AYTU

Today, welcome to the Aytu Biopharma fiscal 2026 Q3 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Robert Blum, Investor Relations. You may begin.

Great. Thank you very much. Good afternoon, everyone. As the operator indicated, during today's call, we will be discussing Aytu BioPharma's fiscal 2026 Q3 operational and financial results for the period ended March 31, 2026. Joining us on today's call is Aytu's Chief Executive Officer, 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. I'd also like to call to your attention the customary safe harbor disclosure regarding forward-looking information.

The conference call today will contain certain forward-looking statements, including statements regarding the goals, strategies, beliefs, expectations, and future potential operating results of 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 except as required by law. With that said, let me turn the call over to Josh Disbrow, Chief Executive Officer of Aytu Biopharma. Josh, please proceed.

Thanks, Robert, welcome everyone. I'm very pleased to be speaking with you today following what has been an exciting first partial quarter of commercial launch activity for EXXUA. As we've discussed, EXXUA represents a significant new opportunity for Aytu. It's the first and only selective serotonin 5-HT1A receptor agonist ever approved by the FDA for the treatment of major depressive disorder in adults. EXXUA is already demonstrating very solid growth trajectory within the MDD category.

During our last call and during our investor day back in January, we spent meaningful time in the market opportunity, the clinical rationale, the unmet need in MDD, and the strategy behind our commercial launch. Today, I want to focus more directly on execution and some of the things we're seeing with respect to early adoption.

Simply said, while we were still very early in the launch, the fundamentals we are seeing are highly encouraging and the launch is progressing very well. Let's dive in. As most of you are aware, we moved from initial commercial availability in our second fiscal quarter in December into a more formalized launch phase during our third fiscal quarter. EXXUA was made commercially available back in mid-December.

The initial tranche of the sales organization completed training in January, while broader field deployment of the full 40+ sales representatives didn't actually begin until late February, early March. That timing's important. While Q3 was our first meaningful commercial quarter, it was still only a partial quarter of full sales support and commercial deployment, with roughly one-third of the sales force only getting into the field in March. We're just getting started.

The most important point here, though, is that physicians are already writing EXXUA. Patients are beginning therapy and very early refill activity is already becoming evident. In Q3, more than 1,300 prescriptions were written for EXXUA. The monthly progression is particularly encouraging, with prescriptions increasing from about 200 in January to about 400 in February to over 700 in March.

That type of sequential growth is exactly what we'd hoped we would see in the early stage of a launch as awareness builds, our representatives increase their reach and frequency, and as physicians begin to identify patients who may be appropriate for EXXUA. Importantly, that momentum has continued. In April, we saw over 920 prescriptions written, up from the 700 in March. That's a 26% month-over-month sequential growth rate.

Further, we shipped over 1,300 units shipped in April, which is 51% sequential growth, and that's more than the prescriptions generated in the entire Q1. While it's early, and we will avoid over-extrapolating from any short period term of data, that continued month-over-month acceleration clearly demonstrates that physician interest is building and that the launch is getting traction. We're also encouraged by the breadth of early prescriber adoption.

During the quarter, more than 450 unique prescribers wrote EXXUA prescriptions. That is meaningful because our initial focus call universe is approximately 3,500-4,000 highly targeted prescribers. At this very early stage, already 10%-13% of our target universe has written EXXUA. Yet again, we're just getting started in building a solid base of physician adoption.

We believe this points to a substantial opportunity ahead as the sales force actively increases, as our access initiatives mature, and as peer-to-peer and rep-based education expands. As most of you know, unit sales and prescription counts are not the same measure. Units reflect product moving through the channel and into distribution networks and ultimately into pharmacies, while prescriptions reflect what physicians, rather, are writing for patients.

In a launch, those numbers can move at different rates because of channel stocking, titration pack, and full prescription ordering, refill timing, et cetera. With that said, during Q3, gross unit sales were 3,335 units, consisting of 1,807 30-count units or full 30-day prescriptions and 1,500 titration units.

