Q3 2025 Aytu BioPharma Inc Earnings Call
Speaker Change: [music].
Okay.
Speaker Change: Greetings and welcome to the <unk> Biopharma fiscal 2025 Q3 earnings call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation.
Speaker Change: No one should require operator assistance during the conference. Please press star zero on your telephone keypad. Please note. This conference is being recorded I will now turn the conference over to your host Robert Flamm Investor Relations at eight you Robert Your line you may begin.
Speaker Change: Thank you very much and good afternoon, everyone as the operator indicated during today's call. We will discussing H O biopharma as fiscal 2025 third quarter operational and financial results for the period ended March 31, 2025 with US on today's call is they choose chief Executive Officer.
Josh Disbrow: Josh Disbrow and Ryan So horn, the company's Chief Financial Officer.
Josh Disbrow: 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 teleconference numbers and conference I'd provided in the press release issued earlier today or by utilizing a link on the company's website.
Josh Disbrow: Under events and presentations.
Josh Disbrow: Finally, I'd also like to called 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 <unk> Biopharma. Although the management believes these statements are reasonable based on.
Josh Disbrow: 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.
Josh Disbrow: Actual results may differ materially as a result of various risks uncertainties and other factors, including but not limited to the factors set forth in the company's filings with the SEC eight you undertakes no obligation to update or revise any of these forward looking statements with that said, let me turn the call over to Josh Hasbro Chief Executive Officer of <unk>.
Speaker Change: Josh Please proceed.
Speaker Change: Thank you Robert and welcome everyone I'm extremely pleased with the operating and financial performance achieved during the 2025 third fiscal quarter.
Speaker Change: A quick run of our numbers here to get Us started.
Speaker Change: Total revenue grew 32% led by growth in both our ADHD portfolio, which was up 25% and pediatric portfolio, which was up 77%. The strong revenue growth coupled with the implementation of our cost reduction initiatives, which helped to decrease operating expenses by $1 6 million led to income from.
Speaker Change: The operations of $2 4 million, it's important to note that this is our second quarter with positive income from operations in the company's history. Another huge milestone for everyone here at <unk>.
Speaker Change: I'll note also that this is our third quarter of positive net income from continuing operations and third quarter of positive net income as well significant accomplishments across the board.
Speaker Change: On the income statement net income was $4 million, which compared to a $2.9 million loss in Q3 of a year ago and translates into basic earnings per share of <unk> 65 cents this quarter compared to a 52 cent loss in the year ago third quarter and finally, adjusted EBITDA came in at $3 nine.
Speaker Change: Compared to <unk> 9 billion in the year ago third quarter by nearly every financial metric. There is we had a phenomenal third quarter.
While it has taken a bit of time to fully get to this point the pieces, we've been putting in place for the past number of quarters, which have focused our efforts on our prescription pharmaceutical business are beginning to fully manifest themselves in our financial performance remember over the past two years, we have halted our clinical development efforts wound down and sold our consumer health business outsourced or Manny.
Speaker Change: Are you factoring to a U S based CMO and refinanced our long term note on more favorable terms. These a bit heavy lifts, but the results announced today highlight what is possible as we move this business forward.
Speaker Change: The beauty of where we sit today is that these positive financial results are being accomplished on a focused portfolio of products I believe our commercial platform has the ability to be further leveraged in the future through additional in licensed or acquired products that can utilize the capabilities of our CNS focused sales team and the broader <unk> Rx connect patient access platform. This is.
Speaker Change: Something we are keenly focused on now and in the future, but first back to our two current product focuses starting with ADHD as I mentioned 80, H D. Net revenue was up 25% coming in at $15 $4 million during the quarter compared to the year ago quarter.
Speaker Change: Sequentially ADHD net revenue also increased up 11% certainly strong performance from the entire commercial organization that we're very pleased with overall ADHD prescriptions were approximately 94000 during the third quarter.
Speaker Change: Looking more broadly at the ADHD stimulant market, we continue to see conditions returning to a more normalized state. Following a series of significant market wide stimulant shortages commencing in early 2023 that impacted the supply of Adderall XR and instead amine based products as well as methylphenidate based stimulant medications as I've discussed.
Speaker Change: Fortunately a two supply was never impacted and we therefore realized short term and long term tailwind from the shortages of this we're facing with the market stabilization in effect. The ADHD net revenue growth was largely driven by organic growth and improvements in gross to nets through assertive management of our brands economics.
