UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of
Report (Date of earliest event reported): November 29, 2019
AYTU BIOSCIENCE, INC.
(Exact
name of registrant as specified in its charter)
Delaware
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001-38247
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47-0883144
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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373 Inverness Parkway, Suite 206
Englewood, CO 80112
(Address
of principal executive offices, including Zip Code)
Registrant’s
telephone number, including area code: (720) 437-6580
N/A
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
☐
Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
Securities
registered pursuant to Section 12(b) of the Act:
Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common
Stock, par value $0.0001 per share
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AYTU
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The
NASDAQ Stock Market LLC
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Indicate
by check mark whether the registrant is an emerging growth company
as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of
1934 (§240.12b-2 of this chapter).
Emerging growth
company ☐
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act.
☐
Item 1.01 Entry into a Material Definitive Agreement.
On
November 29, 2019 the Aytu BioScience, Inc., (the
“Company”) and Acerus Pharmaceuticals Corporation
(“Acerus”), both referred herein as “the
Parties”, closed the July 29, 2019 Amended and Restated
License and Supply Agreement (the “Agreement”) by
virtue of entering into a Waiver and Amendment (the
“Amendment” to the agreement), both Parties agreed to
waive certain conditions to the Agreement that were required before
the Agreement could become effective, including the requirement
that Acerus raise at least $10 million of gross proceeds of
additional capital through one or more series of transactions to
occur over a six month period from the signing of the Agreement on
July 29, 2019. In addition to closing the Agreement, both Parties
agreed for Acerus to assume five current sales employees from the
Company as of December 2, 2019. These staff will operate as Acerus
employees, but they will remain on the Company’s payroll
until the earlier of the date on which Acerus is ready to fully
assume the personnel or June 30, 2020. Finally, Acerus agreed to
reimburse amounts equaling Acerus’s share of certain
regulatory expenses paid by the Company related to the
Company’s low testosterone treatment, Natesto®.
The
foregoing description of the Amendment is qualified in its entirety
by the full text of the Amendment, a copy of which is attached
hereto as Exhibit 10.1.
Item 7.01
Regulation FD
Disclosure
On
December 2, 2019, the Company announced the launch of the
company’s co-promotion with Acerus, which is expected to
accelerate the growth of Natesto® in the United States.
Through this expanded commercial relationship, Acerus has launched
a U.S.-based specialty sales force promoting Natesto to urologists
and endocrinologists. This agreement significantly increases sales
force coverage of targeted testosterone prescribers and puts a
higher promotional focus on urologists and endocrinologists.
Further, this revised partnership enables the Company to increase
its Natesto promotional efforts in primary care and other
specialties.
To
accelerate the launch of Acerus’ U.S. commercial team, the
Company has agreed to transfer five current sales employees to
Acerus as of December 2, 2019. These staff will operate as Acerus
employees, but they will remain on the Company’s payroll
until the earlier of the date on which Acerus is ready to fully
assume the personnel or June 30, 2020.
Item 9.01 Financial Statements and Exhibits.
(d)
The following exhibit is being filed herewith:
Exhibit
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Description
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Waiver
and Amendment to the July 29, 2019 Amended and Restated License and
Supply Agreement.
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Press
Release issued by Aytu BioScience, Inc., dated December 2,
2019
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* A copy of the press release is furnished herewith as Exhibit 99.1
to this Current Report on Form 8-K. The information contained in
the accompanying Exhibit 99.1 is being furnished pursuant to Item
7.01 of this Current Report on Form 8-K and shall not be deemed to
be “filed” for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise
subject to the liabilities of that section. The information
contained in the press release shall not be incorporated by
reference in any filing under the Securities Act of 1933, as
amended, or the Exchange Act, whether made before or after the date
hereof, except as shall be expressly set forth by specific
reference in such filing.
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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AYTU
BIOSCIENCE, INC.
