Aytu_BioScience, Inc. (OTCQX: AYTU) is paying $2 million upfront and purchasing $2 million of Acerus Pharmaceuticals Corporation (TSX: ASP) common stock for an exclusive license agreement for the U.S. commercial rights to Natesto® Nasal Gel. Natesto is the first and only nasal formulation of testosterone approved by the U.S. Food and Drug Administration (FDA) as a replacement therapy for men diagnosed with hypogonadism, a condition in which the body doesn’t produce enough testosterone. Additionaly, payments totaling an aggregate of $6 million payable in fiscal 2017 will also be made. Acerus will receive a supply price to manufacture the product calculated as a percentage of the U.S. net sales of Natesto, throughout the term of the agreement, which will last until at least February 2024, with the maximum milestone payable upon achievement of $125 million in annual U.S. net sales.
Natesto is unique among other testosterone products in that it offers a simple administration via a nasal gel applicator within seconds, but without the risk of testosterone transference associated with other topical products, so of which carry “black box” warnings on their product labels. Aytu anticipates further expanding its current urology-centric sales force and initiating its promotion of Natesto into the $2 billion U.S. testosterone replacement market in July 2016.
Josh Disbrow, Chief Executive Officer of Aytu BioScience, stated, “Securing the rights to commercialize Natesto in the United States represents Aytu’s most significant transaction to date. This partnership further expands on our strategy to build a complementary portfolio of unique urology assets, and we expect Natesto to be a key value driver for Aytu going forward. Approximately thirteen million men in the U.S. have a form of Low T, and we believe that Natesto has significant potential to satisfy the needs of many men that are not satisfied with current Low T treatment options. We look forward to building a strong and long-lasting relationship with Acerus based on successfully establishing Natesto as an important treatment option in the U.S. Our current sales force is already preparing to engage prescribers given our focus on urologists and the key prescribers of testosterone replacement therapies.”
Aytu’s stock price has seen better days with a 52 week high of $11.80, perhaps this license agreement could be the catalyst to help propel Aytu back to its glory days. Aytu stock is currently trading at $0.55 cents during the midday trading hours on above average volume.