Speaker Change: This of course is enabled through our <unk> connect platform, gaining strong channel and dispensing insights and therefore, the ability to manage our per script economics is a calling card of <unk> Rx connect so it was encouraging this quarter to see these G T and improvements we saw a benefit from savings offers government rebates commercial rebates and distributor fee improvements.
Speaker Change: And also took a slight price increase in January of this year. It was a favorable quarter across multiple G. G M parameters to be sure.
Speaker Change: But back to what I believe is a key driver in all of this <unk> Rx connect our flagship best in class patient access platform.
Speaker Change: <unk> connect continues to be a significant differentiator for the company and one that enables us to stand apart from the competition and truly benefit patients.
Speaker Change: As a reminder, Rx connect is among other things a network of about 1000 pharmacies with which we work around the country. Many of these are independent pharmacies in local geographies to do an excellent job servicing patients and prescribers. There are small businesses that work very hard to serve patients well and to go above and beyond to deliver best in class patient experiences.
Speaker Change: The other part of our network is made up of regional grocery chains that are very customer centric that provide excellent customer service and work directly with us to ensure patient access to our products and the optimal use of our savings offers I dove into this during our last quarter a bit but as a reminder, the biggest differentiators of <unk> Rx connect is our ability to cut through the opaqueness of the.
Speaker Change: Pharmacy model to offer prescribers and patients affordability predictability and access irrespective of the patient's insurance or their plan design and even during the high deductible season, when many patients experienced higher out of pocket costs ultimately with Rx connect we were putting the power back into the hands of physicians and patients.
Speaker Change: Something both stakeholders, so desperately need today.
Speaker Change: More than 85% of the company's scripts are driven through the <unk> connect network again. This is something we think can be leveraged in the future as we look to bring in other products to the portfolio.
Speaker Change: Transitioning now to the pediatric side of the business as I mentioned at the beginning pediatric portfolio net revenue increased 77% to $3 $1 million compared to the prior year period sequentially. The pediatric portfolio net increased net revenue increased 27% growth in peds reflects the positive effects from our recently implemented returned to grow.
Speaker Change: Plan as well as improvements in product gross to nets. As a reminder, looking back a few quarters ago, we were impacted by a variety of payer and channel challenges. Initially we saw the impact with a large payer stop covering a big portion of pediatric fluoride based multivitamins that affected the entire multi vitamin plus floor I class. This was exacerbated for.
Speaker Change: Further as we had some fairly concentrated dispensing pharmacies, where this payer has a large market share.
Speaker Change: Alright, histamine was affected similarly by a payer change in an area, where we had a pretty significant concentration of prescribers with that product largely covered by Medicaid.
Speaker Change: We have put in place a series of initiatives focus on diversifying the prescriber base and improving payer coverage for both franchises multi vitamins as well as with their antihistamine franchise. In particular, we are focused on expanding areas of promotion diversifying our base of dispensing pharmacies and bringing on several payers that we hadn't had covering our products before.
Speaker Change: We've also deployed sales representatives and shifted some promotional resources to our pediatric products previously pediatric sales were conducted with a much smaller group of sales specialists that focused on promoting those products for the last couple of quarters, though we shifted our sales forces product mix, providing for a better balanced and more product, but more impactful product penetration and.
Speaker Change: <unk> with increased short term emphasis on those pediatric products.
Speaker Change: Will prudently allocate resources and evaluate the most appropriate product promotional mix to leverage our salesforce. Most effectively will also of course monitor all macro and political factors that could have the potential to impact our brands whether that be our ADHD brands are fluoride supplements or our antihistamine franchise and of course, we will then shift accordingly in terms of our priority.
Speaker Change: <unk>.
Speaker Change: Being nimble and responsive to what we believe are our best growth drivers is a critical success critical success factor here for a too. So we'll always focus resources on the products. We believe can drive the most growth depending upon all commercial and macro factors. We track clearly the work we have done the last six to 12 months is starting to be highlighted more fully in our financial results.
Speaker Change: As we've stated for some time now we first and foremost we're focused on the continued organic growth of our ADHD pediatric portfolios today's results highlight our execution on that initiative.
Speaker Change: We are focused on driving efficiencies across the organization again that started with our decision to stop our development work continued with our shutdown and sale of our consumer health business expanded with the outsourcing of our manufacturing and concluded in some ways with the optimization initiatives, we announced recently to cut out an additional $2 million annually from our operating expenses.
