On March 10, Aytu Bioscience (AYTU) spiked up from $0.34 to $1.4. Traders pushed up the share price because the company announced a license to distribute a IgG/IgM Rapid Test for Coronavirus in the U.S. Currently with a market capitalization of more than $120 million, many investors are skeptical about AYTU’s recent developments. It happens all the time when small companies are said to make tons of money. Let’s review the company’s most recent developments.
Aytu Bioscience And Its Most Recent Bull Run
Aytu Bioscience commenced operations in 2002. Headquartered in Englewood, Colorado, the company is focused on commercializing novel products that address significant patient needs.
Many short sellers are talking about the company’s financials. They believe that the company’s lack of resources can justify a short position in the stock. I don’t doubt that lack of financing may stop the company from developing its activities.
With that, in my view, new deals to sell in-demand products can generate impressive results. Be sure to understand the following sentence: even if Aytu Bioscience does not have a crazy amount of cash to finance marketing activities, sales may spike up.
Let’s review the most recent announcements. I wonder whether short sellers checked them out. In my view, what’s making the market push up the share price is not the new license to distribute a IgG/IgM Rapid Test for Coronavirus. Very recently, the company released a lot of valuable information about its developments. We know that the company signed an agreement with a company in Singapore. But, that’s not all. Aytu has already initiated the delivery of the tests, which were sold in April 15:
“On April 23, 2020, Aytu BioScience, Inc. announced the signing of a definitive agreement with Singapore-based Biolidics, Limited (SGX: 8YY; “Biolidics”) to exclusively distribute Biolidics’ COVID-19 IgG/IgM Rapid Test in the United States.”“On April 17, 2020, Aytu BioScience, Inc. announced today that export and delivery of the Company’s incoming COVID-19 rapid tests remains on track as previously announced.”“On April 16, 2020, Aytu BioScience, Inc. announced today that results from an independent clinical study using the Company’s licensed Coronavirus Disease 2019 (“COVID-19”) IgG/IgM Rapid Test were published in the journal Infection Ecology & Epidemiology, further validating the accuracy, specificity and performance of the antibody rapid test.”“On April 15, 2020 the company has sold or allocated the initial 100,000 tests to U.S. customers and is awaiting delivery of the next 500,000 tests.”
Most Importantly, Trump Talked About The Company’s New Treatments
The most explosive information about the company was recently noted by the Washington Times. A few days ago, Trump remarked that using ultraviolet (UV) A light may be an interesting treatment for Coronavirus. What type of deal signed the company days before Trump’s public statement? Yes, Aytu BioScience announced a deal to test UV-A “Healight.” This new information may create additional market activity. On this regard, read the following lines:
“For example, the pharmaceutical firm Aytu BioScience announced on April 20, four days before the Trump remarks, that it has signed an exclusive licensing deal with Cedars-Sinai Medical Center in Los Angeles. The center has developed and is testing a UV-A “Healight” designed to be inserted via a catheter inside the trachea to kill pathogens, including the coronavirus.”
“The Healight technology employs proprietary methods of administering intermittent ultraviolet (UV) A light via a novel endotracheal medical device. Pre-clinical findings indicate the technology’s significant impact on eradicating a wide range of viruses and bacteria, inclusive of Coronavirus. The data have been the basis of discussions with the FDA for a near-term path to enable human use for the potential treatment of coronavirus in intubated patients in the intensive care unit (ICU).”
Conclusion
I am not sure whether the upward trend in the share price will continue. However, I do believe that short sellers may go thought a difficult time. Aytu BioScience is a small company, but the management is doing all the good moves to become a winner in this crisis.
Stay tuned, we will follow Aytu’s next steps!
Disclosure: I don’t hold shares of Aytu BioScience.
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