Since launch, total gross unit sales are 3,881 units, consisting of just under 2,030 count bottles at 1,991 and 1,890 titration units. Again, highly encouraging numbers at this very early stage. When we look at the combined picture, we see a launch that is doing what we expected it to do. Physicians are beginning to prescribe, patients are starting and staying on therapy.

Titration packs are being utilized, channel partners are ordering, and they're already reordering product. Very importantly, refills are beginning to come through, and we're seeing momentum build month-over-month-over-month. Taking a step back, a key reason we're encouraged by the launch is that the elements of our launch plan are now moving into the market and functioning as they had been designed.

We built this launch to be disciplined, efficient, and scalable. Initially, we are not trying to outspend larger competitors. Instead, we're being very disciplined by focusing on the prescribers most likely to understand the unmet need, evaluate EXXUA's differentiated profile, value our access programs, and become early adopters. Our sales organization is specifically prioritizing high-value, high-prescribing psychiatry practices. Our customer targeting has been informed by market data, branded therapy adoption behavior, existing Aytu relationships, and insights gained from our RxConnect platform.

We believe that this is the right approach for EXXUA at this stage. The product will not benefit from broad, unfocused promotion at this important time. Right now, it needs focused engagement with clinicians who treat high numbers of MDD patients every day and who understand the limitations of existing therapies and are looking for new treatment options.

The phased deployment of the sales team has also been intentional. With only a partial quarter of full sales force support, the early prescription and prescriber numbers are even more encouraging. We believe there remains meaningful room for growth through increased reach and frequency and of course, execution against the target universe that's already been identified. Again, this is just the beginning without a full quarter of promotion even in the books yet. Aytu RxConnect has been and will continue to be a core pillar of the EXXUA launch.

Our objective is to remove friction for both prescribers and patients, particularly in the early months when coverage policies and payer processes are still developing. Through RxConnect, commercially insured patients have a predictable and supported pathway to access EXXUA, including a no-cost 14-day titration pack and guaranteed access through the early treatment period for commercially insured patients specifically.

That allows clinicians and patients to evaluate the medicine based on clinical response rather than on early administrative or payer-driven barriers. This is particularly important in major depressive disorder, where patients and physicians need confidence that therapy can be initiated and continued long enough to assess response and tolerability. By reducing uncertainty at the point of prescribing, RxConnect helps align our commercial model with real-world clinical needs. We're also seeing our channel partners execute well.

The more than 3,300 units sold during the quarter demonstrates preparedness across the distribution network to support the current prescription demand along with the growth we're seeing. The early launch period is not only about demand generation, it is also about making sure that when a physician prescribes EXXUA and a patient is ready to begin therapy, that product is available and the process is smooth.

The qualitative feedback from the field remains consistent with the launch thesis we had laid out previously. Physicians understand that many patients with MDD do not achieve adequate outcomes with existing therapies or struggle with tolerability issues that can affect adherence. EXXUA gives these patients and these clinicians a differentiated option with a novel mechanism of action. That message is clearly resonating.

As it relates to physician adoption, that will build methodically as it always does. Physicians often start by identifying specific patient types where they believe EXXUA may be especially relevant, or in some cases, patients who have been through a long list of antidepressants already and they're simply searching for something new. Our job is to continue educating, supporting access, and building confidence through clinical experience.

The fact that hundreds of prescribers have already written EXXUA gives us confidence that this process is working well and that even very challenging patients, in fact, are reporting positive results. We're also highly encouraged by the early refill activity. Refills are an important proof point because they demonstrate that initial prescriptions are progressing into continued therapy.

The base of patients is still relatively small, but the presence of refill activity together with growth in titration utilization and sequential prescription increases clearly demonstrates that prescribing is picking up and that EXXUA is beginning to establish a role in the treatment of MDD. Most importantly, the patient feedback we're hearing through our prescribers is nothing short of outstanding. Phrases from even difficult patients like, quote, "life-changing," and a specific patient saying, quote, "He has never felt this good in his entire life," are coming through at this point almost daily.