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Date:
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November
29, 2019
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By:
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/s/
Joshua R. Disbrow
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Joshua
R. Disbrow
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Chief
Executive Officer
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WAIVER AND AMENDMENT
This
Waiver and Amendment (this “Waiver”) is made effective as of
November 29, 2019, by and between Acerus Pharmaceuticals
Corporation, a Canadian corporation, having offices at 2486 Dunwin
Drive, Mississauga, ON L5L IJ9, Canada (“Acerus”), and Aytu Bioscience,
Inc., Delaware corporation, having offices at 373 Inverness
Parkway, Suite 206, Englewood, CO 80112 (“Aytu”). Reference is made herein
to the Amended and Restated License and Supply Agreement, dated as
of July 29, 2019 (the “Agreement”), by and between Acerus
and Aytu. Capitalized terms used herein but not otherwise defined
shall have the meanings ascribed to them in the
Agreement.
WHEREAS, Section 2.5(a) of the Agreement
provides that the closing of the Agreement and the other
transactions contemplated thereby shall take place following the
satisfaction or waiver (to the extent not prohibited by Applicable
Law) of the conditions set forth in Section 2.5(c) of the
Agreement, which requires that Acerus raise at least $10,000,000 of
gross proceeds of additional capital through one or more series of
transactions occurring prior to the date that is six months after
the A&R Signing Date (the “Closing Condition”);
WHEREAS, the Parties desire to waive the
Closing Condition, as well as certain other closing deliverables,
and to close the transactions contemplated by the Agreement as of
November 29, 2019;
WHEREAS, in connection with the A&R
Closing, the Parties desire to set forth certain additional
amendments and agreements of the Parties relating to, among other
things, the Sales Representatives on each Party’s Sales
Force; and
WHEREAS, in accordance with Section 15.9
of the Agreement the Parties desire to set forth the waivers,
amendments and agreements described below.
NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereby agree as follows:
1. A&R
Closing. The Parties hereby agree to waive as of the date
hereof: (a) the Closing Condition set forth in Section 2.5(c) of
the Agreement and (b) the requirement set forth in Section
2.5(d)(i)(2) that Acerus deliver at the A&R Closing a
certificate certifying that the capital raise has been closed.
Accordingly, A&R Closing Date shall occur simultaneously with
the execution of this Waiver, and Acerus shall deliver the
following deliverables set forth in Section 2.5(d) promptly
following the A&R Closing Date and in any event no later than
December 6, 2019:
a.
Acerus shall
deliver, or cause to be delivered, to Aytu (i) a payment of
$[●] to reimburse Aytu for half of specific direct costs that
were previously paid by Aytu to Acerus associated with
serialization of Product and (ii) a payment of $[●], which is
its portion of the 2020 FDA user fee; and
2. Transfer
of Regulatory Submissions. Promptly following the A&R
Closing (and in any event within ten (10) Business Days thereafter,
the Parties agree to cooperate in good faith to execute and submit
all letters and documents necessary to transfer the Product NDA to
Acerus, in accordance with Section 4.1 of the
Agreement.
3. Sales
Force Matters.
a.
Employee Transition. In
accordance with Section 6.2(c) of the Agreement, the Parties agree
that the individuals listed on Schedule 1 attached hereto (the
“Transitioned
Employees”) will be transitioned to Acerus as of
December 1, 2019 in accordance with this Section 3.
i.
Promptly following
the A&R Closing Date, Aytu will execute and deliver to each
Transitioned Employee a letter, in substantially the form attached
hereto as Exhibit
A, describing such transition, including the proposed formal
transfer of employment to Acerus (the “Transition Letter”). Aytu will use
commercially reasonable efforts to ensure that each Transitioned
Employee promptly executes a Transition Letter.
ii.
In connection with
such transition, from December 1, 2019 until the date on which the
Parties and the applicable Transitioned Employee mutually agree to
formally transfer such Transitioned Employee’s employment to
Acerus, but in no case later than June 30, 2020, (such period, the
“Employee Transition
Period”), Acerus shall (A) assume commercial
responsibility and costs for the sales territories for which such
Transitioned Employees are responsible, as listed on Schedule 1, as well as the
additional sales territories listed on Schedule 1 for which a Sales
Representative is not currently assigned, and (B) assume sole
responsibility for management direction and hiring and firing
decisions regarding such Transitioned Employee. The Parties intend
that during the Employee Transition Period the Transitioned
Employees will present themselves during Details as representatives
of Acerus (or its Affiliate), including carrying Acerus business
cards, and will report directly to the applicable members of
Acerus’ management team. For clarity, following December 1,
2019, Aytu will ensure that none of its Sales Representatives
Detail or otherwise Promote the Product in the sales territories
listed on Schedule
1 in the Acerus Sales Channel (as defined in the A&R
Agreement).
iii.
