AYTU - Earnings call transcript Q4 2019

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Operator

Good morning, everyone. Thank you for joining us for the Aytu BioScience’s Year-End and Fourth Quarter Business Update Call for the Year-Ended June 30, 2019. With me this afternoon are Aytu’s Chairman and Chief Executive Officer, Josh Disbrow; and Chief Financial Officer, Dave Green.

Aytu BioSciences issued a press release earlier this afternoon with details of the company’s operational and financial results. A copy of the press release is available on the news page of the company’s website at aytubio.com. everyone call remind being to like that is today’s recorded. I’d press be of ID using earnings today’s replay available provided call the conference A and will by numbers the in release. telephone

be accessible addition, I’m Aytu aytubio.com. Events website BioSciences webcast under In the section Presentations live sorry, Investors a within & archived on and – will at

statements conference Aytu the regarding operating forward-looking disclosure regarding Harbor I’d like also Safe certain beliefs, strategies, to Finally, goals, results contain information. the call call The expectations customary statements, potential will your including BioSciences. attention to future today forward-looking and of

Actual Although longer uncertainties differ management any September no to, the assumptions forward-looking risks, Aytu the XX, are accurate a of time and be Time-sensitive guarantees or not of based statements. today, result and statements these factors SEC. on performance. other are company’s not at set replay. the believes estimates, results these of limited materially telephonic or statements XXXX, revise but in of to update any of no forth with projections the including webcast may may these as as filings future reasonable obligation factors, undertakes information

the Sir, turn to to like Josh over Disbrow. now I’d CEO, please Aytu’s ahead. go call

Josh Disbrow

Good Thank and fiscal XXXX financial joining and full-year morning, you, us Tom. operational highlights for thanks for today’s call.

fiscal on We’re Pharmaceuticals, glad our about. to the acquisition key and accomplishments, XXXX’s call focus we’re growth be afternoon. our as which primarily this excited of with enter XXXX you recently will extremely plans we Today’s Innovus announced

to and products XR an doubling accomplishments. ZolpiMist the company’s year the was going in now of two licensing with revenue key Tuzistra of with from Starting four and commercial exceptional fiscal completed a investor, XXXX for XXXX by financings growth, XXXX. the institutional two healthcare led Markets both pivotal bringing Armistice having perspective company also Capital. in were from over in million, a huge $XX Capital year was It Fiscal developments

from Ladenburg healthcare Thalmann two successful that, reputable and in were Wall Securities. attracting we Northland analysts Street Following

past is this and year, a and exceptional President we Entrepreneur Tris investor, Founder board Mehta. Steve Ketan two highly Steve members investor a institutional added and specialty and company, Ketan Pharma. pharmaceutical Capital; Pharmaceutical healthcare Finally, respected Armistice is Boyd and of of

have with both be progress in and XXXX. we pleased Board, we to couldn’t on more gentlemen the the We’re pleased made

Now strong and performance. XXX% a pleased increased driven $X.X MiOXSYS, reiterate revenues this this million, was largely regard specific and up year And to year-over-year to our growth. million $X.X operational financial by I’m from prior Natesto both saw that year. performance which that to

on for riders to total products deeper a base this growth grew of by prescriber almost Natesto little performance, prescriptions and the XX% nationwide. prescription X,XXX both was Diving the growth year, accompanied

in Additionally, are recently which due calling At the and refill the Home. Natesto to NATESTO product modified dramatically, part of we rate Direct, out roll successful increased now

and by total prescriptions is increased total take year provide prior be which new year total the were which from previous To XX% XX,XXX, for Refills quarter. pleased ended more specific, the Natesto for prescriptions prescriptions quick XX to were recent of TRxs. the I’ll prescription with. June activity, the also XX,XXX. to the year’s X,XXX over Natesto we’re from a up up Both snapshot for

to modified we growth transition. to stronger is and a the we grew quarterly X,XXX because X,XXX in is face In Direct program offering late for on make and and early in This QX It’s prescriptions and TRxs service of it providers prescriptions the patients significant. a from it the Natesto prescriptions clinicians. summer, QX, of transitioned Natesto spring significant, up increased prescriptions in XXX Total week. to or average per high an this

