Aytu BioScience (AYTU) Stock: Next Big Thing… MiOXSYS®

Aytu BioScience has been on a roll, raising investor eyebrows from the growth of Natesto®, the company’s testosterone replacement therapy treatment. Investors following that story know that Natesto® is recording robust and sequential increases in new prescription and factory orders of over 300% since the second quarter of the fiscal year 2017, and a more than 411% increase over the same quarter in 2017. However, slightly hidden by the fanfare from Natesto® is MiOXSYS®, AYTU’s novel, rapid semen analysis system that is gearing up to become the standard of care diagnostic system designed to assess male infertility caused by oxidative stress. And, it’s time that MiOXSYS® grabs some more attention.

MiOXSYS®, another approved for market treatment offered from AYTU, is already commercialized outside the U.S. market, capitalizing on its status as a CE Marked, Health Canada cleared product. But, don’t worry, AYTU is not planning to ignore the vast potential of the U.S. market and is in the process of finalizing plans to initiate U.S.-based clinical trials in pursuit of 510(k) medical device clearance by the FDA. For AYTU, MiOXSYS® compliments the strategic plan of optimizing its portfolio of revenue-generating urology products, leveraging off the expertise of its management team that has shown success in building and bringing to market leading brands in specialized, multi-billion dollar markets.

More Good News For MiOXSYS®

Last week, AYTU announced that the Australian Therapeutic Goods Administration granted market approval to the MiOXSYS® system for inclusion on the Australian Register of Therapeutic Goods. The approval acknowledges the value of MiOXSYS® as a viable and reliable tool in the diagnostic assessment of semen quality for patients undergoing male infertility evaluation.

For AYTU, this latest approval by the TGA adds to the placement momentum and positions MiOXSYS® to take advantage of the one in six couples in Australia that suffer from infertility, with an estimated 50% of the cases attributed to male factor infertility. The approval permits AYTU to strategically penetrate the Australian markets to identify and help treat men with suspected infertility where oxidative stress is implicated.

The approval further lays the foundation for AYTU management to expedite its strategic plans to develop targeted sectors of the Australian markets, with management guiding toward the likelihood of adding distribution partners that can further introduce the MiOXSYS® system for clinical use in the coming quarters. Once the agreements get finalized, MiOXSYS® will advance the AYTU pipeline of revenue-generating products addressing multi-billion dollar opportunities, with limited exposure to regulatory pressures that its competitors face by being mired in mid to late-stage clinical trials. For AYTU, the MiOXSYS® system offers the market more than just a new system. The MiOXSYS® solution provides the most comprehensive, state-of-the-art diagnostic designed to generate results almost immediately. And, in most cases, the test can be administered by an office technician, a stark departure from current testing practices that often require well-trained professionals and several hours, or even days of analysis before providing the patient with test results.

MiOXSYS® Is Transformative To Current Standard of Care

Beyond its advantages in speed and accuracy, the MiOXSYS® system offers a solution from the need of expensive and sometimes bulky set-ups that have historically produced unreliable oxidative stress level results, often generated from these now antiquated and difficult-to-use systems.

For practitioners, investing in the latest and most efficient device, MiOXSYS®, will help to alleviate practice disruptions, limiting unreliable oxidative stress level results associated with the use of competitive devices. Beyond generating reliable data, the MiOXSYS® system can provide complete oxidative stress testing quickly, a significant advantage to what has historically taken several hours to complete. The MiOXSYS® test requires no specialized training for administration, can go from box to patient in a matter of minutes, and provides a comprehensive set of results in less than five minutes. The results provide rapid, reliable measures for oxidative stress levels. The importance of determining oxidative stress levels is critical to the clinician, who can target specific treatments to lower oxidative stress and increase the chances of pregnancy.

The Impact Of A Successful Launch

For AYTU investors, management has guided toward an achievable goal, which is to place an estimated 200 MiOXSYS® systems worldwide by the end of 2018. Currently, 96 systems are in use around the world. Once the goal gets met, management expects that each system may generate roughly of $20,000 per year each, totaling to an estimated revenue run rate more than $4 million in annual sales. Utilizing the razor-razorblade sales model, AYTU, or its licensed partners, would provide the disposable components required for each test, allowing the MiOXSYS® system to continuously generate revenue with a low cost, high-margin business model.

Keep in mind that while these projections would deliver a substantial spike in the revenue run rate, they do not include the potential from United States distribution. Management knows this better than anyone, and they are working toward a successful 510(k) medical device FDA approval, which would increase the market opportunity substantially, likely causing the placement projections to get revised sharply higher. And, for those that doubt the effectiveness of the MiOXSYS® system, no less than six papers have been published in prominent peer-reviewed journals and publications that substantiate the system’s value for providing a detailed, accurate, and reliable representation of male infertility analysis.

For AYTU and their investors, the most recent Australian expansion serves as another stepping stone toward a worldwide placement with a game-changing technology. Acknowledging that company management is cultivating significant growth rates for Natesto® units sold and its prescriber base, investors have the right to feel confident that similar quantifying results for MiOXSYS® will get achieved. For those that are familiar with AYTU prowess, the latest MiOXSYS® territory approval is a welcome accomplishment, but at the same time expected. However, for those new to the story, it’s suggested that time gets spent learning about the management team and their proven track record of product development and market success.

Once aware of the team’s prior and developing accomplishments, as well as getting to know the accretive product portfolio beginning to make its presence known to the market channels, investors may be wise to consider purchasing shares at these low levels. After all, taking early advantage of AYTU’s future by realizing the potential from Aytu BioScience’s disruptive and revolutionary products may inevitably lead to long-term success, adding considerable shareholder value from AYTU finding its place as a leader in several multi-billion dollar markets.

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