During the Employee
Transition Period, Aytu shall maintain such Transitioned Employee
on its payroll and other administrative plans as an employee of
Aytu, subject to voluntary resignation by such Transitioned
Employee and Ordinary Course Terminations and Reassignments, as
determined by Acerus; provided that, for clarity, in no event shall
Aytu terminate employment of or reassign any Transitioned Employee
during the Employee Transition Period without Acerus’ prior
written consent.
b.
Employee Costs. During the
Employee Transition Period, all employment and other direct costs
associated with the Transitioned Employees (i.e., meal budget, car
reimbursement, travel, etc.) set forth on Schedule 2 (the
“Employee
Costs”) will be paid for by Acerus on a quarterly
basis (in arrears), which amounts will be deducted from the
quarterly Acerus Commissions Payments payable by Aytu to Acerus
pursuant to Section 7.1(a) of the Agreement. For the avoidance of
doubt, the Employee Costs set forth on Schedule 2 are actual costs
incurred by Aytu from January through October 31, 2019 (T&E
costs) and November 15, 2019 (all other Employee Costs) are
illustrative of the expected Employee Costs. Actual Employee Costs
for which Aytu will be reimbursed by Acerus are expected to differ
based on Transitioned Employees’ actual sales performance,
medical and other benefit plan selections for calendar 2020,
travel, meal spending, car utilization, etc. following Closing. If
the Employee Costs for a given quarter exceed the Acerus
Commissions Payment for such quarter, such negative balance will be
rolled over to the next quarter; provided, that if Employee Costs
exceed Acerus Commissions Payments for three consecutive quarters,
any remaining balance payable to Aytu will be paid by Acerus at the
end of the next quarter.
c.
Transition Period
Activities.
i.
The Parties
acknowledge and agree that Schedule 6.2(a) of the Agreement is
hereby deleted in its entirety and replaced with the attached
Schedule
3.
ii.
In addition to the
activities described on Schedule 3, the Parties agree
that until the earlier of (1) written notice from Acerus and (2)
June 30, 2020, Aytu will continue to provide the following
materials and access to Acerus and the Transitioned
Employees:
1.
Promotional
Materials in amounts and at times consistent with that which was
provided to the Transitioned Employees as Aytu employees prior to
the A&R Closing Date;
2.
Access to the call
reporting and data management tools specific to the Transitioned
Employees and their respective customers and territories/region;
and
3.
The items set forth
on Schedule 4 hereto.
d.
Sales Force Size
Requirements.
i.
The Parties hereby
acknowledge and agree that the requirements for the Aytu
Product-Specific Sales Force set forth in Section 6.3(a)(i)(1) of
the Agreement shall be deleted in their entirety and replaced with
the following:
“(1) for the
first twelve (12) months following the A&R Closing Date, a
number of Sales Representatives on a Full Time Basis that is not
less than twenty (20) and a mutually agreed number of sales force
managers appropriate to manage the Sales
Representatives;”
ii.
The Parties hereby
acknowledge and agree that the requirements for the Acerus
Product-Specific Sales Force set forth in Section 6.3(a)(ii)(1)-(2)
of the Agreement shall be deleted in their entirety and replaced
with the following:
“(1) at least
fifteen (15) Sales Representatives on a Full Time Basis on the date
that is the twelve (12)-month anniversary of the A&R Closing
Date; and”
For
clarity, the Transitioned Employees shall count towards the
requirements for the Acerus Product-Specific Sales Force during the
Employee Transition Period.
iii.
After the first
twelve (12) months following the A&R Closing Date, each Party
will be responsible for employing a Product-Specific Sales Force
consistent with the requirements set forth in Section 6.3 of the
Agreement.
4. This
Waiver shall be effective immediately after its due execution by
the undersigned. This Waiver may be executed in any number of
counterparts, each such counterpart shall be deemed an original
instrument, and all such counterparts together shall constitute but
one agreement. This Waiver may be executed and delivered by email
(.pdf), and upon such delivery the email (.pdf) signature will be
deemed to have the same effect as if the original signature had
been delivered. This Waiver shall be governed by the internal law
of the State of Delaware, without regard to its principles of
conflicts of laws.
