Logo of jester cap with thought bubble.

Image source: The Motley Fool.

DATE

Tuesday, Feb. 3, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer — Josh Disbrow
  • Chief Financial Officer — Ryan Selhorn

Need a quote from a Motley Fool analyst? Email [email protected]

TAKEAWAYS

  • Net Revenue -- $15.2 million, down from $16.2 million in the prior year period, driven by weaker pediatric sales and ADHD marketing deemphasis, partially offset by price increases.
  • ADHD Portfolio Net Revenue -- $13.2 million, versus $13.8 million the previous year, and flat sequentially with Q1; impact from generic entry limited by RxConnect and internal authorized generic strategy.
  • Pediatric Portfolio Net Revenue -- $1.7 million in fiscal Q2 2026, compared to $2.7 million in fiscal Q2 2025 and $715,000 in fiscal Q1 2026, reflecting reduced product returns and stabilized prescriptions.
  • Gross Margin -- 63.5%, down from 66.5% a year ago; result includes a $600,000 branded Adzenys inventory write-down; excluding this, gross margin would have been 67.4%.
  • Operating Expenses (OpEx) -- $11.1 million, compared to $10.2 million in the previous year; includes $300,000 in depreciation/stock compensation and a $400,000 one-time FDA PDUFA fee for Cotempla.
  • Net Loss -- $10.6 million ($1.05 per share), versus net income of $800,000 ($0.13 per share) in the prior year; change driven mainly by an $8.2 million derivative warrant liability loss, compared to a $3 million gain previously.
  • Adjusted EBITDA -- Negative $800,000, compared to positive $1.3 million in the prior year period; primarily attributable to ExuA launch investments and deemphasis on legacy portfolios.
  • Cash and Cash Equivalents -- $30 million as of December 31, 2025, down from $32.6 million at September 30, 2025; no major balance sheet movements reported.
  • ExuA Launch Metrics -- Prescriptions written from 27 states, more than 100 physicians prescribed to date, with first refills observed just over thirty days post-launch; majority of early fills through RxConnect partner pharmacies.
  • RxConnect Platform -- Dispenses approximately 85% of branded ADHD prescriptions and covers about 60% of commercially insured MDD patients for ExuA.
  • Teva Adzenys Generic Impact -- For the six-week period ending January 16, Teva Pharmaceutical Industries (NYSE: TEVA)’s generic captured approximately 5% of scripts; Aytu BioPharma (AYTU 3.32%)’s authorized generic held just under 20%, with the remainder in branded Adzenys.
  • ExuA Launch Investment Budget -- Reduced to under $8 million from a planned $10 million; about $3 million accounts for one-time items including training, consultants, and materials.
  • Gross Margin Guidance (ExuA) -- Management expects about a 69% gross contribution margin after royalty and true-up; initial ramp expected to lag script growth due to free titration offers.
  • Breakeven Targets -- Quarterly normalized OpEx run rate expected to be about $11.6 million (approximately $0.5 million non-cash), with GAAP breakeven at $17.3 million and cash breakeven at $16.6 million quarterly net revenue.
  • Supply Chain Status -- Weather-related distribution delays have cleared; management affirms ample API and inventory to “scale appropriately if demand outstrips even our most optimistic forecast.”

SUMMARY

The commercial launch of ExuA began in January with prescriptions written across a broad national footprint despite major winter storms disrupting logistics, pharmacy supply, and sales activity in most territories. More than one hundred physicians have now prescribed ExuA, and initial refills are emerging, though net revenues will remain subdued during the introductory period due to free titration and early access programs. The launch strategy leans heavily on the RxConnect platform, which guarantees coverage for commercially insured patients and has already driven the majority of filled scripts. Both ADHD and pediatric legacy portfolios experienced net revenue declines attributable to a deliberate shift in commercial focus and lower marketing emphasis. ADHD segment exposure to new generic competition was further limited by internal authorized generic launch and a dominant RxConnect channel, confining Teva’s share to a low single digit percentage early in their launch. Quarter-end cash, at $30 million, supports operational flexibility as ExuA investments ramp, with management indicating spend discipline and no Salesforce expansion until internal cash flows support it.

