DENVER - Aytu BioPharma, Inc. (NASDAQ:AYTU), a specialty pharmaceutical company, has completed the sale of its Consumer Health business, formerly known as Innovus Pharmaceuticals, to an undisclosed private e-commerce company. The agreement, announced today, includes the transfer of the e-commerce platform, inventory, consumer brands, intellectual property, contracts, liabilities, and provisions for Aytu to receive future sales-based royalty payments.
The divestiture follows Aytu's strategic decision to concentrate on its core prescription pharmaceutical segment, aiming for consistent profitability and positive cash flow. The Consumer Health business was acquired by Aytu in February 2020 and has been maintained as a wholly-owned subsidiary. However, the company's strategic review concluded that the Consumer Health unit was no longer aligned with its long-term objectives.
Josh Disbrow, CEO of Aytu, expressed gratitude to the Consumer Health team for their professionalism during the wind-down process. He emphasized that the sale strengthens Aytu's position to focus on growing its prescription medicine portfolio.
During the wind-down, Aytu managed to operate the Consumer Health business near adjusted EBITDA breakeven by selling through existing inventory and settling contractual obligations. The company anticipates that the cost savings from exiting the Consumer Health business, combined with the expected incremental margin improvements from closing its Grand Prairie, Texas manufacturing site, will significantly improve operating results and shareholder value.
Aytu BioPharma's prescription product line includes treatments for attention deficit hyperactivity disorder (ADHD) and various allergic conditions, as well as fluoride-based prescription vitamins for infants and children with fluoride deficiency.
The company's forward-looking statements in the press release are predictions subject to risks and uncertainties that could cause actual events to differ materially. These risks include market acceptance of products, regulatory challenges, and the ability to generate operating cash flows.
This news article is based on a press release statement from Aytu BioPharma, Inc.
In other recent news, Aytu BioPharma has reported significant developments in its operations. The company's shareholders approved all proposals at their recent annual meeting, including the re-election of directors and the ratification of the company's independent auditor. This event demonstrated a strong interest from the shareholders in the governance of the company.
In their earnings call, Aytu BioPharma announced a substantial 49% increase in revenue from their ADHD portfolio in the fiscal third quarter of 2024. The company's adjusted EBITDA also improved by $7 million year-over-year. Despite a 21% decline in net revenue due to the winding down of its consumer health segment, ADHD franchise sales increased to $14 million.
Aytu BioPharma is also shifting its business strategy, suspending certain clinical programs to concentrate on ADHD and pediatric portfolios. In addition to these changes, TuHURA Biosciences, a separate entity, has attracted a significant investment from Laurel Lee, the congressional representative for Florida's 15th district. These are among the recent developments in the two companies.
InvestingPro Insights
In light of Aytu BioPharma's recent divestiture of its Consumer Health business, a closer look at the company's financials and market performance provides additional context for investors. According to InvestingPro data, Aytu BioPharma's market capitalization stands at a modest $14.51 million, reflecting the size and scale of the company within the pharmaceutical industry. Despite the strategic move to focus on their prescription pharmaceutical segment, analysts have noted a sales decline in the current year, which could be a concern for future profitability.
InvestingPro Tips suggest that Aytu's stock price has experienced significant volatility, with a notable decline over the last week and month. This could indicate investor uncertainty following the sale of the Consumer Health business or broader market trends. Moreover, the stock is currently trading at a low revenue valuation multiple, which might attract investors looking for undervalued opportunities.
For those interested in delving deeper into Aytu BioPharma's prospects and performance metrics, InvestingPro offers additional insights. Currently, there are 12 more InvestingPro Tips available for Aytu BioPharma, which can be accessed by visiting https://www.investing.com/pro/AYTU. These tips could provide valuable information for investors trying to navigate the complexities of the pharmaceutical market and make informed decisions regarding Aytu BioPharma's stock.
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