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Aytu Reports Q2 Revenue of $3.2M, Up 77% Year-over-Year and 121% Sequentially

February 13, 2020 GMT
ENGLEWOOD, CO / ACCESSWIRE / February 13, 2020 / Aytu BioScience, Inc. (NASDAQ:AYTU), a specialty pharmaceutical company focused on commercializing novel products that address significant medical needs, today will provide an overview of its business, ...
ENGLEWOOD, CO / ACCESSWIRE / February 13, 2020 / Aytu BioScience, Inc. (NASDAQ:AYTU), a specialty pharmaceutical company focused on commercializing novel products that address significant medical needs, today will provide an overview of its business, ...

ENGLEWOOD, CO / ACCESSWIRE / February 13, 2020 / Aytu BioScience, Inc. (NASDAQ:AYTU), a specialty pharmaceutical company focused on commercializing novel products that address significant medical needs, today will provide an overview of its business, including the company’s operational and financial results for its fiscal second quarter 2020 that ended December 31, 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 Second Quarter Financial and Corporate Highlights

Commenting on the second quarter of 2020, Josh Disbrow, Chief Executive Officer of Aytu BioScience, stated, “Revenue for the three months ended December 31, 2019 was $3.2 million, which represents 121% growth over the three months ended September 30, 2019. Considering that the Cerecor Rx portfolio purchase didn’t close until November, with the start of the integration beginning after that, this is a strong revenue number that we expect to grow with the product portfolio now integrated. We are not yet realizing the full benefit of the acquisition, so we look forward to our continued growth as we complete cross-training and maximize the multiple opportunities to gain synergy through our expanded Rx product portfolio.”

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 57940.

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 a portfolio of prescription products addressing large primary care and pediatric markets. The primary care portfolio includes (i) Natesto®, the only FDA-approved nasal formulation of testosterone for men with hypogonadism (low testosterone, or “Low T”), (ii) ZolpiMist™, the only FDA-approved oral spray prescription sleep aid, and (iii) Tuzistra® XR, the only FDA-approved 12-hour codeine-based antitussive syrup. The pediatric portfolio includes (i) AcipHex® Sprinkle™, a granule formulation of rabeprazole sodium, a commonly prescribed proton pump inhibitor; (ii) Cefaclor, a second-generation cephalosporin antibiotic suspension; (iii) Karbinal® ER, an extended-release carbinoxamine (antihistamine) suspension indicated to treat numerous allergic conditions; and (iv) Poly-Vi-Flor® and Tri-Vi-Flor®, two complementary prescription fluoride-based supplement product lines containing combinations of fluoride and vitamins in various for infants and children with fluoride deficiency. 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

December 31,June 30,
20192019
(Unaudited)

Assets

Current assets

Cash and cash equivalents

$5,259,49211,044,227

Restricted cash

251,396250,000

Accounts receivable, net

5,197,1511,740,787

Inventory, net

2,491,8071,440,069

Prepaid expenses and other

2,361,249957,781

Note receivable

1,350,000-

Other current assets

1,426,617-

Total current assets

18,337,71215,432,864

Fixed assets, net

122,064203,733

Licensed assets, net

17,724,41618,861,983

Patents, net

207,944220,611

Right-of-use asset

374,568-

Product technology rights

22,321,667-

Deposits

2,2002,200

Goodwill

15,387,064-

Total long-term assets

56,139,92319,288,527

Total assets

$74,477,635$34,721,391

Liabilities

Current liabilities

Accounts payable and other

$9,598,567$2,297,270

Accrued liabilities

2,114,0601,147,740

Accrued compensation

786,769849,498

Current lease liability

82,755-

Current contingent consideration

705,8801,078,068

Current portion of fixed payment arrangements

2,661,456-

Total current liabilities

15,949,4875,372,576

Long-term contingent consideration

17,739,96422,247,796

Long-term lease liability

291,813-

Long-term fixed payment arrangements

23,394,761

Warrant derivative liability

11,37113,201

Total liabilities

57,387,39527,633,573

Commitments and contingencies

Stockholders' equity

Preferred Stock, par value $.0001; 50,000,000 shares authorized; shares issued and outstanding 10,215,845 and 3,594,981, respectively as of December 31, 2019 (unaudited) and June 30, 2019.

