|AYTU Bio's (AYTU) MiOXSYS® Is Hot, But Don't Neglect Natesto® Surge|
Jul. 16, 2018 6:27 AM ET|Includes: Aytu BioScience, Inc. (AYTU)
Natesto prescription rates continue to grow in double-digits.
Natesto is still the only TRT product without a Black-Box label warning.
Potentially best-in-class TRT product, does not lower key hormone levels in men.
Aytu BioScience continues to report increasing prescription sales data for Natesto®, its FDA-approved nasally administered testosterone replacement therapy. Going back into 2017, sales for October reached 827 total prescriptions, representing a 17% increase over September totals. Additionally, new prescriptions, as well as the number of new prescribers, which provides the most current and accurate gauge of market adoption for Natesto® increased by 495 and 407, respectively. Combined, the October report published by AYTU indicates that the sales and marketing momentum for Natesto® is not slowing down. To the contrary, since March of fiscal year 2017, Natesto® unit sales have risen more than 299%, complemented by an increase in the number of physicians prescribing Natesto® to 407, an increase of 16% for the period and a more than 42% increase since the first quarter of AYTU's fiscal year 2017. Notably, the reported prescription sales and new prescriber totals for the month represent fresh all-time highs and record growth for both Natesto® pharmacy scripts and prescriber growth.
June 2018 Continues Growth Trend
While 2017 served as an inflection point for Natesto, the growth has not slowed. In a release by Aytu in may 2018, CEO Josh Disbrow released some positive data points:
Grew Natesto® paid prescriptions to 2,300 in the quarter ending March 31, 2018, bringing total year-to-date paid prescriptions to 5,168, 219% growth over the same period last year
Launched the Natesto Support Program (NYSE:NSP) and announced that through just the first nine weeks of implementation:
63% of all enrolled patients who have been previously treated with a topical testosterone replacement therapy have been approved for Natesto treatment by payors through the NSP
70% of patients who have had their prescription claim adjudicated at one specific large national payor have been approved for Natesto treatment
Overall and across all enrolled patients, coverage for Natesto through the NSP has improved by approximately 21% at this early stage of implementation
Presented new research findings for Natesto at the Endocrine Society's 100th Annual Meeting
Received market registration for the MiOXSYS® system for male infertility in Mexico
Completed an underwritten public offering for total gross proceeds of $12.9 million
Impressive Growth For Natesto® Continues
The growth rate for Natesto® is impressive on any scale. Whether investors gauge the momentum by recognizing the spike in product sales or by the growth in new prescribers, AYTU is proving their ability to drive adoption of Natesto® at an accelerated rate and showing its value to a market that is becoming more interested in the product's benefits.
Side-by-side comparisons demonstrate that Natesto® has significant and differentiating advantages over topically applied competitive products such as AndroGel®, Axiron®, and Fortesta®. Although the inherent difference is apparent, investors need to be somewhat patient while the AYTU sales-force works to persuade physicians that Natesto® is not only as good or better than competing products, but it is a far safer alternative as well. And, from a patient perspective, physicians should pay close attention to the details.
A vital difference, and one that should carry enormous prescribing consideration, is that Natesto® is the only topical TRT product on the market that does not have the FDA's Black Box warning on the label. For those that don't know, the Black Box warning is the most severe of warnings that inform users of the potential risks of using a specific product. And, despite the warning getting fixed to all topical TRT products that compete with Natesto®, many physicians still tend to ignore the advice from the FDA, prescribing products that increase the risks of an accidental transmission of the product and minimize suggestions for users to "quarantine" themselves from women and children during product application.
To their benefit, more and more physicians are now prescribing the product based on the clinical data that shows Natesto® to provide as good or better results in treating low testosterone issues in men. And, the known benefits, combined with the Natesto® safety profile, may be factors that drive prescription rates substantially higher.
Natesto® Delivers A Powerful Solution
The cumulative and sequential growth in Natesto® sales is encouraging, and indicators suggest that the momentum will not decrease anytime soon. Based on the fact that Natesto® is the safest and the only nasally-administered TRT product on the market, the growth trend is likely to continue as the differentiated product profile, combined with an increasingly able sales force continue to educate prescribing physicians about the strengths of the product.