Yet again, we're just getting started. We're highly confident we'll continue to hear more and more of these patient success stories. As we move ahead, our priorities are clear. First, we will continue increasing prescriber calls within the initial target prescriber universe. We are only again at the beginning of that process, and our current prescriber base represents a small, a tiny fraction of the opportunity we have identified and an even smaller fraction of who will ultimately be prescribing EXXUA.

Second, we will continue leveraging RxConnect to support access and reduce friction. We expect access, reimbursement, gross to net, and refill dynamics to all become clearer as the launch matures and will remain disciplined in adapting our approach based on the data. By the way, the early signs on both coverage and reimbursement rates are extremely positive across both commercial and government payer channels.

We're seeing solid and increasingly good coverage of EXXUA among commercial plans, and Medicaid and Medicare scripts are making up an increasing portion of the overall script load. It remains early, but many of the positive payer dynamics we've spoken about pre-launch are in fact bearing out. Third, we will continue investing in scientific engagement, KOL development, peer-to-peer programs, and publication and medical congress activity.

We believe EXXUA has a differentiated profile, and the more physicians understand where EXXUA fits into their prescribing, the more opportunity we have to grow. We had a significant presence at a major psychiatric conference last weekend, the NEI Spring Congress. As expected, interest and feedback and follow-up from the conference attendees was excellent.

Finally, we'll maintain commercial discipline by aligning investment with performance and using cash flows from the legacy business to support the highest growth opportunity in the company, and that is clearly EXXUA. Turning now briefly to our legacy portfolios. ADHD net revenue was $9.1 million in the quarter compared to $15.4 million in the prior year period.

As expected, the decrease was primarily driven by our strategic shift in sales force focus late last summer towards EXXUA and some impact from the introduction of generic competition for Adzenys as well. Despite the overall shift in promotional priorities, the ADHD portfolio remains a very important contributor to Aytu, and given the lack of commercial support currently behind the brands, we continue to view the portfolio as profitable and durable on a standalone basis.

The uptake of the third-party generic against Adzenys has been quite low, which has been encouraging, with it only achieving about 14% market share through 4+ months of market availability. This tells us that the protective characteristics of the Aytu RxConnect program are proving protective, given relatively little erosion as a percentage of the overall scripts written within the Aytu RxConnect ecosystem.

The vast majority of decline due to the generic is coming from outside the Aytu RxConnect ecosystem, things are working as we had expected and as we had designed. Our Pediatric Portfolio generated just under $1 million of net revenue in the quarter compared to $3.1 million in the prior-year period. We continue to efficiently service our pediatric products and believe that while small, these mature products will continue to be durable sources of profitable revenue.

Overall, the legacy business continues to provide an important foundation as we transition the company towards the larger CNS opportunity, clearly represented by EXXUA. Our goal is to balance disciplined investment in EXXUA with continued cash generation from the existing business, and the existing base business does generate cash even at these levels and even at lower levels. In summary, we're very pleased with the first meaningful quarter of EXXUA launch activity.

We generated $2.4 million of revenue for, specifically for EXXUA, saw more than 1,300 prescriptions written in the quarter, had more than 450 unique prescribers write the product, sold more than 3,300 units into the channel during the quarter, and saw great momentum and continued growth into April with almost 1,000 prescriptions generated.

Importantly, this was achieved with only a partial quarter of full sales force support and with only a small percentage of our initial target universe writing prescriptions. We're still very early. I can't emphasize that enough. There will be normal launch variability as market, payer access, prescribing, and refill dynamics all settle out.

The proof points we have in hand are encouraging, and they reinforce our conviction that EXXUA can become a significant treatment options for patients living with major depressive disorder and a very meaningful growth driver for Aytu. With that, let me turn the call over to Ryan to review the financials in more detail. Ryan?

Thank you, Josh. Let's jump right into it. Let's start on the revenue line. Net revenue for the Q3 of fiscal 2026 was $12.4 million compared to $18.5 million for the prior year period. That represents a decrease of $6 million or 33% year over year. Breaking net revenue down by portfolio, EXXUA contributed $2.4 million in the quarter.

