AYTU - Earnings call transcript Q3 2018

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Operator

Good afternoon, everyone. Thank you for joining us for the Aytu BioScience First Quarter Fiscal 2019 Business Update Call. With me this afternoon are Aytu’s Chief Executive Officer, Josh Disbrow; Chief Financial Officer, Dave Green; and Chief Operating Officer, Jarrett Disbrow. Aytu BioScience issued a press release earlier this afternoon with details of the Company’s operational and financial results. A copy of the press release is available on the news page of the Company’s website at aytubio.com. everyone call remind being to like that is today’s recorded. I’d press be of ID using earnings today’s replay available provided call the conference A and will by numbers the in release. telephone

replay will addition, Investor under conference the Presentations Corporate call. archived following In Media aytubio.com, of be page, at an and conclusion on the available Company’s webcast this

contain including information. Finally, Safe Harbor customary regarding attention to The call strategies, and I conference the belief, would statements, BioScience. also results future like to certain today goals, the potential will regarding statements of your forward-looking forward-looking call expectations, disclosure Aytu operating

sensitive Although and as to may accurate with be forth reasonable including, the of management revise Disbrow. of factors but to based may no Josh forward-looking statements webcast time risks, are X, result at projections as any SEC. of Aytu of limited materially November results Time and over the the these XXXX uncertainties in Actual assumptions of information believes today, guarantees to undertakes statements call now Aytu’s differ are no replay. longer to on these telephonic these not update a or turn any like I’d not obligation estimates performance. CEO, set or other Company’s factors statements. the the filings future

Josh Disbrow

the call. Thank to you, start update exciting for was This Moira. fronts great quarter Good afternoon, first an and everyone, on and us thanks for the today’s joining quarter year. multiple

quarter very in the We’re and recent developments results the end. that followed pleased with brought we

in we exciting anti-tested numbers markedly. all $X competing Natesto the quarter, revenue just commercial Tuzistra gross-to-net and market. in product Also, achieved U.S. the the licensed During XR, billion other and stage product high increased time

XR Further, The highs. all would It force’s deeper we’ll a from have pay commercial with strategy close transformed August, it our of spring commercial $X ZolpiMist complements very to Natesto strategic earlier dive have the Tuzistra busy bag the was with the our progress in are acquisition effective, investor expecting That we a care changes taken than grown is I’m and and Capital. revenues announced. proud Armistice what portfolio. revenue. on investment nicely quarter along our primary the now we root off a When last that we’re year. sales time team fiscal that reputable already drive accomplished we keeps later, strategy we goals. implemented a incremental more we in we getting healthcare soon back Taking and and discuss quarter. institutional into of the this very commercial against that spoke debt this previously And million really to start And said to increase revenue successfully driving are salesforce to launched stated to strengthens further and has investors

We we would of all change we’d That that that share growth. sequential is done to and yield we even growth continue before. more believe higher wasn’t And way. that also said more happy expected a the I’m that our things these show to we this blip. revenue seen we’ve model and launch to would commercial substantial gross-to-net a shift Natesto post ZolpiMist we and on

over $X.X XX% revenue. quarter and This we growth topline sequentially posted netting million in

higher at Natesto October, have sales physicians through first higher programs launched program continuing uptake full exceptional through in in the to the month growing level of August begun support are refills We and of the to drive we’ve the This done sending the Program launch recent transitioning Direct. our patient in now the the total nearly at grown stickiness to From job an due patients the on the our October The access patients’ model increasingly has to program. team physician customers is been Natesto operating profitable enhancements also patients Support and there’s prescriptions prescriptions grown implemented to significantly had capacity. with is and starting scripts. strong posted success and programs of This have a to Natesto multiples XXX% gross-to-net new full this say that. Direct Natesto newly

into improving We driving scripts driving to getting of are and then better by continuously and monitoring get and these refills. the the support at covered programs operations we payers expect system, scripts the

and Moving over to from booked pull-through. are already ZolpiMist, pharmacy orders revenue initial seeing we early stocking

pull-through. Natesto of to field renewed promotion, secondary awareness are representatives in around driving terms are prescriptions our getting While and ZolpiMist

ZolpiMist nearly compete $X As in with ZolpiMist are zolpidem. just Natesto reminder, XX written annually And billion there for market. and specifically, a both scripts million

