Aytu Bioscience Inc (NASDAQ:AYTU) is exploding higher even as the broader stock market continues to record steep pullbacks. A 400% plus rally has helped catapult the stock from all-time lows, affirming renewed investor interest after a steep pullback in 2019.
NASDAQ:AYTU Price Action Catalysts
While other stocks are plunging on growing investors’ fears about the impact of the coronavirus, NASDAQ:AYTU is exploding on the same reasons. A confirmation that the company has secured an exclusive U.S distribution agreement for the COVID-19 Point-of-Care Rapid Test is the latest catalyst strengthening market sentiments.
In addition to the coronavirus tests boost, Aytu Bioscience prospects have also received a boost on the company entering the Consumer Healthcare Market with the acquisition of Innovus Pharmaceuticals. Likewise, the company gains access to a robust portfolio of products set to strengthen its revenue streams in the years to come.
Conversely, NASDAQ:AYTU has resorted to trading in a steep uptrend amidst strengthening fundamentals. A spike to the $2.05 leaves the stock exposed to the $2.40 level. A rally past the critical resistance level should affirm, the emerging uptrend setting the stage for the stock to continue powering high on its way to registering one-year highs.
Similarly, the $1.50 is the immediate support level above which the Aytu Bioscience looks set to continue powering higher. A breach of the support level would leave the stock susceptible to further pullbacks, probably back to the $1 handle.
Aytu Bioscience casts itself as a commercial-stage specialty pharmaceutical company engaged in the development of novel products for addressing various patient needs. The company’s portfolio of products is made up of prescription products for addressing various primary care and pediatric markets.
Coronavirus Test kits Deal
NASDAQ:AYTU is exploding in the market on the confirmation its products will be at the center of coronavirus testing in the U.S. The company has signed an exclusive distribution agreement for the commercialization of clinically validated COVID-19 rapid test.
The test has already received regulatory approval setting the stage for its use in North America. The test stands to be a big hit at a time when the U.S is facing a spike in demand for coronavirus test kits as the threat of the coronavirus continues to rise.
Intended for professional use, the Rapid Test that Aytu Bioscience will be distributing in the U.S delivers clinical results in two to ten minutes at the point of care. Aytu Bioscience has secured the right to distribute the Rapid Test for a period of three years, renewable for an additional three years thereafter.
“We are excited to be able to work with U.S. regulatory authorities, and we will work to make this important test available in the U.S. as soon as possible. Coronavirus is a major global health concern, and we are proud to be in a position to help clinicians address this very serious public health concern,” said CEO Josh Disbrow.
The distribution agreement presents an opportunity for Aytu Bioscience to generate significant revenues given the ever-growing threat of coronavirus in the U.S. This explains why the stock is exploding, given the huge market opportunity up for grabs.
Innovus Pharmaceutical Acquisition
The exclusive distribution agreement comes just weeks after the company confirmed the acquisition of Innovus Pharmaceuticals. With the acquisition, Aytu Bioscience has essentially expanded its footprint into the $40 billion consumer healthcare market.
Conversely, the acquisition grants the company access to a portfolio of 35 consumer products all-competing in large therapeutic categories for Diabetes, men’s health as well as sexual wellness and respiratory health. The acquisition also broadens the company’s portfolio beyond the $20 million prescription portfolio and enables it to strengthen its revenue base further
A merger of the two businesses provides for an increased business scale that should also lead to operational synergies.
NASDAQ:AYTU breakout does not come as a surprise, given the substantial improvement in its underlying fundamentals. An exclusive distribution agreement for coronavirus test kits is a major development set to strengthen the company’s revenue base as the race to control the virus heats up.
Similarly, the acquisition of Innovus Pharmaceuticals strengthens the company’s growth and long-term prospects. That said, the stock looks set to continue climbing the ladder given the solid underlying fundamentals.
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Disclosure: We have no position in NASDAQ:AYTU and have not been compensated for this article.