Full Press Release Details
Filed by Aytu BioScience, Inc.
Pursuant to Rule 425 under the Securities Act of
and deemed filed pursuant to Rule 14a-12
under the Securities Exchange Act of 1934
Aytu BioScience, Inc. (SEC File No. 001-38247)
Aytu BioScience Announces Definitive Agreement to Acquire Innovus
Acquisition Gives Aytu Timely Entry into Growing Consumer
Healthcare Market with a Portfolio of Over 30 Products that
Generated $24M of Revenue During Past Four Quarters
Combination Will Create Specialty Rx and Consumer
Company with Revenue of $31M
New Products, Robust Cross-Selling, and Operational
Designed to Accelerate Time to Profitability
ENGLEWOOD, CO & SAN DIEGO, CA / ACCESSWIRE / September 12, 2019
/ Aytu BioScience, Inc. (NASDAQ: AYTU), a specialty
pharmaceutical company focused on commercializing novel products
that address significant patient needs and Innovus Pharmaceuticals,
Inc. (OTCQB: INNV), a specialty pharmaceutical company
commercializing, licensing and developing safe and effective
consumer health products, today announced that the companies have
signed a definitive merger agreement whereby Aytu will retire all
outstanding common stock of Innovus for an aggregate of up to $8
million in shares of Aytu common stock, less certain deductions, at
the time of closing. This initial consideration to Innovus common
shareholders is estimated to consist of approximately 4.2 million
shares of Aytu stock. Additional consideration for up to $16
million in milestone payments in the form of contingent value
rights (CVRs) may be paid to Innovus shareholders in cash or stock
over the next five years if certain revenue and profitability
milestones are achieved.
generated more than $24 million in revenue in the four quarters
ending June 30, 2019.
this combined entity, Aytu will expand into the $40 billion
consumer healthcare market with a portfolio of over thirty consumer
products competing in large
therapeutic categories including diabetes, men's health,
sexual wellness and respiratory health. This expanded product line
broadens Aytu's portfolio beyond prescription therapeutics to
enable wider revenue distribution, reduced seasonality associated
with Aytu's seasonal antitussive product line, and higher
revenue from an expanded base of proprietary products.
Aytu and Innovus generated more than $31 million in revenue over
the preceding four reported quarters ending June 30, 2019. This
business combination provides increased revenue scale and enables
operational synergies that can be leveraged to accelerate the
combined company's growth and path to
Disbrow, Chief Executive Officer of Aytu BioScience, commented,
Through this business combination we have taken a very
timely step into a large, rapidly growing segment of the healthcare
market. Over the past two years, significant investment has been
made in the areas of consumer wellness, telemedicine, and online
health, so it's the right time for Aytu to enter this
high-growth market. Further, consumers are increasingly taking
control over their healthcare decisions and, particularly for
common conditions, over 90% of the time patients are self-treating
with over-the-counter options in advance of receiving care from a
prescriber. By adding a consumer unit to Aytu's already
growing prescription business, we increase our exposure to the
broader patient market while continuing to grow our portfolio of
novel prescription products.
Disbrow continued, This will make Aytu a fully-integrated
specialty pharmaceutical company addressing patient needs in both
prescription and non-prescription categories. Innovus President
& Chief Executive Officer, Bassam Damaj, Ph.D. and his team
have developed a robust product line and have more than doubled
revenue since 2017, so I'm thrilled about the prospect of our
combined growth plan as the Innovus business becomes the newly
created Aytu Consumer Health business unit.
the company expects to operate the commercial aspects of the
Innovus consumer business separately from Aytu's prescription
business, while rationalizing general and administrative expenses
through the removal of Innovus' public company costs and
redundant administrative and operational processes, along with the
reduction in overhead, administrative and facilities
prescription product portfolio will continue to be primarily
commercialized through the existing Aytu sales force, while the
consumer health products will continue to be primarily
commercialized via Innovus' proprietary Beyond Human
marketing platform. However, both lines of business are expected to
benefit from opportunistic cross-selling such that some consumer
products may be marketed in the physician office setting by
Aytu's sales force, while the marketing of the prescription
products may be bolstered through various online and
direct-to-consumer marketing initiatives. It is expected that the
two segments will leverage administrative and operational
efficiencies following the integration of the two
Bassam Damaj, Ph.D., President & Chief Executive Officer of
Innovus Pharmaceuticals, stated, This is an exciting
inflection point for Innovus and our shareholders as we combine
with Aytu to strengthen our market position and provide a growth
platform for the company and our products. We are looking forward
to helping build Aytu into a world-class healthcare company, and
I'm personally excited about continuing on as the President
of the Aytu Consumer Health business unit. With the combined
strength of our companies, we believe we can more rapidly grow our
novel OTC medicines and supplements while developing additional
consumer healthcare products as we grow, thus adding value to the
newly-expanded Aytu BioScience.
the terms of the merger agreement, Aytu will issue to Innovus
shareholders a combination of stock and contingent value rights