As Josh mentioned, EXXUA was made commercially available in mid-December and more formally launched in mid-January after completion of Salesforce training, with full Salesforce deployment occurring late in February, early March. While we remain very early in the launch curve, we view the initial contribution as highly encouraging, particularly given that the quarter included only a partial period of full Salesforce support. Further, remember that net revenue is based on gross unit sales, not scripts.

During the quarter, there were 3,335 units consisting of 1,807 30-count units and 1,528 titration units sold. This equates to more than $700 per script. I want to caution that this is better than our initial expectations, and we will wait to see how the dust settles before making any changes to our long-term assumptions around net selling price of EXXUA. The ADHD portfolio generated net revenue of $9.1 million in the Q3 compared to $15.4 million in the prior year period.

The decrease is primarily attributable to lower total prescriptions as we have deliberately shifted commercial focus and sales force prioritization toward EXXUA, which is now the centerpiece of our commercial efforts, as well as the launch of a generic version of one of our ADHD products late in the Q2 of fiscal 2026. The Pediatric Portfolio generated net revenue of $0.9 million for the Q3 compared to $3.1 million in the prior year period.

The Pediatric Portfolio was negatively impacted during the quarter by payer mix, which resulted in higher rebates as well as an increase in returns. Overall, the revenue story this quarter is very much about transition. We are seeing the expected impact on the legacy portfolios as we navigate payer changes.

Again, I'll remind you that the legacy portfolios do generate cash even at these levels. Gross profit margin was 61% in the Q3 of fiscal 2026, compared to 69% in the same quarter last year. The decrease in gross profit percentage was impacted by a $700,000 inventory write-down recorded to cost of goods sold, primarily resulting from the shift from our Adzenys branded product to our Adzenys authorized generic.

Excluding that write-down, gross margin for the Q3 would have been approximately 67%. From an EXXUA perspective, the expected unit economics remain attractive. As discussed previously, EXXUA includes a 28% royalty in addition to a true-up on cost of goods sold. We continue to think about the product as having approximately 31% cost of goods sold or roughly a 69% gross contribution margin before certain fixed costs.

As EXXUA scales, we expect these economics to become increasingly important to the overall model. Turning to OpEx. Operating expenses, excluding amortization of intangible assets, were $10.9 million in the Q3 compared to $9.5 million in the prior year period. Total operating expenses were $11.7 million compared to $10.4 million last year. The increase is primarily a result of planned EXXUA launch investments, partially offset by improved operational efficiencies such as reduced facilities expense.

I'll touch more on the outlook in a moment. Interest expense decreased half a million dollars or 52% during the quarter and by $1.5 million for the year to date compared with the prior year, primarily due to the paydown of our fixed payment arrangements we've previously discussed.

For the quarter, we reported a net loss of $5.6 million or $0.53 net loss per share basic, compared to a net income of $4 million or $0.65 net income per share basic in the prior year period. The fiscal 2026 Q3 results included a $1.3 million non-cash derivative warrant liability loss, compared to a $2.3 million non-cash derivative warrant liability gain in the prior year period.

As a reminder, these changes in non-cash derivative warrant liabilities are primarily related to changes in the company's stock price. When our stock price increases, we generally incur a non-cash loss on those liabilities, and when the stock price decreases, we generally recognize a non-cash gain. The losses recognized during the Q3 were primarily driven by increases in our stock price.

On April 2, 2026, we filed a Form 8-K detailing warrant amendments that resolve the ambiguity of that previously required certain warrants to be classified as liabilities rather than equity. As a result, we reduced our warrant liability and increased stockholders' equity by $26.4 million on March 31st, 2026. We believe this should significantly reduce future non-cash earnings volatility associated with warrant liability gains and losses.

As of March 31st, 2026, stockholders' equity was $35.1 million compared to $14.2 million at December 31st, 2025. Finally, adjusted EBITDA was -$2.8 million for the third quarter of fiscal 2026 compared to a +$3.9 million in the year ago period.

The change primarily relates to the planned investments we've made towards the launch of EXXUA, combined with the broader de-emphasis in marketing toward the ADHD Portfolio and the impact of payer changes affecting the Pediatric Portfolio, both of which impacted net revenue and gross profit. Turning now to the balance sheet. Cash and cash equivalents were $26.7 million at March 31, 2026.

