Aytu BioScience Inc (NASDAQ: AYTU) stock is flying in the market this morning. The company announced that it would be raising funds through an offering. While offerings tend to lead to declines, in this particular case, recent news and the use of the funds to be raised has investors excited. Here’s what’s going on:

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AYTU Stock Runs Up On Offering News

As mentioned above, Aytu BioScience is planning on a fund raise. In the release, the company said that it will sell 16 million shares of common stock and warrants to purchase an additional 16 million shares at a combined purchase price of $1.25 per share and warrant.

The fund raise will take place through a registered direct offering priced at-the-market under Nasdaq rules. In the release, AYTU said that it expects for the offering to close around March 13, 2020.

All told, the company expects to generate about $20 million in gross proceeds. The net proceeds from the offering will be used for working capital, general corporate purposes, and continued commercialization of the company’s products. So, what’s so exciting about that?

It All Has To Do With The Coronavirus

Recently, AYTU announced that it has licensed a coronavirus testing technology and controls the rights to commercialization in the United States. While there are a couple of companies that already have tests, the competing tests require for samples to be taken and sent off to the lab. Of course, this takes time.

However, the test that Aytu BioScience has licensed is very different. The test provides results within 2 to 10 minutes at the point of care. So, in the world of COVID-19 testing, AYTU holds the key to the fastest test on the market in the United States.

When talking about a pandemic like what we’re seeing with the coronavirus, speed is everything. Being able to quickly diagnose and treat patients not only helps those who are sick, but helps to dampen the spread of the virus.

Considering this, AYTU is likely to see strong demand for their test. All they needed was the funds to properly commercialize the product. With today’s offering announcement, all of the pieces are coming together, creating a strong opportunity ahead.

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