support patients we pharmacies. providers and patients to and front. and the assist we’re provider looking services This previous comprehensive efforts, improvement to patient new a begun previous more expanding from its constant transition prescriptions forward of the to better our and Through identified solution has reimbursement on

to and startup patients and So natural time a allied physicians get onboarded. there’s their

new We positioned we’re scalable grow much expect believe some the but continuing we’re and transition provider. pains and this provider to potentially on Natesto impact through a better more with happy short-term robust, scripts,

again, the capture Natesto actually despite see and process, very quarter-to-quarter scripts patient So support some are that. to disruption up to we’re and patient happy

this and Home We’re program new excited covered. Natesto in filled the supports patients about NATESTO further getting At and providers and how

over Moving now. to MiOXSYS

company the growth in MiOXSYS and world, the male XX which also MiOXSYS into to the XXX the product placement sold XX now Our The around having plays for countries. product instruments fiscal fertility substantial takes instrument saw XXXX. year, total

Multiple publications leaders presentations note, endocrinologists around clinical and Scientific presentations the six of at this conferences and the by Vienna, leading leading in ESHRE several at thought from utility scientific summer’s made Of products clinical further world’s of Conference the to were the some large showcase globe. audiences urologists world. around

And performance. aids The of growth in are strong Natesto sleep to the base. as Tuzistra by antitussive and an the business expected propel showed additional growth ZolpiMist with and XXXX revenue addition MiOXSYS expanded evidenced

a our from it’s in on this second-half growth priority $XX relaunch copay than more still Salesforce. steady now] XXXX expect And for we’ve program, [pay TRx and quarter-to-quarter. early we numbers are the relatively higher see and the small, NRxs XX% since to [ph] became in fiscal ZolpiMist TRxs grown of here. promotional but XX% we initiated

got of with very and Westfield, and up a news tablets. profile Ambien recent attributes publication clinical this are PK peer-reviewed In Salesforce publishing and a tablets [ph] to article by growing. been clinical ZolpiMist that doctors with armed both encouraging and pharmacology pharmacy, the to journal it as favorably that stack the early insomnia the as The key in peer-reviewed ZolpiMist the time a publication documenting has Rama was both markers. results in scripts again, clearly now Ambien levels, are blood well demonstrated and and outperformed spray

was underway solid to XR than season, prescriptions Despite over and season got at cough X,XXX this getting a it Tuzistra lighter total this have TRxs cold is we weekly out cough fiscal year. being after encouraging the XXX field a Also the Tuzistra start the and past of into we normal season.

have as be full to we’ll the We even expect to a this year field. stronger season be in

just We co-promotion to a you shortly. speak launched partnership I’ll that also

do it the to I to Before ahead. through go though, over walk Dave, financials. Dave that, I’ll turn please

David Green

for strongest this year you Josh, Thank I results XX, afternoon. thank you, the XXXX, fiscal for joining review June Today, all the the ended us and since our company which financial was for inception. year

housekeeping of couple notes. a First,

report. XX-K and Form Our be XX, today. filed periods the XXXX ended report annual the XXXX That SEC June XX-month XX, full with June contains our will later covering

release statements in can a summary www.aytubio.com The results. now and section the of which financial be includes with We our release, our also this summary investors XXXX results. afternoon found a earlier press issued financial of press website, XXXX the

$X.XX represents a was revenue The XXXX million, growth As Josh revenue mentioned, year-over-year. XXX% doubling was led by revenue. XX% for which of Natesto XXXX surging

MiOXSYS, strong and line performances Europe in grew our device, XX% both in medical year-over-year, Japan. with Next

finally, and And XXXX in both growth. launched ZolpiMist products our to contributed Tuzistra line XXXX top

up in year. ASC While we business and to QX lower-end XXX, range the revenue the one-time of adopted which is line generally at this recognition That come related the standard of strong. accrual new Tuzistra to drop our a range were with in and expectations, revenue off for the did the Natesto’s due of RXs was said, we seasonal QX,

