Form 8-K AYTU BIOSCIENCE, INC For: Feb 08

February 8, 2018 4:04 PM

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

 

Date of report (Date of earliest event reported): February 8, 2018

 

AYTU BIOSCIENCE, INC.
(Exact Name of Registrant as Specified in Charter)
     
Delaware 001-38247 47-0883144
(State or Other Jurisdiction
of Incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
     
373 Inverness Parkway, Suite 206, Englewood, Colorado 80112
(Address of Principal Executive Offices) (Zip Code)

 

Registrant’s Telephone Number, Including Area Code: (720) 437-6580

 

 

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

  

 

  

Item 2.02. Results of Operations and Financial Condition.

On February 8, 2017, Aytu BioScience, Inc. issued a press release announcing its financial results for its fiscal second quarter ended December 31, 2017. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein in its entirety by reference.

The information in this Item 2.02 (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

99.1Press Release dated February 8, 2018

 

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. 

Date: February 8, 2017 AYTU BIOSCIENCE, INC.
   
  /s/ Joshua Disbrow
  Name: Joshua Disbrow
Title: Chief Executive Officer

 

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Exhibit 99.1

 

 

Aytu BioScience Provides Fiscal Second Quarter 2018 Business Update - Live Conference Call and Webcast Today at 4:30 pm ET

Natesto prescriptions increased 23% over previous quarter, and 317% over the same quarter last year

ENGLEWOOD, Colo., Feb. 8, 2018 /PRNewswire/ -- Aytu BioScience, Inc. (NASDAQ: AYTU), a specialty life sciences company focused on global commercialization of novel products in the field of urology, today provided an overview of its business, including the Company's operational and financial results for its fiscal second quarter ended December 31, 2017.  The Company will host a live conference call and webcast today at 4:30 p.m. ET.  Conference call details are provided at the end of this press release.

"I am pleased to report Aytu’s second quarter results, which reflect strong unit sales growth and cost management. Natesto prescriptions increased 23% over our first quarter of this fiscal year to 2,501, which is up 317% over the same quarter last year, while at the same time we reduced our sequential quarter cash burn,” commented Josh Disbrow, Chief Executive Officer of Aytu BioScience.

Mr. Disbrow continued, “While we are satisfied with Natesto unit sales growth, and cash management, our dollar net sales figure is temporarily not at the same growth rate as unit sales. The reason for the temporary disparity is due to discounting and coupon incentives which are used to increase sales to first time Natesto patients. However, we expect to be able to accelerate growth and reduce the level of discounting we have experienced with three targeted strategic actions. The first action is to roll out our recently piloted Natesto Support Program, which allows us to capture more prescription reimbursement, yielding more revenue for each new prescription. The Natesto Support Program is also expected to lead to a higher refill rate on new prescriptions. Second, we are pursuing third party payers to more broadly cover Natesto, and third, we are continuing to invest in increasing the body of clinical evidence supporting Natesto’s distinct efficacy and safety profile.”

Mr. Disbrow concluded, “During the quarter we also had a number of additional operational highlights. First, we continued to grow our business internationally for our MiOXSYS male infertility device, now sold in 36 countries worldwide. Second, we uplisted to NASDAQ, expanding our reach into the investment community. Additionally, we announced the appointment of David Green as Chief Financial Officer. Mr. Green is a highly accomplished CFO, who brings an extensive array of financial, accounting, and operational experience to Aytu, including a background at both public and private life sciences companies over his twenty-five-year career. There was also some recent news that further cemented barriers to entry in the nearly $2 billion U.S. testosterone replacement therapy (TRT) market that Natesto addresses. Taken as a whole, the second quarter reinforced that Aytu has very strong momentum with a well-positioned product portfolio and the personnel to maximize shareholder value.”

Q2 2018 Operational Highlights

Recognized $1.05 million in total revenue for the second quarter of fiscal 2018, representing a 32% increase over Q2 fiscal 2017
Listed the Company's common shares on the NASDAQ Capital Market, on which trading of shares under the ticker symbol "AYTU" began October 20, 2017
Increased Natesto prescription demand to 2,501 total prescriptions, representing a 317% increase over Q2 fiscal 2017
Increased Natesto unit sales to wholesalers to over 7,100, representing a 397% increase over Q2 fiscal 2017’s pull-through demand levels
Increased the number of Natesto prescribers across the U.S. to 1,178, which represents a 174% increase over Q2 fiscal 2017
Increased the number of MiOXSYS System placements globally to 38 since the beginning of fiscal 2018 through the Company's distribution partners, representing an increase of 73% over the same period last year

 

  

 

Q2 2018 Financial Results

Total revenue for the second quarter of 2018 was $1,050,000 compared to revenue of $794,000 for the same period last year, an increase of 32%.  Natesto and MiOXSYS comprised the majority of sales in the second quarter of 2018.  Product sales in the same quarter of 2017 were mostly comprised of ProstaScint and Primsol, a product that was divested in late fiscal 2017.

