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Aytu Reports First Quarter 2020 Financial Results

November 14, 2019
ENGLEWOOD, CO / ACCESSWIRE / November 14, 2019 / Aytu BioScience, Inc. (NASDAQ:AYTU), a specialty pharmaceutical company focused on global commercialization of novel products addressing significant medical needs, today will provide an overview ...
ENGLEWOOD, CO / ACCESSWIRE / November 14, 2019 / Aytu BioScience, Inc. (NASDAQ:AYTU), a specialty pharmaceutical company focused on global commercialization of novel products addressing significant medical needs, today will provide an overview ...

ENGLEWOOD, CO / ACCESSWIRE / November 14, 2019 / Aytu BioScience, Inc. (NASDAQ:AYTU), a specialty pharmaceutical company focused on global commercialization of novel products addressing significant medical needs, today will provide an overview of its business, including the company’s operational and financial results for its fiscal first quarter 2020 that ended September 30, 2019. The company will host a live conference call and webcast today at 4:30 p.m. ET. Conference call details are provided at the end of this press release.

2020 First Quarter Financial and Corporate Highlights

Mr. Disbrow continued, “While boosting our top line run rate, we also expect these transactions to accelerate the company’s path to profitability. Both Innovus and the Cerecor commercial business operate at or near breakeven from a cash standpoint, so we are adding increased revenue scale without a corresponding increase in cash burn. We feel we are well positioned to reach break-even more rapidly as a result of the cost saving synergies the two transactions provide, as well as expected growth in revenue from product cross selling and increased physician reach due to the increase scale across combined sales forces. Additionally, as context, Aytu grew by 100% from fiscal 2018 to 2019, and Innovus has grown over 300% from 2017 to 2019. Through the combination of Aytu and Innovus, coupled with the asset purchase from Cerecor, we expect the consolidated entity to continue on a significant growth path while realizing operational synergies across the new combined organization to achieve profitability sooner than the company would have prior to the consummation of these combinations.”

[1] Pro Forma revenue is a non-GAAP metric calculated by combining the reported net revenues for: (i) Aytu BioScience, Inc., (ii) the net revenues associated with the acquired pediatric pharmaceutical products from Cerecor, which closed November 1, 2019, and (iii) the net revenues associated with the pending acquisition of Innovus Pharmaceuticals, Inc.

[2] Pro Forma net cash is a non-GAAP metric calculated by combining the (i) cash, cash equivalents and restricted cash on hand as of September 30, 2019, and (ii) the net cash proceeds from the October 2019 private placement financing.

Additional Corporate Highlights

Conference Call Information

The company will host a live conference call at 4:30 p.m. ET today. The conference call can be accessed by dialing either:

1- 844-602-0380 (toll-free)

1- 862-298-0970 (international)

The webcast will be accessible live and archived on Aytu BioScience’s website, within the Investors section under Events & Presentations, at aytubio.com, for 90 days.

A replay of the call will be available for fourteen days. Access the replay by calling 1-877-481-4010 (toll-free) and using the replay access code 56773.

About Aytu BioScience, Inc.

Aytu BioScience is a commercial-stage specialty pharmaceutical company focused on commercializing novel products that address significant patient needs. The company currently markets Natesto®, the only FDA-approved nasal formulation of testosterone for men with hypogonadism (low testosterone, or “Low T”). Aytu also has exclusive U.S. and Canadian rights to ZolpiMist™, an FDA-approved, commercial-stage prescription sleep aid indicated for the short-term treatment of insomnia characterized by difficulties with sleep initiation. Aytu is the exclusive U.S. licensee with commercial rights to Tuzistra® XR, the only FDA-approved 12-hour codeine-based antitussive syrup. Tuzistra XR is a prescription antitussive consisting of codeine polistirex and chlorpheniramine polistirex in an extended-release oral suspension. Additionally, Aytu is developing MiOXSYS®, a novel, rapid semen analysis system with the potential to become a standard of care for the diagnosis and management of male infertility caused by oxidative stress. MiOXSYS is commercialized outside of the U.S. where it is a CE Marked, Health Canada cleared, Australian TGA approved, Mexican COFEPRAS approved product, and Aytu is planning U.S.-based clinical trials in pursuit of 510k de novo medical device clearance by the FDA. Aytu’s strategy is to continue building its portfolio of revenue-generating products, leveraging its focused commercial team and expertise to build leading brands within large therapeutic markets. For more information visit aytubio.com.