This compares to $30 million at December 31, 2025, and $31 million at June 30, 2025. The change in cash during the quarter primarily reflects the planned investments behind the EXXUA launch, along with normal working capital movements. As of March 31st, 2026, our revolving line of credit balance was $10.4 million, and total debt, including the current and non-current portions, was approximately $11.4 million.

As noted earlier, the warrant amendments completed at quarter-end also had a meaningful positive impact on the balance sheet presentation, reducing derivative warrant liabilities and increasing stockholders' equity. As of March 31st, 2026, combining both equity classified pre-funded warrants and issued and outstanding common shares, there were 19.5 million shares utilized for calculating the basic weighted average shares outstanding for earnings per share purposes.

Before I turn it back over to Josh, I want to spend a few minutes on how we are thinking about EXXUA from a financial perspective now that we have the 1st meaningful quarter of launch activity behind us. First, EXXUA net revenue of $2.4 million in the quarter was a strong initial result and ahead of our internal expectations.

This revenue reflects a combination of prescriptions written and filled during the quarter, as well as inventory channel stocking to meet prescription growth expectations from channel partners and pharmacies. Said differently, prescriptions are the closest, clearest measure of physician-written demand, while unit sales represent product moving into the channel. In the early stages of a launch, these two measures will not always move in lockstep, but both are important.

Second, gross-to-net dynamics are still settling. During the quarter, growth to net came in materially higher than our initial launch assumption, but again, it is still very early. We will continue to refine our assumptions as payer mix, RxConnect utilization, pharmacy ordering patterns, and patient access programs mature.

The first few months of any launch include noise, and that is especially true for a product like EXXUA, where our strategy is intentionally designed to remove early access barriers for patients and prescribers. As we discussed last quarter, through Aytu RxConnect, we have deliberately reduced early access friction by offering a no-cost 14-day titration pack.

For commercially insured patients, we are also guaranteeing coverage of both month 1 and month 2 of therapy, regardless of the insurance outcome, which is intended to ensure patients can remain on treatment through dose optimization without interruption. That strategy is important clinically and commercially, but it also means that scripts can grow ahead of net revenue in the early going.

As patients transition into month three refills and beyond, we expect the revenue model to begin normalizing more closely with ongoing utilization, although we will continue to see some variability as the launch matures. Third, the launch investment framework remains disciplined.

We made planned investments during the quarter across sales and marketing, service costs, and launch infrastructure, but we continue to manage those investments carefully and align the incremental spend with launch performance and cash flow. Our objective is to support the EXXUA opportunity appropriately without losing the operating discipline that has been central to the company's progress.

In the Q4 of this fiscal year, we are launching our online promotional campaigns, including paid search, programmatic displays, and social media advertising to drive awareness and incremental adoption and should result in an increase in overall sales and marketing spend by $1 million-$2 million, depending on their breadth and overall impact.

Additionally, we have increased our speaker program events spending, medical education content, and conferences involvement, which will likely increase our G&A spending by $200,000-$300,000 in the upcoming quarter. Depending on the success of these programs, we currently anticipate ongoing sales and marketing quarterly spend to range from $6 million-$7 million and G&A to range from $5 million-$5.3 million going forward. Finally, the financial model continues to be straightforward. We expect EXXUA to have attractive gross contribution margin.

We expect launch-related expenses to be managed against demand and return on investment, and we expect the legacy portfolios to continue to providing an important foundation as EXXUA scales. While we are not providing formal guidance today, the general framework we discussed previously remains the right way to think about the business.

Mid to high 60% gross margins over time, a disciplined operating expense base, and the near-term path to profitability as EXXUA revenue builds on top of the existing platform. As always, I'm happy to go over any details during Q&A. With that, let me turn it back over to you, Josh.

Thanks, Ryan. As we look ahead, I want to reemphasize again what we're seeing with EXXUA. While we're still in the very early stages of product launch, the initial traction has been highly encouraging. With more than 1,300 prescriptions written during the quarter by over 450 unique prescribers and continued growth in titration packs and early refill activity, we believe prescribers are increasingly recognizing EXXUA's differentiated role in the treatment of major depressive disorder.

