Summary and Analysis of Key Points

Overview

• The company is a pharmaceutical company focused on commercializing novel therapeutics, with a primary focus on prescription products for conditions developed or diagnosed in childhood, including ADHD.
• The company has two main product portfolios: the ADHD Portfolio and the Pediatric Portfolio.
• The company has entered into international commercial agreements to sell its ADHD products in Israel/Palestinian Authority and Canada.
• The company regularly reviews its performance and prospects, and evaluates potential strategic transactions and business combinations.

Business Environment

• The company is experiencing inflationary pressure and supply chain disruptions, which it expects to continue throughout fiscal 2025.
• The company received a Paragraph IV Certification Notice Letter from a generic competitor for its Adzenys product and plans to vigorously defend its intellectual property rights.
• The company had a change in its Chief Financial Officer.

Results of Operations

• Net revenue decreased by 10% and 13% for the six and three months ended December 31, 2024, respectively, primarily due to decreases in the Pediatric Portfolio and ADHD Portfolio.
• Gross profit decreased by 18% and 26% for the six and three months ended December 31, 2024, respectively, due to increased cost of sales for the ADHD Portfolio.
• Operating expenses were relatively flat, with decreases in general and administrative expenses offset by restructuring costs.
• The company recognized gains from the fair value adjustment of its derivative warrant liabilities.
• The company’s effective tax rates were impacted by limitations on losses and the divestiture of its Consumer Health business.

Liquidity and Capital Resources

• The company finances its operations through a combination of equity and debt financing, as well as cash generated from operations.
• The company has a shelf registration statement and credit facilities in place to support its liquidity.
• Cash flows from operating activities improved in the six months ended December 31, 2024, compared to the prior year period.
• The company has various contractual obligations and commitments, including milestone payments related to its acquisitions and licensing agreements.

Outlook

• The company continues to face inflationary pressures and supply chain disruptions, which could impact its business throughout fiscal 2025.
• The company is focused on accelerating the growth of its commercial business and achieving positive operating cash flows.
• The company is evaluating potential strategic transactions and business combinations to enhance shareholder value, but there is no guarantee it will be able to enter into such transactions or that they will achieve the desired goals.