X% that in potential market Just net $XX are XXX,XXX million ZolpiMist prescriptions over of revenue. is approximately

spray Our feedback physicians resonates rapid patient with oral ZolpiMist and message around positive. is delivery the

was Natesto. update We’re to ongoing happy our innings active to market the Spermatogenesis respect trial Journal – particularly it the as Dr. still Study. in respect clinical of early focused with the broader ZolpiMist activities, Ramasamy’s that to In It With European start. a are on it relates was active very with a Urology September, quarter. published development

As levels Also, only luteinizing within and it total count on follicle baseline. or remain but have University Natesto after full Miami hormone, statistically three simply slightly, for shown as impact production. six you LH, reference total Natesto motile five with for we both concentration, treated function the is may Very of sperm and that male of Ramasamy on months there and and no the patients hypogonadal parameters not from motility key quite normal Natesto has stimulating recall, negative to also sperm authors expected degree count range. were this report Dr. FSH, six would encouraging. With evidence The semen reduced sperm was months sperm determine to correlated but effect a Median therapy, three sperm was the study decreased and times some to hormone, the landmark daily, study seeks significant. clinically men at or the fertility.

total above first reported XXX to study the been per enrolled be that XX restored we Additionally, from deciliter, testosterone patients quarter nanograms patients had an and the enrolled expect with have levels XX nanograms the to in per robust a at median efficacy the early level men perspective, XX% in the deciliter. in their of XXX total. We

what means impact We’re and the only as that for Natesto to about testosterone study it potentially fertility. appear the optimistic replacement therapy doesn’t

keep enables If We no the limited of calendar on grab to be may expected summer. implications are demonstrate younger X interim learn with may label study to made. impact million expect is to far data the men plus T and specific results enable we’ll year claims and increased reaching. protection or this This exclusive spermatogenesis, final an even could on next posted. continues solidify readout The the IP you Low

academic are clinical efficacy advisory so the to unexpected comprised We’re Spermatogenesis We the around positions excited continue a Study and reproductive present prescribed skeptics first time. to awareness the of data and of was to U.S. met Natesto The in and with results the recently this see Ramasamy overwhelmingly urologist therapy. around have leading engage to for compelling academic even We’ll country sitting testosterone room thought build These the Natesto for with kind positive. from one continue that since these Dr. board influential response from the an the leaders more. for

over developments quarter’s to financials. hand speaking on to the cover Dave just Dave? call recent then for opening Before and the it questions, I’ll

Dave Green

Today, review quarter thank year financial ended this for and us of Josh, you, you XX, all for our joining I’ll our that results today. September XXXX Thank first fiscal XXXX.

First, the at a items. Earlier SEC. filed today, of we couple housekeeping Form XX-Q

the strategic in quarter report the million than expected our XX% Natesto reported summary the Natesto Aytu quarter of release for stronger a during represents both financial to this I’ll today provided revenue of issued press gross-to-net XX% from highest changes was QX of ZolpiMist dollars changes, topline July, earlier XXXX. quarterly growth This compared be last a revenue Natesto by quarters beginning of launch can the half last The revenue recorded quarter, our for higher The increases result also earlier beginning is record The to began expected last start directly QX $X.X driven $XXX,XXX the on led favorable discontinued with of acknowledging out performance a was stocking The ever release revenue. and orders the net growth at strong implemented revenue growth XX%. script. from of commercial XX-Q performance, than million website, is operations revenue recognized of model from QX report including to and of by accomplished is growth by $X.X first year. and XX% of sequentially found was to fiscal revenue consecutive with year. to to revenue We MiOXSYS connected said, the year-over-year QX strong We growth. of The and the year-over-year compared press accelerated Adjusting XX% the was products as growth by since pull for second results. ZolpiMist a XXXX. net Natesto www.aytubio.com. performance revenue gross That year’s from that which that fourth two the implemented XXXX through. year-over-year statements was were now more translates

at due and QX was recognized operating small expense shipping and were was gross non-cash relative XXXX, expense items in in the year operating QX million operating Aytu and million line cost in of last in equity amortization Operating Adjusting record. XX% XX% slightly expenses of by GAAP, depreciation, came XX% $X XX% to at million. quarter. cash which of U.S. quarter, required million The with cash largely the cost than ago than gross lower cash cash expenses comp margin operating $X.X year. last are reported profit operating to to level of operating lower and excluding out quarter’s costs. profit expense lower of gross reported more costs expense. gross sold QX margin $X.X QX in when million of we than compares Our The which XXXX QX goods operating QX the sold in increase QX expense. This this came of another were $X.X for XX% operating produced good $X.X aggregate favorably margins and expense also expenses

