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Aytu's first steps into $2bln testosterone market

Natesto is the first nasal formulation of testosterone approved by the US Food and Drug Administration
An attractive man lounging, clearly not in need of any more testosterone.
“Natesto has significant potential to satisfy the needs of many men"

Aytu Bioscience, Inc. (OTCQX: AYTU) has entered into the testosterone replacement market with the acquisition of the rights to Natesto.

The speciality pharmaceuticals company secured a long-term, exclusive US commercial rights license from Acerus Pharmaceuticals.

Natesto is the first nasal formulation of testosterone approved by the US Food and Drug Administration as a replacement therapy for men diagnosed with hypogonadism, or low testosterone.

“Natesto has significant potential to satisfy the needs of many men not satisfied with current Low T treatment options,” said Aytu’s chief executive Josh Disbrow.

There are an estimated 13mln men in the US suffering with the condition and the nasal application prevents testosterone transference associated with other topical products.

It was approved by the FDA in 2014 and is protected by several Orange Book-listed patents.

The group anticipates further expanding its current urology focused sales force and initiating its promotion of Natesto into the $2bn US testosterone replacement market in July 2016.

Securing the rights to commercialize Natesto in the US represented the group’s most significant transaction to date, said Disbrow.

Aytu will pay a $2mln upfront with an additional purchase of $2mln of Acerus stocks.

Additional payments totalling $6mln will also be made in 2017. Acerus will also receive a supply price to manufacture the product calculated as a percentage of the US net sales until February 2024, capped at $12mln in annual net sales.

“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,” added Disbrow.

Shares were down 2.7% to $0.55.

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