5. Except
for the specific provisions waived or amended herein, the Agreement
shall remain in full force and effect and in accordance with its
terms. This Waiver shall be limited solely for the purpose and to
the extent expressly set forth herein and nothing herein expressed
or implied shall constitute an amendment, supplement, modification
or waiver to any of other term, provision or condition of the
Agreement.
[SIGNATURE
PAGES FOLLOW]
IN
WITNESS WHEREOF, the parties hereto have executed this Waiver to be
executed by their duly authorized representatives, as of the date
first written above.
ACERUS
PHARMACEUTICALS CORPORATION
By:
/s/ Edward
Gudaitis
Name:
Edward Gudaitis
Title:
President and Chief Executive Officer
AYTU
BIOSCIENCE, INC.
By:
/s/ Joshua
Disbrow
Name:
Joshua Disbrow
Title:
Chief Executive Officer
[Signature
Page to Waiver]
Schedule 1
Transitioned Employees and Territories
[Omitted
Intentionally]
Schedule 2
Employee Costs*
[Omitted Intentionally]
Schedule 3
Schedule 6.2(a)
Transition Period Activities
[Omitted
Intentionally]
Schedule 4
[Omitted Intentionally]
Exhibit A
Form of Transition Letter
Exhibit 99.1
Aytu BioScience Announces Launch of Natesto® U.S. Co-Promotion
with Acerus Pharmaceuticals
Acerus Launches U.S. Specialty Sales Force; Sales Team Expansion
Nearly Doubles Current Natesto Sales Force
Expanded Commercial Operations Expected to Accelerate Natesto
Growth in the U.S.
ENGLEWOOD, CO / ACCESSWIRE / December 2, 2019 / Aytu
BioScience, Inc. (NASDAQ: AYTU), a specialty pharmaceutical company
focused on commercializing novel products that address significant
patient needs, today announced the launch of the company’s
co-promotion with Acerus Pharmaceuticals (“Acerus”)
which is expected to accelerate the growth of Natesto® in the
United States. Through this expanded commercial relationship,
Acerus has launched a U.S.-based specialty sales force promoting
Natesto to urologists and endocrinologists. Aytu will continue to
recognize all Natesto revenue and promote Natesto to all other
physician specialties including internal medicine and family
practice.
Natesto
total prescriptions grew 30% from fiscal 2018 to 2019, and this
commercial partnership is expected to accelerate brand growth
through joint promotional efforts and a significantly expanded U.S.
presence.
The
Natesto co-promotion officially closed November 29, 2019 and was
effective December 1, 2019. This agreement significantly increases
sales force coverage of targeted testosterone prescribers and puts
a higher promotional focus on urologists and endocrinologists.
Further, this revised partnership enables Aytu to increase its
Natesto promotional efforts in primary care and other
specialties.
To
accelerate the launch of Acerus’ U.S. commercial team, Aytu
has agreed to transfer five current sales employees to Acerus as of
December 2, 2019. These staff will operate as Acerus employees, but
they will remain on Aytu’s payroll until the earlier of the
date on which Acerus is ready to fully assume the personnel or June
30, 2020. Aytu will deduct the costs of these sales personnel from
quarterly payments otherwise owed to Acerus under the revised
agreement, with a final accounting to be done once per year.
Throughout 2020, Acerus will be building out a complete US-based
specialty sales force and other commercial functions, significantly
increasing the number of employees working directly on Natesto in
the United States.
As
previously announced on July 30, 2019, the companies signed an
agreement to expand their commercial partnership and amend and
restate the original 2016 Natesto exclusive U.S. license agreement.
Under the revised agreement, Aytu will remain the exclusive U.S.
supplier of Natesto and retain all rights to revenues
generated.
Aytu
and Acerus will continue to operate a joint commercialization
committee in support of Natesto and will closely collaborate on
U.S. brand strategy and commercial initiatives.
Josh
Disbrow, Aytu BioScience Chief Executive Officer, commented,
“We are excited to be launching our co-promotion with Acerus
as they launch their sales team. With a coordinated promotional
approach, this nearly doubling of the Natesto commercial footprint
stands to substantially accelerate Natesto prescription growth.
