Aytu BioPharma, Inc. (AYTU) on Q3 2024 Results - Earnings Call Transcript
Operator: Good afternoon, everyone and welcome to the Aytu BioPharma Fiscal 2024 Third Quarter Earnings Call. At this time, all participants have been placed on a listen-only mode. [Operator Instructions] And we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host Roger Weiss. Sir, the floor is yours.
Roger Weiss: Good afternoon, everyone and thank you for joining us for Aytu BioPharma's Fiscal 2024 Third Quarter Financial and Operational Results Conference Call for the period ended March 31, 2024. Joining us in today's call is Aytu’s CEO, Josh Disbrow and the company's Chief Financial Officer, Mark Oki. At the conclusion of today's prepared remarks, we will open the call for a question-and-answer session. I'd like to remind everyone that today's call is being recorded. A replay of today's call will be available by using the telephone numbers and conference ID provided in the press release issued earlier today. Finally, I'd 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 otherwise 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, the mic is yours.
Joshua Disbrow: Thank you, Roger, and welcome everyone. The positive operating momentum we've experienced over the past two years continued during the third quarter of fiscal 2024 as ADHD portfolio revenue continued its rapid growth, increasing 49% over the fiscal 2023 third quarter. Further, we improved our adjusted EBITDA by $7 million compared to the year ago third quarter. On a trailing 12 month look back, our company-wide adjusted EBITDA is now in excess of $15 million, and our Rx business operating income over that same period is over $7 million, a significant achievement for the company as it continues to reinforce the strategic initiatives we've undertaken to reposition Aytu as a growing specialty pharmaceutical company focused on commercializing novel prescription therapeutics. Recall that just two years ago, we had an annual net loss in excess of $100 million. So this has been quite a transformation of our operating profile. As a reminder, our repositioning started back in October of 2022, when we indefinitely suspended our clinical development programs and continue with that decision to wind down our consumer health segment, which we announced in mid-calendar 2023. These two parts of our business were a drain on cash and masked the strength of our Rx segment. When you look back specifically at the Rx business, it has generated over $17 million in adjusted EBITDA over the last four quarters and has achieved positive adjusted EBITDA in seven of the last eight quarters. Our goal is for the consumer health segment to be wound down and closed in mid-calendar 2024. And once completed, Aytu will solely be a specialty pharmaceutical business with our growing ADHD portfolio as our lead products, coupled with our pediatric portfolio focused on our multivitamin franchise and carbonate ER. As we close the loop on the wind down of consumer business, we believe aforementioned operating highlights will be made clearly visible to the market, and those investors that screen for growth, margin expansion, and profitability, and this could lead to a re-rating of our corporate valuation as we go forward. Importantly, our financial wherewithal is solid, as seen by our cash balance holding steady at $19.8 million compared to $19.5 million at the end of the December quarter. To expand on the financials in more detail, let me run through a few key points within both our ADHD and pediatric portfolios, starting first with ADHD. As I mentioned, our ADHD portfolio demonstrated a 49% year-over-year increase in net revenue during the third quarter to $12.3 million. The growth in net revenue was driven by strong sales force execution along with the company continuing to leverage and adapt our innovative Aytu RxConnect platform, which we believe is the best in class patient support program. As a reminder, from a seasonality standpoint, our third fiscal quarter is where RxConnect access and pricing guarantees provide the greatest benefit to patients and healthcare providers as a result of the January deductible reset from many health insurance plans. Our transparent drug pricing plan works directly through our 1,000 plus RxConnect partner pharmacies nationwide to deliver our products, ensuring predictability of out-of-pocket costs for the patients who need our treatments. Aytu remains committed to ensuring predictable and clear out-of-pocket costs around our branded portfolio. In addition to our strong operational execution, the trends we have talked about the past two years within the ADHD market have continued. The market continues to experience intermittent supply disruptions and accompanying patient access challenges for generic amphetamine and now Lisdexamfetamine with [indiscernible] generic, along of course with various methylphenidate products which continue to experience shortages and in some cases discontinuations. These access disruptions are