Aytu BioScience’s’s today announced that the company had completed its shareholder approved reverse split, taking the effective share count down to approximately 4.0 million shares from its former outstanding share total of 80.4 million shares. Aytu BioScience intends for this strategic initiative to assist in its drive to gain a listing on a senior stock exchange. For the next 20 trading days, AYTU will trade under the symbol “AYTUD,” and after the 20-day period will resume trading under its original symbol “AYTU.”
Strategic Intent To Up-list to a Senior Exchange
Shareholders in AYTU have been met with positive news in recent weeks, although the share price may not be telling the right story to investors. As reported by the company on its corporate website, AYTU has seen prescription levels for its lead product, Natesto, rise substantially during the previous two-quarters. In addition to the increase in Natesto prescription volumes, the company recently raised in excess of $11 million in a private placement with accredited investors.
Although the share price has endured pressure most likely due to the overhang of the planned reverse split, investors can now replace uncertainty with a renewed focus on the developments underway at the company.
Not only is Natesto delivering robust prescription growth rate performance, but AYTU’s two other pipeline products are also positioned to gain traction from the company’s increasing focus on the sales and marketing of MiOXSYS and Fiera, two products that address reproductive and sexual dysfunction issues in both the male and female markets, respectively.
Strategic Products Gaining Market Share
Natesto, the company’s lead product is an FDA approved testosterone replacement therapy. Notably, Natesto is the only nasally administered TRT in the market, and clinical results demonstrate that the product may soon be a best-in-class alternative over competing products. Importantly, Natesto is the ONLY testosterone replacement therapy available on the market that does not include an FDA mandated Black Box warning, which represents one of the most severe warning labels imposed by the FDA. Natesto has been proven safe, effective, convenient, and easy to use on a regular basis. Since April of 2017, Natesto prescription levels have risen by over 300%, and the company has finally worked through previous inventory levels sold to customers by Endo Pharmaceuticals before Aytu’s licensing of the product in 2016.
MiOXSYS is also expected to gain traction, with AYTU providing additional sales and marketing efforts to capitalize on this $11 billion market opportunity that addresses male infertility. Similar to Natesto, MiOXSYS holds best-in-class potential, providing physicians or trained technicians with the ability to offer advanced in-office fertility screening. The MiOXSYS panel of results does in minutes what has traditionally taken days for competitive products to produce.
Finally, AYTU is taking a stronger interest in marketing Fiera, a revolutionary, hands-free and drug-free option for women enduring sexual arousal issues. Fiera has shown sequential growth rates in sales recently, despite only being marketed online. Fiera has a CE marking in place and is in a position to capitalize on the EU markets, with plans to launch via Aytu’s sales force in the United States within the next six months. The Fiera device was purchased in an all-stock transaction from Nuelle, Inc. in May of 2017. The acquisition provides AYTU with a novel, commercial-stage product that is delivering revenue to the company. The potential addressable market in the female sexual dysfunction space is expected to exceed $3 billion by 2020 and target an estimated 50 million female patients during that same period.
With Aytu BioScience’s emerging with a restructured share count and a strong balance sheet, investors may be wise to pay attention to the company’s revenue producing pipeline, and pay less attention to the pressures put on the stock for reasons other than product performance.
Although shares have been beaten down during the prior month, the intrinsic value within AYTU has been growing in counter-measure to the stock price. Keeping an eye on the long-term potential at AYTU should take center stage in the near term, and investors should allow time for the strategic vision to materialize. The balance sheet is strong, and the company has guided toward profitability within the next twelve months. Despite the current beat down, AYTU at these adjusted levels is a potential gift to investors who have the stomach for volatility, but at the same time recognize both near and long-term potential.
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