Results Do Not Include September 2019 Definitive Agreement to Acquire Innovus Pharmaceuticals: Combined LTM revenues of over $31M, Diversifies product line by 10x to over 30 products

ENGLEWOOD, CO / ACCESSWIRE / September 26, 2019 / Aytu BioScience, Inc. (NASDAQ:AYTU), a specialty pharmaceutical company focused on commercializing novel products that address significant patient needs, today will provide an overview of its business, including the company's operational and financial results for its fiscal year 2019 that ended June 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.

FY 2019 and Recent Operational Highlights

  • Fiscal Year ending June 30, 2019 revenue increased 100% to $7.3 million; results do not include any contribution from September 2019 Definitive Agreement to acquire Innovus Pharmaceuticals: combined last twelve-month revenues of over $31 million
  • Generated $5.1 million in FY 2019 gross profit, a 218% increase over prior year
  • Grew product portfolio from Natesto® only, to three products - with the acquisition of ZolpiMist™ and Tuzistra® XR
  • Natesto Spermatogenesis Study results were accepted for presentation as a "Late-Breaking Abstract" by the American Society for Reproductive Medicine (ASRM). The study results will be presented at the 75th ASRM Scientific Congress & Expo in Philadelphia, PA October 16, 2019
  • Used $2.1 million less cash than prior year despite cash used to purchase two new products, buy inventory and launch both quickly, within one-quarter of closing each transaction
  • Raised $20.6 million new capital (debt, equity and warrant exercises)
  • Added multiple high-quality, healthcare focused fundamental institutional investors
  • Added two sell-side analysts covering AYTU
  • Expanded the board to include Steve Boyd, Founder and CIO of healthcare institutional investor Armistice Capital, and Ketan Mehta, Founder, President, and Chief Executive Officer of Tris Pharma

Subsequent to Fiscal Year Ending June 30, 2019

Announced Innovus Pharmaceuticals acquisition to form an integrated specialty pharmaceutical company:

  • Combined trailing twelve-month revenues of over $31 million
  • Diversifies product line by 10x to over 30 products in both Rx and consumer segments
  • Adds a robust, growing consumer health business to complement current growing prescription product portfolio
  • Adds complementary, seasoned management team to continue the growth of the Innovus consumer health business
  • Innovus operating near breakeven; near-term commercial, administrative, and operational synergies, resulting in acceleration of time to EBIDTA positive, are expected to be realized through the rapid integration of the two companies' operations.

Announced Natesto license re-negotiation with Acerus Pharmaceuticals to accelerate revenue growth and increase promotion to Low T specialists:

  • Doubles Natesto sales representatives; augments current Aytu sales force with nationwide specialty sales team focused on urology and endocrinology
  • Increases gross profit, eliminates milestone payments, removes regulatory fees and clinical trial expenses

Announced Tuzistra XR co-promotion with Poly Pharmaceuticals to accelerate Rxgrowth and increase physician coverage:

  • Doubles the Tuzistra XR sales representative headcount; potential to double revenue in FY2020
  • Expands primary care physician promotion by over 7,500 prescribers

Josh Disbrow, Chief Executive Officer of Aytu BioScience, commented, "FY 2019 and subsequent activities reflect that Aytu is entering a period of hypergrowth. Revenue in FY 2019 increased 100% year over year to $7.3 million, as we grew the product portfolio 3x from one product to three. With our September 2019 definitive agreement to acquire Innovus Pharmaceuticals, combined trailing twelve-month revenue is more than $31 million, and this grows and diversifies our product line by 10x to over 30 products in both Rx and consumer health segments. The synergies from the combination are expected to result in accelerating our time to EBITDA positive, which we expect will be a significant catalyst that further increases shareholder value."

FY19 Financial Results

  • Net revenue for the year-ended June 30, 2019 was $7.3 million, an increase of 100% over the prior year ended June 30, 2018.
  • Cash, cash equivalents, and restricted cash was approximately $11.3 million as of June 30, 2019
  • Cash used in operations for the year ended June 30, 2019 decreased by $2.1 million from the prior year ended June 30, 2018.
  • Operating expenses excluding COGS for the year ended June 30, 2019 were $22 million, which were comparable to the prior year ended June 30, 2018.
  • The company retired all of its outstanding debt through an exchange with Armistice Capital in the fourth quarter of 2019, which increased its equity investment in the company. The $5 million exchange was approved by a shareholder vote with 95% of votes cast supporting the exchange.

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 53674.

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 recently acquired exclusive U.S. 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. 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: 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.
Consolidated Balance Sheet Information

 
  June 30,  
 
  2019     2018  
Assets
     
Current assets
           
Cash and cash equivalents
  $ 11,044,227     $ 7,012,527  
Restricted cash
    250,000       100,000  
Accounts receivable, net
    1,740,787       578,782  
Inventory, net
    1,440,069       1,338,973  
Prepaid expenses and other
    957,781       440,009  
Total current assets
    15,432,864       9,470,291  
 
               
Fixed assets, net
    203,733       218,684  
Licensed assets, net
    18,861,983       11,120,086  
Patents, net
    220,611       245,944  
Deposits
    2,200       5,088  
Total long-term assets
    19,288,527       11,589,802  
 