negatively impacting the lives of too many ADHD patients and their families and continue to frustrate physicians and pharmacies alike. Having just been in the field visiting with customers, I can tell you that these disruptions are very real, and the positive impact RxConnect and our products are having is notable as a real solution for these patients and providers. As these intermittent shortages and patient access challenges have continued, our team has done an exceptional job meeting the demands of patients, having maintained supply to meet the growing demand for Adzenys and Cotempla. As a reminder, Adzenys, the only approved extended release ODT amphetamine for the treatment of ADHD, is approved as bioequivalent to Adderall XR. So our brand is well positioned to continue to capture additional market share as amphetamine patient access remains unpredictable. Cotempla is the only approved extended release ODT methylphenidate for the treatment of ADHD, which competes against the likes of Concerta and other long-acting methylphenidates, which are also in the midst of continuing channel uncertainties. We view the ongoing ADHD supply and patient access situation as one that will likely continue for the foreseeable future in some form or fashion. And perhaps more importantly, this long-term disruption is causing and has caused undue uncertainty well into the future. Even as some manufacturer stimulant products have returned to more normal levels, patients, parents, and physicians continue to question when the next shortage will pop up. And in many providers' minds, other shortages will occur as they have in the past. We just don't know when, and we don't know what coverage may be at that time. So that's where RxConnect comes in. And that creates the opportunity for more and more patients and prescribers to get experience with Adzenys and Cotempla. Not only do patients get effective, reliable ADHD brands at a pharmacy they know and trust, they get these products at a consistent price and perhaps more importantly on a timely and predictable basis. With our products and our robust support services, we are filling a huge gap that continues to be pervasive across the pharmaceutical ecosystem, affecting both brands and generics and reaching beyond ADHD stimulants. We're solving this issue and our results speak to that. And as we look at prescription trends in April and into May, we're seeing growth in Rx’s for the ADHD brands. In fact, ADHD TRXs through the middle of May are trending to make this the highest month in a year following what were consistent all-time highs last year. We're excited about finishing fiscal 2024 with both a growing and strong stimulant franchise. Transitioning now to pediatrics, which represents about 12% of our third quarter Rx net revenue. Similar to what we discussed last quarter, our pediatric portfolio net revenue, which was down $3.5 million, was impacted primarily by payer changes that occurred in the September 2023 quarter. We've seen the multivitamin business stabilize during the past quarter and have started to see some growth here almost halfway through the fourth quarter. We've implemented a number of tactics that give us comfort that we can get back to growth mode across the pediatric portfolio. Given the early signs of recovery and some recent coverage wins across the pediatric portfolio, we're reallocating resources in real time to the pediatric products to capitalize on numerous opportunities with respect to this improved coverage and patient access. The team has moved swiftly and those actions are beginning to show some positive early results. I think it's important for everyone to note how well the overall operations of our business have progressed in light of the current downdraft on the peds operations and the potential positive swing that can occur as the initiatives we have implemented come to fruition. But transitioning just here for a bit, one item I think is important to discuss in context to our third quarter was the widespread and widely reported cyberattack that impacted UnitedHealthcare subsidiary, Change Healthcare, beginning back in February. For those not familiar, Change Healthcare, among many other things, enables branded manufacturers, copay programs, savings programs, buy downs, etc. to be processed through what is essentially a switchboard that interfaces with pharmacy dispensing and reimbursement systems. It also interacts with physician billing and reimbursement systems to get those physician offices paid for their services. Among other things, the cyberattack created havoc across the healthcare ecosystem and resulted in many pharma companies' coupon programs not working properly or in some cases not working at all for extended periods of time. This in turn significantly impacted out-of-pocket pricing and patient access to branded products and often resulted in prescriptions going unfilled, in some cases for long durations of time or in some cases losing those prescriptions altogether. Fortunately, we at