Operating expenses for the second quarter of 2018 were $5,045,000, which was in line with the same quarter last year.

Cash used in operations for the quarter was $3,101,000, down 26% from the first quarter of 2018.

Cash and cash equivalents totaled approximately $4,000,000 as of December 31, 2017.

Conference Call Information

The Company will host a live conference call at 4:30 p.m. ET today.  The conference call can be accessed by dialing either:

1 (855) 656-0926 (U.S.)

1 (412) 542-4198 (international)

The webcast will be accessible live during the conference call and archived on Aytu BioScience's website, within the Investors section under Corporate Presentations & Media, at aytubio.com, for 90 days.

A replay of the call will be available for seven days. Access the replay by calling 1 (877) 344-7529 (U.S.) or 1 (412) 317-0088 (international) and using the replay access code 10116883.

About Aytu BioScience, Inc.

Aytu BioScience is a commercial-stage specialty life sciences company focused on global commercialization of novel products in the field of urology, with a focus on products addressing vitality, sexual wellness, and reproductive health. The Company currently markets two prescription products in the U.S.: Natesto®, the second and only FDA-approved nasal formulation of testosterone for men with hypogonadism (low testosterone, or "Low T") and ProstaScint® (capromab pendetide), the only FDA-approved imaging agent specific to prostate specific membrane antigen (PSMA) for prostate cancer detection and staging. 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 the U.S. where it is a CE Marked, Health Canada cleared, Australian TGA approved product, and Aytu is planning U.S.-based clinical trials in pursuit of 510k 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 growing markets. For more information visit aytubio.com. Aytu also now owns wholly-owned subsidiary Aytu Women's Health (formerly Nuelle, Inc.), a personal health and wellness company focused on women's sexual wellbeing and intimacy. Aytu Women's Health markets Fiera, a personal care device for women that is scientifically proven to enhance physical arousal and sexual desire. Fiera is a consumer device and is not intended to treat, mitigate, or cure any disease or medical condition. For more information about the Fiera personal care device visit fiera.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 Natesto sales not increasing, MiOXSYS not expanding outside the US, and setbacks related to the integration of Fiera that would affect having adequate cash to effectively operate into fourth quarter fiscal 2018, 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 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

 

SOURCE Aytu BioScience, Inc.

 

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Aytu BioScience, Inc.
Consolidated Balance Sheets
Unaudited

   December 31,   June 30, 
   2017   2017 
         
Assets    
 Current assets          
 Cash and cash equivalents  $3,908,183   $802,328 
 Restricted cash   75,534    75,214 
 Accounts receivable, net   1,377,436    528,039 
 Inventory, net   1,379,806    1,312,221 
 Prepaid expenses and other   1,003,766    310,760 
 Total current assets   7,744,725    3,028,562 
           
           
 Fixed assets, net   560,624    647,254 
 Developed technology, net   1,254,309    1,337,333 
 Customer contracts, net   74,667    77,667 
 Trade names, net   152,438    164,037 
 Natesto asset, net   8,571,710    9,231,072 
 Goodwill   238,426    238,426 
 Patents, net   258,611    271,278 
 Deposits   2,888    2,888 
 Total long-term assets   11,113,673    11,969,955 
           
 Total assets  $18,858,398   $14,998,517 
           
 Liabilities and Stockholders' Equity          
 Current liabilities          
 Accounts payable and other  $3,414,854   $2,220,400 
 Accrued liabilities   257,631    782,536 
 Accrued compensation   837,290    339,704 
 Deferred rent   4,787    6,673 
 Current contingent consideration   286,339    261,155 
 Total current liabilities   4,800,901    3,610,468 
           
 Long-term contingent consideration   7,726,698    7,386,782 
 Long-term deferred rent   -    1,451 
 Warrant derivative liability   3,300,213    - 
 Total liabilities   15,827,812    10,998,701 
           