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, or the Exchange Act. All statements other than statements of historical facts contained in this presentation, are forward-looking statements. Forward-looking statements are generally written in the future tense and/or are preceded by words such as ″may,″ ″will,″ ″should,″ ″forecast,″ ″could,″ ″expect,″ ″suggest,″ ″believe,″ ″estimate,″ ″continue,″ ″anticipate,″ ″intend,″ ″plan,″ or similar words, or the negatives of such terms or other variations on such terms or comparable terminology. These statements are just predictions and are subject to risks and uncertainties that could cause the actual events or results to differ materially. These risks and uncertainties include, among others: the effects of the business combination of Aytu and the Commercial Portfolio and the previously announced, but not yet consummated, merger (“Merger”) with Innovus Pharmaceuticals, including the combined company’s future financial condition, results of operations, strategy and plans, the ability of the combined company to realize anticipated synergies in the timeframe expected or at all, changes in capital markets and the ability of the combined company to finance operations in the manner expected, the diversion of management time on Merger-related issues and integration of the Commercial Portfolio, the ultimate timing, outcome and results of integrating the operations the Commercial Portfolio and Innovus with Aytu’s existing operations, the failure to obtain the required votes of Innovus’ shareholders or Aytu’s shareholders to approve the Merger and related matters, the risk that a condition to closing of the Merger may not be satisfied, that either party may terminate the merger agreement or that the closing of the Merger might be delayed or not occur at all, the price per share utilized in the formula for the initial $8 million merger consideration in the Merger may not be reflective of the current market price of Aytu’s common stock on the closing date, potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the Merger, risks relating to gaining market acceptance of our products, obtaining or maintaining reimbursement by third-party payors, the potential future commercialization of our product candidates, the anticipated start dates, durations and completion dates, as well as the potential future results, of our ongoing and future clinical trials, the anticipated designs of our future clinical trials, anticipated future regulatory submissions and events, our anticipated future cash position and future events under our current and potential future collaboration. We also refer you to the risks described in ″Risk Factors″ in Part I, Item 1A of the company’s Annual Report on Form 10-K and in the other reports and documents we file with the Securities and Exchange Commission from time to time.

Contact for Investors:

James Carbonara

Hayden IR

(646) 755-7412

Aytu BioScience, Inc,

Condensed Consolidated Balance Sheet Information

(Unaudited)
September 30,June 30,
20192019

Assets

Current assets

Cash and cash equivalents

$7,014,307$11,044,227

Restricted cash

250,000250,000

Accounts receivable, net

1,705,4281,740,787

Inventory, net

1,380,7291,440,069

Prepaid expenses and other

573,199957,781

Note receivable

1,000,000-

Other current assets

59,014-

Total current assets

11,982,67715,432,864

Fixed assets, net

137,900203,733

Licensed assets, net

18,293,19918,861,983

Patents, net

214,278220,611

Right-of-use asset

393,820-

Deposits

2,2002,200

Total long-term assets

19,041,39719,288,527

Total assets

$31,024,074$34,721,391

Liabilities

Current liabilities

Accounts payable and other

$2,632,642$2,297,270

Accrued liabilities

1,151,1811,147,740

Accrued compensation

1,002,409849,498

Current lease liability

79,362-

Current contingent consideration

1,236,6251,078,068

Total current liabilities

6,102,2195,372,576

Long-term contingent consideration

22,272,06822,247,796

Long-term lease liability

314,457-

Warrant derivative liability

11,37113,201

Total liabilities

28,700,11527,633,573

Commitments and contingencies

Stockholders' equity

Preferred Stock, par value $.0001; 50,000,000 shares authorized; shares issued and outstanding 3,151,148 and 3,594,981, respectively as of September 30, 2019 (unaudited) and June 30, 2019.

315359

Common Stock, par value $.0001; 100,000,000 shares authorized; shares issued and outstanding 17,981,094 and 17,538,071, respectively as of September 30, 2019 (unaudited) and June 30, 2019.