That’s Gross a and on million, higher than profit $X.X XXXX. stronger was for revenue profit a million more increase compared margin. Xx XXXX gross to $X.X in

million support were excluding XXXX. items, approximately in million in expenses, operating compared XXXX, new tied and COGS driven The and sales to compared by Factoring expenses services in to to the XXXX. $XX.X Operating of growth. patient of addition XXXX, expenses all $XX revenue out million marketing increase in product $XX Natesto, $XX.X personnel were non-cash in strong and the million was launches for

The loss compared XXXX commercial to XXXX. for XXXX cost and of million increases. declined expenses $XX.X operating million, was some G&A in in the offset $XX.X

increased gross offset selling improvement driven roughly So personnel revenue growth, and by $X.X million largely profit and costs. was by

or contingent was non-cash due per The in tied XXXX loss consideration Of due the an million of to sharp loss line positive hand, contingent increased approximately expected higher revenue the payouts, connection share. with non-cash to as royalties Net in note, for $X.X Tuzistra loss is liability. the contingent $X.XX is our increase milestones. a higher below as million, expected a revenue net product as across increase as XR, to the licensing consideration development of with $XX.X future such portfolio. hand goes higher and the expected is expectation in of well This

A Turning few to to million million to balance was cash is statement. XXXX. our cash million, items XXXX activities cash balance Net $XX.X were flow the cash in $XX.X for used sheet which approximately our XXXX $XX million, total in was at and used assets compared than year-end million include note less year-end. operating $XX.X $X.X

and eliminating $X.X exchange, of and approximately interest. related shares million shareholder a with completed we and our quarter, fourth connection the and outstanding million million debt approved all interest. we transaction, of during approximately extinguished accrued interest-bearing In warrants the exchange X.X issued X.X debt Finally, accrued

and interest-bearing the the a than together in Josh operational used next, all XXXX and initiatives was revenue activities in to than launches $X.X will profit accelerating with debt. XR we that profit burn describe All achieved growth strategic million and That and summarize product more reduction. stage financial XXX% net gross cash perspective, increased line continued sets times, performance, financial top eliminated for together Tuzistra ZolpiMist and three operating growth, reduced from more by

back that, with call over And Josh. I’ll turn to the

Josh Disbrow

Dave. Thanks,

fiscal our fiscal performance, opening think you current to in say believe of ending XXXX fiscal year alluded We current transformational. would that XX, very that for announcements some in of might but proud even which a XXXX number reasons, remarks, first our I September As quarter includes XXXX. made be were our stronger and my we’re this

XR double on XR Pharmaceuticals. X, This representatives Tuzistra agreement Poly approximately September collaboration Tuzistra pharmaceutical announced commercial XX co-promotion to will across the privately-held the with States. United nearly company, we specialty Salesforce First, the for

Tuzistra million promote on footprint XXX,XXX pharmacy accounting season. and started and Poly covers revenue. in the geographic allergy cough physician annually, prescriptions X, approximately and promotion to to to annual approximately expects XXXX-XXXX to $XXX Poly’s approximately September XR for subscribers Salesforce X,XXX antitussive

excited Board. We’re new having about relationship excited Poly on the about and

on in and been allergy Since Poly’s mostly founding markets. XXXX, company has focused antitussive the the

launch they’re for us as we full XR. ideal our season into first with So promotion Tuzistra an of partner

few ahead physician customer encouraged only feedback. cough early setting we’re by into weeks squarely a While the promotion in, of season and the

Abstract Study Reproductive have been complete as Secondly, Spermatogenesis at Late-Breaking in and the that fiscal is until Natesto October Natesto for Spermatogenesis in form to been the ASRM which accepted presentation, the remain of have results Embargo Society date we results presentation a Meeting. American will Medicine, Annual XXXX, Study abstract submitted ASRM for the XXXX. QX announced in results The also XX,

release away. weeks just few Study and the readout this Natesto a We’ve for now several months data talked about Spermatogenesis planned in is

Low with T this the is in formation XX as why readout men Well, their the data family So are of important? XX% approximately million-plus U.S. years. reminder, in a

However, men. for really and in two known sperm testosterone parameters to treatment that replacement negatively an it’s be total. therapy these render plus Thus option million men causes well often isn’t impacted therefore, TRT