Aytu felt minimal impact due to the unique attributes of RxConnect and how we interface with pharmacy partner systems along with the broader commercialization approach we take that doesn't rely on any single system of adjudication or any single switch. But it did have some very minimal and transient impact on us, but I'm happy to say we fully recovered and moved past it very quickly. Moving to our progress on the outsourcing of our ADHD brand manufacturing and overall operation improvements, we continue to do a great job on improving our gross margins. Rx gross margins during the quarter were 74% compared to 61% in Q3 of last year, an improvement of 1,300 basis points. We believe there will be continued, albeit smaller improvement, as we complete the transition of Adzenys and Cotempla manufacturing to our outsourcing partners. For those that may not be familiar, we will be shutting down our manufacturing operations in Texas, where we have a manufacturing facility that’s much larger than we need and therefore as a source of large fixed overhead expenses and a source of significantly elevated cogs. Everything is on track in terms of the manufacturing transfer and we expect to complete our final in-house production run by the end of June and that remains very much on track. We will continue to incur some costs related to the manufacturing facility through the calendar year as we close down the facility to return it to the landlord. An additional exciting change we've recently implemented is the onboarding of a new distributor to help further optimize the RxConnect platform. Integration of this new distributor into the program along with some modifications around our pharmacy interfacing has been going well and with these changes we expect to further improve the robustness of our pharmacy partner offerings to further add to the stickiness of the business overall. We view this change as an important one, and it's already showing positive signs for future growth. Quickly on the Consumer Health wind down now. Our team has done an exceptional job effectively managing the wind down of our Consumer Health operations. The process's effect on our adjusted EBITDA was minimal, which is the negative $370,000 impact during the third quarter, more than a $1 million improvement from the third quarter a year ago. We expect to have inventory write-downs and final shutdown expenses booked in the fourth quarter, and then minimal revenue into the first quarter of fiscal 2025. From that point forward we don't expect to discuss the consumer health segment further, as we will be 100% focused on the prescription business. To wrap things up before I turn it over to Mark, it has been our objective to transition Aytu from a multi-pronged operation, which included not only our Rx segment, but also our consumer health segment and pipeline development programs, both of which generated negative cash flows. To a hyper-focused pharmaceutical company with management concentrated on growing sales, increasing margins, and adjusted EBITDA and profitability, the Rx business has been adjusted EBITDA positive for seven of the last eight quarters, witnessed by our trailing four quarter company-wide adjusted EBITDA of over $15 million and generating over $7 million in operating income for our Rx business. Our team's planning, coordination, and hard work are all resulting in transitioning this business from a negative cash flow one with losses to now be on the cusp of free cash flow generation and net income as we move forward. Let me turn the call over now to Mark, and I will then come back to wrap things up briefly before turning over to questions. Mark?
Mark Oki: Thank you, Josh, and thank you to everyone joining this call. Let's look at the third quarter results in a bit more detail. Net revenue in the third quarter of 2024 declined 21% to $18 million from $22.7 million in the prior year period, as we continued our ongoing wind down of our Consumer Health segments. As a reminder, in October 2022, we initiated a strategic mandate to focus our efforts solely on the existing Rx business. This process continues with the Consumer Health segments revenue declining from $8.9 million in the third quarter of 2023 to $4 million in the current quarter, which primarily consists of selling off existing inventory. The other component of our consolidated revenue is Rx segment sales, which rose to $14 million from last year's light quarter of $13.8 million. Breaking down the Rx revenue shows that our core ADHD franchise increased 49% to $12.3 million from $8.3 million in 2023, and the pediatric portfolio declined to $1.7 million from $5.3 million in 2023. As we've discussed previously, the decline in our pediatric portfolio resulted from some ongoing reimbursement issues. As Josh mentioned, we are implementing several initiatives in real time to improve the demand for pediatric portfolio products and are seeing solid signs of improved reimbursement across the portfolio. Gross margins increased to 65% in 2024's third