ENGLEWOOD, Colo., Sept. 1, 2016 /PRNewswire/ -- Aytu BioScience, Inc. (OTCQX: AYTU), a specialty pharmaceutical company focused on global commercialization of novel products in the field of urology, provided today a review of its recent accomplishments and provided an overview of its business and growth strategy, as well as its operational and financial results for the fiscal year ended June 30, 2016. The company will host a live conference call and webcast today at 4:30 p.m. ET.

Fiscal 2016 Corporate Highlights:

  • Executed commercial-focused business strategy, acquiring two additional FDA-approved, revenue-generating urology products
  • Secured exclusive U.S. rights to Natesto®, the only FDA-approved nasally-administered testosterone product and only topically applied testosterone product without a black box safety warning
  • Acquired global rights to Primsol®, the only FDA-approved trimethoprim-only oral solution for treating urinary tract infections
  • Built and expanded the company's commercial infrastructure, including proven commercial leadership and a nationwide specialty sales force
  • Secured CE Marking and approval by Health Canada for MiOXSYS™, the company's novel, proprietary device for the rapid assessment of male infertility
  • Appointed three independent board directors and established the full spectrum of corporate governance policies and procedures in compliance with the listing requirements for both NYSE and NASDAQ

Fiscal 2016 Financial Highlights:

  • Grew annual revenues nearly ten-fold from $262,000 in fiscal 2015 to $2.6 million in fiscal 2016 (newly licensed Natesto is not included in either of these revenue numbers, as it was launched in July 2016)
  • Demonstrated consistent quarterly revenue growth, with sales of $469,000, $669,000, and $937,000 in fiscal quarters two, three, and four, respectively
  • Raised sufficient initial growth capital through convertible note and equity offerings to support the company's initial commercial infrastructure and three product launches
  • Ended fiscal 2016 with $8.1 million in cash and cash equivalents
  • Successfully upgraded Aytu stock from OTCQB to OTCQX
  • Entered into a $10.5 million stock purchase agreement with Lincoln Park Capital just after the start of fiscal 2017 to enable balance sheet strength and flexibility as the Company executes on the Natesto product launch
  • Executed a reverse stock split in June 2016 to support potential up-listing of Aytu stock to a national stock exchange

"2016 has been a period of remarkable growth for Aytu," stated Josh Disbrow, Chairman and Chief Executive Officer of Aytu BioScience, Inc. "During our first complete fiscal year since our merger in 2015, we've become a rapidly maturing, commercially driven specialty pharmaceutical company that has already achieved substantial revenue growth and built a portfolio of differentiated urology-focused commercial products.  With our most recent acquisition of Natesto, we achieved a critical mass of products and scaled our commercial organization to execute a successful launch of Natesto, which we expect to be the primary revenue driver for Aytu, while efficiently growing both ProstaScint and Primsol in the U.S.  We're already on a strong growth trajectory, and our objective is to continue growing revenue and driving toward profitability as efficiently as possible."

Securing the U.S. commercial rights to Natesto was a transformational event for Aytu.  It enabled the company to launch the product in late July 2016 and begin establishing it within the growing $2.4 billion U.S. testosterone replacement therapy (TRT) market.  Natesto is the only FDA-approved nasally-administered TRT product, and unlike the leading topical TRTs, it does not carry a black box safety warning due to the risk of unintended transference. Nor does Natesto require a lengthy and cumbersome application process. 

Through the first four weeks of the launch of Natesto, Aytu has received a positive response for the product, with steady week over week prescription growth, based on IMS data. Weekly redemptions of Natesto co-pay coupons have already surpassed the previous 2016 weekly high levels registered under the previous marketer's co-pay program.  Additionally, the Company's Assure Rx program is operational in nearly all sales territories across the U.S. with confirmed prescriptions across multiple partner pharmacies.  The Company has already booked additional demand-driven factory sales through its wholesale channels, which were pre-stocked prior to Aytu's Natesto launch – another positive indicator for the initial launch of this product.

