling. And if you'll comply with the terms of our programs, you will obviously get a new patient that potentially would have otherwise gone to a big box store. And, of course, you'll get the comfort and sort of confidence in those physicians prescribing such that you might get even non-Aytu products." That's the pitch to the pharmacy. The pitch to the physician is, "Send it to one of these partner pharmacies, and we will handle the rest." That's what we've done.
And what it has enabled is for those physicians, and there are many, and that number of doctors is increasing that are willing to send to specific pharmacies in their area. And these pharmacies, by the way, often ship or courier to a patient's home or office to make it very easy. And they cover a lot of things like prior authorizations and a lot of the paperwork needed. And so they really increasingly enjoy working with these, in many cases, independent pharmacies that are doing a lot of the back office work for them. And quite simply, what it enables is a quadruple win. It's a win for the patient, of course, because they're getting the prescription predictably at a cost that they can afford and expect month after month.
The physician is finally able to get a product through, like at Adzenis, that competes in a Adzenis being one of our ADHD meds, competes in a very large, crowded, genericized market. I can actually get a brand consistently without the hassles of the PBM stepping in. The pharmacies benefit because they've got a new patient. They've got a reliable cash flow that that patient will bring to them month after month after month and potentially that patient's family's prescriptions. And then, of course, we win because we get a very sticky prescription. We get a very sticky patient. We get a higher level of adherence. We get a much higher level of control. And the economics to us are very predictable, very easy to understand, and very easy to toggle as it relates to any potential issues around generic intrusion.
For a lot of reasons, this makes a lot of sense for everybody in the value chain. It has resulted in exceedingly sticky business in an exceedingly genericized market in ADHD, which we've competed in for the better part of a decade if you take these products back to their launch dates. We think will materially help improve the uptake for Exxua because, again, we're cutting out the number one concern that a physician has when prescribing a new medication. It is always what's cost and coverage. If you can answer that out of the gate and say, "Cost and coverage is fixed. It's predictable.
All you have to do is send it to this partner pharmacy, and we will take care of the rest." And so we are highly optimistic that this will translate exceedingly well from the ADHD franchise into the new Exxua prescription line. So looking forward to that. And we're already seeing it in action. And I won't give specific numbers other than to say it is doing as we would have expected. Physicians, particularly those that are already familiar with RxConnect, it won't surprise you to know that they are already our most likely to prescribe here as we are just into the early days of product availability and, frankly, really haven't even fully launched, having not left our launch meeting yet.
So you've alluded to the legacy business a couple of times. Maybe we can briefly touch on that. Obviously, it generates a fair bit of revenue for you. And you were in a couple of different businesses. Maybe you could briefly just give us an overview of that and what it's looked like financially for you over the last, let's say, couple of years.
Yeah. If you look at our legacy business, it's really two books of business. One that's materially larger than the others, and that's our ADHD franchise. So we essentially have two branded ADHD products. One's called Adzenis. It's an amphetamine that competes with Adderall. Another one's called Cotempla. It's a methylphenidate that competes with Ritalin and Concerta. And those, if you look at the trailing 12-month period, so that'd be for the 12 months ending September, which is the last quarter for which we've reported, that's a $55.5 million business. And it's been relatively stable. It's down a little bit from the preceding, call it, fiscal year. But more or less, if you look at the last two or three years, even for ADHD, you're talking a $55-ish-$57-ish million business. So it's been stable.
And that product line competes, as I alluded to earlier, with a highly genericized market. And we've been able to compete and carve out a niche by virtue of the fact that they've got some unique attributes in terms of clinically how they present. They're orally disintegrating tablets, so they're easy to take. But really, it's the RxConnect piece that puts the cherry on top to enable sort of the niche to have been carved out. And then we've got a much smaller line of pediatric products that we acquired prior to the pandemic. We've got a line of multivitamins with fluoride, and we also have an antihistamine. And that line of business has been stable over the last couple of years at, call it, $8 million-$8.5 million. And that's a non-core business. That's not a business that we really allocate any material resources to.
No reps and no real marketing spent on that outside of a handful of websites and relatively modest spending, so these are all, and that business, by the way, breaks even. We actually have been $8-$9-ish million in EBITDA if you look at the last two years. Kind of the trailing 24-month period is, call it, $8.5 million in EBITDA. So you've got a $64 million top-line business generating about $8+ million, $8 million-$9 million in EBITDA. So a business that pays for itself, washes its own face, so to speak, and covers kind of all the bells and whistles, inclusive of, obviously, overhead and non-direct costs, but mature brands, and so what that really sort of meant to us is that we really need to find something else. We think we're a stable business.
And I won't go into all the gory details of sort of how we sort of improved the business over the last years. But we got to a point that we said, "Now we're ready to take on something else because we've got this infrastructure. We've got this channel. We've got these reps. We're in psychiatry." And that's really what enabled us at the beginning of last year to say, "We've stabilized the business. It's pretty solid, albeit mature and not without risk of generic intrusion. So now let's look for really a growth driver." And that's really what enabled us to go all in on Exxua.
So you've been pretty candid during investor conversations, investor calls about the threat of generic intrusion for the ADHD products. Can you give us an update on where you stand with that?
Yeah, happy to. So the one most relevant is prior to us acquiring Neos, Neos Therapeutics had struck a Paragraph IV settlement with Teva at the time, Actavis, to enable entry of a Teva-approved ANDA. Actually, last year, they were able to enter as early as September 1st of 2025. And that settlement goes all the way back to 2018. And so that's long since been in place. It's been in the public domain, disclosed many, many times. And so they've had an approved ANDA for quite some time, for the better part of a year and a half. And so we fully anticipated that they would launch. And they have come into the market. And it's been very recently that they've launched their product, really just sort of coming into, but really out of the holidays.