Speaker Change: All of these moves are nearly fully recognized in the results you see today.
Speaker Change: With our infrastructure near full optimization, we remain focused on leveraging our platform through the pursuit of additional in licensed or acquired products that can utilize the capabilities of our CNS focused sales team and the broader <unk> Rx connect patient access platform we.
Speaker Change: We are adept at identifying valuable assets and aligning with partners to seek a commercial partner with unique capabilities.
Speaker Change: So we see a tremendous advantage in.
Speaker Change: A tremendous opportunity rather to leverage our infrastructure, our capabilities and our expertise and to diversify our portfolio by in licensing <unk> acquiring assets of course will be smart about it and look to pick these assets up as attractively as possible in win win transactions for us and our prospective partners as.
Speaker Change: As you can hear I'm extremely pleased with the progress made and the results being more fully manifested in our financial results in some ways. This was the type of breakout quarter that we always knew we were capable of when we implemented the series of strategic initiatives over the past couple of years, it's great to see it come to fruition.
Speaker Change: Let me now turn the call over to Ryan to review the financials in more detail after which I'll provide a few closing comments and we'll be happy to take your questions Ryan.
Ryan: Thank you Josh as you mentioned 2025 fiscal third quarter's results underscore the hard work dedication and perseverance of the entire <unk> team our financial progress highlights the huge number of operational and financial changes that we've worked on over the past few years. Please.
Ryan: Please note that our March 3rd quarter fiscal 2025 financial results are detailed in both our press release and Q3 fiscal 2025 Form 10-Q that we filed today with the SEC.
Ryan: Let's dive into the numbers in more detail.
Ryan: Third quarter net revenue was $18 5 million up 32% from 14 million in the year ago third fiscal quarter.
Ryan: ADHD portfolio net revenue rose, 25% to $15 4 million versus $12 3 million in Q3 fiscal 2024, primarily reflecting improvement in our gross to net that we spent a lot of time optimizing and constantly refining on.
Josh Disbrow: On the pediatric side net revenue was $3 1 million versus $1 7 million in Q3 of last year as Josh noted, we continued to see the progress and the execution of our pediatric returned to growth program and are pleased with our results, which again showed a rebound both year over year and sequentially.
Ryan: Gross margin for the third quarter was 69% compared to 74% in Q3 of last year.
Ryan: Last quarter I had mentioned the noise in our numbers, especially in our cost of sales we are and expect to continue to work through the higher cost inventory through the end of this fiscal year, which ends on June 30th.
Ryan: As a reminder, from a GAAP accounting standpoint earlier this year, we loaded factory overhead costs into the ADHD inventory manufactured at our now shuttered Grand Prairie facility. We did this as we ramped down our own manufacturing and ramped up production at our contract manufacturer, which ensured a balanced manufacturing.
Ryan: Handoffs.
Ryan: As our self manufactured production output fell the in house produced goods absorbed through the same amount of overhead from our facility and personnel.
Ryan: The numerator or the overhead expense stayed constant while our denominator or manufactured units fell as a result.
Ryan: It resulted in higher unit cost of goods.
Ryan: As we continue to sell through this inventory, we expect to see our ADHD gross margins expand.
Ryan: Breaking down our cost of goods sold slightly during the third quarter of the overall $5 6.352 million represent the current year depreciation and amortization $1 5 million represents overhead and indirect costs with direct costs, consisting of the remaining $3 $8 million with continued.
Ryan: Revenue growth, we expect to see gross profit margins improved toward the low to mid 70% range and see operating margins reflect our reduced head count leaner management structure and of course outsourced manufacturing.
Ryan: Operating expenses in Q3, excluding amortization of intangible assets and restructuring costs were down $1 3 million to $9 5 million from $10 8 million last year. The decrease Opex as a result of our focus on continued cost reduction and our improved operational efficiencies one no.
Ryan: What about our last year's numbers the consumer health care business is now accounted for as discontinued operations. Thus last year the expense exclude that division's revenues and expenses. If you were to look at the actual opex from the year ago quarter. The savings are significantly greater.
Ryan: Net income from operations. During this quarter was $2 4 million versus last year's loss of operations of $1 6 million or a $4 million swing in earnings bottom line net income during the third quarter of fiscal 2025 was $4 million or 65 net income per share basic and 21% net adds.
Ryan: <unk> per share diluted compared to a net loss of $2 9 million or 50, <unk> net loss per share basic and diluted in the prior year period.