While Natesto is the lead product in terms of sales force prioritization, the Company remains committed to continuing to build revenue for ProstaScint and Primsol, and will continue to market these products to urologists through existing sales channels and partnerships.  In fiscal 2016, Aytu established partnerships for both of these products.  In March, Aytu partnered with Hybridyne Imaging Technologies to potentially expand the utility and application of ProstaScint for detecting prostate cancer by using it with Hybridyne's minimally invasive camera.  Hybridyne has initiated enrollment and patient dosing in an open-label prostate cancer study.  Also in March, Aytu signed a strategic co-promotion agreement with Allegis Pharmaceuticals, which is focused on marketing Primsol for the pediatric indication of acute otitis media.

Aytu also continues to develop MiOXSYS, its proprietary diagnostic device for male infertility that offers rapid and convenient oxidative stress testing in semen, and it has generated a robust and growing body of clinical data supporting this product.  In fiscal 2016, Aytu successfully obtained CE Marking as well as Health Canada approval for MiOXSYS and has begun to recognize ex-U.S. sales with a small commercial footprint.  In July, Aytu's academic and clinical collaborators presented three posters demonstrating the potential of MiOXSYS to be used as an aid in the diagnosis of infertility in men at the European Society of Human Reproduction and Embryology annual meeting.  Aytu also published clinical findings in the high-profile, peer-reviewed medical journal Fertility and Sterility, and MiOXSYS was featured with a dedicated chapter in a major andrology textbook.  The company expects to gain potential FDA clearance for MiOXSYS under the 510(k) de novo process and is currently finalizing a study protocol in conjunction with the Agency.  Aytu expects to begin a formal FDA clinical study by the end of calendar year 2016.

Financial Highlights

Net revenue for fiscal 2016 was $2.6 million, which was related to sales of ProstaScint and Primsol, ex-U.S. sales of MiOXSYS, and licensing revenue from Zertane.  Net revenue in fiscal 2015 was $262,000, which consisted primarily of initial sales of ProstaScint.  Revenues are expected to grow substantially in fiscal 2017 with the launch of Natesto and continued marketing of ProstaScint and Primsol.

Cash and cash equivalents were $8.1 million as of June 30, 2016.  In July 2016, Aytu entered into a $10.5 million stock purchase agreement with Lincoln Park Capital, expected to provide additional balance sheet strength and flexibility to support the company's rapidly progressing commercial activities. Based on current operational plans and assumptions, Aytu believes it has adequate financial resources to continue operations into the second quarter of fiscal 2017 and believes that it will be able to raise additional funding to support its growth.  In conjunction with a potential uplisting of the Company's stock to a national exchange, the Company intends to raise additional capital, with the expectation of extending operational and growth capital through fiscal 2017 and into fiscal 2018.

Aytu executed a 12:1 reverse stock split in June 2016, which was approved by Aytu shareholders in support of the company's plans to uplist to a national stock exchange.

Conference Call Information:
The live conference call and webcast will begin today at 4:30 p.m. Eastern Time.  Interested participants and investors may access the conference call by dialing either:

  • 1 (855) 656-0926 (U.S.)
  • 1 (412) 542-4198 (international)

The webcast will be accessible live and archived on Aytu's website, http://aytubio.com, for 90 days.

A replay of the call will be available for seven days. Access the replay by calling 1 (877) 344-7529 (U.S.) or 1 (412) 317-0088 (international) and using the replay access code 10091951.

About Aytu BioScience, Inc.
Aytu BioScience is a commercial-stage specialty pharmaceutical company focused on global commercialization of novel products in the field of urology. The Company currently markets three products: Natesto®, the first and only FDA-approved nasal formulation of testosterone for men with hypogonadism (low testosterone, or "Low T"), ProstaScint® (capromab pendetide), the only FDA-approved imaging agent specific to prostate specific membrane antigen (PSMA) for prostate cancer detection and staging, and Primsol® (trimethoprim hydrochloride), the only FDA-approved trimethoprim-only oral solution for urinary tract infections. 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 the U.S. where it is a CE Marked, Health Canada cleared product, and Aytu is conducting 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 urology products, leveraging its focused commercial team and expertise to build leading brands within well-established markets. For more information, visit aytubio.com.