So may that the whole treatment see matter Natesto a segment and these that for remain this with that for Low parameters does men fertile. seeking first semen an on this of data may T time, impact treatment there’s a we following or with large any the for readout, go-to younger to and become men

of Acerus As the global their to we’ve and we’re a in our for undertaken Acerus excited plan announced expand U.S.-based Aytu launch the change Pharmaceuticals. partnership Natesto through transformation over it license commercial Natesto via to a relates planned footprint further our in Salesforce. announced Natesto, recently about joint the with strategic partner

urology financing and endocrinology through cover the a complement prescribing this, Acerus of planned following Through focused coverage the the effectively Salesforce. launch focused Acerus’ key focused double on specialists physicians. more a and a the resourcing high to sales XX-person Salesforce and Aytu Aytu’s to expects primary more care footprint of enabled we’ll

call reps launch and be will entire care sales this key remind greater and them almost the Acerus close shortly team I’ll financing physicians up freed frequency this our plan, commercial to have product soon to increased would you is our turn, increased and sell primary In adjusted now their will portfolio. much their thereafter. With to expected reach X,XXX to nationwide. enable who prescribers,

believe inclusive to some of us prescription million to $XX we We’ll be positioned up Acerus, level liabilities, of going high successful also clinical this a well take it’s to also among shedding some to revenue-based and very sales. very regulatory shed in milestones, help to be and while expenses, others.

this deal formally Aytu Acerus’ forward this for of financing. sense and we’re looking the this, makes following to So implementing closing

our accomplishments I’ve organic XXXX. So highlighted that XXXX’s as we’ve key we growth and plans and entered – dynamics fiscal

with in why Innovus $X will Now whereby X.X Innovus we I’d discuss it. we rationale announced like million shareholders. merger outstanding another almost for the XX, excited the shares XXXX, signed just in entirely and Starting deal million about to recently securities stock acquisition a upfront, deal – details. acquire and approximately to Aytu up we’re September agreement, the of so Pharmaceuticals, to issue all definitive Aytu On

more XXXX. many our and XX, in ending Innovus revenue a And and this than we deal shareholders. others, $XX in believe generated good June million that fourth Aytu quarters reason the is for for very

Additional the form CVRs if profitability met. shareholders to Innovus five or $XX of in are of over in value consideration paid next milestone milestones million may to be payments and years the contingent up specific revenue rights,

including consumer diabetes, over why through this sexual health. we’re $XX XX so moving So a large products expands health, in the respiratory market combined Well, Aytu consumer competing into wellness billion and men’s of excited? portfolio categories, entity, healthcare therapeutic with

line prescription expanded with antitussive seasonality higher revenue wider seasonal product and to This line broadens beyond of therapeutics proprietary revenue distribution, from an portfolio our reduce enable product expanded products. our associated base

that more million short, than a in $XX four products Innovus perspective, quarters Aytu over ending pro June revenue XX. will In be forma in it generated XXXX. and combined management reported since has strengthens preceding their the team our From revenues Aytu doubled additional that

combination As cost company’s synergies and company accelerate We this pertains we redundant immediately can that removing Innovus’ increased and the and it path gain and believe profitability. operational business can processes public to synergies costs to scale leveraged overhead. be revenue and to reducing cuts enables earnings, provides

and view Aytu December thus as whole, is ending to shareholder close is our with thrilled early as transformative Taken really to transaction and quarter this both we and The is deal where are we today. stand Innovus. expected a as votes subject at XX,

Aytu fiscal Board. outstanding summarize, the XXXX to had to So executing $X.X doubling revenue across and an million

amended announcements, improved potential, with Natesto’s momentum including all upcoming XXXX, our Acerus, Spermatogenesis coupled potential agreement a profile. and expense growth copromote poly, QX exiting and solid our organic XXXX supported fiscal Our with the results opportunity

and looking On month of top or new the now results four we’re than a BioScience. path XX faster for potentially combined of at times revenue combined trailing at that, Aytu profitability the XX more to company standalone

clear we’re new fiscal that even fiscal So the but a Aytu optimistic I hope we beyond. made in had XXXX, more XXXX strong Aytu today and about