Ryan: Fiscal 2025 third quarter results were impacted by $2 $3 million of derivative warrant liabilities gain Darren due primarily to the decrease in the company's stock price compared to a derivative warrant liabilities gain of $1 million in the third quarter of fiscal 2024.
Ryan: To reiterate from earlier the positive operating income of $2 4 million is our second quarter with positive income from operations in the company's history and again. This is our third quarter of positive net income from continuing operations and positive net income overall.
Ryan: For the quarter adjusted EBITDA was $3 9 million in the third quarter fiscal 2025 compare to your point 9 million in the prior year period, a full reconciliation of adjusted EBITDA is included in the press release it puts our trailing 12 month EBITDA at $9 2 million.
Ryan: Turning now to the balance sheet cash and cash equivalents were $18 2 million at March 31, 2025, compared to $20 4 million at December 31 2024.
Ryan: I do want to note that the biggest change in the balance sheet was from the growth of our accounts receivable with show at $35 8 million up from last June's $23 5 million.
Ryan: While our sales can be somewhat lumpy. Our collections are very predictable, we collected about $19 million of those receivables in April and expect that the remainder will come in during may per our normal trade terms.
Ryan: On the liability side of the ledger, we're in full compliance with all our debt covenants. We use we did use some of our cash holdings to pay down a combined $2 5 million in long term debt and other fixed payment arrangement during the third quarter of fiscal 2025.
Ryan: While we don't provide forward guidance I will say that overall, we are very pleased with the progress that <unk> made in getting to this point in time, our hope is that as we approach the end of our fiscal 2025 year, we are well positioned to take advantage of the growth in our underlying business with that let me turn it back over to Josh.
Ryan: Thank you Ryan.
Ryan: Let me just say that its very gratifying when a plan comes together.
Ryan: The way, our multi year strategic realignment to focus the plan has come together.
Ryan: Let's not forget that in fiscal 'twenty, one we had a net loss of $58 3 million and an adjusted EBITDA loss of $34 $8 million, we were burning cash and taking significant impairments on our assets. Today, we have recorded three consecutive quarters of positive net income and eight straight quarters of positive adjusted EBITDA.
Ryan: We've utilized the opportunity to improve the balance sheet through the continued pay down of our long term loan with eclipse, our senior lending partner and other fixed payment arrangements as Ryan mentioned, we paid down $2 5 million in this quarter alone.
Ryan: The sales team and our <unk> connect platform are operating at high levels of efficiency and as Ryan just highlighted we still have upside potential within our gross margins as we fully finalized the outsource manufacturing transition all of this would not have been possible without the hard work of the entire <unk> team.
Ryan: Look forward to building off the success in the future and I think the whole team here for their efforts to get us to this important point. Thank you to everyone participating on today's call will now be happy to answer any questions operator.
Speaker Change: Thank you at this time, we'll be conducting a question and answer session. If you'd 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 he would like to remove your question from the queue.
Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Speaker Change: Once again Thats star one if you'd like to ask a question today.
Speaker Change: One moment, please while we poll for questions.
Speaker Change: On the first question is coming from and as Robin from Maxim Group. Your line is live.
Robin: Hi, everyone. Thanks for taking my questions and congrats on the progress made especially over all these years.
Robin: First quarter did you see any one time effects in the ADHD pediatric business, whether it's stocking.
Robin: Alex that impacted the numbers.
Robin: Okay.
Robin: No. Thanks for the question. The answer is no on that on both fronts. This was organic growth driven driven by.
Robin: Obviously, all the optimization efforts, but theres no one timers in there at all nothing related to stocking so very good to see that.
Robin: Got it and on that point and it seems like the ADHD franchise is finally back to the levels seen at late fiscal 'twenty three early fiscal 'twenty four or these are all the do you expect to continue growing forward or do you expect to see growth here I guess based on what you've seen thus far.
Robin: In the current quarter, what are you sort of expecting in CE.
Robin: Yes, we do certainly expect growth going forward and I. Appreciate you acknowledging that we're sort of back to historically high levels.
Robin: Following just some some optimization efforts that have happened along the way and as we continue to focus obviously on the ADHD products along with the pediatric products I think we've really developed a good balance and prioritization across the portfolio to enable growth of both both portfolio. So yes very excited what's your trajectory of the sales teams really.
Robin: <unk> begun to get optimized and operate with good efficiency and so excited to think that we can maintain.