  • Chief Executive Officer Disbrow said, “already seeing our first set of refills come through the platform.” for ExuA within thirty days of launch.
  • Chief Financial Officer Selhorn stated that ExuA gross contribution margin is expected at 69% after royalties and cost of goods sold true-ups.
  • Physician uptake of ExuA has extended beyond Aytu BioPharma’s Salesforce geographies, as scripts originated in states with no reps, aided by a web-based and non-personal promotional campaign.
  • Feedback from early ExuA prescribers centers on the drug’s differentiated mechanism of action and favorable tolerability profile, especially regarding sexual side effects and weight gain.
  • Management reduced planned ExuA commercial launch spending by at least 20% through execution efficiency, without impacting readiness.
  • The majority of ExuA prescribers to date are concentrated in the commercial insurance segment; coverage and fills in Medicaid and Medicare are characterized as “encouraging early,” but volumes remain primarily commercial.
  • Management clarified that Salesforce expansion will not be pursued prior to reaching cash-positive operations and Board approval, regardless of demand signals.

INDUSTRY GLOSSARY

  • RxConnect: Aytu BioPharma’s proprietary pharmacy network and access platform designed to streamline branded drug coverage, limit out-of-pocket costs, and enhance payer contracting through direct dispensing and data capture.
  • 5-HT1A agonist: A class of compounds acting on the serotonin 1A receptor, here denoting ExuA's mechanism targeting major depressive disorder.
  • Authorized Generic: A version of a branded drug released by the originator under its own approval to compete with third-party generics, typically under a separate label and pricing structure.
  • PDUFA Fee: Prescription Drug User Fee Act fee paid to the FDA for product application review, applicable for Cotempla in this context.

Full Conference Call Transcript

Josh Disbrow, and Ryan Selhorn, the company's Chief Financial Officer. At the conclusion of today's prepared remarks, we'll 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 your attention to 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 Aytu 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 filings with the SEC. Aytu 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 Aytu BioPharma. Josh, please proceed.

Josh Disbrow: Thank you, Robert, and welcome, everyone. I'm excited to be speaking with you on what is truly a momentous time for Aytu as we just commercially launched ExuA. The first and only 5-HT1A agonist approved by the FDA for the treatment of MDD representing a truly novel way to treat MDD. As many of you are aware, we held an Investor Day back on January 20 where we spent the better part of two hours diving into all things ExuA. If you weren't able to attend in person or part of the live broadcast, please know that a replay is available on our website under the Investor Relations page. And I certainly encourage everyone to take a listen.

Given the deep dive we just did two weeks ago, let me spend a few minutes summarizing a few of the key discussions that occurred during the event, which were really divided between understanding the 5-HT1A receptor and its clinical importance in major depressive disorder, along with the unmet treatment needs and their implications for antidepressant treatment selection in MDD. And further, ExuA's clinical trial data, including efficacy and safety, and some in-depth elements of our commercial launch strategy.

First, on the clinical side, Dr. Steven Stahl, an internationally renowned clinician, researcher, and teacher in psychiatry, with subspecialty expertise in psychopharmacology, discussed how the current standard of care for major depressive disorder has largely relied on SSRIs and SNRIs, which work by broadly increasing serotonin levels in the synapse and non-selectively activating multiple serotonin receptor subtypes. While these therapies can provide symptom relief, that lack of selectivity is believed to drive many of the well-known limitations of reuptake inhibitors including treatment-emergent sexual dysfunction, insomnia, anxiety, appetite changes, and weight gain, and other off-target side effects that can impact tolerability and patient adherence.

