EX-99.1 2 aytu_ex991.htm PRESS RELEASE Blueprint
 
  Exhibit 99.1
 
Aytu BioScience Reports 291% Revenue Growth in Q3 FY19
 
Company Posts Highest Ever Quarterly Revenue
 
ENGLEWOOD, CO / ACCESSWIRE / May 14, 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 third quarter of fiscal year 2019 that ended March 31, 2019. The company will host a live conference call and webcast today at 9:00 a.m. ET. Conference call details are provided at the end of this press release.
 
Q3 FY19 and Recent Operational Highlights
 
●
Recorded all-time high net revenue of approximately $2.4 million, 291% growth over Q3 FY18 and a 33% increase sequentially from Q2 FY19
 
●
Reported continuing sequential growth of Natesto® revenue and total prescriptions, and meaningful revenue contribution from Tuzistra® XR, ZolpiMist™, and MiOXSYS®
 
●
Cash balance of approximately $15 million on March 31, 2019
 
●
Announced positive interim results from the Natesto Spermatogenesis Study; if confirmed in the final data read out this summer, Natesto would be the only testosterone replacement therapy proven to maintain fertility parameters in hypogonadal men
 
●
Announced the U.S. field sales launch of Tuzistra XR and initiated sales promotion to overlapping physician call points
 
●
Announced a global distribution agreement with SUDA Pharmaceuticals to sublicense ZolpiMist outside of the United States and Canada
 
●
Announced the submission of ZolpiMist for regulatory approval to the Australian Therapeutic Goods Administration (TGA) by global partner SUDA Pharmaceuticals
 
●
Announced the appointment of Steven Boyd to the board of directors
 
Josh Disbrow, CEO of Aytu BioScience commented, "Fiscal Q3 2019 was another record quarter for Aytu, and our fourth sequential quarter of significant revenue growth. Revenue grew nearly 300%, over Q3 2018, to the highest level in company history. Importantly, we saw increased contribution across our newly diversified portfolio following the recent additions of ZolpiMist and Tuzistra XR, while continuing to drive Natesto prescriptions and revenue. The company has successfully transitioned over the last twelve months, now commercializing four products with a combined total addressable market of approximately $7 billion. While Natesto continues to be the biggest percentage of revenue, with another increase in revenue this quarter, we are excited by Tuzistra XR getting off to a good start, and the growing contribution from ZolpiMist and MiOXSYS.”
 
Mr. Disbrow continued, “We also added several value drivers during the quarter, and subsequent to the close of Q3. We announced our partnership with SUDA, sublicensing the global distribution rights for ZolpiMist, for which they are already pursuing regulatory approval in Australia. Additionally, we continue to receive good news on the Natesto Spermatogenesis Study, which is investigating the impact of Natesto, the only FDA approved, nasally-administered testosterone treatment, on the preservation of fertility parameters. Interim results demonstrated preservation of semen parameters after six months of Natesto treatment. Of the 56 subjects enrolled to date, 43 subjects have completed one month of Natesto therapy, 23 subjects have completed three months, and 15 subjects have completed the full six-month treatment period equivalent to two cycles of spermatogenesis. The entire study group is expected to complete the full six-month treatment period during summer 2019, and the full data will be reported soon thereafter. Finally, MiOXSYS, our proprietary male infertility diagnostic platform that we market primarily overseas, continues to make outstanding progress in developing the global market for this one-of-kind clinical device and is contributing meaningful revenue to further broaden our revenue mix.”
 
Mr. Disbrow concluded, “Taken as a whole, we are encouraged by the strong performance of our core product portfolio, the operational progress we’ve made across our key strategies, as well as the potential of our licensing and development initiatives.”
 
Q3 FY19 Financial Results
 
●
Net revenue for Q3 FY19 was $2.38 million, an increase of 291% over Q3 FY18 and 33% over Q2 FY19 
 
●
Cash, cash equivalents, and restricted cash was approximately $15 million as of March 31, 2019 
 
●
Cash used in operations for the quarter was $3.3 million, down 23% sequentially from Q2 FY19
 
●
Operating expenses for the quarter were $6.7 million, down 17% over the same period last year
 
●
After the end of Q3, the company retired all of its outstanding debt through an exchange with Armistice Capital, 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 9:00 AM ET today. The conference call can be accessed by dialing either:
 
 1-844-369-8770 (toll-free)
 
1-862-298-0840 (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) or 1-919-882-2331 (international) and using the replay access code 48308.
 