Robin: Maintaining and even even grow these levels so very good very good momentum.
Speaker Change: Got it and on the similar energy on the Pediatrics business. Your narrow returning to growth I don't really like to sell a level not seen I guess somewhere between like a late fiscal 'twenty through early fiscal 'twenty four.
Speaker Change: What are you sort of see the franchise going or getting back to do you can go back to be coming in like a $25 million annual business or anything that's less than now what do you think the potential or the pediatric wisdom now.
Speaker Change: Yeah, probably probably not quite to that level of nos. We would realistically expect growth to some degree from these levels, but probably not to that 25 plus million dollars annualized run rate, but I'd always sort of said we'd be pleased if we could get sort of halfway back to where it where it was so something north of where it is today, but perhaps not at again.
Speaker Change: $25 million level, So you know.
Speaker Change: Don't want to guide specifically, but if you take a look at this quarter and potentially applied some growth to that I think that's a realistic number you know we're seeing really good momentum on the antihistamine franchise in particular, theres, probably probably more substantial growth in that particular franchise than perhaps with the multivitamins for for various reasons and ultimately.
Speaker Change: I don't think we can grow that product, but I think something approximating and maybe exceeding halfway where they were would be a good number and that would make this a meaningful contributor for the company. While we think we can continue to grow the ADHD franchise as well.
Speaker Change: Okay.
Speaker Change: Got it thanks, and I guess I'm Gonna stay business development front.
Speaker Change: What has been the gaining factors and potentially closing a deal is it more like you're having some issues with finding the correct as it is at the asking price and also what what are you seeing in terms of allocation of valuations come.
Speaker Change: Come down in the last several months a miss like market volatility has been relatively stable how they increase like what you've been seeing in would've been the gating factors to potentially closing some sort of transaction.
Speaker Change: Yes, I'd say the main gating factor for US is the right. The right fit we're really really looking for the right asset to complement the capabilities. The therapeutic focus the sales force footprint and of course, the Rx connect capability that we're.
Speaker Change: Obviously very proud of and so we would be optimally looking for something aligned to what the sales force does on a regular basis, which is largely calling on psychiatrist and to some degree pediatricians and so that's been the biggest factor is finding just the right asset and where I'll remind you that we are open to assets at various stages.
Speaker Change: Most most.
Speaker Change: Preferably something that's commercial ready commercial stage potentially something that's on the market, but the sweet spot would be something that is on the market <unk> are ready to be marketed visa b through its already been through the FDA approval process.
Speaker Change: So that's been the main thing is just finding the right thing and I'll say look we're excited about some of the things that we have.
Speaker Change: That we're evaluating some of the things we have on our plate at the moment.
And I think we can get something done here in the relative near to mid term. We've said, it's a high priority for the company to bring in an asset that's complementary, but we don't want to bring in just any asset for the sake of it.
Speaker Change: We are willing to look at brands that need to be launched we're also willing to look at brands that are they.
Speaker Change: They need to be relaunched in some cases and of course, we're open to mature assets that we believe can be accretive.
Speaker Change: <unk> valuation I would say the valuation is going to have to be right for us obviously, we want to use our cash judiciously.
Speaker Change: Particularly in this in this environment, where cash remains very precious to us. So we have priorities not just around launching a product, but also around managing the debt and by paying that down.
Speaker Change: Valuations are a bit high obviously in this environment people are companies are holding onto their assets more and so the valuations are higher but I'm increasingly confident that we're going to be able to bring in an asset that really well aligns with the again the therapeutic focus our footprint in with our capabilities and so more to follow but are excited about the <unk>.
Speaker Change: So we have kind of circulating at the moment.
Speaker Change: That was very helpful. Thanks, and one last question, if I may and complex as a broader.
Speaker Change: Political environment.
Speaker Change: Tariffs have any impact on <unk> and if so how are is there any other piece of legislation anything might have any material near or medium term impact me too.
Speaker Change: Yes. Good question I'd say in the context of tariffs as it relates to our products relatively de minimis impact understanding that our ADHD meds are all of our products are manufactured in the U S.
Speaker Change: Just just to restate that.
Speaker Change: We've mentioned that I think in the past the ADHD products by definition are made in the U S. The DEA does not allow you to import.
Speaker Change: Centimeter mental suddenly.
Speaker Change: And so by definition, there's minimal impact we have sort of small componentry that would be sourced outside the U S that would have some level have been impacted to some degree from tariffs, but it's not a material amount.