In contrast, ExuA represents a fundamentally different, more targeted approach specifically designed to engage the 5-HT1A receptor which is thought to be central to antidepressant efficacy. ExuA acts as a full agonist at presynaptic 5-HT1A autoreceptors to enhance serotonergic signaling and as a selective partial agonist at postsynaptic 5-HT1A receptors without any significant activity of receptors associated with sexual side effects or weight gain. This differentiated mechanism has potential implications across key brain regions involved in mood, anxiety, cognition, and stress. Thus reinforcing our belief that ExuA offers a novel and clinically meaningful advancement in the treatment of MDD.

Next, Dr. Anita Clayton, who has focused her clinical practice and research on multiple psychiatric areas of unmet need, including major depressive disorder, in which she has been a principal investigator for essentially all the new antidepressants approved since 1991, highlighted how major depressive disorder remains a significant and growing public health challenge affecting an estimated 21 million US adults, with nearly 15 million experiencing severe functional impairment. Despite the widespread use of first-line SSRIs, 50% to 60% of patients fail to achieve remission, and even among those who do, many never fully recover key aspects of daily functioning such as cognition and workplace productivity.

Nearly half of patients ultimately discontinue their initial therapy often driven by tolerability issues, most notably sexual dysfunction and weight gain, which affect a substantial portion of patients on traditional antidepressants. Against this backdrop, she discussed the important clinical implications for ExuA, which does not carry a warning for sexual dysfunction and demonstrated a neutral sexual profile in clinical studies with no sexual-related adverse event rates exceeding placebo and showed no clinically meaningful weight gain compared to placebo across pivotal trials. These attributes position ExuA as a truly differentiated option that directly addresses some of the most persistent unmet needs in the treatment of MDD.

Finally, Dr. Christoph Correll, who annually is listed as one of the most influential scientific minds and among the top 1% cited scientists in psychiatry, discussed how ExuA's phase three clinical program demonstrated meaningful efficacy and a well-defined safety profile in adults with major depressive disorder. I once again, on this call, thank these three esteemed members of the psychiatry community for their participation and, again, encourage everyone to listen to their commentary on ExuA.

Okay, now let's turn to the commercial launch plans for ExuA, which is being executed upon with a clear balance of efficiency and comprehensiveness with a focus on driving prescriber adoption and long-term brand growth. The core of this effort is a highly motivated and incentivized sales organization supported by metrics-based performance management, incentive-driven territory growth, and a strong sense of urgency around execution.

In addition to our internal sales team, we are augmenting our reach through scalable and efficient initiatives, including a virtual sales team designed to broaden awareness and generate early customer leads, as well as a rolling contract sales organization model that allows us to flex in-person promotion in line with product performance and as profitability and cash flow allow. Our promotional strategy is intentionally targeted yet broad in scope, combining both personal and non-personal approaches to maximize impact. From a non-personal standpoint, we are deploying a focused, compliant, media-based consumer promotion strategy while ensuring our sales efforts remain concentrated on the highest value psychiatry practices.

Targeting has been informed by detailed customer profiling and direct Salesforce input prioritizing high-volume antidepressant prescribers, prescribers with a demonstrated propensity to adopt branded therapies, and physician practices already familiar with Aytu through our ADHD portfolio and the RxConnect platform. The early wins we're seeing reinforce our confidence that this focused approach is resonating in the field.

Patient access is a critical pillar of the ExuA launch, supported by our best-in-class Aytu RxConnect platform along with full retail distribution through national wholesalers to ensure nationwide pharmacy availability. RxConnect was purpose-built to remove uncertainty and friction for patients and prescribers by guaranteeing predictable coverage for commercially insured patients, thus minimizing administrative burden and capping patient out-of-pocket costs at no more than $50 per prescription for ExuA. Again, for all commercially insured patients. Importantly, patients also retain the flexibility to fill prescriptions outside the RxConnect network when preferred, ensuring broad access and choice for all patients.