So of with I’d this the the call. to the Q&A that, section like at open operator, time, lines for

Operator

Jeffrey is floor first our for your you, Thalmann. questions. Instructions] Cohen [Operator take Ladenburg with now Thank sir. open The We’ll question from

Jeffrey Cohen

you? Josh Hi, how and are Dave,

Josh Disbrow

Jeff. Hi,

David Green

Jeff. Hey,

Jeffrey Cohen

So questions. in few through order. I’ll just a specific a roll

give So what strong quarter as for you called additional us it far MiOXSYS strength there? any the as areas were in particular. Could geographic you color

Josh Disbrow

Yes, we can.

comments. Dave mentioned strong for are As quite just his us. Japan Europe both and

in Asia a areas, building excellent both works has base in an of fact, multiple We’ve partners nice installed region. areas. the in potentially in We’re partner both Pacific instruments got the in

Asia both So strong. both Europe and quite are

Jeffrey Cohen

the could heavier fourth on size? you the a got speak And amortization quarter one second Okay, we you had a to versus particular. accrual was One, the the in it. could actual the couple seemed talk questions in Dave, side, of little – what financial expected? or what about QX two is,

David Green

the due to probably a amortization accruals. accounting were Jeff, seen partial the you’ve now quarter past. and acquisitions So have kind a We is that the Yes, of product really full-year and of full in they

had made much year. ASC the XXX. of just on would I line, past accrual would the first today. On top little weeds the the the shown experience further of with rev side, a have was is that without our say deep year. But adjustments in the This and for quarter the that implemented discussion kind XXX line in at end reg that we better We

really say won’t future a that needs with at got need it’s an more just quarters. It’s – experience analyzed would that be a moving we as and the so it’s a for of it and the affect collected forward. us it’s year one-time, It’s – new considered And I end not for to pronouncement, created behind one-time. adjustment more something the and data So the and progressed year. it’s

Jeffrey Cohen

on finally, us afterwards see little the more the publication Abstract it. to ASRM talk Could got with when you about hypothesize then, bit with and Embargo Josh, could Okay, And a prior publication the we upcoming the presentation? full might and conference you about podium. the a

Josh Disbrow

Yes.

So, Abstract accepted it’s up abstract coming is as Late-Breaking I – accepted the and afternoon has been Jeff, XX. the October mentioned, ASRM for the for been is

And so release we would to that expect to be in a shortly position thereafter.

of then there’s of terms because set there publication rather other data of product around and the the obviously in obviously a the team context we underway are initiated specifics Dr. of than relatively out to plan an study, by say, publication and being In planning, because and speak get his Ramasamy impact the there – is subsets, this to an the sort to Embargo status, investigator main is quickly. can’t get publication efforts led to extensive

I as in sterility publish fertility in will in say will at ASRM. with the or abstracts the Abstract presented presentations abstract is typical any form

out, will that be will and high expectations publication be abstract the publication are the but peer-reviewed formally practical the of and full put journals. TBD, as first a to that impact respect soon the terms as in with then the of So

that. yes, to So, look, look forward

Jeffrey Cohen

Thanks Okay. That the for for does taking me. it questions.

Josh Disbrow

Jeff. Thanks,

David Green

Jeff. you, Thank

Operator

next our Northland from Byrnes take question with Capital. Carl We’ll

Carl Byrnes

Josh here. questions couple A good of Hey, Dave. afternoon, and

terms a of let’s call marketing have you to to XX see couple then months? how at And this follow-up course coming a readout take in next, NDA over clinical follow-up or data supplemental XX I a it, ASRM supplemental do What’s just a questions. it And expectations up. the affecting potentially this filing? We Thanks. more the the [indiscernible] as you on see Just PI, of data? the you in – that’s the would using your do

Josh Disbrow

for Thanks Thanks. Carl. that,

Acerus, might obviously great engage about going be involved suffice the as much more is broad our who at And we’re a we’re intimately fairly be. with certainly are excited us there’s hands the But of to specifically prospect positive, to a mean. But tipping what readout not our data to assuming collectively what Obviously, data that with the opportunity will for so U.S. business. implications. get will readout partners it say, to data the this the

the sense down changes we to partners makes by we’ll follow. Acerus And with label pathway potential most really what again, specific evaluate opportunities the of our are the and sit engage There in and terms with at which FDA.