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, 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 risks related to the company's operational results for the fiscal third quarter 2019 being presented on Tuesday, May 14, 2019, at 9:00 a.m. ET, our expectations related to coupon rates in subsequent quarters and the timing and results of the Natesto Spermatogenesis Study, risks relating to gaining market acceptance of our products, obtaining 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 revenue growth, 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 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.
 
Contact for Investors:
 
James Carbonara 
Hayden IR
(646)-755-7412 
james@haydenir.com
  
 
 
 
Aytu BioScience, Inc.
Consolidated Balance Sheets
Unaudited
 
 
 
 March 31,
 
 
 June 30,
 
 
 
2019
 
 
2018
 
 
 
 (unaudited)
 
 
 
 
 
 Assets
 
 
 
 
 Current assets
 
 
 
 
 
 
 Cash and cash equivalents
 $14,647,402 
 $7,012,527 
 Restricted cash
  100,296 
  100,000 
 Accounts receivable, net
  1,376,358 
  578,782 
 Inventory, net
  1,530,083 
  1,338,973 
 Prepaid expenses and other
  804,840 
  440,009 
 Total current assets
  18,458,979 
  9,470,291 
 
    
    
 
    
    
 Fixed assets, net
  219,177 
  218,684 
 Licensed assets, net
  19,430,767 
  11,120,086 
 Patents, net
  226,944 
  245,944 
 Deposits
  2,200 
  5,088 
 Total long-term assets
  19,879,088 
  11,589,802 
 
    
    
 Total assets
 $38,338,067 
 $21,060,093 
 
    
    
  Liabilities and Stockholders' Equity
    
 Current liabilities
    
    
 Accounts payable and other
 $2,131,251 
 $2,119,672 
 Accrued liabilities
  772,140 
  185,882 
 Accrued compensation
  791,586 
  540,674 
 Current deferred rent
  - 
  1,450 
 Current contingent consideration
  808,779 
  547,100 
 Total current liabilities
  4,503,756 
  3,394,778 
 
    
    
 Long-term contingent consideration
  12,633,824 
  4,146,829 
 Long-term debt - related party (Note 11)
  5,134,795 
  - 
 Warrant derivative liability
  28,513 
  93,981 
 Total liabilities
  22,300,888 
  7,635,588 
 
    
    
 Commitments and contingencies (Note 7)
    
    
 
    
    
 Stockholders' equity
    
    
 Preferred Stock, par value $.0001; 50,000,000 shares authorized; shares issued
    
    
    and outstanding 2,335,665 and 0, respectively as of
    
    
     March 31, 2019 and June 30, 2018
  234 
  - 
 Common Stock, par value $.0001; 100,000,000 shares authorized; shares issued
    
    
    and outstanding 12,848,499 and 1,794,762, respectively as of
    
    
     March 31, 2019 and June 30, 2018
  1,285 
  179 
 Additional paid-in capital
  107,893,259 
  92,681,918 
 Accumulated deficit
  (91,857,599)
  (79,257,592)
 Total stockholders' equity
  16,037,179 
  13,424,505 
 
    
    
 Total liabilities and stockholders' equity
 $38,338,067 
 $21,060,093 
 
 
 
 
Aytu BioScience, Inc.
Consolidated Statements of Operations
Unaudited
 
 
 
 Three Months Ended March 31,
 
 
 Nine Months Ended March 31,
 
 
 
2019
 
 
2018
 
 
2019
 
 
2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Product revenue, net
 $2,372,016 
 $607,473 
 $5,598,836 
 $2,734,995 
 License revenue, net
  5,776 
  - 
  5,776 
  - 
 Total revenue
  2,377,792 
  607,473 
  5,604,612 
  2,734,995 
 
    
    
    
    
 Operating expenses
    
    
    