Finally, medical education and scientific engagement will underpin sustainable adoption. Our medical affairs team is rapidly expanding a robust KOL network and executing an active publication and medical meeting strategy as ExuA enters its first full year of commercial availability. Insights from more than 1,000,000 prescriptions filled through RxConnect continue to guide our payer contracting strategy covering approximately 60% of commercially insured MDD patients, with encouraging early coverage across Medicaid and Medicare populations. Overall, the ExuA launch is highly focused, data-driven, and designed to scale intelligently over time, aligning promotional investment with performance and cash flow to support durable growth. As we were really only a couple or few weeks into launch at most, the availability of data is sparse.

Let me share a couple of data points we do have, which is largely derived from our insights from the RxConnect platform. Today, scripts for ExuA have been written from 27 states, including numerous states where we don't have sales reps, thus highlighting the very broad opportunity. Over 100 doctors have prescribed ExuA to date, which is exciting. With us just over thirty days since ExuA was first made commercially available, we're in fact already seeing our first set of refills come through the platform. And perhaps most importantly, the early feedback from patients on ExuA has been very good.

While only a small number of patients have been on ExuA for a month or longer, they're reporting good tolerability and satisfaction with the product. So all signs are positive in the early days here post-launch. And to say the least, we are extremely excited to have ExuA fully underway in launch mode. And even more encouraged by the while still very early, our efficient yet comprehensive launch strategy is unfolding as planned. Our sales team is exceptionally well prepared. Our KOL network continues to expand. And we are already seeing validation of our commercial approach. I look forward to being able to share more with you in the quarters to come.

Let's transition for a moment now to our ADHD portfolio. For the quarter, ADHD net revenue was $13.2 million, and this was just a slight decrease from the year-ago period and flat compared to Q1. Quite impressive in my opinion given the evolving dynamics of the Salesforce prioritization now geared towards ExuA and the recent introduction of generic competition. The evolution of the ADHD portfolio continues to perform above what I'll call standard expectations given similar circumstances. And we feel very good about the long-term prospects of the ADHD portfolio, given the protections afforded by RxConnect. As we previously discussed, Teva did in fact launch their ANDA for Adzenys back in mid-December.

The early data on scripts continues to reinforce our long-term conviction in the enhanced stickiness and attractive economic value of the Aytu RxConnect platform, through which, again, I'll remind you, approximately 85% of our branded ADHD prescriptions are dispensed. The launch of our own Adzenys authorized generic has also served to limit the impact to date of the Teva generic. For the six-week period ending January 16, the Teva generic accounted for approximately 5% of prescriptions written. Over that same period, our authorized generic of Adzenys represented just under 20% of total prescriptions, with the remaining volume continuing to be branded Adzenys.

While we do expect some continued transition from the brand to generics as we deemphasize our ADHD portfolio in favor of ExuA, we do believe that any incremental non-Aytu generic volume will largely come from the roughly 15% of the prescriptions dispensed outside the RxConnect platform in the near term as we expect relatively little erosion within the network. We've also taken a recent price increase, which will help to offset any script erosion via net pricing improvements we've seen over time. While time will ultimately tell, we believe the dynamics here will differ meaningfully from many comparable situations, and we do not expect the typical erosion trajectory to fully materialize in the way other brands have seen.

Quickly on our pediatric portfolio before I turn it over to Ryan to review the financials in more detail. We saw a nice uptick in net revenue from the fiscal 2026 first quarter to our fiscal second quarter, coming in at $1.7 million compared to $715,000 in Q1. Part of this relates to reduced quantity of returns we experienced last quarter while we also saw relative stabilization of prescriptions. To be clear, given the broader commentary from the FDA around fluoride and to prioritize our largest growth driver, we of course continue to focus the bulk of our resources on ExuA.

If there are changes with respect to the FDA, our approach may change, but to this point, our legacy pediatric products remain non-core for the company as we go forward. So with that, let me turn the call over to Ryan to go into more detail on the financials. I'll make a few closing comments, and then we'll look to address any questions you might have. Ryan?

