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

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But I’m happy to see that some, in particularly in some territories and some geographies, we’ve really grabbed sort of outsized share from what we had, say, prior to the shortages. So there’s good growth from both perspectives. And again, even if you just took growing kind of with the market, that’s going to be really solid growth. But we’re always striving, obviously, to grow beyond what the market growth rate is. And we’re seeing that in various circumstances, depending on, again, the time points that you look at.

Robert Blum: Got it. Josh, also during your prior comments, you spoke about the pass approvals for both Adzenys and Cotempla that you received from the FDA. Do you have a specific timeline for the ramp up of the contract manufacturing? And on the other side, the eventual exit from your Grand Prairie facility?

Josh Disbrow: Yeah. So the ramp up, Roger, is really, it’s happening now. Given the fact that we had at Adzenys, the PAS approved early in the year and just got the Cotempla PAS approved, the manufacturer has purchase orders in hand, is beginning the process of scaling up manufacturing. Those deals again are being sort of acted on and we’re happy to see that. We do have said almost by definition we’ll be out of Grand Prairie sort of by the end of next year. The lease expires at the end of calendar ‘24, and so certainly no later than that we would expect. And really the process will be essentially kind of a seesaw as we’re producing, as we’re increasing production levels at the CMO, we’ll be decreasing production levels in Grand Prairie, Texas.

But there will be a caveat to that, which is we need to make sure we don’t do anything to interrupt supply. And so we’re going to continue to build inventory in Texas, while the CMO is building their inventory. That will create some noisiness in the P&L, specifically as it relates to gross margin. You’re not going to see an immediate step down in COGS, for example, because we’re going to have to build supply really on both sides. But generally expecting to be sort of fully exited by, kind of summer and into the fall, and then again, definitely out as it relates to the lease expiry, at the end of next calendar year. Everything’s going very well. It really has gone according to plan. If we look at sort of how we cast things about a year ago, it’s really on the same timeline that we had sort of presupposed back then, finishing sort of on budget.

And so we’re excited about the progress we’re making there as we exit and obviously difficult to part ways with some of these longtime colleagues that have been working at the facility there for years but we’ve implemented a really good communication plan I think we’ve been forthright along the way everybody’s had a good heads up in terms of what the timing for their end of employment will be and so we’ve got some of that some of that’s already occurred something that’s coming up here shortly And then some of the separations will happen a little bit further down the road as we sort of fully start to exit the facility and close the doors.

Robert Blum: Got it, Well, Josh, thank you. Let me turn it back to the operator. Operator, any additional Q&A?

Operator: We have no further questions in queue. I’d like to turn the call back to management for any closing remarks.

Josh Disbrow: Great, thank you, John. Well, let me just say again, thanks to everyone for your time on the call today. Thanks for your interest in Aytu BioPharma. We are very, very pleased with the progress we’ve made to date or excited about where we’re going. Really, my hats off to the entire team at Aytu, a lot has gone on to enable this transformation. It’s still underway. As I mentioned, it’s not always a straight line, but we continue to really demonstrate solid progress across all of the initiatives that we’ve undertaken. Really proud of the growth that we’re seeing, particularly as it relates to the ADHD brands. And we’re really optimistic about how we’re positioned here as we move forward. So until next time, thanks very much for your time. Thanks for your interest in Aytu BioPharma and have a good rest of the afternoon or evening. Thank you.

Operator: This concludes today’s conference and you may disconnect your lines at this time. Thank you for your participation.

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