Full Press Release Details
Aytu BioScience Acquires $12.4 Million Prescription Product
Transaction increases annual revenue to $44M and is expected to
accelerate time to breakeven, following recently announced
acquisition of Innovus Pharmaceuticals
Total upfront consideration equals 1.4x LTM revenue plus assumption
Triples size of Rx product portfolio to nine commercial
Investor webcast and conference call today at 4:30 p.m.
ENGLEWOOD, CO / ACCESSWIRE / October 14, 2019 / Aytu BioScience, Inc. (NASDAQ: AYTU), a
specialty pharmaceutical company focused on commercializing
novel products that address significant patient needs, announced
the signing of an asset purchase agreement to acquire a portfolio
of prescription products from Cerecor, Inc. (the Commercial
Portfolio ). The Commercial Portfolio and accompanying
commercial infrastructure generated $12.4 million in net revenue
and was profitable on a standalone basis for the twelve months
ending June 30, 2019.
The company will host a live conference call and webcast today at
4:30 p.m. ET to discuss the details of the transaction. Conference
call details are provided at the end of this press
Josh Disbrow, Chief Executive Officer of Aytu BioScience,
commented, This asset purchase is a transformational
transaction for Aytu BioScience. Through the combination of this
acquisition and the previously announced acquisition of Innovus
Pharmaceuticals, we increase Aytu's top line more than
six-fold, growing from $7.3 million annually in fiscal 2019 to a
combined annual revenue run rate of $44 million. These two
transactions accelerate the company's growth and provide for
an increased revenue base from which to expand. Further, through
the acquisition of this novel portfolio of six prescription
products and the accompanying commercial team, which is profitable
on a standalone basis, we achieve much higher commercial
Mr. Disbrow continued, Additionally, with today's
separate announcement of our $10 million financing with two
high-quality, healthcare-focused institutional investors, we have a
strong balance sheet with estimated cash of approximately $17.3M as
We are well positioned to integrate and grow this newly expanded
Mr. Disbrow concluded, Following closing, we plan to quickly
start the integration process with the commercial team to increase
revenue and realize cost savings through the removal of
redundancies. The cost savings we expect to realize by year-end,
along with an immediate step-up in revenue, should enable us to
quickly cut our burn, significantly extend our cash runway and
accelerate our time to breakeven. Through these two strategic
transactions and newly expanded scale, Aytu is on a much higher
trajectory and is positioned to deliver more value to our
shareholders. This is an exciting day for the Aytu team, and we are
excited to begin driving more growth at the new Aytu
Following the closing of this asset purchase agreement and upon the
closing of the previously announced merger agreement with Innovus
Pharmaceuticals, Aytu BioScience's annual revenue will exceed
$44 million - based on combined trailing twelve-month revenue as of
The transaction is expected to further increase revenue scale and
accelerate the company's time to achieve
The purchased Commercial Portfolio includes prescription products
competing in markets exceeding $8 billion in annual U.S. sales. The
portfolio consists of six established, commercialized pediatric
primary care products including: AcipHex Sprinkle ,
Cefaclor for Oral Suspension, Karbinal ER,
Flexichamber , Poly-Vi-Flor and Tri-Vi-Flor . The
Commercial Portfolio complements current Aytu products
Natesto , ZolpiMist , and Tuzistra XR. The
combined total addressable U.S. market across both product
portfolios exceeds $13 billion.
Asset Purchase Agreement Components
of the Commercial Portfolio generating $12.4 million in net revenue
for the four quarters ending June 30, 2019. This portfolio includes
the following product lines: AcipHex Sprinkle, Cefaclor for
Oral Suspension, Karbinal ER, Flexichamber ,
Poly-Vi-Flor and Tri-Vi-Flor
of the commercial infrastructure and nationwide sales force that
commercializes the Commercial Portfolio
of Matthew Phillips, current Chief Commercial Officer of Cerecor,
as Aytu's Executive Vice President of Commercial Operations,
reporting to the Chief Executive Officer
of contracts associated with the Commercial Portfolio inclusive of
licensing and supply agreements, along with wholesaler, third-party
logistics, distributor, and direct purchase agreements
of $4.5 million in cash and $12.5 million in Aytu preferred stock,
which converts into common stock upon receipt of Aytu shareholder
of Cerecor's outstanding payment obligations to Deerfield
CSF, LLC ( Deerfield Note ) totaling approximately
$16.575 million in principal and interest, which is payable in
expects to refinance and extend the term of the Deerfield Note
Note guaranteed by Armistice Capital via an escrow
upfront consideration in cash and preferred stock for this $12.4M
commercial portfolio is $17 million, or approximately 1.4x LTM
revenue, plus the assumption of the Deerfield Note.
The purchase of the Commercial Portfolio, in conjunction with the
planned acquisition of Innovus Pharmaceuticals, increases
Aytu's annual revenue to over $44 million based on combined
company sales over the four quarters ending June 30,
Both Innovus Pharmaceuticals and the Cerecor commercial business
have operated near or above breakeven on a cash basis over the last
The company expects to integrate the Cerecor commercial team,
currently led by Matthew Phillips, into Aytu's current
commercial infrastructure and realize cross-selling and cost
savings across multiple product lines.
Matthew Phillips will transition from Cerecor to Aytu to serve as
the company's Executive Vice President of Commercial
Operations, reporting to the Chief Executive Officer. Jarrett