Full Press Release Details
BioScience and Neos Therapeutics Announce
Merger Agreement, Creating a Combined
Revenue1 Specialty Pharmaceutical Company
CO and GRAND PRAIRIE, TX / ACCESSWIRE / December 10, 2020 / Aytu BioScience, Inc. (NASDAQ: AYTU), a specialty pharmaceutical
company focused on commercializing novel products that address significant patient needs, and Neos Therapeutics, Inc. (NASDAQ:
NEOS), a commercial-stage pharmaceutical company developing and manufacturing central nervous system-focused products, today announced
that they have entered into a definitive merger agreement pursuant to which Neos will merge with a wholly owned subsidiary of
Aytu in an all-stock transaction.
the effectiveness of the merger (the "Merger"), Neos stockholders will be entitled to receive 0.1088 shares of common
stock of Aytu for each share of Neos common stock held, after taking into account the one-for-ten reverse split of Aytu's
common stock that was effected on December 8, 2020. The transaction will result in Neos stockholders owning approximately 30%
of the fully diluted common shares of Aytu. The all-stock transaction is valued, on a fully diluted basis, at approximately $44.9
million based on the 10-day volume weighted average price of Aytu stock for the period ended December 9, 2020.
boards of directors of both companies have approved the transaction.
Rationale and Financial Benefits of the Transaction
combined entity will have an increased footprint in the prescription pediatric market, an established, growing multi-brand ADHD
portfolio addressing the $8.5 billion ADHD market and significant combined revenue scale. For the 12-month period ending September
30, 2020, Neos generated $57.0 million in revenues. On a combined pro-forma basis for this same period, Aytu and Neos' aggregate
net revenue is over $100 million. In addition, this Merger facilitates operational and commercial synergies that can be harnessed
to accelerate the path to profitability for the combined entity, with estimated annualized cost synergies of approximately $15.0
million beginning fiscal year 2022.
is a truly transformative transaction, elevating the newly combined company to a $100 million revenue, leading specialty pharmaceutical
company positioned for what we expect to be an accelerated path to profitability, continued revenue growth and further business
diversification," said Josh Disbrow, Chief Executive Officer of Aytu BioScience. "The combination of Neos with the
Aytu business further increases our footprint in an attractive pediatric medicine market, following our acquisition of the Cerecor
pediatric Rx assets late last year. This transaction is an excellent strategic fit with our market expansion plans and we believe
creates strong stockholder value."
Disbrow continued, "This transaction increases Aytu's addressable market, adding the large and growing ADHD market,
with 75.1 million scripts written annually. Importantly, and despite the impact of COVID-19 on this market, Neos' ADHD product
growth significantly outpaced the overall ADHD market in the third quarter of 2020, with Adzenys XR-ODT prescriptions growing
by 9.9 percent and Cotempla XR-ODT prescriptions growing by 6.5 percent. Expanding into ADHD with Neos is the ideal embodiment
of Aytu's strategy to build a portfolio of best-in-class prescription therapeutics and consumer health products competing
Chief Executive Officer, Jerry McLaughlin, stated, "I firmly believe Aytu BioScience is the right partner to continue the
exceptional work our team has done to build the ADHD franchise into what it is today and to continue the development of NT0502
for the treatment of sialorrhea. By leveraging the respective commercial infrastructure of Neos and Aytu, including complementary
sales call points and our best-in-class patient support program, Neos RxConnect, we expect continued growth of the product portfolio.
After a thorough evaluation of strategic alternatives, the Board of Directors of Neos believes that this merger represents the
highest-potential value creation opportunity for Neos stockholders."
combined company will be led by Josh Disbrow, Chief Executive Officer of Aytu and will be headquartered in Englewood, Colorado.
The board of the combined company will consist of six members designated by Aytu and two members designated by Neos, including
Neos Chief Executive Officer and Director Jerry McLaughlin and Neos Director Beth Hecht.
Merger is currently expected to close by the second quarter of 2021, subject to certain approvals by both Aytu and Neos stockholders
and the satisfaction of other customary closing conditions.
part of the transaction, Aytu has agreed to provide Neos with access to up to $5.0 million cash for working capital needs for
the period prior to the closing of the Merger. In addition, upon closing of the Merger, $15.0 million in principal of Neos's
existing senior secured debt facility with affiliates of Deerfield Management will be repaid, and Deerfield has agreed to allow
the remaining debt under the facility to remain outstanding with the combined company following the Merger. Indebtedness under
Neos's existing ABL agreement with Encina Business Credit will also remain outstanding.
is acting as the exclusive financial advisor to Aytu, and Dorsey & Whitney LLP is acting as its legal counsel. MTS Health
Partners LP is acting as the exclusive financial advisor to Neos, and Goodwin Procter LLP is acting as its legal counsel.
and Neos will jointly host a live conference call at 8:30 am ET today.
conference call can be accessed by dialing:
webcast will be accessible live and archived at the following link: https://www.webcaster4.com/Webcast/Page/2142/39104 and on
Aytu BioScience's website, within the Investors section under Events & Presentations, at aytubio.com, for 90 days.
replay of the call will be available for fourteen days. Access the replay by calling 1-877-481-4010 (toll-free) or 919-882-2331
(international) and using the replay access code 39104.