September XX. the share Our shares recognized counts gross the of was cash giving QX a per weighted of to ended in the cash million the loss which $XX.X balance was on $X.X from on bottom based approximately average $X.X public line quarter And was X.XX we year. last from X. equivalence of completed share cash, the proceeds restricted on and $X.XX October or of we million million effect million, with approximately million loss reduced Loss $X.X sheet, offering

strategic making to last changes to implemented Other than balance the I With million. relative the company. approximately plus the we’ve key even business financial controlled end or made it the positioned the in impact the expenses, ever. Aytu’s on quarter. items Our certain QX echo growth sheet, summary, a sheet that $XX than substantial of the of stronger In at XX% cash a topline at Josh operating impacts October ago cash, were six end months balance just of was better of performance positive balance stable

So with Josh additional that, for over some let me commentary. the call back to turn

Josh Disbrow

occurred Thank have the that you, Dave. I’ll touch closed. on quarter some of developments the since

license awakening pleased his with very position investors Tuzistra that relationship from a Founder, privately done As senior FDA product. fundamental healthcare XR market Dave had. TRIS. share license unmet investor. entered offering FDA is with and codeine forward with to solution. prescriptions team. week unique expected Pharma Tris XX last in named is development, from XR Mehta This huge FDA In Ketan It oral antitussive Friday working of the the dosed by approval. both as need approved Thus due I’m infusion offering we $XX.X annually. is runway we and into beginning large this and another complimentary to commercialize cough was very led company to four deal Armistice written term, multiple have that and hour million were is Capital, first antitussive new Aytu cash they throats said, ever you be The They approved these just pending sleepless We cash investors. short inherent we’ve healthcare on closed persist. with had only to Current with get every and October. the to estimated the $X cough able and billion to recent we codeine We with institutional held truly Tuzistra participation nighttime million existing six in hours. along we the assets competes drippy due $XX the were antitussive over need. nights a and XR from to exclusive Tuzistra that the a longest excited well, an oversubscribed antitussives This look have note in new brought be a

the antitussive Tuzistra market, deliver only As hour symptoms. all and codeine the night will cold on patients from relief all XX day, cough

to to introduced her translates antitussive this rapidly FDA. prescriptions been million net Tuzistra more topline than asset XX,XXX attractive already cold XX,XXX and calendar believe and to have expect launch cough Tuzistra pipeline we over and quickly U.S. the XXXX. and Importantly, annual additive this our for to deeply season. the to market so is we been in prescriptions We prescribers be has sales, X submitted win back prepping can in generated year. Aytu’s The

informed. you As that we��ll keep moves forward,

And the with Tuzistra is and so cold nicely course can months. it the complimentary to a product, be in it fits care we’ll high. seasonal current efficiently that targets. Given the of in primary be physician Natesto overlap weather overlap will during have promoted ZolpiMist is and Tuzistra,

We expect Natesto continue and be to ZolpiMist promoted year will round.

on as of part we securing secured expect the note to a Finally, million with assets. very $X Capital Armistice soon TRIS close

be it’s institutional cap Armistice Armistice job we As Capital done companies $XXX with Steve Capital companies and City. assets as on on by is healthcare, excited and on million it over in and grow. a Armistice management. has identifying, York an healthcare investor in may and and Aytu Steve very founded healthcare Steve largely investing and small under we’re has focused to in exceptional reputable focuses like advising New you in Boyd, know, based working

in was revenue accomplished a licensing out, quarter recently. Some significant our our investment closing more, and ZolpiMist, of with in of launch things growth, the here the lot first the Tuzistra, Armistice

results. commercial current very our open concludes our remarks, for and our for about portfolio That position pleased growth operator prospects and to with so our I’ll the we’re across phones enthusiastic quarter’s We’re our prepared more this questions. ask

Operator

you. Thank

be We ahead. go first Please The from session. conducting Securities. Instructions] question-and-answer will a from Byrnes is Carl [Operator now question Northland

Carl Byrnes

the you. Thank Congratulations progress. on

with how here Or sort year? augment With the campaigns marketing at of sales that flu expectation force? may can bit approach how of addition during the little that sampling? course you and season. the and SG&A, direct terms of for the Tuzistra, So Are direct the all talk had your terms any anything can you of change to in about entering your you if in of amplify investment cold Thanks. looking

