Healthcare Business

The Path to Profitability for Aytu BioScience Stock

Aytu BioScience, Inc. (NASDAQ: AYTU) is a specialty pharmaceutical company focused on commercializing novel products related to low testosterone, upper respiratory problems, insomnia, and more. But what has really put Aytu BioScience stock on the map is its exclusive distribution agreement for a COVID-19 rapid test developed in China.

Other companies like Quest Diagnostics Inc. (NYSE: DGX), Co-Diagnostics Inc. (NASDAQ: CODX) and Becton, Dickinson and Co. (NYSE: BDX) have seen lucrative results from coronavirus testing as well.

Aytu BioScience’s stock price dropped as low as $0.34 per share in February before the stock market reacted to the coronavirus testing news. Shares reached as high as $2.99, but have since normalized and found a trading range between $1.25 and $1.65.

Overall, the company offers an interesting value proposition as coronavirus testing becomes more available to the general public.

Peak Coronavirus

Late in April, the company announced that it had reached an agreement with Sterling Medical Devices to finalize the development of the Healight platform technology. Basically, this is a novel endotracheal catheter that emits ultraviolet light and is a potential treatment for the coronavirus.

Management believes the Healight platform technology has the potential to affect outcomes positively for critically ill patients with coronavirus and other infections. Aytu, with support from Cedars-Sinai, is working with the U.S. Food and Drug Administration (FDA) to determine an expedited regulatory process for Healight. The goal is to enable near-term use of the technology, initially as a coronavirus intervention for critically ill intubated patients.

Fundamentally Sound

Aytu BioScience recently reported quarterly results and there is cause for optimism. If anything, the year-over-year comparison may be surprising to investors.

For the quarter ended in March, Aytu BioScience announced revenues of $8.16 million, more than a three-fold increase from $2.38 million the same period last year. Although the company is still operating at a loss, this was significantly reduced. The net loss per share will continue to decrease as long as this company keeps pumping out coronavirus tests.

The company had a net loss of $5.33 million for the quarter, an increase from $4.50 million in the first quarter of last year. However, net loss per share was only $0.15, compared to $0.50, so this is a big step in the right direction.

Again, if Aytu BioScience can keep up production and sales–because the demand is there–this company could be highly profitable. Stock market investors want good news about a potential coronavirus treatment and this company may give it to them.