1,7981,754

Additional paid-in capital

113,640,376113,475,205

Accumulated deficit

(111,318,530)(106,389,500)

Total stockholders' equity

2,323,9597,087,818

Total liabilities and stockholders' equity

$31,024,074$34,721,391

Aytu BioScience, Inc,. Consolidated Statements of Operations Information (Unaudited)

Three Months Ended
September 30,
20192018

Revenues

Product revenue, net

$1,439,826$1,431,809

Operating expenses

Cost of sales

375,720410,959

Research and development

78,020155,878

Selling, general and administrative

5,146,4433,576,580

Selling, general and administrative - related party

-253,709

Amortization of intangible assets

575,117451,957

Total operating expenses

6,175,3004,849,083

Loss from operations

(4,735,474)(3,417,274)

Other (expense) income

Other (expense), net

(195,386)(76,561)

Gain from warrant derivative liability

1,83047,352

Total other (expense) income

(193,556)(29,209)

Net loss

$(4,929,030)$(3,446,483)

Weighted average number of common shares outstanding

15,325,9211,759,824

Basic and diluted net loss per common share

$(0.32)$(1.96)

Aytu BioScience, Inc, Condensed Consolidated Cash Flow Information (Unaudited)

Three Months End
September 30,
20192018

Operating Activities

Net loss

$(4,929,030)$(3,446,483)

Adjustments to reconcile net loss to cash used in operating activities:

Depreciation, amortization and accretion

869,312556,807

Stock-based compensation expense

165,171152,114

Derivative income

(1,830)(47,352)

Changes in operating assets and liabilities:

Decrease (increase) in accounts receivable

35,359(181,274)

Decrease in inventory

59,34028,870

Decrease (increase) in prepaid expenses and other

384,582(296,971)

Increase (decrease) in accounts payable and other

276,917(7,889)

Increase in accrued liabilities

3,441242,969

Increase in accrued compensation

152,911256,174

(Decrease) in deferred rent

(3,990)(1,450)

Net cash used in operating activities

(2,987,817)(2,744,485)

Investing Activities

Deposit

-2,888

Purchases of fixed assets

-(6,065)

Contingent consideration payment

(42,103)-

Note receivable

(1,000,000)-

Purchase of assets

-(300,000)

Net cash used in investing activities

(1,042,103)(303,177)

Financing Activities

Net cash provided by financing activities

--

Net change in cash, restricted cash and cash equivalents

(4,029,920)(3,047,662)

Cash, restricted cash and cash equivalents at beginning of period

11,294,2277,112,527

Cash, restricted cash and cash equivalents at end of period

$7,264,307$4,064,865

Aytu BioScience, Inc, Condensed Consolidated Statement of Stockholders’ Equity Information (Unaudited)

Preferred StockCommon StockAdditional paid-inAccumulatedTotal Stockholders'
SharesAmountSharesAmountcapitalDeficitEquity

BALANCE - June 30, 2019

3,594,981$35917,538,071$1,754$113,475,205$(106,389,500)$7,087,818

Stock-based compensation

----165,171-165,171

Preferred stock converted in common stock

(443,833)(44)443,83344---

Net loss

-----(4,929,030)(4,929,030)

BALANCE - September 30, 2019

3,151,148$31517,981,904$1,798$113,640,376$(111,318,530)$2,323,959
Preferred StockCommon StockAdditional paid-inAccumulatedTotal Stockholders'
SharesAmountSharesAmountcapitalDeficitEquity

BALANCE - June 30, 2018

-$-1,794,762$179$92,681,918$(79,257,592)$13,424,505

Stock-based compensation

----152,114-152,114

Adjustment for rounding of shares due to stock split

--6,6491(1)--

Net loss

-----(3,446,483)(3,446,483)

BALANCE - September 30, 2018

-$-1,801,411$180$92,834,031$(82,704,075)$10,130,136

Aytu BioScience, Inc, Reconciliation of GAAP to Non-GAAP Pro Forma Financial Information (Unaudited)

Three Months EndedTwelve Months Ended
September 30,September 30,
20192019

Pro Forma Revenue

Aytu product revenue, net

$1.47.3

Acquired Cerecor Pediactric Therapudic revenue, net

3.412.7

Innovus revenue, net

5.822.7

Total Pro-Forma Revenue

$10.6$42.7
As of
September 30,
2019

Pro Forma Net Cash

Cash, cash equivalents and restricted cash at September 30, 2019

$7.3

Cash raised from an October private placement financing

9.3

Total Pro Forma Cash

$16.6

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