Dave Green

Thanks expect Carl. for Dave. your is in up question, early This and together development. very being launch The its step operating to And do this is of expense, yes, in pulled point. at kind we still

with to Tuzistra at we’re I’d revenue expected So expect not two for the a to proportional larger we do fiscal point. up we launch anything additional incremental in be our That step this on expense guidance this now have of say a what relative cost with that and said, it’s year. spending lot And products. much near don’t marketed current also of

Carl Byrnes

question a could. if And just I as Great. follow-up

Being quantify at Natesto effort XX% would to to are of looking over mainly selling the with primary mean practices. that. ZolpiMist you over We’re Tuzistra that be care going I qualify it’s being how targeted, folks marketed or with

think would significant I will provide overlap, along amount but great. So any there comments lines be a those of you be

Josh Disbrow

on call half primary time. This you, speaking, the Thank care Carl. Josh. generally we is Yes, Yes. about

are section care. if So look at targets urology Natesto, and cross you the primary endocrinology, of

Some of of care surprised replacement largest are testosterone to physicians. hear folks are some the therapy that, primary prescribers

in those we’re So offices.

straightforward a XX certainly around Tuzistra augments to cough four a the hour And portfolio. standard can priority. is story, the winter quite it’s versus months a frankly remains really very simple six-hour the relief then dosing. So the Natesto we Obviously

cold – those is that the the there PCP sample a when by market offer detail So offices, in and is market, sensitive. you quick very way, And samples. cough

So less again, Natesto, it’s it detail seasonal. so very and intensive a compliments than well it’s

off promotion. and on, pulse So pulse – it’s sort of pulse really

do So we’ll that. be very able to efficiently

While expect incremental be small less said, an it up than will SG&A, to we there as will far Dave in generate be revenue. a what step

Carl Byrnes

the considering with II. class significant coding [indiscernible] III is Hydrocodone question, then based How look what’s your in eyes. of hour, only XX if Schedule just from Tuzistra Schedule we happened And reclassification one at Great. final to

Josh Disbrow

generally feel old Tussionex, so and but about a there’s disease reclassification forth, quite a We it’s good like there There’s since a Carl. with this. there footprint in speaking, national market has of question, significant cold like almost the That’s talking field. small that not the products promotion no of smattering frankly, Hydrocodone out been companies and cough, the

to it be expect we significant a factor. So

changer II whereas C for coding, a how and with of opiates IIs, III. shift, around his of receiving respect Class physician how coding products a game concern samples if from a their office, is overarching to and III controlled is based like the a the product Moving Class our they’re C and controlled to in it’s specifically just because level

So sampling comfort the everything Hydrocodone have at efficacy essentially physicians, We some to notable. a II of same overall and for more hills. potential comfortable When be is significantly the believe many to channel Schedule you began seeing that’s just And quite different. start to without the distribution writing the Class III, there’ll physicians of run gives concerns. from

can general, markets will greatly that gap realize Oxycontin and very really Oxycodone, some the be filled. replacement depressed. in and a markets Hydrocodone – to that Hydrocodone the at we they’ve look Just nice need of been help think be Codeine

Carl Byrnes

much and congratulations. so Thanks Great.

Josh Disbrow

Thanks, Carl.

Operator

from Capital. next Tony The go question Please ahead. Instructions] Pollock [Operator Aegis from is

Tony Pollock

afternoon. Good

Josh Disbrow

Tony. Hi

Tony Pollock

Could the to you and is new the address Tuzistra two the products ZolpiMist? insurance the insurance, on what

Josh Disbrow

Yes, question. good

if what products. been are included But ZolpiMist that will. calls product allergy generally it bit that that a been Both we’re So the many ZolpiMist that the pharmacy like Ambien the they and chart, market heavily get speaking can for prescription before. But requires have the example, the then managed, times had different patient to insurance in have often we on situation, and a you tier a cough, Ambien, physician the seeing is third if they’d it’s And filled. the get Tuzistra Natesto. different cold the simply on is information, not Tuzistra, with

with down some readily it’s even products offer copay. X X in just the default that Tier generic the such to both Tier a price these a relatively cards we copay copay. to buy with And products, copay tend the competitive cases patients savings So or to of

cover anymore. We nothing its worked the we that, we’ve pretty covered know XXXX that within is So well is good. system. universally very Obviously, insurance understand and that

And some so to potentially certainly and to be largely the Tier this have that put about then fill and any point, early opportunity fact we learnings have on things would at we’ll gaps. in place that But good expect covered we feel we’ll some buy X there’ll the to down.