Again, with April posting over 900 prescriptions and over 1,300 unit shipments, we're seeing continued month over month increases in prescription and unit demand. Importantly, this momentum was achieved with only a partial quarter of full sales for support, which reinforces our confidence in both the market opportunity and the disciplined, efficient commercial strategy we have put in place.

EXXUA gives Aytu access to a very large MDD market with a meaningful unmet need, attractive unit economics, and a clear opportunity to build long-term value. We remain extremely excited about the path ahead and look forward to updating you as the launch continues to scale. As always, I want to thank everyone participating on today's call. We'll now be happy to answer any questions. Operator?

Thank you. At this time, we'll be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Once again, that will be star one on your phone at this time if you wish to ask a question. One moment, please, while we pull for questions. First question today is coming from Thomas Flaten from Lake Street. Thomas, your line is live.

Hey, good afternoon, guys. Thanks for taking the question. Hey, Ryan, just doing some back of the envelope math, I kind of figured about a million and a half in quote-unquote stocking revenue in the EXXUA number for the quarter. Is that a reasonable assumption?

Sorry. Yeah, that is a pretty accurate calculation.

Okay. Josh, you mentioned some efficacy anecdotes in the prepared remarks, but I was curious what you've heard back specifically related to weight gain and sexual side effects if the physicians have provided you with any feedback on that.

Yeah. I'll take weight gain first, which is that that'll always be quite a while before that develops just because of the time it takes for someone to gain weight. What I will say is, we're certainly not hearing anything unexpected there, but again, you wouldn't necessarily expect in the first few weeks much weight gain one way or the other. On the sexual side effects, I will say, that's where things like life-changing and never felt so good in my life, those anecdotes sort of come from.

Even having heard from them personally from some select physicians in my area where I've had conversations. One gentleman who had been on quote, "Everything under the sun," was switched to EXXUA and immediately, restored his libido. We're hearing very, very good positive anecdotes, way more than just those handful.

That's just a couple that I put into the prepared remarks, and again, one I experienced myself directly from a prescriber here in Colorado.

Just one last one, if I might. You mentioned something like 10-ish% of your customers had written EXXUA. What's been the writing activity of non-customers, so to speak, people that you haven't called on? Is there any of that?

Yeah. Highly encouraging as well. You know, when you look at the amount of white space we have around the lower 48, it's fairly significant as any of those who follow us closely know. You know, we really cover the eastern seaboard, call it from Connecticut down to Miami, out to Florida, and then some dots kind of in flyover country. We have gotten significant prescribing from states where we have no physical presence. It's been extremely encouraging.

Finding their ways to the product without any promotion. We've had inbound calls. We've had significant prescribing in places where, again, there's been no presence at all. It's been highly encouraging. I want to say we've had prescriptions in 42 or, yeah, 41 or 42 states at this point.

Obviously we don't physically have presence in nearly that many, so it's been very encouraging.

Great. Appreciate that. Thank you.

Thank you.

Thank you. The next question will be from Naz Rahman from Maxim Group. Naz, your line is live.

Hi, everyone. Congrats on the progress, and thanks for taking my questions. I only have two. The first one is on reimbursement. I understand it's very early in the launch process, but in terms of, like, those prior authorizations, could you provide some color on, I guess, how many of those or what % of those prior auths are getting approved on the first pass versus how many or what % you have to have, like, a back and forth through prior to getting reimbursed?

Yeah, good question. I'll sort of separate it into commercial as well as CMS, Medicaid, Medicare. Medicaid, Medicare is highly variable, down to the individual patient, down to the individual state. What I'll say is what we're seeing early on is prescribing EXXUA fits well within what they currently do.

Which is to say, in the state of Colorado, you need to demonstrate that you failed, two, quote, "preferred agents," which are really nothing more than just generic established therapies like SSRIs, and then the prior authorization goes through. We've seen that already in real time happening in numerous states, and so that's going through smoothly and as expected.