Acerus’ increased commitment to Natesto, as evidenced by
their significant investment in launching a U.S. commercial team,
is an important step in the evolution of the Natesto growth story.
This development, coupled with the two recently announced payer
formulary wins, should substantially accelerate Natesto’s
growth trajectory.”
Mr.
Disbrow continued, “We’re excited to be working with
Acerus to increase our reach to physicians around the country.
Additionally, with the recent expansion of Aytu’s therapeutic
portfolio that now includes ZolpiMist™, Tuzistra® XR,
and the recently acquired six-product portfolio from Cerecor, this
enhanced commercial arrangement enables us to employ a more
distinct focus on primary care physicians to grow our entire
product portfolio, while Acerus increases the promotional focus on
Natesto with urologists and endocrinologists.”
Aytu
will continue to serve as the exclusive U.S. supplier to purchasers
of Natesto, and Acerus will receive performance-based commissions
on prescriptions generated by urologists and endocrinologists above
specified revenue levels. Acerus will assume regulatory and
clinical responsibilities and associated expenses and will serve a
primary role in the development of key opinion leaders in urology
and endocrinology. Aytu will focus on commercial channel
management, sales to wholesalers and other purchasing customers,
and will direct sales efforts in all other physician
specialties.
The
revised Natesto license agreement extends the original agreement by
at least three years to the later of 2027, the launch of an FDA
approved, AB-rated generic equivalent to Natesto, or the expiration
or invalidation of the last to expire Natesto patent.
The
payment structure currently in place will be replaced with a
pay-for-performance commission incentive structure intended to
drive Natesto prescription growth across all physician specialties.
All previously agreed upon milestone payments payable by Aytu have
been removed. Additionally, Acerus will now pay all annual FDA
fees, future clinical trial costs, and all regulatory and
pharmacovigilance and compliance-related expenses.
Aytu
will continue to book Natesto revenue and will pay Acerus quarterly
commissions based on sales from prescriptions generated by
urologists and endocrinologists.
About Aytu BioScience, Inc.
Aytu
BioScience is a commercial-stage specialty pharmaceutical company
focused on commercializing novel products that address significant
patient needs. The company 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) AcipHex®
Sprinkle™, a granule formulation of rabeprazole
sodium, a commonly prescribed proton pump inhibitor; (ii)
Cefaclor, a
second-generation cephalosporin antibiotic suspension; (iii)
Karbinal® ER, an
extended-release carbinoxamine (antihistamine) suspension indicated
to treat numerous allergic conditions; and (iv) Poly-Vi-Flor® and
Tri-Vi-Flor®, two complementary prescription
fluoride-based supplement product lines containing combinations of
fluoride and vitamins in various for infants and children with
fluoride deficiency. Aytu's strategy is to continue building its
portfolio of revenue-generating products, leveraging its focused
commercial team and expertise to build leading brands within large
therapeutic markets. For more information visit
aytubio.com.
Forward-Looking Statements
This
press release includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, or the
Exchange Act. All statements other than statements of historical
facts contained in this presentation, are forward-looking
statements. Forward-looking statements are generally written in the
future tense and/or are preceded by words such as ''may,''
''will,'' ''should,'' ''forecast,'' ''could,'' ''expect,''
''suggest,'' ''believe,'' ''estimate,'' ''continue,''
''anticipate,'' ''intend,'' ''plan,'' or similar words, or the
negatives of such terms or other variations on such terms or
comparable terminology. These statements are just predictions and
are subject to risks and uncertainties that could cause the actual
events or results to differ materially. These risks and
uncertainties include, among others: risks relating to gaining
market acceptance of our products, obtaining reimbursement by
third-party payors, the potential future commercialization of our
product candidates, the anticipated start dates, durations and
completion dates, as well as the potential future results, of our
ongoing and future clinical trials, the anticipated designs of our
future clinical trials, anticipated future regulatory submissions
and events, our anticipated future cash position and future events
under our current and potential future collaboration. We also refer
you to the risks described in ''Risk Factors'' in Part I, Item 1A
of the company's Annual Report on Form 10-K and in the other
reports and documents we file with the Securities and Exchange
Commission from time to time.
Contact for Investors:
James
Carbonara
Hayden
IR
(646)-755-7412
james@haydenir.com
Source: Aytu BioScience, Inc.