Speaker Change: Same applies for our other products carbon on the multi vitamin franchise, while there are components that we pull in from outside the U S. For example, one of the key ingredients are Multivitamins does come from Europe, but it's a relatively small.
Speaker Change: Purchase price in the scheme of things and again those products are all finished here so would not expect tariffs to have any any any material impact.
Speaker Change: As it relates to other potential macro factors out there.
Speaker Change: You know theres been talk.
Speaker Change: Particularly recently around fluoridation, some states have recently banned them well.
Speaker Change: Florida, putting fluoride in the municipal water supply Utah's one state that has recently enacted that and that will take effect here very very quickly other municipalities or.
Speaker Change: Seemingly daily the making the move to potentially remove floor I from the water.
Speaker Change: So we're monitoring that and what impact does that have on the upside remains to be seen equal parts Theres talk of the FDA evaluating.
Speaker Change: Fluoride and fluoride supplements as to their benefits and the utility.
Speaker Change: There is the potential that they at some point down the road.
Speaker Change: You know conductor study they they've indicated as much that they plan to study fluoride supplements here.
Speaker Change: And come out with at least a recommendation what impact that has I mean that that has a long ways to go in terms of whether that even becomes close to reality.
Speaker Change: There's certainly the we've.
Speaker Change: We've had the thought already understanding that that's relatively new news it.
Speaker Change: It may be it may be challenged in court. The American Dental Association continues to be very strong proponents of fluoridation and fluoride supplementation. So it remains to be seen whether.
Speaker Change: Any action would be taken but we'll monitor that I'm understanding that.
Speaker Change: The pediatric multi vitamins are not gigantic pieces of our business today, So and if there were any action. We think it would take quite some time if it ever actually comes to fruition. So those are a couple of things as as we think about the business, but overall certainly minimal if any impact from a materiality standpoint on the from a tariffs perspective, so we feel good about.
Speaker Change: That.
Speaker Change: Got it thanks, a lot for taking my questions and once again congrats on the quarter.
Speaker Change: Thanks, guys appreciate it.
Speaker Change: Thank you and once again it will be star one on your phone if you wish to ask a question at this time.
Speaker Change: [noise], Josh and Ryan This is Robert here, while we wait to see if there are any additional questions from the teleconference line, we have a couple of questions here maybe.
Speaker Change: Maybe Josh the first one for you here you referred to the return to growth plan for the pediatrics business, but can you revisit the substance of that plan and specifically what entailed a related to that to what degree did you pivot the commercial team to get the products back to growth.
Yes, Thanks, Robert Yeah, I would say look we first and foremost we did deploy the sales force against more pediatric targets than we had in the past specifically looking at antihistamine allergy targets. So that was one thing and so not to suggest that we took them away from ADHD, but we certainly did add carbon all to their promotional priority.
Speaker Change: That was one thing that we did we also did expand the footprint significantly more reps in more places than we had been before we had a relatively small team that was active mostly in the areas where there was you know quite favorable coverage.
Speaker Change: So we've deployed more.
Speaker Change: More folks in the field around that again, having dual responsibility for both the ADHD products as well as.
Speaker Change: Carbinol in particular to create sort of hybrid responsibilities and so that that has that has certainly serve to drive some growth and then numerous pieces on the payer front to pick up additional coverage, particularly on the public payer side as it relates to the antihistamine franchise.
Speaker Change: Several states that had previously not been covering their product through some creative contracting in various strategies, we've employed across the franchise, we've been able to pick up multiple state Medicaid plans previously carbon all being covered in really a very small handful of states and the coverage I will say.
Speaker Change: Heading into the spring allergy season has picked up.
Speaker Change: Materials multiples more in terms of the number of states that have the product now covered on the formulary and in many cases without any kind of prior authorization or any kind of restriction. So and so it is a capstone to all that I would say just put more emphasis in general on the pediatric franchise, while not letting our foot off the gas on ADHD and that has certainly served to really help us.
Speaker Change: So we feel like carbon oil in particular has had some really good momentum and good upside from these current levels.
Speaker Change: That having been said as I mentioned in my prepared comments, we will continue to evaluate promotional priorities in the mix in the field.
Speaker Change: You know you never stay stagnant and static you definitely want to make sure your adhering to market trends, obviously growth drivers are going to be what we put the most emphasis behind and so you know in the in the <unk>.