    
     Cost of sales
  616,853 
  1,136,833 
  1,552,950 
  1,809,445 
 Research and development
  108,901 
  114,141 
  413,808 
  (22,391)
 Selling, general and administrative
  5,368,762 
  4,637,495 
  13,991,516 
  13,809,264 
 Selling, general and administrative - related party (Note 11)
  6,797 
  - 
  351,843 
  - 
 Impairment of intangible assets
  - 
  1,856,020 
  - 
  1,856,020 
 Amortization of intangible assets
  575,117 
  387,606 
  1,561,137 
  1,156,258 
 Total operating expenses
  6,676,430 
  8,132,095 
  17,871,254 
  18,608,596 
 
    
    
    
    
 Loss from operations
  (4,298,638)
  (7,524,622)
  (12,266,642)
  (15,873,601)
 
    
    
    
    
 Other (expense) income
    
    
    
    
 Other expense, net
  (194,703)
  (186,629)
  (398,833)
  (572,155)
 Derivative (expense) income
  (2,521)
  3,139,971 
  65,468 
  3,957,756 
 Other gain
  - 
  1,753,568 
  - 
  1,753,568 
 Total other (expense) income
  (197,224)
  4,706,910 
  (333,365)
  5,139,169 
 
    
    
    
    
 Net loss
 $(4,495,862)
 $(2,817,712)
 $(12,600,007)
 $(10,734,432)
 Weighted average number of
    
    
    
    
 common shares outstanding
  9,061,023 
  592,771 
  5,785,669 
  250,478 
 
    
    
    
    
 Basic and diluted net loss
    
    
    
    
 per common share
 $(0.50)
 $(4.75)
 $(2.18)
 $(42.86)
 

 
 
 
Aytu BioScience, Inc.
Consolidated Statements of Cash Flows
Unaudited
  
 
 
 Nine Months Ended March 31,
 
 
 
2019
 
 
2018
 
 
 
 
 
 
 
 
Cash flows from operating activities
 
 
 
 
 
 
Net loss
 $(12,600,007)
 $(10,735,432)
Adjustments to reconcile net loss to cash used in operating activities
    
    
Depreciation, amortization and accretion
  1,974,213 
  1,975,448 
Stock-based compensation expense
  121,979 
  288,010 
Issuance of restricted stock
  600,863 
  158,585 
Issuance of common stock to employee
  11,690 
  - 
Derivative (income)
  (65,468)
  (3,957,756)
Impairment of intangible assets
  - 
  1,856,020 
Other gain
  - 
  (1,753,568)
Issuance of warrants
  - 
  179,287 
Warrant amendment
  - 
  4,633 
Changes in operating assets and liabilities:
    
    
(Increase) in accounts receivable
  (797,576)
  (204,437)
(Increase) decrease in inventory
  (191,110)
  428,401 
(Increase) in prepaid expenses and other
  (364,831)
  (586,139)
(Decrease) increase in accounts payable and other
  (17,769)
  967,641 
Increase (decrease) in accrued liabilities
  586,258 
  (571,121)
Increase in accrued compensation
  250,912 
  558,451 
Increase in interest payable - related party
  134,795 
  - 
(Decrease) in deferred rent
  (1,450)
  (5,005)
Net cash used in operating activities
  (10,357,501)
  (11,396,982)
 
    
    
Cash flows used in investing activities
    
    
Deposit
  2,888 
  - 
Purchases of property and equipment
  (59,848)
  (74,707)
Contingent consideration payment
  (408,917)
  (7,385)
Purchase of assets
  (500,000)
  - 
Net cash used in investing activities
  (965,877)
  (82,092)
 
    
    
Cash flows from financing activities
    
    
Issuance of preferred, common stock and warrants
  15,180,000 
  24,740,015 
Issuance costs related to preferred, common stock and warrants
  (1,479,963)
  (2,697,066)
Warrant exercises
  258,512 
  640,380 
Issuance of debt - related party
  5,000,000 
  - 
Net cash provided by financing activities
  18,958,549 
  22,683,329 
 
    
    
Net change in cash, cash equivalents and restricted cash
  7,635,171 
  11,204,255 
Cash, cash equivalents and restricted cash at beginning of period
  7,112,527 
  877,542 
Cash, cash equivalents and restricted cash at end of period
 $14,747,698 
 $12,081,797