Aytu BioScience, Inc. (NASDAQ:AYTU) Q2 2019 Earnings Conference Call - Final Transcript

Feb 07, 2019 • 09:00 am ET

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Aytu BioScience, Inc. (NASDAQ:AYTU) Q2 2019 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

Thank you. The floor is now open for questions. (Operator Instructions) And our first question comes from Jeffrey Cohen from Ladenburg Thalmann. Please state your question.

Analyst
Jeffrey S. Cohen

Good morning, Josh, Dave and Jarrett, can you hear me, okay?

Executive
Josh Disbrow

You're fine, Jeff. Good morning.

Analyst
Jeffrey S. Cohen

Awesome, so could you tell us a little bit more about the other filing for the other cough suppressant that you mentioned, composition and maybe some timelines or parameters that we may hear more about it?

Executive
Josh Disbrow

Yes, good question. We haven't disclosed very much about Tuzistra (inaudible) private company. And there was a previous licensing arrangement that, that's put us in a bit of a position to be a little bit cautious about it. But the bottom line is that it is a complementary antitussive. So it's similar and obviously, the call point is going to be virtually identical. It's a similar type of product, but the ingredient mix is a bit different. And it is with the FDA. So it has been submitted to the FDA. And really all we've said generally speaking is that obviously that entails a relatively near-term review. We're not putting a specific timeline on it, but it is in front of the FDA. So you can surmise that it's a relative near-term opportunity for us. We wouldn't expect it this cough and cold season potentially in the coming one, this fall or perhaps the one following that, so I would say in the relative near term.

Analyst
Jeffrey S. Cohen

Okay. And as far as severity, would it be less than or greater than Tuzistra?

Executive
Josh Disbrow

I'm sorry, say that again.

Analyst
Jeffrey S. Cohen

As far as severity of cough and cold, where would it be on the treatment paradigm, would it be for more severe cases or less severe cases?

Executive
Josh Disbrow

It would be for slightly more severe cases, but not markedly so. It would be -- it's an extra ingredient on top of the codeine, so wouldn't necessarily move too far up the treatment channel, but a complementary patient, it's just -- it takes care of an extra symptom.

Analyst
Jeffrey S. Cohen

Okay, got it. And then a little more color on the debt conversion, we'll see some news on that in the short term, you mean coming days or weeks, and what you expect that goes to equity or it goes to other instruments, will be pure equity?

Executive
Josh Disbrow

It is pure equity. And so, we have disclosed the details in the queue. And ultimately, Armistice Capital agreed essentially to a near-market conversion from debt into equity. So it was a three-year 8% note that was payable by the Company at any time. But Armistice approached us relatively recently, negotiated it back and forth, conferred with the Board and other advisers and ultimately really aftermarket day before yesterday, really yesterday agreed to essentially take it and convert it. So we believe favorable terms for the Company and it is relatively well detailed in the queue as a subsequent event.

Analyst
Jeffrey S. Cohen

Got it, okay, that's great news. And then one for Dave if I may.