               
Total assets
  $ 34,721,391     $ 21,060,093  
 
               
Liabilities
               
Current liabilities
               
Accounts payable and other
  $ 2,297,270     $ 2,119,672  
Accrued liabilities
    1,147,740       185,882  
Accrued compensation
    849,498       540,674  
Current deferred rent
    -       1,450  
Current contingent consideration
    1,078,068       547,100  
Total current liabilities
    5,372,576       3,394,778  
 
               
Long-term contingent consideration
    22,247,796       4,146,829  
Warrant derivative liability
    13,201       93,981  
Total liabilities
    27,633,573       7,635,588  
 
               
Commitments and contingencies
               
 
               
Stockholders' equity
               
Preferred Stock, par value $.0001; 50,000,000 shares authorized;
shares issued and outstanding 3,594,981 and 0,
respectively as of June 30, 2019 and 2018, respectively.
    359       -  
Common Stock, par value $.0001; 100,000,000 shares authorized;
shares issued and outstanding 17,538,071 and 1,794,762,
respectively as of June 30, 2019 and 2018
    1,754       179  
Additional paid-in capital
    113,475,205       92,681,918  
Accumulated deficit
    (106,389,500 )     (79,257,592 )
Total stockholders' equity
    7,087,818       13,424,505  
 
               
Total liabilities and stockholders' equity
  $ 34,721,391     $ 21,060,093  
                 
                 

Aytu BioScience, Inc.
Consolidated Statements of Operations Information

 
  Year Ended June 30,  
 
  2019     2018  
Revenues
           
Product revenue, net
  $ 7,314,581     $ 3,660,120  
License revenue, net
    5,776       -  
Total product revenue
    7,320,357       3,660,120  
 
               
Operating expenses
               
Cost of sales
    2,202,041       2,050,544  
Research and development
    589,072       167,595  
Selling, general and administrative
    18,887,783       17,732,490  
Selling, general and administrative - related party
    351,843       -  
Impairment of intangible assets
    -       1,856,020  
Amortization of intangible assets
    2,136,255       1,553,705  
Total operating expenses
    24,166,994       23,360,354  
 
               
Loss from operations
    (16,846,637 )     (19,700,234 )
 
               
Other (expense) income
               
Other (expense), net
    (535,500 )     (749,423 )
(Loss) / gain from change in fair value of contingent consideration
    (9,830,550 )     6,277,873  
Gain from warrant derivative liability
    80,779       3,983,921  
Total other (expense) income
    (10,285,271 )     9,512,371  
 
               
Net loss
  $ (27,131,908 )   $ (10,187,863 )
 
               
Weighted average number of shares outstanding of common shares outstanding
    7,794,489       665,605  
 
               
Basic and diluted net loss per common share
  $ (3.48 )   $ (15.31 )
                 
                 

Aytu BioScience, Inc.
Consolidated Statements of Cash Flows Information

 
  Year Ended June 30,  
 
  2019     2018  
Operating Activities
           
Net loss
  (27,131,908 )   (10,187,863 )
Adjustments to reconcile net loss to cash used in operating activities:
               
Depreciation, amortization and accretion
    2,727,067       2,591,270  
Impairment of intangible assets
  -       1,856,020  
Stock-based compensation expense
    1,022,202       596,934  
Loss / (gain) from change in fair value of contingent consideration
    9,830,550       (6,277,873 )
Warrants issuance and amendments
  -       183,920  
Issuance of common stock to employee
    11,690     -  
Derivative income
    (80,779 )     (3,983,921 )
Changes in operating assets and liabilities:
               
(Increase) in accounts receivable
    (1,162,005 )     (50,743 )
(Increase) decrease in inventory
    (101,096 )     (26,752 )
(Increase) in prepaid expenses and other
    (517,772 )     (129,249 )
Increase / (decrease) in accounts payable and other
    134,775       (109,707 )
Increase / (decrease) in accrued liabilities
    961,858       (596,654 )
Increase in accrued compensation
    308,824       200,970  
Increase in interest payable - related party
    166,667     -  
(Decrease) in deferred rent
    (1,450 )     (6,674 )
Net cash used in operating activities
    (13,831,377 )     (15,940,322 )
 
               
Investing Activities
               
Deposit
    2,888       (2,200 )
Purchases of fixed assets
    (59,848 )     (74,707 )
Contingent consideration payment
    (505,025 )     (7,385 )
Purchase of assets
    (500,000 )     (400,000 )
Net cash used in investing activities
    (1,061,985 )     (484,292 )
 
               
Financing Activities
               
Issuance of preferred, common stock and warrants
    15,180,000       11,839,995  
Issuance costs related to preferred, common stock and warrants
    (1,479,964 )     (1,402,831 )
Issuance of preferred, common stock and warrants
    -       12,900,020  
Issuance costs related to preferred, common stock and warrants
    -       (1,294,235 )
Warrant exercises
    375,026       677,100  
S-3 registered offering cost
    -       (60,450 )
Issuance of debt - related party
    5,000,000       -  
Net cash provided by financing activities
    19,075,062       22,659,599  
 
               
Net change in cash, restricted cash and cash equivalents
    4,181,700       6,234,985  
Cash, restricted cash and cash equivalents at beginning of period
    7,112,527       877,542  
Cash, restricted cash and cash equivalents at end of period
  11,294,227     7,112,527  
                 
                 

SOURCE: Aytu BioScience, Inc.



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