1,022359

Common Stock, par value $.0001; 100,000,000 shares authorized; shares issued and outstanding 20,733,052 and 17,538,071, respectively as of December 31, 2019 (unaudited) and June 30, 2019.

2,0731,754

Additional paid-in capital

128,619,922113,475,205

Accumulated deficit

(111,532,777)(106,389,500)

Total stockholders' equity

16,758,3677,087,818

Total liabilities and stockholders' equity

$74,477,635$34,721,391

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

Three Months Ended December 31,Six Months Ended December 31,
2019201820192018

Revenues

Product revenue, net

$3,175,236$1,795,011$4,615,062$3,226,820

Operating expenses

Cost of sales

606,046525,138981,766936,097

Research and development

66,675149,029144,695304,907

Selling, general and administrative

6,516,1605,046,17411,662,6038,622,754

Selling, general and administrative - related party

91,337345,046

Amortization of intangible assets

953,450534,0631,528,567986,020

Total operating expenses

8,142,3316,345,74114,317,63111,194,824

Loss from operations

(4,967,095)(4,550,730)(9,702,569)(7,968,004)

Other (expense) income

Other (expense), net

(446,958)(127,569)(642,344)(204,130)

Gain from derecognition of contingent consideration liability

5,199,806-5,199,806

Gain from warrant derivative liability

-20,6371,83067,989

Total other (expense) income

4,752,848(106,932)4,559,292(136,141)

Net loss

$(214,247)$(4,657,662)$(5,143,277)$(8,104,145)

Weighted average number of common shares outstanding

17,538,1486,477,00416,425,9904,183,591

Basic and diluted net loss per common share

$(0.01)$(0.72)$(0.31)$(1.94)

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

Six Months Ended December 31,
20192018

Operating Activities

Net loss

$(5,143,277)$(8,104,145)

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

Depreciation, amortization and accretion

2,157,5401,230,671

Stock-based compensation expense

327,435346,176

Derecognition of contingent consideration

(5,199,806)-

Issuance of common stock to employee

-11,690

Derivative income

(1,830)(67,989)

Changes in operating assets and liabilities:

(Increase) in accounts receivable

(3,456,364)(903,708)

(Increase) in inventory

(132,199)(305,888)

(Increase) in prepaid expenses and other

(171,430)(504,757)

(Increase) in other current assets

(136,694)-

Increase in accounts payable and other

2,806,973252,113

Increase in accrued liabilities

145,467760,798

(Decrease) Increase in accrued compensation

(62,729)203,160

(Decrease) in fixed payment arrangements

(216,150)-

Increase in interest payable

-36,164

(Decrease) in deferred rent

(3,990)(1,450)

Net cash used in operating activities

(9,087,054)(7,047,165)

Investing Activities

Deposit

-2,888

Purchases of fixed assets

-(12,954)

Contingent consideration payment

(104,635)(50,221)

Note receivable

(1,350,000)-

Purchase of assets

(4,500,000)(800,000)

Net cash used in investing activities

(5,954,635)(860,287)

Financing Activities

Issuance of preferred, common stock and warrants

10,000,00015,180,000

Issuance costs related to preferred, common stock and warrants

(741,650)(1,479,963)

Issuance of debt

-5,000,000

Net cash provided by financing activities

9,258,35018,700,037

Net change in cash, restricted cash and cash equivalents

(5,783,339)10,792,585

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

$5,510,888$17,905,112

Supplemental disclosures of cash and non-cash investing and financing transactions

Cash paid for interest

$161,890$-

Fair value of right-to-use asset and related lease liability

374,568-

Issuance of Series G preferred stock due to acquisition of the Cerecor portfolio of pediatrics therapeutics (unaudited)

5,559,914-

Inventory payment included in accounts payable

460,416-

Contingent consideration included in accounts payable

16,014-

Fixed payment arrangements included in accounts payable

291,666-

Exchange of convertible preferred stock into common stock

319-

Return deductions received by Cerecor

1,309,365-

Fair value of warrants issued to investors and underwriters

-1,888,652

Issuance of preferred stock related to purchase of asset

-519,600

Contingent consideration related to purchase of asset

$-$8,833,219

SOURCE: Aytu BioScience, Inc.

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