quarter from 56% in 2023, driven by increasing ADHD revenue and the decline in consumer product sales. This improvement was adversely impacted by the previously noted decline in sales of our pediatric products, our historically highest margin product group. As a reminder to any new listeners today, Aytu's top line and margins are impacted by the seasonal nature of our business. On the demand side, many patients take a summer [scale back] (ph) from the ADHD meds, which primarily affects our first fiscal quarter and to a lesser extent, our fourth fiscal quarter. During the third fiscal quarter, most insurance plans reset deductible amounts beginning January 1st. From January through March, we generally experience a greater use of our RxConnect price protection program, which historically has lowered our gross to net margins. Please remember that this is part of our normal seasonality and those gross to net adjustments historically improved throughout the calendar year. Our operating expenses, excluding restructuring costs, changes in contingent consideration, and amortization of intangible assets were $12.6 million in the third quarter of 2024 compared to $20.8 million in the same period a year ago. This 39% decrease reflects our continued focus on cost reduction and the winding down of the consumer health segment. Research and development expenses were $619,000 in the third quarter of 2024, compared to the $856,000 in the corresponding 2023 quarter. Reflecting a normalized base level and highlighting the absence of any substantive drug involvement expenses consistent with our prior announcements. We recorded a $2.9 million net loss or $0.52 per share versus last year's $7.2 million net loss or $1.93 per share. Please note, that due to the difference between US-GAAP and tax accounting, almost $250,000 of net loss was from an income tax expense. Adjusted EBITDA expanded by $7 million to a positive $425,000 from a negative $6.5 million on a year-over-year basis. Cash and cash equivalents on March 31, 2024, were $19.8 million compared to $19.5 million on December 31, 2023. We are comfortable with this capital level and believe that our balance sheet provides us with a continuing solid foundation to execute our corporate game plan. I should point out that the biggest change in the balance sheet is the classification shift of our $15 million term note from long-term to short-term as it matures in January, 2025. In our 10-Q filed earlier today, we continue to include going concern language footnotes to our financial statements. Given our success in restructuring the company's operations, financials, and outlook, we are quite pleased with where we sit regarding our borrowings. We have begun the refinancing process of our term loan and believe that a new facility can be obtained at equal or better terms versus the maturing one. We will re-evaluate the requirement to include going concern language in our financial statements if and when we complete this refinancing. Again, as we finish up our fiscal 2024 and look into fiscal 2025, we anticipate the exit from our Consumer Health segment, a completed ADHD production shift to our outside contract manufacturer, and related exit from our Texas manufacturing facility, a steady rebound in our pediatric portfolio revenue, and the refinancing of our term loan. These ongoing shifts and improvements should bolster our top line, while lowering our cost structure and allowing us to focus on free cash flow and net income aspiration. With that, let me turn it back over to Josh.
Joshua Disbrow: Thanks, Mark. As you might imagine, I continue to be extremely pleased with the continued progress in our business. It's better positioned today than at any point in our history. With over $15 million in company-wide trailing 12 month adjusted EBITDA and nearly $12 million of cash at the end of March. And while there is still work to be done with our pediatric portfolio, given the strength of our ADHD portfolio, the pending benefits from the wind down of the consumer health business, as well as the outsourcing of the manufacturing. We're excited about the overall trajectory of the business as we finish fiscal 2024 on a high note. I want to thank the entire team at Aytu for their hard work and dedication to delivering for both patients and stockholders. Thank you to everyone participating on today's call. I'll now be happy to answer any questions.
Operator: Certainly. Everyone at this time we will be conducting a question-and-answer session. [Operator Instructions] Your first question is coming from Naz Rahman from Maxim. Your line is live.
Naz Rahman: Hi everyone. Congrats on the progress and thanks for taking my questions. I'd like to start on the ADHD business. Seeing how the sales are continuing to grow and the franchise is seemingly growing larger and larger every day. How has your conversation with the DEA evolved? Have they changed at all? Has the frequency changed or has there been any concerns or anything regarding getting additional quota?