Ryan Selhorn: Thank you, Josh. Let's jump right into it. Let's start on the revenue line. Net revenue for the quarter was $15.2 million compared to $16.2 million for the prior year. Breaking net revenue down, the ADHD portfolio net revenue was $13.2 million compared to $13.8 million in the prior year period. The $13.2 million was also flat with the most recent sequential first quarter. The change from the year-ago quarter is attributable to a decrease in total prescriptions primarily due to broader deemphasis in marketing towards the ADHD portfolio as the company's marketing efforts have shifted towards ExuA, which is now the centerpiece of our commercial efforts, and some relatively small impact from the generic that entered the market.

All of this was then partially offset by product price increases and improved gross to nets. The pediatric portfolio was $1.7 million for the first quarter compared to $2.7 million last year. And as Josh just mentioned, we had just $715,000 in the most recent sequential first quarter. The change in net revenue from the year-ago quarter is primarily attributable to the broader deemphasis in marketing towards the pediatric portfolio in lieu of ExuA, particularly given the recent commentary by the administration and the FDA around fluoride. Gross margin was 63.5% during the quarter compared to 66.5% last year.

The decrease in gross profit percentage is primarily related to the decrease in net revenue given the focus on ExuA's launch as well as transition-related expenses associated with the ADHD authorized generic performance whereby there was a write-down of approximately $600,000 in inventory related to branded Adzenys. Excluding this write-down, gross margins would have been 67.4% for 2026. Turning to OpEx. Operating expenses, excluding amortization of intangible assets, and prior year restructuring costs, was $11.1 million in the second quarter compared to $10.2 million in the prior year period. This $11.1 million figure also includes about $300,000 in depreciation and stock compensation, so the cash OpEx number is about $10.8 million.

The change is primarily a result of increased ExuA launch investments partially offset by improved operational efficiencies such as reduced facilities expense. We also incurred a one-time FDA PDUFA fee of $400,000 for Cotempla, which flowed through the income statement this quarter. For the quarter, we reported a net loss of $10.6 million or a $1.05 net loss per share basic compared to net income of $800,000 or $0.13 net income per share basic in the prior year period. The fiscal 2026 second quarter results were impacted by derivative warrant liability loss of $8.2 million while the year-ago period had a derivative warrant liability gain of $3 million.

These changes in non-cash derivative warrant liabilities are primarily related to change in the company's stock price. We touched on this last quarter, but as a reminder, if our stock price increases, we incur a loss. If the stock price decreases, we incur a gain on these derivative warrant liabilities, which are a result of the prefunded warrants issued due to ownership percent blockers as part of the ExuA transaction and a previous financing as well as other standard warrants. On the balance sheet, those warrants are treated as a liability until they are converted to common shares, at which time they move to additional paid-in capital.

During the quarter, there were 550,000 prefunded warrants exercised which effectively added $1.3 million to APIC. As we sit today, there are 10.7 million common shares outstanding plus an additional 8.8 million prefunded warrants outstanding which effectively puts us at 19.5 million shares outstanding. Finally, adjusted EBITDA was a negative $800,000 for 2026 compared to a positive $1.3 million in the year-ago period. The change primarily relates to the increased ExuA launch investments and broader deemphasis in marketing towards the ADHD and the pediatric portfolio impacting net revenue and gross profit.

Turning now to the balance sheet. Cash and cash equivalents were $30 million at 12/31/2025. This compares to $32.6 million at 09/30/2025. There were no major movements on the balance sheet during the quarter with most changes in inventory, accounts receivable, accounts payable, accrued liabilities, and our revolving line of credit and other key items largely in line with normal operating procedures. Before I turn it back over to Josh, I just wanted to confirm a few assumptions largely pertaining to the ExuA launch as we enter the back half of the year. First, as we communicated to you last quarter, December was just a small initial product load-in, which was in line with expectations.