In some places where there are mandates to allow for psychiatric prescribers specifically to essentially be waived of any PA requirement, that's happening also in the states that we expected it to. That's all encouraging. Medicare, relatively small numbers on Medicare. Those prescriptions are going through as well.

Highly variable from plan to plan in terms of what is required. Most patients will have to meet a deductible. The benefit from their Medicare provider, for example, like AARP, will start to kick in. On the commercial side, because we've got this unique setup, I'll bifurcate that a bit as well, because we certainly have prescriptions going through the Aytu RxConnect network. That is the vast majority.

To Thomas Flaten's previous question around prescriptions that are being dispensed and prescribers outside of our footprint, those two are going through. They're completing any prior authorizations, and we're actually seeing a relatively high rate of well-covered claims in places, again, where we have no coverage. Within the Aytu RxConnect network, we are seeing prior authorizations go through with good success.

We're seeing of the numbers that we're doing, and it's still relatively small, over 70% of those are getting approved, and so we're seeing a very high rate. Obviously, approved claims means better for everyone, a lower copay for the patient and a higher net selling price to us, and so that's highly encouraging.

Even, I'll remind you, even in cases when prior authorizations either aren't done or aren't going through, that in the initial going and for that first trial period, we're essentially covering those prescriptions for either $0 or potentially $50. I'll say just as an overarching statement as it relates to reimbursement and coverage, the approval rates continue to improve month-on-month, and the dollars in terms of net selling price when you aggregate government and commercial are materially higher than we initially budgeted.

To reiterate what Ryan said, we'll caution of extrapolating that out too far because things are still settling out. I'm extremely pleased, and I think we all are collectively here on the team with what we're seeing with respect to reimbursement and frankly, the relative ease some of these prescriptions are going through with.

Very pleased.

That was very helpful. Just kind of on that point, these patients, do you know, I guess, what line they are on by the time they get to EXXUA? It sounds like in Colorado, these are like 3rd line patients. Do you have an idea of like how many of these patients are like 2nd line versus 3rd or 4th?

Yeah, that's a good question. It's still very early, and it's very heterogeneous. We have everything from 2nd line all the way to very late line, kind of tried everything, so to speak. What I'll say is we have good data that we know in the 60%+ range, those patients are being switched, which suggests minimally those patients have been on 1 therapy.

Really, when you speak with doctors in real terms, these are patients that in the early goings have been on multiple. If I had to put a number, it's somewhere between probably 3rd and 5th line realistically. Very encouraging that you've got patients that are being prescribed 2nd line. I know of a specific patient.

I don't know the anything other than the patient's demographics based on a prescription that was generated just last week. It was second line. It was a young patient. I believe the patient's 22 years of age, had been on a therapy and was experiencing sexual side effects and was immediately switched to EXXUA. Still very early to know how that patient's doing.

I'll say generally speaking, I'm encouraged that we appear to be getting a little bit earlier in therapy, but certainly there are the, quote, "train wreck" patients that are being started. Very encouragingly, those patients in many cases are responding quite well when other things have failed. It's been quite encouraging.

That was very helpful. Thanks for taking my questions.

Thank you.

Thank you. Once again, as a reminder, it'll be star one on your phone if you wish to ask a question on today's call. The next question is coming from Edward Woo from Ascendiant Capital. Edward, your line is live.

Yeah, congratulations on all the progress. I just had a mechanical question. In terms of patient and prescriptions, is it normally prescribed for 30 days, and then after the 30 days, they would have to either go back to the physician or they will get automatic refills and it will show up as the refill count?

Good question, Edward. We start patients off, in an optimal world, the prescriber would prescribe the 14-day titration pack. By definition, that's two weeks. That patient would then get moved to one of the top two doses in most cases, either the 54.5 mg or the 72.6 mg. Those, either of those, the 54.5 or the 72.6, would be prescribed for 30 days.

Typically, they'll either be seen back to either stay optimized on the 54.5 or move up to the 72.6. From that point forward, they would probably get a prescription for something like three months or six months. In some cases, we already have pharmacies dispensing 90 days or three full months right after they get titrated to the 54.5.