For Investors & Media:
Tiberend Strategic Advisors, Inc.
Joshua Drumm, Ph.D.: jdrumm@tiberend.com; (212) 375-2664
Janine McCargo: jmccargo@tiberend.com; (646) 604-5150

Forward Looking Statement
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. All statements other than statements of historical facts contained in this press release, including statements regarding our anticipated future clinical and regulatory events, future financial position, business strategy and plans and objectives of management for future operations, 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 unpredictability of the size of the markets for, and market acceptance of, any of our products and product candidates; the potential future commercialization of our approved products and product candidates; our need to obtain additional funding and our ability to obtain future funding on acceptable terms; our anticipated capital expenditures and our estimates regarding our capital requirements; the ability to meet ongoing conditions of the Lincoln Park Capital agreement in order to access the financing under the agreement; the ability to have Aytu common stock listed on a national securities exchange; 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; risks relating to gaining market acceptance of our products; obtaining reimbursement by third-party payors; our anticipated future cash position; and future events under our current and potential future collaborations. We also refer you to the risks described in "Risk Factors" in Part I, Item 1A of Aytu BioScience, Inc.'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.

 

 

AYTU BIOSCIENCE, INC.

Balance Sheet





 June 30,


2016


2015

 Assets



Current assets




 Cash and cash equivalents

$8,054,190


$7,353,061

 Accounts receivable, net

162,427


157,058

 Inventory, net

524,707


39,442

 Prepaid expenses and other

215,558


370,888

 Prepaid research and development - related party  

121,983


121,983

 Investment in Acerus

1,041,362


-

Total current assets

10,120,227


8,042,432





 Fixed assets, net 

231,430


29,706

 Developed technology, net

1,159,736


780,125

 Customer contracts, net

1,353,375


711,000

 Trade names, net

194,472


79,000

 Natesto asset

10,549,797


-

 Goodwill

221,000


74,000

 In-process research and development

-


7,500,000

 Patents, net

296,611


628,776

 Long-term portion of prepaid research and development - related party 

213,471


335,454

 Deposits

2,888


4,886

 Total long-term assets

14,222,780


10,142,947

Total assets

$24,343,007


$18,185,379





 Liabilities and Stockholders' Equity



Current liabilities




 Accounts payable and accrued liabilities

$3,519,711


$1,195,368

 Natesto payable

5,379,675


-

 Accrued compensation

1,200,930


196,503

 Deferred  revenue

-


85,714

 Deferred rent

4,109


-

Total current liabilities

10,104,425


1,477,585





 Contingent consideration

3,869,122


664,000

 Long-term deferred revenue

-


425,893

 Deferred rent

8,215


1,449

 Warrant derivative liability

275,992


-

Total liabilities

14,257,754


2,568,927





 Commitments and contingencies




Stockholders' equity




 Preferred Stock, par value $.0001; 50,000,000 shares authorized; none issued

-


-

Common Stock, par value $.0001; 100,000,000 shares authorized; shares issued
    and outstanding 3,741,944 in 2016 and 1,188,307 in 2015

374


119

 Additional paid-in capital

56,646,304


38,997,674

 Ampio stock subscription

-


(5,000,000)

 Accumulated deficit 

(46,561,425)


(18,381,341)

 Total stockholders' equity

10,085,253


15,616,452

Total liabilities and stockholders' equity

$24,343,007


$18,185,379

 

 

 

AYTU BIOSCIENCE INC.

Statement of Operations








Three Months Ended June 30,


 Year Ended June 30,



2016


2015


2016


2015

Product and service revenue


$489,984


$160,608


$2,050,838


$176,068

License revenue


447,321


21,428


511,607


85,714

 Total revenue


937,305


182,036


2,562,445


261,782










Operating expenses









Cost of sales


334,854


88,109


957,076


88,109

 Research and development


2,819,763


801,236


6,127,772


3,219,361

 Research and development - related party 


47,997


47,998


191,991


203,992

 Sales, general and administrative


3,101,554


1,292,472


8,517,592


3,980,974

 Sales, general and administrative - related party 


53,024


66,000


307,704


311,004

 Impairment of intangible assets


7,500,000


-


7,500,000


-

 Amortization of intangible assets


380,074


37,571


664,707


90,662

 Total operating expenses


14,237,266


2,333,386


24,266,842


7,894,102










 Loss from operations


(13,299,961)


(2,151,350)


(21,704,397)


(7,632,320)










Other (expense)









 Interest (expense) 


(1,063,351)


(4,094)


(5,491,486)


(114,994)

 Unrealized loss on investment


(971,629)


-


(971,629)


