AYTU BIOSCIENCE, INC.
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Report Link: Initial Research Report (Dated 02/17/2017)
Analyst: Juan Noble
Taglich Rating: Speculative Buy
Price Target: $1.25
Time Horizon: 12 Months
Rating Established: February 17, 2017
Price When Established: $0.90
Most Recent Report: February 17, 2017
Price When Issued: $0.90
Aytu Bioscience Announces Completion of Tender Offer
On March 1, 2017, Aytu BioScience announced completion of a tender offer to amend and exercise certain categories of existing warrants originally issued to investors participating in the company's May 2016 and October 2016 financings. Approximately three million of the warrants were tendered at a temporarily reduced exercise price of $0.75 per share. Net cash proceeds from the warrant exercises were approximately $2.0 million, which are expected to be used for working capital and general corporate purposes.
AYTU Bioscience, Inc. (Other OTC: AYTU), headquartered in Engelwood, Colorado, was formed in April 2015 through a reverse triangular merger with two companies that were formed in 2013. Shortly after the merger, the company, which was formed in 2002, changed its name from Rosewind Corporation to Aytu Bioscience.
The company’s principal pipeline product, MiOXSYS, acquired with its merger, is CE-marked but not yet cleared in the US. To jump start its commercialization, AYTU acquired the radiolabeled imaging agent ProstaScint (May 2015) for prostate cancer diagnosis, and an oral liquid antimicrobial (October 2015), Primsol, approved for the treatment of uncomplicated urinary tract infections. ProstaScint and Primsol made full-year revenue contributions last year (ending June 2016), accounting for most of the company’s product revenue in FY2016.
In July 2016, the company also acquired the US rights to Natesto, a testosterone replacement hormone that is cleared in the US and in some overseas markets for the treatment of hypogonadism. Natesto, launched early this fiscal year, could contribute significantly to FY2017 revenue.
Aytu has expanded a sales force that is focused on marketing to urologists and, in the case of Natesto, also to endocrinologists. The product line aims to treat or diagnose conditions in substantial patient populations that are growing steadily due in part to demographic trends. These target patient populations seek treatment mainly from urologists, which represent a single call point that can be more easily targeted as they tend to be more concentrated in urban centers in the most populous states in the US. As all of its manufacturing is done by a contract manufacturer or the companies that its products were acquired from, AYTU can devote most of its efforts to marketing and raising additional financing.
Company ReportsInitial Research Report (Dated February 17, 2017)
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