Joshua Disbrow: Yes. Hi, Naz, great question. The short answer is, the communications with the DEA, I would say have been extremely productive. Our team that interfaces with the DEA on a regular basis has had significant conversations. DEA has increased the frequency of quotas. Their dialogue with industry has really picked up. So I would say we stand to benefit. The rest of the industry does, of course, as well with that. That having been said, very comfortable with our ability to get quota as we move forward. We've again increased the frequency of dialogue with them. The transparency that [indiscernible] from the DEA, I'd say -- I'd suggest is at the highest level ever in terms of what they look at when they're allocating, when they are granting quotas, the data sources that they're referencing. And I think we continue to do a better and better job as an industry of making sure that we're giving the DEA what they need and understanding what it is that they look at when they're allocating and granting quotas. So that is all to say, these products at Adzenys Cotempla never had a stock out. We continue to have solid levels of supply, always seeking to increase our supply, but more or less at their thresholds that we'd like to be in terms of our days on hand. So comfortable with where we are, comfortable as we move into the outsourcing setup with our manufacturer [Halo] (ph) that we can continue to get access. It's really all about communication and DEA has been exceptional as of late in picking up their level of communication with industry and notably with us.
Naz Rahman: Got it. Thank you. That's helpful. And in terms of your promotional strategy, you just have to comment on what the current strategy is now with prescribers? Are you trying to get your existing prescribers to write more scripts or you're also more focused on getting more prescribers? Probably a combination of both. Could you also comment what that dynamic is right now too?
Joshua Disbrow: Yeah, happy to. So we're always focused on both breadth and depth of prescribing. We obviously want to get new prescribers on board. The shortages of note will be brought on a significant number of new prescribers and the objective is always to get them to keep at Adzenys Cotempla at top of mind and keep that -- keep them prescribing that among their chosen stimulants. Particularly in the face of the continuing uncertainty, we can go to them with, obviously, the fact that we've never had a stock out with these products, with the fact that we've been consistent on our pricing programs, RxConnect is a huge benefit to their patients. Understanding that we backstop the prescriptions, they pay no more than $50 for commercially insured patients or if they're commercially insured, that's irrespective of whether it's on that form or not. So we cut out any of the guesswork in terms of whether it's available or not. We cut out the guesswork in terms of where they can get it because they know they can get it at one of the RxConnect partner pharmacies. And we cut out the guesswork around how much they can get it for, which again is capped. So that all comes together to present sort of a holistic solution for these physicians. And we've continued to grow prescriptions by virtue of not just the fact that they are good products that patients improve their symptoms on. They are products that, again, they can get consistently at a consistent price at a neighborhood pharmacy that they know and trust. And it has continued to resonate with prescribers. Because even as we enter a period where perhaps they're able to get access to what they used to be writing more routinely, even as Adderall XR, for example, and the generics come back into more of a normal level of inventory and its availability, they've been stung. That continues to linger with physicians. It really continues to linger with patients and their parents and caregivers. And they sort of wonder when it's going to happen again. So to go and say, look, it's never happened to these products. We continue to meet all the demand that we're able to drive here as these products continue to grow. And it's enabled us to get physicians more actively prescribing our products. And that's been encouraging to see.
Naz Rahman: That was helpful, thank you. On the pediatric multivitamin business, obviously you said you were engaged in a lot of initiatives and you're starting to sort of see a return to normalization. I think you can elaborate more on that. How much of the prior business do you think you can get back like revenue wise and what do you think a new normal might look like for that piece of business?