there’s on property. think implication follow fairly to good around There’s a I but more substantial So that, also intellectual optimism.

follow more on that. So, to

the this to pursue piece and with a best the protection. portfolio the exploit how in additional become the of product is really ways really that to But partnership respect protected relatively partner with again, surrounding evaluate important our the Acerus will Natesto, that could and patent

compliant to specifics an the to submission some first, FDA, got the sort And the get obviously, even showcase as assertively, data medicine of So it, the we arena. relatively there’s are and or other I quite our as but reproductive interest would a obviously, And say, in with filing out that bit particularly data possible to to today, there sNDA really be around around will to the it’s plan see whether data of supplemental feedback the sets clinicians. collaborate. limited

it more excited we’re fulsome getting basis. a out about So on there

on the again, excited of hope about the the the XXth October. So is we’re data with that positive prospects, readout

Carl Byrnes

year-end cover us on much. Great. with where recent given you Natesto, they where with they Understood. the obviously is are announcements that [Technical there year, formulary, last you to now any Difficulty] And so lives to can details give Thanks respect time? were of respect just versus

Josh Disbrow

Yes.

of we’ve significantly in million in to So than XX lives. it’s up of addition say, of will actually more the the and couple multiple here opened I we’ve that months formularies lives. excess more Natesto representing announced last

payers year. had two we’ve done what this is signed had first contracted. with the We the commercial previously product contracts not So

we’ve excess the coverage again million So to broadened of in well XX dramatically lives.

hand speak we For to PBM referring can’t confidentiality because lives, the of exact to. reasons, number we the frankly may which tips be it of

literally way There this say, contracts Pharmacy we’ve Benefit area, are with landed patients This will Manager and quite So key the affect to influential – by suffice both very nationwide, every long lives uptake. go in positive a to thing it impacted MSA. contracts key decision. broadening this

working the they driving of So get here partners again, picking looking of substantial commercial with Acerus, forward to, footprint home as importance plan. our really a with at up their such underway

So excited about it.

Carl Byrnes

think, gears burn your million $XX the of quarter switching with $XX.X a was you have of to – terms And long say, up year, look second cash, your at over in end way the million. to fiscal little of that the if another guess, on I if at in us and much XX the XX can What’s cash expectations let’s Great. comment you quote at your at you then And how Innovus operations, in on bit months? I to, next cash, cash respect terms cash sustaining it, do looking the in used all? for maybe fiscal Thanks. think how change closing – you can

David Green

Yes, Carl.

So We what I reduced is the have that, year. this a would by it $X been past we reducing burn. little say fiscal million over

say, Innovus. close as the wipe cash of cash company to duplicative of that when With synergistic that addition of out the – much losses as putting we losses some is regard and Innovus – break-even, that the costs flow think expected we two entities the in combine at out to other, remove, pretty they can are we will public the the costs, costs to

of that top on And is company growing. that,

some We’re we cost new but of into the that growing really – a on to put do of with like nicely have Josh lifting significant the no to have and Acerus initiatives impact some line. cash expected which co-promotion the have the place top situation covered, have partners, that us,

to XX a longer have even We we the of past. than bit that do quite the in million we expect sheet have as on stress June balance $XX.X

burn believe will the more a rapidly we over you. have do forecast for don’t be we that have So, move as reduced XX specific than we past forward But months. the

Carl Byrnes

Great. Thanks much. so

Please like over I’d Josh to At go Disbrow. you. to the this turn back sir. time, ahead, Thank call

Josh Disbrow

today’s to are thanks joining Tom. with Again, XXXX fiscal we you, everyone pleased Thank how on very for win. Well, calls. us Great.

have for we optimistic that extremely about We’re all XXXX. planned

So and we’ll with forward results. following for just our XXXX thanks that, your fiscal for first look I’ll again interest, you updating Thanks joining. say to quarter’s

So with and joining. I afternoon a again pleasant you that, thanks good and wish a evening for

Aytu BioPharma (AYTU) 26 Sep 192019 Q4 Earnings call transcript