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): May 14, 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 May 14, 2018, Aytu BioScience, Inc. issued a press release announcing its financial results for its fiscal third quarter ended March 31, 2018. 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

 

99.1

Press Release dated May 14, 2018

 

 

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.

	AYTU BIOSCIENCE, INC.
Date: May 14, 2018	By:	/s/ David Green
		Name: David Green Title: Chief Financial Officer

 

Exhibit 99.1

 

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

 

ENGLEWOOD, CO, May 14, 2018 /ACCESSWIRE/ -- 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 third quarter ended March 31, 2018.  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.

 

Q3 2018 Operational Highlights

 

·

Grew Natesto® paid prescriptions to 2,300 in the quarter ending March 31, 2018, bringing total year-to-date paid prescriptions to 5,168, 219% growth over the same period last year

 

·

Launched the Natesto Support Program (NSP) and announced that through just the first nine weeks of implementation:

 

·

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 NSP

·

70% of patients who have had their prescription claim adjudicated at one specific large national payor, have been approved for Natesto treatment

·

Overall and across all enrolled patients, coverage for Natesto through the NSP has improved by approximately 21% at this early stage of implementation

 

·

Presented new research findings for Natesto at the Endocrine Society's 100th Annual Meeting

 

·

Received market registration for the MiOXSYS® system for male infertility in Mexico

 

·

Completed an underwritten public offering for total gross proceeds of $12.9 million

 

Josh Disbrow, Chief Executive Officer of Aytu BioScience commented, “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.”

 

Mr. Disbrow added, “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.”

 

Q3 2018 Financial Results

 

Cash and cash equivalents totaled approximately $12.1M as of March 31, 2018.

 

Revenue for the third quarter of 2018 was $607,000, which reflects the resetting of patient insurance deductibles in January, along with significant Natesto prescription discounting and vouchering that ended on March 31, 2018.

 

Sales, general, and administrative expenses for the quarter were $4,637,000, which is in line with the same period last year.

Cash used in operations for the quarter was $4,078,000.

 

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 (877) 407-9124 (toll-free)

 

1 (201)689-8584 (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 fourteen days. Access the replay by calling 1 (877) 481-4010 (toll-free) or 1 (919) 882-2331 (international) and using the replay access code 29628.

 

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

 

Statements contained herein that are not based upon current or historical fact are forward-looking in nature and constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements reflect the company's expectations about its future operating results, performance and opportunities that involve substantial risks and uncertainties. These statements include but are not limited to statements regarding the intended terms of the offering, closing of the offering and use of any proceeds from the offering. When used herein, the words ''anticipate,'' ''believe,'' ''estimate,'' ''upcoming,'' ''plan,'' ''target'', ''intend'' and ''expect'' and similar expressions, as they relate to Aytu BioScience, Inc., its subsidiaries, or its management, are intended to identify such forward-looking statements. These forward-looking statements are based on information currently available to the company and are subject to a number of risks, uncertainties, and other factors that could cause the company's actual results, performance, prospects, and opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

 

Contact for Investors:

James Carbonara 
Hayden IR

(646)-755-7412 
[email protected]

 

 

Aytu BioScience, Inc.

Consolidated Balance Sheets

 

		March 31,				June 30,
		2018				2017
		(unaudited)
Assets
Current assets
Cash and cash equivalents		$	12,006,069			$	802,328
Restricted cash			75,728				75,214
Accounts receivable, net			732,476				528,039
Inventory, net			883,820				1,312,221
Prepaid expenses and other			896,899				310,760
Total current assets			14,594,992				3,028,562
Fixed assets, net			260,742				647,254
Developed technology, net			19,286				1,337,333
Customer contracts, net			-				77,667
Trade names, net			2,500				164,037
Natesto asset, net			8,242,029				9,231,072
Goodwill			-				238,426
Patents, net			252,278				271,278
Deposits			2,888				2,888
Total long-term assets			8,779,723				11,969,955
Total assets		$	23,374,715			$	14,998,517
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and other		$	3,199,323			$	2,220,400
Accrued liabilities			211,415				782,536
Accrued compensation			898,155				339,704
Current deferred rent			3,119				6,673
Current contingent consideration			29,893				261,155
Total current liabilities			4,341,905				3,610,468
Long-term contingent consideration			6,162,337				7,386,782
Long-term deferred rent			-				1,451
Warrant derivative liability			120,146				-
Total liabilities			10,624,388				10,998,701
Commitments and contingencies
Stockholders' equity
Preferred Stock, par value $.0001; 50,000,000 shares authorized; shares issued
and outstanding 0 and 0, respectively as of
March 31, 2018 and June 30, 2017			-				-
Common Stock, par value $.0001; 100,000,000 shares authorized; shares issued
and outstanding 35,820,069 and 824,831, respectively as of
March 31, 2018 and June 30, 2017			3,582				82
Additional paid-in capital			92,551,906				73,069,463
Accumulated deficit			(79,805,161	)			(69,069,729	)
Total stockholders' equity			12,750,327				3,999,816
Total liabilities and stockholders' equity		$	23,374,715			$	14,998,517

 

 

Aytu BioScience, Inc.