In some cases, doctors are more aggressive and will go to the 72.6. Again, they'll get the full 90-day. I say that all to say it's variable, but generally speaking, they're getting 30 days, and then they're typically gonna get moved to a every three-month check-in with a three-month prescription or a six-month check-in with a six-month prescription. We're just now at the very early stages of even starting some of those sort of, call that maintenance therapy on the 54.5 or the 72.6.

Okay. It's not clearly 30 days, then you see the refill. You might actually, based on your data, without disclosing much information, you're happy with the refill rate so far that you're seeing this at this point in time?

Very. When we look at patients, the percentage of patients that are moving just from titration to a full 30-day supply, which that demonstrates tolerability, it may not necessarily demonstrate that they're getting clinical benefit yet. Although I will say we're hearing very consistent anecdotes that patients are feeling better quickly.

That having been said, we're still so early, we'd hesitate to put a number on what we would expect sort of conversion to be longer term. It's very, very solid, and we expect it to improve over time. Again, these numbers that we're posting are really without any material annuity value baked in in terms of repeat use and refills and so forth. Just getting started.

That sounds good. My last question is just on geography. I know you mentioned that you guys are aiming for the coast, for the big markets. Is that your continued plan going forward is just to target the big metro markets first and then move to the smaller markets?

You know, what I'll say already, Edward Woo, is we're actively contemplating, in select markets, moving into some of those, potentially a little bit quicker than we'd initially anticipated. We'll be judicious as Ryan Selhorn said. We'll certainly be cost-efficient.

In areas where we've already identified sort of a groundswell of physicians that have found themselves prescribing the product or in places where we have access, whether that be from a commercial or government perspective, places that we think we can optimize. We are already looking. Certainly, you know, I mentioned a few dotted territories kind of in flyover country, so to speak.

We are actively looking at north to south, east to west, and even. That's all that having been said, with the territories we have in place to have sort of this type of momentum already, understanding that a full third or more of our sales force just got out there, you know, call it the 1st full week of March. Of course, we all know it takes a while for anybody new in a geography and, of course, new physicians to start getting on board with anything that we would fully expect to expand into other markets and see that same type of uptake.

Excellent. Well, thanks a lot for answering my questions, and I wish you guys good luck. Thank you.

Thank you, Edward.

Thank you. There were no other questions at this time. I would now like to hand the call back to Josh Disbrow for closing remarks.

Thank you, Paul. Again, thanks everyone. We could not be more excited with the progress that we're seeing in real time here. I've got the unique benefit of not just leading the team, but in some cases, having conversations of my own. The real-world feedback is really nothing short of amazing.

We've continued to hear positive feedback across the board with patients that have tried a lot of therapies and in some cases, quote, "everything," according to the psychiatrist. To hear the feedback that's coming back is nothing short of inspiring. We'll continue to keep the pedal down and obviously drive higher and higher adoption.

Until we report our fiscal Q4 and full years in September, we'll be sure to be present at conferences to make sure folks are aware of what's happening and continue to update prescription trends as we move along. Thanks for listening to today's call. Appreciate your support, and I wish you a good afternoon and good evening until next time. Thanks very much.

This does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.

Good day, everyone. And welcome to the Aytu BioPharma Fiscal 2026 Second Quarter Earnings Call. At this time, all participants are placed on a listen-only mode. And we will open the floor for your questions and comments after the presentation. It is now my pleasure to hand the floor over to your host, Robert Blum. Sir, the floor is yours.

Alright. Thank you very much, and good afternoon. As the operator indicated, during today's call, we will be discussing Aytu BioPharma's fiscal 2026 second quarter operational and financial results for the period ended 12/31/2025. Joining us on today's call is Aytu's Chief Executive Officer, 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.

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?

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.

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?

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.

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.

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.

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?

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.

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?

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.

Got it. That's super helpful. Thanks.

Thanks, Thomas.

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

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?

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.

Got it. Thanks for taking my questions.

Thank you.

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.

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?

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.

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

Thank you, Ed.

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

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.

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