-

 Derivative income (expense)


37,483


-


(12,572)


-

 Total other (expense)


(1,997,497)


(4,094)


(6,475,687)


(114,994)










Net loss, before income tax


(15,297,458)


(2,155,444)


(28,180,084)


(7,747,314)

 Deferred income tax benefit


-


-


-


23,910

Net loss


$(15,297,458)


$(2,155,444)


$(28,180,084)


$(7,723,404)










Weighted average number of Aytu common shares outstanding

3,002,980


665,768


1,741,137


767,326










Basic and diluted Aytu net loss per common share


$          (5.09)


$        (3.24)


$        (16.18)


$       (10.07)

 

 

 

AYTU BIOSCIENCE INC.

Statement of Cash Flows





 Year Ended June 30,


2016


2015

Cash flows from operating activities




Net loss

$(28,180,084)


$(7,723,404)

Stock-based compensation expense

902,946


1,017,938

Depreciation, amortization and accretion

874,789


118,202

Asset impairment

7,500,000


-

Amortization of debt issuance costs

182,759


-

Amortization of beneficial conversion feature

4,943,073


-

Noncash interest expense

221,024


-

Derivative expense

12,572


-

Amortization of prepaid research and development - related party

121,983


121,984

Unrecognized loss on investment

971,629


-

Deferred taxes

-


(23,910)

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




(Increase) in accounts receivable

(5,369)


(157,058)

(Increase) in inventory

(485,265)


(39,442)

Decrease in prepaid expenses and other

155,330


150,434

(Increase) in prepaid research and development - related party

-


(150,000)

Increase in accounts payable and accrued liabilities

1,623,469


547,314

Increase in accrued compensation

1,004,427


196,503

(Decrease) in payable to Ampio

-


(607,061)

Increase in deferred rent

10,875


-

(Decrease) in deferred revenue

(511,607)


(85,714)





Net cash used in operating activities

(10,657,449)


(6,634,214)





Cash flows used in investing activities




Deposits

1,998


(4,886)

Purchases of fixed assets

(252,932)


-

Purchase of ProstaScint Business

-


(1,000,000)

Purchase of Primsol asset

(1,040,000)



Purchase of Natesto license

(2,000,000)



Investment in Acerus

(2,012,991)



Net cash used in investing activities

(5,303,925)


(1,004,886)





Cash flows from financing activities




Proceeds from convertible note from Ampio converted to stock

-


7,400,000

Proceeds from convertible promissory notes, net

5,175,000


-

Debt issuance costs

(298,322)


-

Costs related to the conversion of the convertible promissory notes to equity

(29,754)


-

Ampio stock subscription payment

5,000,000


5,000,000

Luoxis option payout pursuant to the merger

-


(27,476)

Liabilities paid out pursuant to the merger

-


(20,013)

Sale of stock subscription

200,000


-

Proceeds from issuance of equity financing

7,520,493


-

Issuance costs related to equity financing

(904,914)


-

Net cash provided by financing activities

16,662,503


12,352,511





Net change in cash and cash equivalents

701,129


4,713,411

Cash and cash equivalents at beginning of period

7,353,061


2,639,650

Cash and cash equivalents at end of period

$8,054,190


$7,353,061





Non-cash transactions:




Ampio stock subscription

$               -


$5,000,000

Ampio unpaid debt converted to stock, received prior to 2015

$               -


$4,600,000

Contingent consideration related to the ProstaScint purchase

$               -


$   664,000

Warrant derivative liability related to the issuance of the convertible promissory notes

$   102,931


$               -

Primsol asset purchase included in primsol payable, $1,250,000 less future accretion of $173,000

$1,077,000


$               -

Conversion of convertible promissory notes and interest of $221,000 to common stock

$5,396,024


$               -

Natesto asset purchase included in Natesto payable, $6,000,000 less future accretion of $620,325

$5,379,675


$               -

Warrant derivative liability related to the issuance of the registered offering placement agent warrants

$   297,317


$               -

Reclassification of liability based warrants to equity presentation related to the convertible promissory notes

$   136,828


$               -

Beneficial conversion feature related to convertible promissory notes

$4,943,073


$               -

Debt issuance costs related to notes that converted to equity

$ (218,494)


$               -

 

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SOURCE Aytu BioScience, Inc.