Aytu Bioscience Inc (NASDAQ: AYTU) is having an incredibly strong start to the trading session this morning, and for good reason. The company provided an update of its business as well as financial results for the third quarter, leading to excitement among investors and sending the stock screaming for the top. Today, we’ll talk about:
- What we saw from earnings;
- what we’re seeing from the stock;
- and what we’ll be watching for with regard to AYTU ahead.
AYTU Is Headed Up On Financial Results
As mentioned above, Aytu Bioscience is having an incredibly strong day in the market today after providing a corporate update and releasing financial data. Here’s what we saw from the financial side of the report:
- Cash – In terms of cash and cash equivalents, the company had $12.1 million at the end of the quarter on March 31, 2018.
- Revenue – Revenue for the quarter came in at $607,000. AYTU said that this figure reflects the resetting of patient insurance deductibles in January as well as significant Natesto prescription discounting and vouchering which ended on March 31st.
- Costs – In the release, AYTU said that sales, general, and administrative costs came to $4.637 million, which was in line with the same quarter last year.
At the end of the day, this was where Aytu Bioscience really shined. Here are some key points from the company’s operational performance during the third quarter:
- Natesto prescriptions climbed to 2,300 in the quarter, bringing-year-to-date paid prescriptions to 5,168% and representing growth in the amount of 219% year over year.
- The company launched the Natesto Support Program.
- About 70% of patients who had their prescription claim adjudicated at one specific large national payor have been approved for Natesto treatment.
- AYTU received market registration for the MiOXSYS® system for male fertility in Mexico.
In a statement, Josh Disbrow, CEO at AYTU, had the following to offer:
During the quarter, we made solid progress toward our stated goals of increasing Natesto paid prescriptions, increasing product revenues to reflect lower discounting and patient couponing levels, and continuing to build clinical support that differentiates Natesto from other marketed testosterone replacement therapies. First, we launched the Natesto Support Program to capture more prescription reimbursement. In the first nine weeks since the launch of this program, 63% of all enrolled patients, who have been previously treated with a topical testosterone replacement therapy, have been approved for Natesto treatment by payors through the program. Second, we began actively pursuing third-party payors to more broadly cover Natesto. During the quarter we have formally proposed contract terms with multiple payors and have received a favorable, initial response from one particularly large national plan. Third, we continued to invest in increasing the body of clinical evidence supporting Natesto’s distinct efficacy and safety profile. We initiated a clinical study, at the University of Miami, studying Natesto’s effect on spermatogenesis in hypogonadal men, for which we expect completion in the second half of fiscal 2019. Finally, the company presented new research findings at the Endocrine Society’s 100th annual meeting, illustrating additional safety benefits of Natesto.
As a result of the early progress with the Natesto Support Program, we are realizing a significantly higher percentage of revenue-generating prescriptions. Although, a step-change in the revenue line was expected to occur as a result of the significant voucher and coupon utilization that concluded in Q3, upon the discontinuation of vouchers and zero-revenue prescriptions on April 1, 2018, the early results demonstrate that the company’s combined strategy is working and is yielding the positive results we anticipated. Already in April, we have seen a significant increase in Natesto revenue over January, February, and March, and we anticipate continued growth as we progress into this next phase of the Natesto launch.
What We’re Seeing From The Stock
As investors, we know that it’s important to keep a close eye on the news. After all, the news moves the market. In the case of AYTU, the news proved to be overwhelmingly positive as the company made serious progress in the third quarter. So, it comes as no surprise that the stock is making a run for the top in the market today. At the moment (9:48), AYTU is trading at $0.47 per share after a gain of $0.075 per share or 18.96% 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 ongoing growth in Natesto sales as well as the commercialization of MiOXYS. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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