Tony Pollock

Great.

year. University of some is XXXX year. you’re about that the Is fiscal you On this interim talked in study, Miami results or that having this

Josh Disbrow

calendar this expect year. We

expect investors, shortly have we contrary, see that update through we types the point any additional come don’t such relatively to So patients anything in heard can status. an we have expect this an we that reason report to at frankly, And whereby to continue to any have overall results. and the same of to would haven’t out to believe

production, the advisory very, around Frankly, hard times the daily dosing, but their seems time had important a very we getting It was and not how mentioned, pulsatile have here to role this very, mind very PK meeting playing very could three I the people three impact times sperm reception As well profile was that. dosing in received. nothing a board something positive. Denver be a like of short a in productive

report out relatively to excited yes, shortly. here So, that

Tony Pollock

take the long besides do daily? study. three for long that How How times in patients long they product is do How for? the the

Josh Disbrow

a weeks, so So study. it’s six-month XX essentially

semen three-month, five the then XX specifically full just out through three key up total motile baseline, human with month, So fact, And And all month essentially they parameters, baseline in as a reporting no concentration, for well points. six we’re analysis, come flat goes on essentially month semen patients analysis, a and they those in for semen time analysis and we’ve a checkup, impact essentially the slightly. count any as in analysis. motility, then come six-month sperm of and a they’re one week at getting concentration and first stay, or what actually seen laboratories

exciting So data. very

Tony Pollock

paying this? Who’s Great. for

Josh Disbrow

very Well, study. Ramasamy This initiated little. we an frankly investigator us. was call are the you what actually sponsor, we’ve approached Dr. paid

nominal the by three across And it we virtue of pay study. quite costs it’s overhead some so product there’s call we then that and pay, entire frankly, but $XX,XXX

So this to things but rich springboard very more data, wrapped we up, many as frankly getting get us could

Tony Pollock

you this you in from end published think being guys? announcement Do journal just a does will that up or an

Josh Disbrow

out confirmed, presentation that the published on of I urology been but data and and the interim of that would that patient based solicit read expect European a journal in likely fact set type interest minimally another gets by five was the specifically level a specifically hasn’t focused.

read So we I would is would expect certainly publications additional once dataset to be a to impact expect and a the publication and what a have entire journal out. high

Tony Pollock

And say? is be do the next final you that should summer

Josh Disbrow

Realistically, next broadening And to we’ll already the able claims terms around, support label. of might to in really in read out. getting this stock evaluate to take forward Obviously, an further with how are into and earnest our and next be we data it that of steps respect that strategy our the coverage. moving at IP patent expect obviously point, summer,

Tony Pollock

you All a idea good. us November give right, little sales? and Could on October

Josh Disbrow

quarter, to lot. a good much with be, where expectations gross on the very trend. now much to be Obviously, got we very it month higher we our holiday gross new would the to best Tony, we October, be, month with Natesto with And change has What on with that had in continue December. are accounted can growing say, is while We’ve expect appropriately improved and week of net is, our holiday this improved net, really, less we’ve to to be really feels and we’re the expect wanted or – we more got absolutely I we guide. on been has a a that very to We’ve November helped to for got say since track don’t where couple weeks continue a solid going to those that internal think we I of It Thanksgiving. and

Tony Pollock

Thanks.

Josh Disbrow

Tony. you, Thank

Operator

from We Carl Byrnes from a Northland have Please follow-up Securities. question ahead. go

Carl Byrnes

Thanks.

referenced million approximately going very $X $XX soon to the is year close another Armistice, around and cash I then on note three million. with you think which

of terms that you where In burn, you’re juncture? does as at at it take to this out internally looking

Josh Disbrow

we Carl, the topline I would that future, well foreseeable positioned are to for the say going with the grow. expectation to is that continue

We’re going and substantial small have we bump off to a are the operating where but relative nothing to expenses, today.

So confident need access anytime that we capital to a the not are there’s soon. markets to be going substantial

Carl Byrnes

you. Thank

Josh Disbrow

Carl. Thanks

Operator

this closing further no Disbrow back comments. for would to over There Josh I are questions the turn floor like at to time.

Josh Disbrow

joining Thanks Thanks questions. Thank you, Moira. everyone today’s call. your for for to

We’re look excited the sharing more we that results quarter about the quarter. and forward just next posted. We to

evening. for So good a and have thanks joining, again until then,

Aytu BioPharma (AYTU) 14 May 182018 Q3 Earnings call transcript