Speaker Change: Foreseeable future. Obviously, we're you know we're fully back to promoting the ADHD brands, along with a carbon all and so excited to see that as it unfolds, but good momentum across the portfolio on the basis of some of this return to growth plan that we put in place.
Speaker Change: Okay. Great next question here and you touched on this a bit with nos, maybe if theres anything you can add here as it relates to new product opportunities. How are you thinking about potential product targets anything to add there.
Speaker Change: Yeah, all I would say just to reiterate again, the sweet spot for us the bull's eye so to speak would be something in the CNS space with something that's in psychiatry, and neurology, but with a potential secondary emphasis in the pediatric types of products and some good conversations happening with things that are sort of aligned to that.
Speaker Change: We clearly are going after brands, we are definitely interested in things that are commercial stage commercial ready I E already approved through the F. D. A it can be launched in relatively short order or products that are already in the market that we can potentially bring back or re reinvent so to speak.
Speaker Change: And again, we definitely want things that ideally if we can get them that fit well within the call point, we've got a sales team that's out there actively engaging with psychiatrists and to a lesser extent pediatricians in and select family practitioners. You know, we're obviously in psychiatry by virtue. The fact that we're in ADHD and so something that aligns to that again are branded <unk>.
Speaker Change: Asset on market or ready to be launched would be really in the sweet spot of what we're looking for we also want things that align well with our payor strategy and fit within the <unk> connect platform.
Speaker Change: Things again that.
Speaker Change: We understand the nuance around the payer challenges how to work within the current <unk>.
Speaker Change: Confines of the P. B M ecosystem, and obviously how to work with our pharmacy partner partners to ensure that there's good value created for everyone in the value chain the patient the physician and obviously the dispensing pharmacists as well so you mix all those things together.
Speaker Change: It does create sort of a pretty specific bullseye, but I think if we can find the right asset it will be one that weakens surely say is <unk> is a really perfect fit and one that we really can mobilize around so.
Speaker Change: Excited with some of the conversations that we're having.
Speaker Change: Alright, Great and then last question maybe for Ryan here with the Opex haven't come down materially over the last four plus quarters or so how do you think about the go forward quarterly Opex line and what's a good breakeven number based on the current spend there.
Speaker Change: Yes, Thanks, Robert and thanks for the question and yes, you're correct over the last four years, we've continued to experience a reduction in the operating expenses as we've improved the efficiency of the operation to be sold the consumer Health Division outsourced the manufacturing of ADHD products.
Speaker Change: Excuse me, we finally hit the point this quarter, which demonstrate that expenses are apparently.
Speaker Change: We currently expect to continue into the future periods to come.
Speaker Change: You'll note in the Q3 results, we did not incur any restructuring expenses and don't anticipate such expenses in the future our cash based operating expenses for the quarter, which excludes amortization depreciation and stock based compensation totaled 9.3 million with our overall operating expenses of about $10 4 million.
Speaker Change: When analyzing our breakeven number from an overall operation standpoint, and factoring in a similar gross profit of what we accomplished this quarter of 69, 4%.
Speaker Change: Revenue would need to achieve approximately $15 million on a quarterly basis to breakeven.
Speaker Change: If we eliminated the noncash expenses in calculating kind of a breakeven from an operating cash perspective.
Speaker Change: Total revenue.
Speaker Change: Be closer to about $13 1 million to hit that breakeven point.
Speaker Change: Alright fantastic.
Josh: Josh Ron not showing any additional questions here, so Josh I guess I'll turn it over to you for closing remarks.
Josh: Great. Thanks, Robert and thanks to everyone on today's call for your time, we appreciate everyone's interest in <unk> Biopharma. We really are very pleased with the progress that we've made over the last couple of years. It has been a longtime coming we appreciate everyone's patience as we enacted many of these significant changes to transform the company to get ourselves into the position that we.
Josh: We are today, so with that I'll say again, thanks for your time, thanks for your interest thanks.
Josh: Thanks for your ongoing support of <unk>, and we look forward to sharing our full fiscal 'twenty five year end results in the fall in September when we file our 10-K and subsequently.
Josh: <unk> earnings for the fourth fiscal quarter, which is off to a very very good start so with that I wish you a good afternoon and good evening and again. Thanks for your time have a good evening.
Josh: Yeah.
Thank you. This does conclude today's conference you may disconnect. Your lines at this time. Thank you for your participation.
Josh: Yeah.