We're seeing minimal prescriptions at the moment, not to suggest they couldn't come in and get more. Prior to them coming into the market, I think it's important to note that we actually launched our own generic or our authorized generic for Adzenis. We've distributed under a label within the company. So we've not licensed out rights to the AG. We market it ourselves. That product is doing phenomenally well. It has a material portion of the market already. We think it's already serving an important purpose in really thwarting some of the Teva intrusion. More than that, we've talked about sort of the RxConnect piece. One of the things that really we haven't talked about in the context of this conversation is the economic incentives kind of around the RxConnect piece as it relates to the pharmacy.
What I'll just say without getting into all the gory detail is there's high incentive to fill the AG or the brand. And I would say higher when we look at what some of the pharmacies are being reimbursed on both the brand, our AG, and then what Teva right now is reimbursing or is being reimbursed. Very, very comfortable that intrusion is a reality. Mass destruction, we don't believe it is. We don't think Teva comes in and takes a part of our significant chunk such that the company turns EBITDA negative. And I'm happy to take questions offline on that. But that having been said, to be open about it, Teva is in the market. We had anticipated that for many months because they'd activated it quite many months ago, but we're not seeing much impact.
But we are seeing phenomenally positive impact as it relates to our authorized generic. And it's doing what we expected. And the RxConnect network that I'll remind anyone listening, RxConnect network, we run about 85% of our ADHD meds through that. And so while Teva might be able to nibble at some of the non-network pieces, we think it may be difficult for them to infiltrate that 85% of our base business revenues.
We've got a couple of minutes left. Let's get to some numbers. I'm sure I won't be able to talk you into giving me a forecast for Exxua, but how do you think about what that can do relative to your current business? Maybe as a multiple of that, maybe that's a good place to start.
Yeah, I think that's a good place to start, and I guess I'll start before that by just reminding folks, if you look at this market, this is, again, a $345 million prescription market. Contrast that to ADHD, which is a large market, but it's in the $95 million annually range. So we're talking a 3.5x larger market and a market that pricing is 3x-5x higher when you look at a net selling price per prescription per month.
So you're talking many multiples higher just in terms of the total addressable market. So I'll start with that. Look at our current business with 40 or so reps out there milling around in very competitive, highly genericized markets with products that are tough to sell because Adderall has been generic forever, and frankly, we're selling ODT versions of Adderall and Ritalin, essentially, Ritalin or Concerta.
We've been able to carve out base business, including Peds now. So I'll add a little bit of that in. But that's a base business of, call it, $65 million in a pretty unfavorable market dynamic with respect to payers, pricing, access, and so forth. What I would say is if we can't do multiples, and I would say even not a multiple, if we can't do multiples of what our base business is doing, again, kind of a $65 million-$75 million business, something's gone sort of wildly wrong.
I don't want to guide to hundreds of millions or whatever the case might be, but if it even does a multiple or two, this is a home run when you look at where the company's positioned today. We have high aspirations for this, as does our partner, Fabre-Kramer. The data backs it up. Again, large market, a differentiated compound with a really unique story and a payer piece that's really unlike any others. It sets up to be something that transforms this company by many multiples.
So with the last few seconds that we have, when you did the Exxua deal, you also raised about $17 million gross, I might add. How do you think about cash and the need to raise additional funds, which is always a question for companies of your size?
Yeah, good question. And really, we've been really good with our cash, particularly when you look at the quarters kind of preceding Exxua. And while we do expect the spend to tick up a little bit, it's not going to be massive. Look, we ended the September quarter with $32.6 million in cash. So there's no anticipated need for cash. We believe we can get to profitability with what we have on hand. And frankly, even if there's some material decline to the ADHD business, the burden on Exxua is de minimis. This doesn't have to be a $50 million year one type of thing. Even if the ADHD products decline by, call it, 35% between, say, last year and, say, 2027, you're basically talking about Exxua having to backfill only $20 million-$25 million in revenue. So we have very, very little concern around any need for capital.
The perfect place to end with some good news. Josh, thank you very much for your time. Robert, thanks for the invite. And with that, I'll hand it back to Robert for any closing comments.
All right. Great. Well, again, Josh, Thomas, thank you very much for your participation in today's summit. Thomas, maybe before we depart here, if anyone would like to get in touch with you, what's the easiest way for them to do that?
Yeah, I think the easiest thing without me spelling out my email is just to go on the Lake Street Capital Markets website. You'll find all my contact info there, and more than happy to engage on this very exciting story.
All right. Very good. Well, again, if anyone has questions, follow-up questions following today's discussion, or perhaps would like to schedule a meeting with Aytu, you can send me an email, Blum, blum@lithiumpartners.com. Again, Josh, Thomas, thanks so much for your participation. Thank you to everyone watching here as well. We hope you've enjoyed the conference and hope everyone has a great rest of your day.
Thank you.
Thanks.
All right. That's a wrap on the Lithium Partners Investor Healthcare Summit. Big thank you to all of our viewers, participating companies, and our guest analysts for joining us today. If you missed anything, don't worry. Our entire event will be available on demand right after this. And all webcasts will also be available on our YouTube channel. Feel free to follow us on LinkedIn so you're the first to know about all future events. And if you'd like to learn more about Lithium Partners, visit our website at www.lithiumpartners.com. Thank you and have a great rest of your day.