With the launch now underway for the March 2026 quarter, we continue to expect to see a small initial ramp in ExuA net revenue due to our deliberate approach to remove early access barriers. As mentioned previously, through RxConnect, we deliberately eliminated that friction by offering a no-cost fourteen-day titration pack. For commercially insured patients, we are guaranteeing full coverage of both month one and month two of therapy regardless of the insurance outcome, ensuring patients can remain on treatment through dose optimization without interruption and allowing clinicians to evaluate ExuA based on true clinical response rather than payer-driven access challenges.

As we ramp up, this will lower the net revenues recognized by Aytu until month three refills occur and these no-cost guarantees are removed, which will begin to occur during June and beyond. Simplistically put, we will see scripts grow ahead of net revenue in the early going. From a gross margin perspective, as a reminder, we have a 28% royalty on in addition to a true-up on cost of goods sold. Think of it in essence as about a 31% cost of goods sold or a 69% gross contribution margin.

We do anticipate some fixed expenses to be incurred in cost of goods sold, however, the upfront fee, post-launch fee, and any milestone payments will be reported as an intangible asset and amortized to the operating expenses, which started in December 2025 after we launched ExuA. Finally, as I mentioned during the investor day, our initial launch investment budget for ExuA of $10 million has been reduced to under $8 million driven by execution efficiencies and tighter cost management without sacrificing commercial readiness. And of that, approximate $8 million about $3 million is projected to be one-time items such as training development, commercial and medical affairs consultants, and campaign and marketing materials development.

So as we look forward for modeling purposes, we will see a continued uptick in the March for OpEx, likely in the $4 million to $5 million range, excluding depreciation and amortization. Beyond that, moving forward, we will adjust our spend as the ramp of ExuA continues but think about exiting the fiscal year at about $11.6 million quarterly normalized run rate with about half a million of that in non-cash expenses. Assuming gross margins in this mid- to high 60% range, that puts our breakeven at about $17.3 million of net revenue per quarter all in, including ExuA spend. Cash breakeven would be about $16.6 million per quarter. As always, happy to go over any details during Q&A.

And with that, Josh, let me turn it back over to you.

Josh Disbrow: Thanks, Ryan. This is truly an exciting moment in a pivotal time in the company's history as we are now fully engaged in the commercial launch of, again, a first-in-class treatment for major depressive disorder. We're already seeing prescriptions come through and are hearing strong enthusiasm from the field, reflecting the unique opportunity ExuA represents as the first and only 5-HT1A agonist approved for the treatment of MDD in adults, addressing a very large and a very meaningful unmet need with extremely encouraging early momentum. Our commercial launch plan is comprehensive with a clear focus on prescriber adoption and brand growth while maintaining efficiency and relative spend.

What our team has accomplished in just over six months since acquiring ExuA's commercial rights is what often takes years in a large pharmaceutical corporation. Simply couldn't be more proud of what's been accomplished as we work to positively impact the lives of the approximately 21 million Americans living with MDD. As always, I want to thank everyone participating on the call and for your support. We'll now be happy to answer any questions that you have. Operator?

Operator: Certainly. Everyone at this time will be conducting a question and answer session. If you have any questions or comments, please press 1 on your phone at this time. We do ask that while posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality. Once again, if you have any questions or comments, please press 1 on your phone. Your first question is coming from Thomas Flaten from Lake Street. Your line is live.

Thomas Flaten: Hey, good afternoon, guys. Appreciate you taking the questions. Josh, you hinted at this a little bit in your prepared comments, but I'm curious in those 100 docs that have actually written prescriptions, do you have any anecdotal feedback from the sales team on, you know, why they made the decision to write, what was it that, you know, convinced them this would be a good alternative for the patients? Anything along those lines would be super helpful.