The Natesto® nasal dosing application eliminates the risk of accidental transference, and it has also been clinically proven to be both safer and as good or better than its topically-applied competitors. A side-by-side comparison to top-selling AndroGel® exemplifies a few of the critical distinctions. Androgel®, like other available products mentioned, is a TRT treatment that works by releasing a relatively constant amount of testosterone into the user throughout the day. However, the drawbacks to this dosing approach can have detrimental effects on the user.
As the body absorbs this new influx of testosterone, the brain is led to believe that the body's testosterone levels are adequate and slows the natural production of the necessary hormones LH and FSH. The problem with misleading the brain into thinking that the testosterone flow is normal is that it can cause severe undesired consequences.
In the example, although Androgel® may cause some regulation of testosterone levels, the reduced amounts of LH and FSH have the undesirable effects on the user's body of dramatically lowering sperm count and in some cases is shown to cause testicular shrinkage. Moreover, a deficit of LH and FSH hormones can cause the brain to slow natural testosterone production as well, often making the patient dependent on artificial treatments in order to maintain proper testosterone levels. And, while these symptoms appear in competing products, Natesto® users have experienced none of these symptoms, a statement supported by data from extensive clinical trials. AYTU released at the beginning of the year, in fact, details of a study in which LH and FSH remained at normal levels after 90 days of continued treatment with Natesto®. Consequently, because with Natesto® treatment LH and FSH levels remain within their normal ranges, it wouldn't be expected to cause the adverse side effects associated with other treatments. But, although this advantage is significant, there is more to support the switch to Natesto®.
Drawbacks To Competing TRT Products
One of the most severe drawbacks faced by the TRT market is that all long-acting gel preparations and injections are shown to cause increased hematocrit levels in the patient. The increase in the hematocrit levels causes thicker blood within the user's body, which is clinically associated with a significantly enhanced risk of stroke. To compensate for their higher risk of stroke, patients often are required to lower their prescribed dosage or even quit their TRT medication. Others turn to the undesirable route of donating blood more frequently to thin it out, which is not exactly an easy solution to the problem at hand, especially when FDA-approved Natesto® is available as an alternative. After all, Natesto® has been clinically shown to outperform other TRT products in this area – in fact, Natesto® has been shown to have virtually no effect on hematocrit levels, supporting the case that AYTU's solution may provide the best option for users of TRT products.
Persuading Physicians To Change
The case for Natesto® being the superior TRT product on the market speaks for itself. Not only is it the only testosterone replacement product on the market that is not Back Box labeled, but Natesto® offers a nasally-administered two to three times daily dosing application. Beyond safety and proven efficacy, Natesto® is discreet and convenient to use, allowing patients to regulate the dosing regimen as part of a daily routine. The strategy getting promoted by AYTU is to educate and inform both users and physicians of the product benefits, and the results are noticeable.
Considering the growth rate of Natesto®, the team at AYTU is making considerable strides to making the product the physicians choice. Taking the current numbers, for instance, Natesto® is set to provide revenue of almost $1,500,000 per quarter based on market pricing, excluding promotional discounts. Then, factoring in that AYTU is successfully broadening its reimbursement coverage from large insurance companies, the likelihood that AYTU will post continued record revenues is likely. Of course, investors need to then factor in the product growth rates, more than 10% per month over the past year, to gain visibility for potential revenue increases in the coming months, a signal which points to continued monthly double-digit growth.
For investors, understanding that the fundamentals and growth of Natesto® are getting established through proven benefit and sales-force market penetration, the recent slump in share price looks to be more of an opportunity than a setback.
It's always good to know, as well, that AYTU recently raised more than $11 million in a private placement deal with accredited investors, and those investors liked what they saw three months ago. Considering the growth of Natesto®, as well as from the company's other pipeline and approved for market products, they most certainly must like the numbers getting posted by AYTU now. And, knowing that big money has an active and vested interest in the success of AYTU only provides more confidence to the thesis that Aytu BioScience is a sound investment, even at share prices far higher than current levels.
See more content about Aytu Bioscience and other emerging stocks at my website Soulstring Report
Disclosure: I am/we are long AYTU.
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