Joshua Disbrow: Yeah, good question, Naz. We haven't guided, as you know, historically. So as not to guide, I would suggest we think we can get a significant percentage of our business back across the portfolio. Without giving a specific number, what I can say is, look, we've recently done some work and have really started to put some things into place to capitalize on some of the positive payer changes that we've observed in some major areas. And if things go as we're sort of projecting, I think we can get both Karbinal and the multivitamin line back to a substantial level. Is that to suggest we bring it all the way back? You know, perhaps not, but I think over the long term with all the things that we have in place and being able to manage some of these new coverage aspects, particularly if we look at some of the state plans that have begun covering both sets of products, both portfolios, if you will, feel very good that we can get these back to a reasonable level. Obviously, coupled with that is what we expect to be continuing growth on the ADHD side. And so, imagine if you will for a company that still, even in our lowest quarter, which is seasonally consistently our lowest revenue quarter, and that's our lowest margin quarter, for us to have generated almost $0.5 million in positive EBITDA, despite the fact that peds really was -- it has significantly declined. If we can bring those products back to any degree, 20%, 30%, 40% or even more, that obviously starts to translate immediately into not just operating income but net income and free cash flow. So we don't need to see a tremendous amount of growth back from the bottom, which we think we're at. At this point, we think we've actually sort of started to move up from the bottom as we really see the business stabilize, again, on both Karbinal as well as the multivit. So, encouraged with the early work that's been done. Our commercial team's done an exceptional job of moving very quickly, being very, very nimble and responsive to some of these payer changes and excited to see how these favors as we move forward. We'll take some time to get it back to a significant level but encouraged with the momentum and we're really looking solid here as we enter our fiscal 2025 here in the next month and a half.
Naz Rahman: Got it. That was very helpful. And my last question is actually just on the Change Healthcare impact. I know you said it was nimble, but was is possible for you to quantify the potential sales impact? And did that Change Healthcare situation impact all the different business lines or just a couple of them or a few of them?
Joshua Disbrow: Yeah, good question. So we have not and won't quantify anything specific in terms of potential revenue impact understanding that it was transient and we did solve for it relatively quickly. That having been said, there is some probably indeterminate, relatively small amount of revenue impact that we did have. I'd hesitate to put a number on it. I know some companies have, but we'd resist that just by virtue of the fact that we moved past it, we were able to really respond effectively. We have multiple switches that our customers can utilize. And so that was -- we were really able to sort of de-lever from change. That having been said, we know for a fact that several of our competitors and even some competitors within the ADHD category did experience far more than just transient impacts. Some had significant downdrafts in their prescriptions. Our programs, our copay cards across the portfolio, so across the entire prescription line, continue to work, continue to work very effectively. It was a handful of days that I would say there was some level of things having to get sort of rewired, but really more than anything else as a backbone, we're not relying upon any single vendor that really affects us from a switch perspective. So positive with that. That having been said, not a huge impact for us. It's in the rear view mirror, our Q4 looking healthy, and really it's an afterthought for us. It's not an afterthought for many. So I would say it's an opportunity for us to potentially go back and gain leverage for some of our customers to say, look, the nightmare that you had been living through and in some cases providers are still living through, we can say, look, we weren't affected by that. Our programs have not been -- do not leverage that. So in the event that this lingers, there's been rumors -- more than rumors, reports in fact that there were there additional ransomware or additional sort of ransom requests. There were sort of some knock-on effects. Andrew Witte, UHG's CEO, has said specifically that they haven't solved for all of it. They certainly haven't gotten their physicians and pharmacies caught up. So for us to be able to potentially be a solution, say, look, when you think about ADHD, multivitamins or an antihistamine, we certainly have a robust platform that doesn't rely on any single switch. So, to put a finer point on it, again, a relatively small amount, certainly less than 10% of our revenues, Naz, were affected and again, very transient. But despite the fact -- so it shows a couple of things, despite the downdraft and the PEs, despite this disruption, which I don't want to suggest it wasn't disrupting at all, there was some short period of time where there were certainly some disruptions. Despite all of that, we posted positive EBITDA and obviously, now we're coming out of the time of year when the deductibles are largely getting fulfilled and so our gross financial improve as we move throughout the calendar year. And Q4 for us, our quarter ending June 30th is always a strong one for us. But yes, that is definitely in the rear view mirror.