Josh Disbrow: Yeah. As is often the case, particularly in psychiatry, Tom, and thanks for the question. It is mixed as you would expect. I mean, various motivations for physicians in those very early days to prescribe. It's a cross-section of patients that have been challenging for them, and challenging meaning not getting the response or robust response and or side effects that patients have been experiencing in the form of, as we would expect, sexual side effects or weight gain. There's definitely an interest in just the MOA. That in and of itself is attractive for physicians, psychiatrists particularly, to try something new for a patient that, again, is probably inadequately controlled on something.

And then there's an element as well that, you know, given the relative ease through which they're able to prescribe through RxConnect, there's definitely an interest in being able to prescribe something new that has minimal barriers. So I'd say those are among the key things that are being sort of fed back to us. As we would expect in this early stage, you know, we will get some difficult-to-treat patients, and that's expected. Any new drug is gonna often get the problematic patients that have been on countless medications.

And so we expect that, but we also expect as time goes on, patients will probably better identify patients that are perhaps not down to the full extent of having tried, you know, many, many medications. And start to position the product perhaps earlier in use. But that's at least the early feedback that we're getting.

Thomas Flaten: Got it. Super helpful. And then, particularly in light of Ryan's comments around cash breakeven and real breakeven, you mentioned during your Analyst Day that, you know, you were contemplating a Salesforce expansion over time. First part of the question is, is there an expectation of any of that occurring in fiscal 2026? And then the second part of the question is what triggers are in place for that to initiate?

Josh Disbrow: Yeah. Good question. I think the short answer is it would be unexpected to expand that quickly. I mean, we really need to get, as Ryan said, kind of through the trial periods into that sort of June time frame before we're sort of getting patients fully on their refills and, obviously, just getting more and more patients experience in general. And in the context of what will trigger it, it will be over attributing our internal forecast and getting the cash flow. We want to be clear that there's no plan to expand without cash on hand to support that. And we'll be very judicious in how we think about expansion.

We have identified territories beyond the 44, as we've talked about. There's many multiples more that we could scale to, but again, it's gonna be the primary trigger with the board approval will be cash flow supporting it. There will not be any appetite to raise capital in the context of that specific piece for sure. So, yeah, we're definitely waiting for profitability and cash flow.

Thomas Flaten: And then one more quick one, if I might. You mentioned in your press release that you were working on a kind of a direct-to-consumer campaign. Could you maybe provide a little bit of detail on specifically what that looks like?

Josh Disbrow: It will largely be web-based as most things are. We don't anticipate broad-based, you know, quote media spend traditional over-the-air type of media, but we certainly have engaged in the early stages of search engine optimization and keyword search campaigns. So a lot of word search and things along that line as patients are looking for alternative therapies. We will continue to look at social media angles, although that can be challenging with respect to FDA regulatory compliance. Given the fact that all products in this category have a black box warning. But we have in the early stages of looking at, you know, chat room forums. And, again, we need to be obviously very conscientious and compliant with that.

But forums like Reddit and so forth, there's a lot of chatter. In fact, we're already seeing some mention of ExuA for patients that have actually already tried the therapy and have been positive on it. So that'll be some of that's an example of the types of things that we'll explore. But to be clear, we want to be very efficient, you know, with our heavy spend. We'll be on the face-to-face interactions with the Salesforce and, you know, a far secondary piece of it will be sort of the consumer piece until we start to get some momentum and a higher level of awareness among the psychiatrists that obviously we're presenting the product to.

Thomas Flaten: Got it. That's super helpful. Thanks.

Josh Disbrow: Thanks, Thomas.

Operator: Thank you. Your next question is coming from Nazibur Rahman from Maxim Group. Your line is live.

Nazibur Rahman: Hey, everyone. Thanks for taking the questions and congrats on progress. Just two quick short questions. Because of the weather around so much in the United States the last couple of weeks, have you seen any delays or issues with scripts getting filled after they were written, or has that not been a problem? I realize it's been early days. And just kind of following up from that too. The scripts that have been filled, have they mostly been from RxConnect or, I guess, retail pharmacy? Like, do you know the mix there?