Aytu BioScience, Inc.
BioScience is a commercial-stage specialty pharmaceutical company focused on commercializing novel products that address significant
patient needs. Aytu currently markets a portfolio of prescription products addressing large primary care and pediatric markets.
The primary care portfolio includes (i) Natesto , the only FDA-approved nasal formulation of testosterone for men with hypogonadism
(low testosterone, or "Low T"), (ii) ZolpiMist , the only FDA-approved oral spray prescription sleep aid, and (iii)
Tuzistra XR, the only FDA-approved 12-hour codeine-based antitussive syrup. The pediatric portfolio includes (i) Cefaclor,
a second-generation cephalosporin antibiotic suspension; (ii) Karbinal ER, an extended-release carbinoxamine (antihistamine)
suspension indicated to treat numerous allergic conditions; and (iii) Poly-Vi-Flor and Tri-Vi-Flor , two complementary
prescription fluoride-based supplement product lines containing combinations of fluoride and vitamins in various formulations
for infants and children with fluoride deficiency. Aytu also distributes a COVID-19 IgG/IgM rapid antibody test and rapid antigen
test. These tests are used separately in the rapid, qualitative diagnostic assessment of the 2019 Novel Coronavirus. Additionally,
Aytu recently licensed worldwide rights to develop the Healight technology platform. Healight is an investigational medical
device being studied as a prospective treatment for COVID-19 and other respiratory infections.
operates a consumer health subsidiary, Innovus Pharmaceuticals, Inc. ("Innovus"), a specialty pharmaceutical company
commercializing, licensing and developing safe and effective consumer healthcare products designed to improve men's and women's
health and vitality. Innovus commercializes numerous novel consumer health products competing in large healthcare categories including
diabetes, men's health, sexual wellness, respiratory health, and general wellness. The Innovus product portfolio is commercialized
through direct-to-consumer marketing channels utilizing the company's proprietary Beyond Human marketing and sales platform.
strategy is to continue building its portfolio of revenue-generating Rx and consumer health products, leveraging its focused commercial
team and expertise to build leading brands within large therapeutic markets. For more information visit aytubio.com and visit
innovuspharma.com to learn about Aytu's consumer healthcare products.
Therapeutics, Inc. is a commercial-stage pharmaceutical company developing and manufacturing central nervous system (CNS)-focused
products. Neos markets Adzenys XR-ODT (amphetamine) extended-release orally disintegrating tablets (see Full Prescribing
Information, including Boxed WARNING), Cotempla XR-ODT (methylphenidate) extended-release orally disintegrating tablets (see
Full Prescribing Information, including Boxed WARNING), and Adzenys-ER (amphetamine) extended-release oral suspension (see
Full Prescribing Information, including Boxed WARNING), all for the treatment of ADHD. Neos also has a development candidate,
NT0502, for the treatment of sialorrhea in patients with neurological conditions. Additional information about Neos is available
Information about the Proposed Merger Transaction and Where to Find It
press release relates to the proposed merger transaction pursuant to the terms of the Agreement and Plan of Merger, dated as of
December 10, 2020, by and among Neos Therapeutics, Inc. ("Neos"), Aytu Bioscience Inc. ("Aytu"), and Neutron
Merger Sub, Inc. In connection with the proposed merger transaction, Aytu expects to file with the United States Securities and
Exchange Commission (the "SEC") a registration statement on Form S-4 that will include a joint proxy statement of
Aytu and Neos that also constitutes a prospectus of Aytu, which joint proxy statement/prospectus will be mailed or otherwise disseminated
to Aytu stockholders and Neos stockholders when it becomes available. Aytu and Neos also plan to file other relevant documents
with the SEC regarding the proposed merger transaction.
ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IF AND WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER TRANSACTION.
may obtain a free copy of the joint proxy statement/prospectus and other relevant documents (if and when they become available)
filed by Aytu or Neos with the SEC at the SEC's website at www.sec.gov. Copies of the documents filed by Aytu with the SEC
will be available free of charge on Aytu's website at www.aytubio.com or by contacting Aytu's Investor Relations at
james@haydenir.com. Copies of the documents filed by Neos with the SEC will be available free of charge on Neos' website
at www. investors.neostx.com or by contacting Neos' Investor Relations at (972) 408-1300.
Information Regarding Participants
and Neos and their respective directors, executive officers and other members of management and employees may be deemed to be