Naz Rahman: Thank you, That was very helpful. Thanks for taking all my questions. And once again, congrats on the progress.
Joshua Disbrow: Thanks, Naz.
Operator: Thank you. [Operator Instructions]
Roger Weiss: Operator, while we're waiting to see if there are any other questions, let me relay a couple that have been sent in offline. Josh, this quarter showed very strong ADHD revenue growth again. How much of the up 49% do you think is growth from the ongoing disruptions in the category versus organic execution based growth? And then the other question was, I know you don't give forward guidance, but how do you think about next year fiscal 2025?
Joshua Disbrow: Yes, thanks, Roger, for passing those on. We are really in a situation where the levels of -- the shortages have -- they come and go, but what I would say is the macro environment around ADHD is starting to normalize. So this growth is largely and almost entirely organic. It's execution-based, it's a sales force that's out there, continuing to execute well. We've actually entered some new areas. So we're seeing growth in areas where the historic NEOs had been, but we hadn't been really in quite a few years. So it's good to see some of that uptake in some new territories around the country. And we are continuing to leverage RxConnect. And certainly the pain continues to be felt from the historical shortages, but even again, as that normalizes, I would say, remember what that was like and remember the fact that we have two very reliable products that are effective, that are obviously unique in their delivery, and patients obviously respond well to them, so I've got to really commend the team. They've executed well across the board and really continue to demonstrate solid growth territory by territory, and then even in areas where we don't have Salesforce presence, we're continuing to see growth. So largely organic and on the backs of the execution the team is having. As we think about 2025, we're excited about the future outlook. As we look out just a few months from now, we look to exit our fiscal 2024 in June really strong, understanding obviously that the seasonality of ADHD has an effect, but our gross to net again, we really expect to continue to improve. There's lots of things that are being done and have been done around the scenes to improve profitability on a per prescription basis. Bringing on this new distributor has been exciting and it's been great and in many ways seamless. Nothing's ever perfect, but it really has been a very seamless transition as we begin to integrate this new distributor. And so as we look out, particularly exiting this calendar year into the new calendar year, you're going to look at a company that is significantly streamlined from where it's been. We're going to be focused squarely on the Rx business, obviously the ADHD and pediatric portfolios. We're going to be out of the Grand Prairie, Texas facility, understanding the lease expires the end of this calendar year. So by definition, we will be entirely out physically there. Obviously, R&D has been wound down to a diminutive amount. We expect to continue to have that low level of spending. We expect to refire debt here. And as Mark alluded to, we would certainly expect more favorable terms. So a lot of things to really further improve the health of the company as we get into 2025. And we think we'll be in a position to obviously continue to post positive EBITDA, significantly grow revenues and obviously continue to manage expenses. So this quarter I think is a pretty good look at what the expense base will look like, although it's actually going to come down probably even more as we get fully out of Grand Prairie, get fully out of consumer. And of course, we would expect gross margins to take up a little bit once we're fully transitioned out of the facility to the contract manufacturer and packager. So all positive signs still a little bit of work to do. I'd say, you know, use the baseball analogy now that we're in baseball. We're certainly sort of rounding third base heading for home in terms of completing the major initiatives. I think you give us another quarter or two and we're going to be sliding in the home and really kind of having completed the transformation of really what's been a couple of years in the making.
Roger Weiss: Josh, thank you. Operator, are there any other questions?
Operator: Thank you. There are no further questions in the queue. I'll now hand the conference back to management for closing remarks. Please go ahead.
Joshua Disbrow: Well, thanks everyone for joining. Thanks to those who are asking questions and we look forward to finishing this quarter -- our Q4 very strong and equally look forward to sharing our full year and quarterly results in September upon the filing of our 10-K. So thanks very much to all of you. Appreciate your ongoing support, and have a good afternoon and a good evening wherever you may be. Thanks.
Operator: Thank you, everyone. This concludes today's event. You may disconnect at this time and have a wonderful day. Thank you for your participation.
