After announcing its entrance into the cold and cough market, Aytu Bioscience Inc (NASDAQ: AYTU) is flying in the market early on this morning. The entrance into this massive market is the result of a new licensing agreement that the company has announced. Of course, the agreement excited investors who are pushing the stock on a run for the top. Today, we’ll talk about:
- The agreement;
- what we’re seeing from AYTU as a result; and
- what we’ll be watching for with regard to the stock ahead.
AYTU Announces Entrance Into The Cough And Cold Market
As mentioned above, Aytu Bioscience is having a great day in the market today after announcing its entrance into the cough and cold market. This market is massive, representing about $3 billion per year in the United States alone.
In the release, AYTU said that its entrance into this large market is the result of an exclusive license agreement that it has entered into with Tris Pharma. The agreement surrounds Tuzistra XR, an FDA approved treatment for cough and cold symptoms.
Tuzistra XR is a prescription drug that is the only FDA-approved 12-hour codeine-based antitussive. The treatment consists of codeine polistirex and chlorpheniramine polistirex in an extended-release oral suspension.
AYTU Also said that along with the licensing deal, it has also licensed the right to a complementary antitussive product that is currently pending FDA approval. Upon approval, this treatment will also be directly marketed in the United States through the company’s sales force. In 2017, Tuzistra XR generated more than 40,000 prescriptions and is a strong revenue generator.
Aytu Bioscience also said that as part of the transaction, it will enter into a strategic financing agreement with Armistice Capital, an institutional healthcare investor. As a result of the agreement with Armistice Capital, the company will be provided up to $5 million in the form of a three-year note. In a statement, Josh Disbrow, CEO at AYTU, had the following to offer:
We are thrilled to be partnering with Tris Pharma in acquiring this license to Tuzistra XR and the complementary antitussive therapeutic pending approval. We believe these products align well with our primary care portfolio, and Tuzistra XR provides another attractive, revenue-generating therapeutic asset with clear clinical differentiation and patient benefits. We’re equally excited about the prospect of adding a complementary antitussive to the portfolio as that product gains approval. We thank the Tris Pharma team for entrusting Aytu to build these products into strong brands and look forward to a successful long-term relationship with Tris.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that the news leads to moves. In the case of AYTU, the news proved to be positive. With this new licensing agreement, the company will start generating revenue in one of the larger healthcare markets, one that has incredible potential. So, it comeas as no surprise that excited investors are sending the stock on a run for the top today. As is just about always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:55), AYTU is trading at $1.34 per share after a gain of $0.20 per share or 17.54% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on AYTU. In particular, we’re interested in following the story surrounding the company’s work to sell Tuzistra XR as well as the complementary product, once it is approved of course. Nonetheless, we’ll continue to follow the news closely and bring it to you as it breaks!
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