Consolidated Statements of Operations

Unaudited

 

		Three Months Ended March 31,								Nine Months Ended March 31,
		2018				2017				2018				2017
Product revenue		$	607,473			$	893,548			$	2,734,995			$	2,385,701
Total revenue			607,473				893,548				2,734,995				2,385,701
Operating expenses
Cost of sales			1,136,833				324,438				1,809,445				1,067,654
Research and development			114,141				279,049				(22,391	)			774,526
Research and development - related party			-				291,963				-				387,960
Sales, general and administrative			4,637,495				4,385,145				13,809,264				13,732,226
Sales, general and administrative - related party			-				35,767				-				137,311
Impairment of intangible assets			1,856,020				-				1,856,020				-
Amortization of intangible assets			387,606				437,013				1,157,258				1,311,043
Total operating expenses			8,132,095				5,753,375				18,609,596				17,410,720
Loss from operations			(7,524,622	)			(4,859,827	)			(15,874,601	)			(15,025,019	)
Other (expense) income
Interest (expense)			(186,629	)			(80,722	)			(572,155	)			(884,187	)
Derivative income			3,139,971				16,662				3,957,756				212,809
Unrealized gain on investment			-				-				-				230,936
(Loss) on investment			-				(292,455	)			-				(292,455	)
Other gain			1,753,568				-				1,753,568				-
Total other (expense)			4,706,910				(356,515	)			5,139,169				(732,897	)
Net loss		$	(2,817,712	)		$	(5,216,342	)		$	(10,735,432	)		$	(15,757,916	)
Weighted average number of
common shares outstanding			11,855,413				546,931				5,009,545				378,118
Basic and diluted net loss
per common share		$	(0.24	)		$	(9.54	)		$	(2.14	)		$	(41.67	)

 

 

 

Aytu BioScience, Inc.

Consolidated Statements of Cash Flows

Unaudited

 

		Nine Months Ended March 31,
		2018				2017
Cash flows from operating activities
Net loss		$	(10,735,432	)		$	(15,757,916	)
Adjustments to reconcile net loss to cash used in operating activities
Stock-based compensation expense			288,010				2,241,989
Depreciation, amortization and accretion			1,975,448				2,263,975
Other gain			(1,753,568	)			-
Issuance of restricted stocks			158,585				655,416
Impairment of intangible assets			1,856,020				-
Issuance of warrants			179,287				-
Derivative income			(3,957,756	)			(212,809	)
Amortization of prepaid research and development - related party			-				335,454
Loss on investment			-				61,519
Common stock issued to executives			-				509,996
Issuance of warrants to initial investors			-				596,434
Gain on sale of asset			-				(428,374	)
Warrant amendment			4,633				1,507
Changes in operating assets and liabilities:
(Increase) in accounts receivable			(204,437	)			(180,110	)
Decrease in inventory			428,401				290,984
(Increase) in prepaid expenses and other			(586,139	)			(126,555	)
Decrease (increase) in accounts payable and other			967,641				(307,854	)
(Decrease) in accrued liabilities			(571,121	)			(146,290	)
Decrease (increase) in accrued compensation			558,451				(355,359	)
(Decrease) in deferred rent			(5,005	)			(2,775	)
Net cash used in operating activities			(11,396,982	)			(10,560,768	)
Cash flows used in investing activities
Purchases of fixed assets			(74,707	)			(53,435	)
Contingent consideration payment			(7,385	)			-
Purchase payment for Natesto asset			-				(6,000,000	)
Sale of investment in Acerus			-				1,071,707
Sale of investment in Acerus cost			-				(91,864	)
Installment payments for Primsol asset			-				(750,000	)
Sale of Primsol asset			-				1,750,000
Net cash used in investing activities			(82,092	)			(4,073,592	)
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 preferred, common stock and warrants			12,900,020				-
Issuance costs related to preferred, common stock and warrants			(1,294,235	)			-
Warrant exercises			640,380				-
Issuance of common stock to Lincoln Park Capital			-				631,481
Costs related to sale of common stock			-				(24,247	)
Warrant tender offer			-				2,243,281
Warrant tender offer cost			-				(332,567	)
Registered offering			-				8,602,500
Registered offering costs			-				(997,865	)
Over-allotment warrants purchased by placement agents			-				2,852
Net cash provided by financing activities			22,683,329				10,125,435
Net change in cash, cash equivalents and restricted cash			11,204,255				(4,508,925	)
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		$	12,081,797			$	3,545,265
Warrants issued to investors and underwriters		$	4,117,997			$	-
Contingent consideration included in accounts payable		$	11,283			$	-
Warrant exercise of derivative warrants		$	40,096			$	-
Earn-out payment to Nuelle Shareholders		$	250,000			$	-
Fixed asset purchases included in accounts payable		$	-			$	58,683
Warrants issued in connection with the equity financing to the placement agents		$	-			$	292,630
Warrants amended in connection with warrant tender offer		$	-			$	63,183

 

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