 Commitments and contingencies          
           
 Stockholders' equity          
 Preferred Stock, par value $.0001; 50,000,000 shares authorized; shares issued          
    and outstanding 1,900 and 0, respectively as of          
     December 31, 2017 and June 30, 2017   1    - 
 Common Stock, par value $.0001; 100,000,000 shares authorized; shares issued          
    and outstanding 4,894,638 and 824,831, respectively as of          
     December 31, 2017 and June 30, 2017   489    82 
 Additional paid-in capital   80,017,545    73,069,463 
 Accumulated deficit   (76,987,449)   (69,069,729)
 Total stockholders' equity   3,030,586    3,999,816 
           
 Total liabilities and stockholders' equity  $18,858,398   $14,998,517 

 

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Aytu BioScience, Inc.
Consolidated Statements of Operations
Unaudited

  

Three Months Ended

December 31,

  

Six Months Ended

December 31,

 
   2017   2016   2017   2016 
                 
                 
 Product revenue  $1,051,154   $794,172   $2,127,522   $1,492,152 
 Total revenue   1,051,154    794,172    2,127,522    1,492,152 
                     
 Operating expenses                    
     Cost of sales   385,411    551,293    672,612    743,217 
 Research and development   (277,486)   263,457    (136,532)   495,479 
 Research and development - related party   -    47,998        95,996 
 Sales, general and administrative   4,553,366    3,642,332    9,171,769    9,347,082 
 Sales, general and administrative - related party   -    50,772    -    101,544 
 Amortization and impairment of intangible assets   383,811    437,014    769,652    874,029 
 Total operating expenses   5,045,102    4,992,866    10,477,501    11,657,347 
                     
 Loss from operations   (3,993,948)   (4,198,694)   (8,349,979)   (10,165,195)
                     
 Other income (expense)                    
 Interest expense   (196,781)   (388,085)   (385,526)   (803,465)
 Derivative income   518,051    266,757    817,785    196,148 
 Unrealized (loss) gain on investment   -    (497,164)   -    230,936 
 Total other income (expense)   321,270    (618,492)   432,259    (376,381)
                     
 Net loss  $(3,672,678)  $(4,817,186)  $(7,917,720)  $(10,541,576)
 Weighted average number of Aytu                    
 common shares outstanding   4,113,256    392,540    2,481,110    295,546 
                     
 Basic and diluted Aytu net loss                    
 per common share  $(0.89)  $(12.27)  $(3.19)  $(35.67)

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Aytu BioScience, Inc.
Consolidated Statements of Cash Flows
Unaudited

  

Six Months Ended

December 31,

 
   2017   2016 
         
Cash flows from operating activities          
Net loss  $(7,917,720)  $(10,541,576)
Adjustments to reconcile net loss to cash provided by (used in) operating activities          
Stock-based compensation expense   275,688    1,425,133 
Issuance of restricted stock   103,635    156,814 
Depreciation, amortization and accretion   1,315,063    1,722,965 
Derivative (income)   (817,785)   (196,148)
Amortization of prepaid research and development - related party   -    60,992 
Unrealized (gain) on investment   -    (230,936)
Compensation through issuance of stock   -    509,996 
Issuance of warrants to initial investors   -    596,434 
       Adjustments to reconcile net loss to net cash used in operating activities:          
(Increase) in accounts receivable   (849,397)   (419,966)
(Increase) decrease in inventory   (67,585)   85,741 
(Increase) in prepaid expenses and other   (454,595)   (221,015)
Increase (decrease) in accounts payable and other   1,124,558    (195,836)
(Decrease) in accrued liabilities   (524,905)   (238,395)
Increase (decrease) in accrued compensation   497,586    (681,432)
(Decrease) in deferred rent   (3,337)   (1,350)
Net cash used in operating activities   (7,318,794)   (8,168,579)
           
Cash flows used in investing activities          
Purchases of property and equipment   (12,195)   (44,876)
Installment payment for Natesto asset   -    (2,000,000)
Installment payment for Primsol asset   -    (750,000)
Net cash used in investing activities   (12,195)   (2,794,876)
           
Cash flows from financing activities          
Issuance of preferred, common stock and warrants   11,839,995    - 
Issuance costs related to preferred, common stock and warrants   (1,402,831)   - 
Issuance of common stock to Lincoln Park Capital   -    631,481 
Costs related to sale of common stock   -    (24,247)
Registered offering of common stock and warrants   -    8,602,500 
Registered offering costs   -    (997,865)
Over-allotment warrants purchased by placement agents   -    2,852 
Net cash provided by financing activities   10,437,164    8,214,721 
           
Net change in cash, cash equivalents and restricted cash   3,106,175    (2,748,734)
Cash, cash equivalents and restricted cash at beginning of period   877,542    8,054,190 
Cash, cash equivalents and restricted cash at end of period  $3,983,717   $5,305,456 

 

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