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Aytu BioScience to acquire 6 products from Cerecor for $17M

Aytu BioScience Inc. agreed to acquire a portfolio of six prescription products from Cerecor Inc. for an up-front payment of $17 million.

The portfolio includes three drugs, AcipHex Sprinkle, Cefaclor and Karbinal; two fluoride-based supplement product lines, Poly-Vi-Flor and Tri-Vi-Flor; and Flexichamber, which administers medication from pressurized inhalers.

Rockville, Md.-based Cerecor generated $12.4 million in revenue from these six products during the 12 months ended June 30, according to Aytu's Oct. 14 press release.

Under the agreement, Aytu will pay $4.5 million in cash and $12.5 million in preferred shares. The preferred shares can be converted into common shares after shareholders' approval. All shares issued as part of the deal are under sale restriction until July 1, 2020.

In addition, Englewood, Colo.-based Aytu will take up Cerecor's outstanding debt of about $16.6 million, payable to Deerfield CSF LLC in January 2021.

Aytu expects to refinance the rate and extend the payment date after closing the deal, subject to necessary approvals and delivery of financial statements by Cerecor.

Cerecor values the deal at over $43 million, which also includes the elimination of existing royalty obligations and various commercial accruals of $11 million.

Under the deal, Aytu has agreed to retain the commercial infrastructure and sales force for the six drugs along with licensing, supply and direct purchase agreements.

Moreover, Cerecor's Chief Commercial Officer Matthew Phillips will become Aytu's executive vice president of commercial operations.

Cerecor plans to use the proceeds from the deal to fund marketing authorization application for CERC-801, a treatment for a rare inherited metabolic disorder called phosphoglucomutase 1 deficiency. The U.S. Food and Drug Administration granted fast-track designation to the drug in February.

Cerecor's stock was up 10.90% to $3.46 as of 2:24 p.m. ET on Oct. 14.