Josh Disbrow: Yeah. Good question. Take the weather one first. Absolutely huge impact. You know, this is sort of two weeks of snowmageddon, so to speak. So we really haven't had a complete week in the field. When you take into consideration, we're at our launch meeting, you know, essentially, the first full second full week of January, essentially, the week of the twelfth. The next week was a holiday week shortened due to the Martin Luther King holiday. So that was really their first time into the field.

And then really two solid weeks of weather affecting a huge chunk of our territories, the vast majority, in fact, and really with the exception of the Western territories, Western really meaning essentially, you know, California, I would say, every territory is affected at least in some way. So that not only impacted scripts getting filled, it affected shipments getting to pharmacies. It affected reps getting to doctors to, you know, present at appointments and meetings and so forth. So huge impacts, which is why we're even more encouraged because, frankly, we have not had any more close to a full week of productivity.

In terms of the prescriptions that are being filled, yes, most are coming to RxConnect, but I'm actually very pleased that we're seeing prescriptions come in areas where we don't have sales representatives, and coming through regular way retail as well, but the majority are coming through our RxConnect partner pharmacies. And if you look at sort of a mix, you know, it is largely commercial as we would expect. Still very early, and the end is just too small to really see where it's gonna settle out.

But it's shaping up to resemble, you know, the market at large in terms of split between commercial and government, which I'll remind you, generally speaking, is, you know, is in the 60/40 split in favor of commercial. We're not seeing quite that split. We're heavier towards the commercial piece as we would expect just given our footprint and, again, the early stage of launch. But that's generally how it's laying out. But, yeah, RxConnect is definitely doing its job, and that's where the, you know, substantial majority of prescriptions are being filled.

Nazibur Rahman: Got it. Thanks for taking my questions.

Josh Disbrow: Thank you.

Operator: And once again, everyone, if you have any questions or comments, please press star then 1 on your phone. Your next question is coming from Edward Woo from Ascendiant Capital. Your line is live.

Edward Woo: Yeah. Thank you, and congratulations on the progress. My question is going also on the supply issue. You mentioned a little bit of weather issue that may have affected getting inventory into the channel. Has that been corrected now? And also, do you have any issues potentially in terms of how much you could ramp up if demand does increase faster than you expect?

Josh Disbrow: Yeah. Good question. It has been corrected. I mean, when I think about delays from the distributors, for example, into the pharmacies, you know, we're talking, you know, a couple few days delay. We're not talking weeks necessarily. So they, you know, almost without exception kind of cleared the channel. And so we've got sort of adequate supply. In terms of can we do we have adequate supply to ramp? Absolutely. I mean, we were very prudent in how we organized the initial production runs to ensure that we've adequate for the very near term really through this entire calendar year and beyond. And we have API stateside at the manufacturer.

We have componentry needed to produce multiples of what we've already produced, and so we have zero issues being able to scale appropriately if demand outstrips even our most optimistic forecast will be fine with the supply that we have already stateside at our contract manufacturer.

Edward Woo: That's great to hear. Thanks for answering my questions, and I wish you guys good luck.

Josh Disbrow: Thank you, Ed.

Operator: Thank you. That does conclude our Q&A session. I'll now hand the conference back to management for closing remarks. Please go ahead.

Josh Disbrow: Great. Thank you. And thanks again, everyone, for joining us on today's conference call. As mentioned, and hopefully you can hear this, we remain very excited and highly convicted about the market potential for ExuA and are already seeing in real time the tremendous interest from the psychiatry community. It's really been exciting. So looking forward to sharing more and speaking with you next quarter following what will be our first full quarter of actual commercial availability. So until then, again, thank you for joining us. Thanks for your interest, and have a good evening.

Operator: Thank you. Everyone, this concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.